Council Meeting Minutes
West Coast Yakima Center Hotel
Yakima, Washington
July 16-18, 2002
Contents
1. Rod Sando, Columbia Basin Fish and Wildlife Authority
2. Release Mainstem Amendments for Public Comment
3. Wildlife Crediting Subcomittee
4. NMFS: Salmon at River?s End ? The Role of the Estuary
in the Decline and Recovery of Columbia River Salmon
5. Independent Economic Analysis Board on Hatchery Review
6. Artificial Production Review and Evaluation Initiation
7. Enhancing Relationship with Columbia Basin Tribes,
including proposal by Governor Kitzhaber
8. Council Business
9. Fish and Wildlife Committee Recommendations
10. Steve Wright, Administrator, Bonneville Power
Administration
11. Yakama Nation on Bonneville Funding of Training and
Education
12. Draft Fiscal Year 2004 Budget and Fiscal Year 2003
Revisions
Decision ? To Meet in Executive Session
Judi Danielson made a motion that the Council meet in executive session
on July 18 at the call of the chair to discuss matters protectible under
the civil litigation exception. Tom Karier seconded the motion,
which passed unanimously on a roll call vote.
Decision ? Recommend Funding for SNAPP
Judi Danielson moved to add consideration and funding for Safety Net
Artificial Production Planning (SNAPP) protocols to the Council's
agenda. John Brogoitti seconded the motion, which passed unanimously
on a roll call vote.
Rod Sando, the new executive director of the Columbia Basin Fish and
Wildlife Authority (CBFWA), said it is incumbent on his organization to
help Bonneville and the Council be successful in carrying out the region's
fish and wildlife program. He described his experience at the helm
of the Minnesota Department of Natural Resources, which included a
subbasin planning effort. ?it's not an easy path,? Sando said,
adding that to be successful, you have to engage local people in a
credible way. Sando also served for two years as director of the
Idaho Department of Fish and Game.
He stressed the importance of leadership in carrying out a successful
program. ?it's incumbent on us as leaders to resolve conflicts,?
he said, otherwise, ?it's like playing golf all of the time in the
rough.? Leadership on fish and wildlife in the Northwest is
dynamic, with frequent changes that can interrupt program continuity and
disrupt planning, Sando said.
As for funding, he pointed out that the Council's role includes
constantly allocating dollars. Such a system can tend to focus on
inputs rather than the output products, Sando said. ?I believe in
accountability and strong financial management,? and ?I want to work
with you to bring more accountability to this process,? he added.
The region needs to apply benchmarking to projects ? ?some may have
outlived their usefulness,? Sando said.
He suggested diversifying the funding for the region's fish and
wildlife activities, adding that he planned to look into foundation and
non-profit support. The region could seek matching funds for some
activities from organizations like the Nature Conservancy, Sando
recommended. The situation is not encouraging for going to
ratepayers for more funds, so we need to leverage what we have, he
stated. Sando also pointed out that capital costs take away some of
the flexibility in budgeting for new activities, and he suggested that
capital expenses be funded by selling revenue bonds where possible.
Sando wrapped up with his perspective on the relationship between
science and policy. I?ve been in both the role of the scientist
and the policymaker, he told the Council. When you make policy
choices, you rarely have science on target with you ? policy requires a
wider spectrum and the need to bring in other points of view, Sando
said.
?Science is the only consistent source of truthful information in our
society ? there is nothing more reliable than a peer-reviewed piece of
science,? he stated. ?Don?t blame the scientists if they don?t
have the answers for you,? Sando advised. The real issue is making
policy choices, he said. With policy, you stand up and say, ?there
will be effects, but what we?re doing is worth it,? according to Sando.
You can use science, ?but sometimes you have to trust your instincts and
fly by the seat of your pants,? he stated.
John Shurts, Legal Counsel; Doug Marker, Director, Fish and Wildlife
Division; and Bruce Suzumoto, Manager, Special Projects
Cassidy said the Council had intended to discuss its draft mainstem
amendments, but noted that Montana and Idaho are planning to make new
submissions. It may not be worthwhile to wordsmith the current draft
if changes are going to be proposed, he said.
There is not going to be a joint Idaho/Montana proposal that is in
competition with the current draft, nor are we going to present a ?third-party?
document,? Kempton said. But there are issues we are looking at
and on which we want to bring new proposals, he acknowledged, adding that
the proposed changes could be extensive.
Staffer John Shurts pointed out that major new proposals could ?ripple
back through? all parts of the document. Bartlett and Hines
indicated Montana would have substantial suggestions on flow augmentation,
spill, and the operation of storage reservoirs. We want to work with
the Council and staff on our proposal, and we will commit to having it
done within the next two weeks, Hines said.
Will other states have new proposals? Judi Danielson asked. We
will need time to look at what's being presented by others, Bloch
responded. I want to get straight on what we?re doing, he
added. We put out a request for amendments last year, and we decided
not to construct a program that went head-on with current river operations
under the Biological Opinion (BiOp), Bloch said. It was my
understanding we would make changes to operations if they are needed to
address fish and wildlife other than those listed under the Endangered
Species Act (ESA), and we would focus on critical uncertainties, he went
on. Are Idaho and Montana constructing a new hydro operations
proposal? Bloch asked. If so, that changes the character of things,
and we may need to give much more time and thought to how to treat the
fish and wildlife managers? proposed amendments, he indicated.
We?ve been arguing that there be enough flexibility in the mainstem
operations to accommodate our proposals, Hines said. Karier said the
delay could push the decision on amendments off to September. Are we
pushing the process too much? Do we need to start over and make new
rules for this? he asked.
You called for recommendations and those came in, Shurts stated.
The Act tells you to create a program based on the recommendations, he
said. it's not inappropriate to consider other proposals, but when
the day ends, you have to have a way to explain how the program relates
back to the recommendations you received, Shurts advised.
In 2000, we rejected specific projects in lieu of adopting basinwide
goals and objectives, Bloch said. Since we?re going down a
different road, I?m wondering if it requires us to go back and look at
all of the recommendations and ?start from scratch,? he
said.
We could have a problem if there isn?t a match between the
recommendations and our final program, but I think we can go ahead with
this course, Karier responded. Shurts reminded the Council that the
law requires deference to recommendations from the agencies and
tribes. He also said the Council must act on recommendations within
one year of submittal. ?We already blew past that,? and the
further we get beyond that year, the more precarious the situation gets,
Shurts added.
Idaho intends to work within the bookends offered by the initial
recommendations, Kempton said. We are also within the bookends,
Hines stated.
My sense is that we ought not to go through the current draft, Cassidy
concluded. We will use the July 5 draft as the base document into
which we will incorporate proposals within two weeks, he said.
Shurts said the Council must also consider the adequate, efficient,
economical, and reliable power supply (AEERPS) standards. You?ll
be putting out the AEERPS analysis at the same time you release the
amendments, he added.
Peter Paquet briefed the Council on the ongoing stalemate between
Bonneville and fish and wildlife agencies over crediting for wildlife
protection and enhancement activities. At the heart of the dispute
is whether Bonneville is obligated to provide 1:1 or 2:1 mitigation for
wildlife losses, Council members indicated. Paquet laid out issues
for further discussions between the parties, including: the need to
standardize terminology and develop criteria and standards for assigning
protection credit; whether to assign wildlife mitigation credit for fish
habitat projects; and how to credit wildlife gains resulting from the
creation of open-water habitat.
Staff recommends that we continue to work through the fish and wildlife
managers and Bonneville to lay out a schedule for resolving issues, Paquet
said. ?But everyone is realistic? ? these issues have been on
the table for seven years without a resolution, he added. There is
concern over what will happen to wildlife projects in the meantime, Paquet
said.
The new federal farm bill offers opportunities for funding, he
continued, pointing out that as much as $500 million could be available
for some of the region's wildlife work. Paquet suggested convening
a group from CBFWA and Bonneville to develop a proposal on how to take
advantage of this potential source of funds. We ought to continue to
look at the crediting issues and come up with a proposal for how we might
use the new farm bill to meet the needs, rather than delaying until all of
the issues are resolved, he concluded.
Bob Austin of Bonneville said the staff proposal makes sense. The
farm bill offers an opportunity to leverage funds, he said, adding that
Bonneville wants to keep good projects moving. Staffer John Ogan
recommended the farm bill work be a top priority. Let?s put people
to work on these new issues ? ?they?ve butted heads? for seven
years on the others, he said.
it's clear that until we resolve some of these other issues, we can?t
get to ?the 1:1 or 2:1 issue,? Danielson agreed. We aren?t
even talking the same language, so standardizing the terminology is
paramount, she added.
I hope that resolving some of these other issues will open new avenues
for resolving the 1:1 or 2:1 question, Bloch commented. When it
comes to this key element, ?we ought to enforce it or remove it from the
program,? he stated.
We?re getting distracted by talking about going after these other
funds, a representative of the Oregon Department of fish and wildlife
stated. Bonneville still has an obligation to mitigate ? the real
issue is what the Council's program says, she said. The farm bill
funds should not be used to replace Bonneville's obligation,? she
added. Another fish and wildlife manager said Bonneville ?dug its
heels in on Day 1? of the crediting discussion. We have tried to
be creative ? if this is another attempt to get Bonneville out of that
obligation, ?we won?t be at the table,? he said.
The language in the program is clear, and we didn?t mean to say that's
not the case, Paquet responded. We aren?t talking about using the
farm bill funds as a substitute, he added. The 1:1 or 2:1 dispute is
not going to be resolved soon, yet we?re holding up projects over it,
Paquet said.
I don?t deny that 1:1 and 2:1 is the big issue, but if these other
efforts will help us get there, I?m not opposed to going forward with
them, Bartlett indicated. The Wildlife Crediting Subcommittee
members agreed that Paquet should proceed on the tasks and priorities he
outlined.
Dr. Mike Schiewe, Division Director, Fish Ecology, Northwest Fisheries
Science Center; Dr. Ed. Casillas, Program Manager, Estuary and Ocean
Ecology; and Dr. Dan Bottom, Estuary and Ocean Ecology Program
Reporting on research into the role of the Columbia River estuary in
the decline and recovery of salmon, Dan Bottom of NOAA Fisheries said the
estuary is not just a conduit for migrating fish. ?it's an
important rearing habitat? in which some species of salmon spend
considerable time, he explained. The estuary has been largely
ignored, but it is among the most productive areas in the river system,
acting ?as a big sump for organic matter,? Bottom said. Because
of the tidal process, the organics tend to stay in the estuary, and some
salmon take a lot of advantage of that habitat, he
said.
Bottom outlined how the research he and other scientists have
undertaken is looking at the estuary in terms of: habitat
opportunity ? can the salmon actually get there; habitat capacity ? if
salmon can get there, what is the quality of the habitat; and population
structure ? are there life histories that have adapted to estuary
use? He gave an overview of research on the effects of flow
regulation on the estuary and the impact of diking in the lower
river. In terms of habitat capacity, we?ve lost shallow-water
habitat and the estuary has shrunk over time by about one-quarter due to
diking and other activities, Bottom said.
With these losses come changes in the food chain, he pointed out.
There has been a decline in food sources that are found in the wetlands,
shallows, and flats, and these are what salmon feed on, Bottom
explained. Changes in the ecosystem can bring about increases in the
populations of other species, such as American shad, he said.
A sampling study conducted from 1914 to 1916 has given modern
researchers a way to compare the diversity of salmon in the estuary,
Bottom continued. The samples taken today show much more uniformity
of size ? we are seeing much less of a range in terms of timing and
sizes of fish that are moving through the estuary, he reported. The
timing, composition, and duration of juvenile chinook runs in the estuary
are now largely influenced by hatchery releases, Bottom said.
Diversity is a natural hedge against bad ocean conditions, and less
variability could mean a dampening of the salmon's ability to survive,
he indicated.
As a result of the research, Bottom offered several
recommendations: restore and protect tidal wetlands and floodplains;
expand salmon life-history diversity; establish an estuarine monitoring
program; monitor/model physical changes in the estuary; assess the change
in tidal-fresh habitats; and study the effects of food-web changes.
NOAA Fisheries researchers are moving ahead on the recommendations, he
said. In 2001, we initiated a long-term monitoring study funded by
the Corps, and we?ve established intensive research sites in the
Cathlamet Bay marshes, where we are trying to develop links between salmon
and habitat, according to Bottom.
Are the floodplains populated now? Could they be reflooded? Hines
asked. Many are populated, and others are developed for agriculture,
Bottom responded. We need to inventory the habitat and zero in on
the highest-priority habitat for recovery, weighing the biological
benefits against the social costs, he said.
Cassidy pointed out that the Council will consider funding projects in
the estuary province in September. Our approach was going to be to
protect the ongoing projects and fund new projects if there is extra
money, he said, adding that the estuary province ?is sorely underfunded.?
Bloch said a departure from that approach may be a good idea. We?d
have $500,000 for new projects in the lower Columbia and estuary,
according to staffer Karl Weist. I take it from your discussion that
you want us to start with a zero-based budget and build from there, he
commented. it's my preference and Eric agrees, but I don?t know
if there's consensus, Cassidy responded. We need to wrestle with
it a month and get more information, he added.
Terry Morlan, manager, Economic Analysis; and Dan Juppert, IEAB Chair
Dan Huppert, Chair of the Independent Economic Analysis Board (IEAB),
reported on the first phase of the hatchery cost-effectiveness
study. The board compiled cost and performance data from eight
hatchery programs throughout the basin, he said, adding that the IEAB
found that data on capital costs and hatchery operations was ?pretty
available.?
The cost-effectiveness study pegged hatchery costs according to three
measures, Huppert explained: cost per fish released; cost per adult
returned; and cost per fish harvested. He provided the Council with
a table that showed the average cost per salmon released varied from 14
cents to $2.60. The average cost per returning adults ranged from $3
to $3,707, according to the table. As for the average cost per fish
harvested, the cost went from a low of $12 to a high of $68,031.
Huppert cautioned that the $68,031 figure may not be accurate since so few
fish were caught from the hatchery in question.
How do you ?tease out the difference? between a hatchery?s lack
of success and the lack of success of the fishermen? Bloch asked.
that's why we have three measures for cost-effectiveness, Huppert
responded.
The IEAB recommends going on to phase two of the study, he said.
One of our objectives was to see if we could come up with enough data to
make sense of the costs and do the analysis, Huppert explained. We
now think a more extensive cost-effectiveness analysis is possible, he
said. The IEAB made two recommendations, according to Huppert:
conduct a further analysis of costs that would integrate the hatchery
objectives and extend the process into a cost-benefit analysis.
Karier pointed out that problems with recordkeeping and tracking cost
data on fish and wildlife projects, which make such analyses possible, are
being addressed. This is a great start ? it would be good to
expand this to all hatcheries funded by Bonneville, he said. Program
implementers could be required to provide better data-keeping for their
projects, Hines suggested. Project sponsors are providing a lot of
information, but it isn?t being recorded and tracked, staffer Doug
Marker responded.
?I see no excuse for Bonneville not to have these accounting
practices in place,? Brogoitti said. We?re getting further
behind in trying to come up with budgets and actual information about
project spending, he stated. ?I?d encourage Bonneville to get
with the program,? Brogoitti added.
Since we have the artificial production review and evaluation going on,
we need to be sure we aren?t duplicating efforts here, Cassidy said of
the proposed phase two study. If you want the second phase, ?the
ball is in our court to come up with a proposal,? Huppert said, adding
that the IEAB will submit a proposal later this year.
Bruce Suzumoto, Manager, Special Projects
Staffer Bruce Suzumoto outlined the artificial production review and
evaluation (APRE) effort. The objectives of APRE are to implement
the policies and recommendations of the original artificial production
review, supply data and information to subbasin planners, and assist with
completion and coordination of ESA/BiOp activities, including the Hatchery
Genetic Management Plans (HGMPs), he explained. The scope of the
effort is to review over 300 resident and anadromous fish artificial
production programs and complete HGMPs for all 150 anadromous fish
programs, according to Suzumoto. The base budget is $869,000, and the
Council voted earlier in the week to recommend that Bonneville fund an
additional $462,000 to prepare the draft HGMPs, he said.
Suzumoto went over the steps staff would take to complete the work,
from gathering data and information to finalizing recommendations to send
to subbasin planners and to Congress. He described the three teams
? stakeholder management, project management and scientific ? that
have been organized to carry out the activities. The
province-by-province schedule for APRE goes from July 2002 to June 2003,
and each province will take about eight months to complete, Suzumoto
said.
APRE will incorporate scientific reviews at various stages, and the
final product will be a report on the 300 hatchery programs, outlining the
benefits and risks, he said. Things are moving ahead nicely,
Suzumoto concluded.
One of our goals was to identify a purpose for each hatchery, Karier
commented. We intend to go to each hatchery ?and pin people down
on the purpose? ? we should have that by the end of the year, Suzumoto
responded.
?I?m bewildered and appalled? that we are just now developing a
database on hatcheries, Rob Walton of the Public Power Council
commented. How long has Bonneville been funding hatcheries? he
asked. We should have had this done years ago, Walton stated.
Steve Crow, Executive Director
Referring to Oregon Governor John Kitzhaber?s May 16 letter to the
other Northwest governors, Cassidy said there is a proposal before the
Council to amend its bylaws regarding consultation with Indian
tribes. The letter also contained a proposal regarding election of
officers, but he noted that the Council's agenda included the two as
separate items.
Governor Kitzhaber met with representatives of the tribes, and he heard
concerns about the tribes? relationship with the Council, Bloch
said. I would venture that the tribes feel the Northwest Power Act
is the most important federal legislation for exercising their rights
under treaties and Executive Orders on hunting, gathering, and
environmental protections, he commented. Given the turnover that
occurs on the Council and the passage of time since the Act was passed,
the tribes want a durable way to capture their central role in what the
Council does, Bloch explained.
Governor Kitzhaber has asked the Council to consider including in its
bylaws a recognition of the Tribes? central role and procedures that
would lead to an ongoing relationship, he said. This proposal is not
intended as a criticism of the Council or our work, but as a concern about
the turnover and the passage of time since the Act, Bloch
reiterated. The Oregon members propose to put the governor's
bylaws proposal into a motion and have it discussed and voted on, he
stated.
Paul Lumley of the Columbia River Inter-Tribal Fish Commission (CRITFC)
led a panel of tribal representatives. He said the tribes have a
vested interest in seeing a strong Council and that newspaper articles
indicating Oregon could pull out of the Council raise concerns.
CRITFC supports Governor Kitzhaber?s proposed changes to the Council
bylaws, Lumley said.
We?d like to see increased deference to the tribes, he stated.
With respect to our history with the Council, the relationship has not
always been good, but it's better now than in the past, Lumley
said. The bylaws change would be a positive move, he added.
The tribes are upset over the lack of balance between power and fish,
Lumley told the Council. He outlined several instances in which the
tribes disagreed with the way fish and wildlife project funding was
handled. ?We weren?t treated with the respect we deserve,?
Lumley stated. He urged the Council to include in its bylaws
Kitzhaber?s proposed language regarding respect and courtesy to the
tribes.
When new Council members come on board, they need to be educated,
Lumley continued, and he added that the tribes want more access to
information on Council business before they arrive at meetings. it's
difficult to get up to speed on complex issues quickly, he added.
Lumley said the tribes also feel the Independent Scientific Review Panel
(ISRP) is prone to moving off its charter. You need to remind them
of their charge, he suggested.
Lynn Descharme said the Confederated Salish and Kootenai Tribes
support the proposed bylaws language that affords ?a high degree of
deference? to the tribes? interpretations of the Act?s fish and
wildlife provisions and their recommendations for program measures.
We don?t want our support to reflect negatively on the Montana members
? they?ve been our allies, she added. I would encourage the
Council to engage with Bonneville on getting the funding going for
approved projects, Descharme said. We?ve been deadlocked for nine
months, and we would appreciate your support, she stated.
Terry Courtney of the Confederated Tribes of the Warm Springs
thanked Bloch and Brogoitti for bringing up the issues. He asked the
Council to indicate more specifically when there will be opportunity at
its meetings for testimony on issues. Selective fishing doesn?t
get us to recovery, Courtney stated. If the tribes can?t get input
on these issues, ?it leaves a bad taste in our mouth,? he said.
The Council must make a better effort to understand the tribes, Courtney
concluded.
Keith Wolf of the Colville Tribe said when the tribes get
involved locally on subbasin planning and ask for commitments of time and
effort, ?we need to ensure? that Bonneville and the Council will
continue to provide a high level of support. It is also very
important to us that we have long-term stable funding for our projects, he
added. Wolf said the tribes want continuity when there are staff and
leadership changes. We are an important partner, and we want to have
discussions when there are anticipated changes in staff, he
indicated.
Guy Dodson of the Shoshone-Paiute Tribes said term length for
the Council chair is an internal matter, as the letters from the other
governors indicated. As for adequate tribal consultation, the equity
and fairness is not there for the blocked areas, he said. Each of
the tribes at the table has a vast and varied history, as well as
similarities, and all of us should be treated fairly, Dodson stated.
Ken Hall of the Confederated Tribes of the Umatilla talked about
?pre-treaty life.? Our negotiators wanted to retain our hunting
and gathering rights and our resources, he said. We invite you to
come to each tribe and learn about what each of us thinks the Northwest
Power Act means, Hall stated. We want to see the fish back and see
tribal members exercising their rights to hunt and fish on a daily basis,
he said. Hall urged the Council to learn what it means to ?live in
common? ? letting the water flow the way it is supposed to and letting
the animals go where they are supposed to go.
Cassidy pointed out that when new members come on to the Council, they
receive a thorough briefing on tribal issues. We can do better, he
added.
To resolve the issues, we should encourage a dialogue between the
governors and the tribal chairs, Lumley said. Rotating the
chairmanship among the states is good business ? there are benefits to
being the chair that should be shared, he added.
Any perception of a lack of respect or courtesy is troubling, Karier
said. Your comments about getting out information on the agenda and
on the ISRP are constructive, he added. Whether we adopt the bylaws
changes or not, we take your comments seriously, Karier said. We are
listening to you ? the fact that you?re here tells us there is room
for improvement in our relationship, Bartlett stated. The bylaws
changes are a different question, he noted.
These issues are very important to our governor, Brogoitti said.
I hope the Council can come up with something to make this work, he
added.
What strikes me is the commonality between what the tribes want and
what we want, Hines said. We both want to bring back the fish and
wildlife, he said. Regarding the relationship, more intimate
discussions ?away from the table? are a good idea, Hines stated.
The concerns you expressed are fundamental issues the Council will
address, Kempton stated. Cooperation is very important for subbasin
planning, he added.
I?d like to express support for the ideas in the bylaws proposals and
the tribal comments, Walton said. But I support the three governors?
position ? the bylaws are not the best vehicle for these proposals, and
this could encourage others to offer bylaws changes, he commented.
If the Council initiates a broader effort to educate members, include the
public, Walton urged. Others need to learn about these issues, too,
he said.
Danielson said Idaho's governor was asked to have a
government-to-government consultation with the tribes on fish and wildlife
issues. We signed memoranda of understanding with the tribes on
subbasin planning, and Governor Kempthorne made a proclamation that
acknowledges the sovereignty of the tribes and commits to working with
them on a government-to-government level, she said. Danielson showed
a videotape of a ceremony in which Kempthorne delivered the proclamation
to several tribal leaders.
My recommendation is that we weigh what we?ve heard and explore other
ways to get at this, Cassidy said, noting that a bylaws change may not
accomplish what is needed.
The tribes have said we?re central to their lives, and we have to
find a way to capture the current positive state of our relationship,
Bloch said. I believe we already do some of what is in this proposal
? I say let?s weigh these comments for a month and then see where we
should go, Cassidy responded.
I believe the Act is durable and specific about our relationship to the
tribes, Bartlett said, and page 53 of our fish and wildlife program talks
about the role of the tribes. The tribes have a special place in
what we do ? it is recognized in our program, he commented.
Decision ? Consideration of governor's
Amendment to Chapter 14 of Bylaws and Postponing until August Meeting
We need to get a motion on the floor so we can have an open discussion,
Brogoitti suggested. Cassidy reiterated his suggestion that the
Council weigh the input and then consider a motion in August to vote the
bylaws amendment up or down. Brogoitti offered a ?unanimous
consent request? to delay consideration to Helena. Karier
objected, and the request failed. Brogoitti made a motion to
consider Governor Kitzhaber?s proposed amendment to Chapter 14 of the
bylaws, and Bloch seconded. Brogoitti then made a motion to table
consideration of it until the Council meets in August. Karier
seconded the motion, and it passed unanimously.
Approval of Minutes
Decision ? Approval of June Minutes
Danielson made a motion that the Council approve the minutes of the
June 11-12, 2002 Council meeting for the signature of the vice
chair. Brogoitti seconded the motion, and it passed unanimously.
Approval of Subbasin Planning Contracts
Decisions ? Authorization to Negotiate A
Contract with Oregon and Washington Subbasin Planning Coordination
Groups
Staffers Brian Allee and Lynn Palensky gave an update on subbasin
planning activities. Danielson made a motion that the Council
authorize the Executive Director to negotiate a contract in an amount not
to exceed $175,000, with the contractor the Oregon Subbasin Planning
Coordination Group selected at a July 12, 2002 meeting to provide
statewide coordination and project management for subbasin planning in the
state of Oregon, as outlined in the statement of work presented by the
staff. Bloch seconded the motion, and it passed unanimously.
Danielson made a motion that the Council authorize the Executive
Director to negotiate a one-year contract in an amount not to exceed
$152,132 with the contractor the Washington Subbasin Planning Coordination
Group will select, to provide statewide coordination and project
management for subbasin planning in the state of Washington, as outlined
by the staff. Karier seconded the motion and reported that Anthony
Grover had accepted the coordinator position. The motion passed on a
unanimous vote.
The Council postponed action on a contract with Mobrand Biometrics,
Inc., amid questions about what form of scientific assessment would be
acceptable if a project sponsor chooses not to use the Ecosystem
Diagnostic and Treatment (EDT) model Mobrand has developed. EDT is a
useful tool, but it is not mandatory, Allee explained. Danielson
said there is concern about how projects will be treated by the ISRP and
Bonneville if they are not based on the EDT model. If a subbasin
doesn?t use EDT, other alternatives have to be acceptable, Bartlett
said. Cassidy suggested the Mobrand contract be moved to later in
the agenda, and he subsequently announced it would be handled in a
conference call.
Decision ? Authorization to Negotiate a
Contract with Drew Parkin
Danielson made a motion that the council authorize the Executive
Director to negotiate a contract with Drew Parkin in an amount not to
exceed $97,440 to perform the work related to technical support for
subbasin planning set out in the statement of work presented by the
staff. Bloch seconded the motion, and it passed unanimously.
Status on Mainstem System-wide Project
Selection
This agenda item was not discussed.
Discussion and Public Comment on Possible
Bylaw revisions for Election of Chair
Bloch made a motion that the Council approve a five-point amendment to
Chapter 4 of its bylaws. The motion, a longer version of the
proposal Governor Kitzhaber made in his May 16 letter to the other
governors, called for the office of chair to ?rotate among the states as
follows: Idaho, Oregon, Montana, and Washington? and for the vice chair
to be chosen from the state next in rotation. The motion offered an
exception to the rule if both members from the state in line for
leadership decline to stand for chair, and it proposed to change the term
of office for chair and vice chair to two years. Brogoitti seconded
the motion.
Brogoitti then moved to table the amendment until the Council's
August meeting. Bloch seconded the motion, but it failed on a
five-to-three vote, with Bartlett, Bloch, and Brogoitti voting aye, and
Danielson, Cassidy, Karier, Kempton, and Hines voting no.
Speaking in favor of his motion, Bloch said, ?Oregon has tried to be
supportive of its sister states when they have raised issues relating to
the interface of the Council's work and mission and a state's unique
interests.? He pointed to examples, including Oregon's
cooperation with Washington's needs in subbasin planning, Idaho's
needs in water acquisitions, and Montana's desire for integrated rule
curves. The issue of how the Council selects its chair, and doing so
in a way that all four states share equally in the leadership, is very
important to Oregon's Council members, Governor Kitzhaber, and the
state, Bloch said.
Rotation of the chair is ?the only logical and durable way? to
assure equal leadership among the states, he continued. ?It is
improper for the four sovereign states that comprise the Council not to
share equally in something as fundamental and visible as the Council's
leadership,? Bloch said. The Council members take their place
after they are appointed by the governor and confirmed by the state
senate, and in Oregon, the Council members serve as part of the governor's
cabinet, he explained. If an individual passes that gauntlet
successfully, ?that ought to be good enough for all of us here,?
according to Bloch. He contended that the current approach is
undemocratic because ?it undoes the work and the rightful expectation of
our states? highest elected representatives.?
Rotation assures that the diversity of issues among the states will be
mirrored through the leadership, and it is both a symbolic and practical
issue, Bloch said, adding that rotating the chair among the states assures
the Council's ability to maintain broad support. He pointed out
that some newspaper editorial boards had given support to the approach of
rotating the chair, and he provided examples of other multi-state
organizations that take this route to selecting a leader. In
summary, Bloch said, ?it all comes down to whether this Council is
willing to set up a system for electing the chair that doesn?t impose
our judgment over the judgments of our governors and our senates? in
determining that all Council members are qualified to perform the duties
of the chair.
I?m troubled by the context in which we are making this decision,
Karier stated. There is ?a thinly veiled message? that if we don?t
pass this, Oregon may not continue to participate on the Council, he
said. But I won?t let this influence my decision, Karier said,
adding that he would vote on the merits of the proposal. ?The
current election of officers is democratic; election by bylaws is not
democratic,? he concluded.
Brogoitti said Governor Kitzhaber had not said he would pull Oregon's
members from the Council if the proposal did not pass. ?It sits as
a possibility,? but the governor has made no decision, Bloch
stated.
There clearly has been a rotation of the chair in the past, Bartlett
stated. It isn?t fixed and set, but it shouldn?t be a matter of
?it's my turn, and I insist on being elected,? he said. We
should aim for rotation ? it should be a principle we strive for ? and
the other governors indicated that in their responses to Governor
Kitzhaber, Bartlett said. We have rotation now in a way that makes
sense for us, he stated. ?The way we do it now is just fine ? I
won?t support the motion,? Bartlett said. Our governor has said
the election of officers should be an internal affair, Hines pointed
out. Having a chair that is not supported by the majority does not
make for a strong Council, he said.
The governors have responded, Kempton said. I believe in the most
sincere way and with respect to the tribes, that the strongest leader is
the most important issue here, he indicated. For this circumstance,
I think we have that ? our governor says to strive for rotation, and
that is what we will do, Kempton stated.
?Your intellect is unequaled on the Council,? Cassidy said to
Bloch, but ?you cast aspersions on Brogoitti?s position as chairman of
the fish and wildlife committee and on your own position as a member of
the executive committee.? Cassidy said he saw no evidence that
Oregon has suffered for lack of chairmanships, and he dismissed the
contention that showed up in some newspaper articles that Governor
Kitzhaber?s speech on dam breaching or Oregon's position on the issue
had anything to do with the chairmanship election. Last January, the
Council chose its chair in a democratic process, Cassidy said, and he
added that Bloch was a credit to the Council in any position.
Cassidy said he could find no record of Oregon's governor making a
request for rotating chairs on any other commission, nor could he find a
record of Washington's governor having done so. He concluded by
saying that the Council needs Oregon's participation.
I agree that we need a strong Council, Bloch responded, and we believe
sincerely that this is the way to achieve that. The current bylaws
trouble me, Brogoitti said. What happened in January was
unfortunate; the old bylaws said there could only be two consecutive
terms, he pointed out. We need to go back to that, Brogoitti urged.
In January, people wanted to suspend the rules for the election, but I
declined to serve under those circumstances, and the bylaws were changed,
Cassidy said. I don?t object to a rotation, but I do to a forced
rotation, he added.
Brogoitti called for the question, and the motion to amend the bylaws
failed on a six-to- two vote. Bloch and Brogoitti voted in favor;
Danielson, Cassidy, Bartlett, Karier, Kempton, and Hines voted no.
Lower Snake Compensation Plan Review
Staffer Mark Fritsch provided background on the Independent Scientific
Review panel's (ISRP) evaluation of the Lower Snake River Compensation
Plan (LSRCP). This is ?a huge and complex group of projects,?
and the ISRP provided favorable comments, he said. There were some
issues the ISRP felt Bonneville should address during the contracting
process, Fritsch added.
The LSRCP projects were once funded under a purely reimbursable
arrangement, but the costs are now covered through a direct-funding
agreement between Bonneville and the U.S. Fish and Wildlife Service
(USFWS), according to staffer John Ogan. We have sought to integrate
the LSRCP with other projects in our fish and wildlife program, he said,
adding that the USFWS has agreed to participate in subbasin planning and
in the artificial production review and evaluation.
Decision ? Accept ISRP Review &
Recommend Bonneville Address Issued Raised by the ISRP
Danielson made a motion that the Council do the following: accept
the ISRP review of the LSRCP; recommend Bonneville and USFWS address
through the artificial production review and evaluation and subbasin
planning the issues raised by the ISRP; and direct the staff to summarize
the ISRP report and include the summary in a report to Congress that was
requested in the 1999 Energy and Water Development Appropriations Bill for
?reimbursable projects.? Brogoitti seconded the motion, which
passed on a unanimous vote.
Additional Funding for Hatchery and Genetic
Management Plans
Staffer Bruce Suzumoto said staff will produce 150 draft Hatchery
Genetic Management Plans (HGMPs) for NOAA Fisheries. Brogoitti said
he was concerned about the request for $462,000 to accomplish the project
because it won?t cover finalizing the HGMPs. We have a
?blank hole? for funds to finish the HGMPs that should be filled up
front, he pointed out. Suzumoto said staff would capture information
from 60 or 70 HGMPs that are already in the works by other agencies.
Cassidy recommended the Council advise Bonneville to scrutinize requests
for funds to prepare HGMPs so there is no duplication of effort.
A spreadsheet on what we?ve already spent on HGMPs is ?conspicuously
absent? from this request, Karier pointed out. I?m uneasy that
we are spending money on a project for which we don?t track the funding,
he said.
Decision ? Recommend Reallocation of
Funds
Danielson made a motion that the Council recommend Bonneville
reallocate $462,000 from the FY 2002 anadromous program?s unallocated
placeholder for Project 2002-47, Artificial Production Review and
Evaluation, as presented by the staff, suggested by NOAA Fisheries and
Bonneville, and recommended by the fish and wildlife committee.
Brogoitti seconded the motion, which passed on a unanimous
vote.
Recommendation on Kalispel Hatchery
Fritsch explained that the Kalispel tribal hatchery had not been able
to reach its production goals, and the tribe is requesting funds to build
rearing ponds. The ISRP gave ?a harsh review? to the tribe?s
?stocking strategy? and its monitoring and evaluation (M&E)
tracking program, he said. If we approve this, we would be acting
contrary to the ISRP recommendation, Bloch pointed out. The Kalispel
are committed to addressing the M&E concerns, staffer Doug Marker
said. But the fish and wildlife committee is aware the program needs
this help to continue ? using the available sloughs is not working, he
added.
When do they have to come forward with a new M&E program? Bloch
asked. We haven?t stipulated the timing, but I?m confident they
will get us something, Fritsch responded. The Council determined
that this resident fish bass project was appropriate, Karier said.
We should adopt the recommendation and ask the ISRP to be more specific
about what they want in the way of M&E, he said.
Decision ? Recommend Funding by
Bonneville for Construction of Rearing Ponds
Danielson made a motion that the Council recommend Bonneville fund the
construction of rearing ponds under Project 1995-001-00, Kalispel Tribe
Resident Fish, in an amount not to exceed $180,000, as recommended by the
fish and wildlife committee and subject to the conditions noted by staff,
including: this is a one-time allocation of money with no further
O&M; and the project sponsor will address the ISRP concerns prior to
the next funding cycle. Karier seconded the motion, which passed on
a unanimous vote.
Yakima Access Habitat Project
Decision ? Recommend Funding
Danielson made a motion, seconded by Brogoitti, that the Council
recommend Bonneville fund in an amount not to exceed $750,000 each year
for FY 2003 and 2004, the Kittitas County Water Purveyors? strategic
plan as presented by the staff and recommended by the fish and wildlife
committee. This is a very good project opportunity, and the
agricultural interests are very involved, Cassidy commented. The
motion passed unanimously
Safety Net Artificial Production Planning
(SNAPP)
Marker explained the revised Safety Net Artificial Production Planning
(SNAPP) protocols, which NOAA Fisheries wants to move forward. These
are strategies to prevent extinction of species, he said. The ISRP
has considerable concern about SNAPP and briefed us on its concerns in
Bend, Marker said. The project sponsors don?t believe the ISRP?s
primary concerns about the risk analysis apply just yet, he continued, and
they would like to go forward. They have also reduced their costs,
Marker added. The sponsors are committed to looking at all factors
affecting potential extinction, he explained. They have indicated
they will not jump directly to an artificial production program if there
are other things, such as habitat measures, that could be effective,
Marker pointed out. Staff supports the project going forward and so
does the fish and wildlife committee, he stated.
Decision ? Recommend Funding by
Bonneville for SNAPP
Danielson made a motion to recommend that Bonneville fund SNAPP at the
level of $411,000 in 2002 and $215,000 in 2003 on the condition that the
timing of implementation allow for scientific review and coordination with
the Council's artificial production review and evaluation. The
funding recommendation also takes note of the sponsors? July 10, 2002
responses to six issues previously raised by the ISRP and the Council, she
added. Brogoitti seconded the motion, which passed unanimously.
Bonneville Administrator Steve Wright laid out the details on what he
called Bonneville's ?most severe financial situation in 25 years ?
maybe in our history.? The agency has seen its financial reserves
plummet from $800 million at the end of fiscal year (FY) 2000 to an
expected $125 million at the end of FY 2002, he reported. Wholesale
power rates are lower than expected, which means Bonneville is taking in
less revenue than forecast, according to Wright. ?My concern is
growing by the day,? he said, adding ?the lower the markets go, the
worse our problem becomes.? While $125 million may sound like a
lot of money, ?it isn?t much in our world,? and the downturn in
revenue poses a significant concern for our ability to pay creditors,
Wright pointed out.
He explained the assumptions that went into the 2000 rate case,
including Bonneville's expectations that it would serve 9,500 megawatts
(MW) of load (1,500 MW over the federal resource base); increase fish and
wildlife (fish and wildlife) spending by $100 million annually; and do so
without raising rates. We thought we could achieve this through
increased efficiencies and higher than average surplus power revenues,
Wright continued. We expected costs at the Columbia Generating
Station (formerly WNP-2) to continue to go down, along with Corps of
Engineers and Bureau of Reclamation costs, he said. And we thought
we would cut Power Business Line (PBL) staff in half, Wright added.
?The world hasn?t played out that way,? he stated. We ended
up with 11,000 MW of load to serve, and by the time we set rates and
signed contracts, ?the markets had gone sky high,? Wright said.
To address the changed conditions, Bonneville worked with customers to
eliminate the fixed rate and establish rate adjustment clauses that allow
the agency to change rates every six months, depending on conditions, he
explained.
Bonneville raised rates 46 percent in October 2001 by triggering the
?load-based? adjustment clause, but this was to cover the cost of
serving the additional load and didn?t address the rest of our financial
situation, Wright went on. We expected to be a net seller in the
market this year, but now wholesale prices are way below what we
anticipated, he said. ?We didn?t expect prices to come down as
fast or as much as they have,? Wright acknowledged. The cost of
serving the 3,000 MW of load above our resource base has been declining
through time, and we will be able to reduce the load-based adjustment
October 1, he said. But the rest of our business is not going well,
according to Wright.
Bonneville lost over $200 million in 2001 and will lose over $250
million this year, Wright said. People ask why we lose money when
markets are high, as they were in 2001, and also when markets are low, as
they are now, he continued. When the markets were high, we had a
drought and no inventory to sell, so we lost money, Wright
explained. In 2002, we have pretty close to average water, but the
price forecast for power is lower than expected, and ?that combination
is putting us in difficulty,? Wright stated.
It became clear to us in December that we would end 2002 in dire
straits, he continued. We also started looking at the 2003 to 2006
period, and we expect revenues will be lower than we thought a year ago,
Wright said. In addition, our current expense forecast is higher
than expected, he added. Among other things, Wright explained that
deferred maintenance at Corps and Bureau hydro projects has led to
declines in generating capability. To bring that capability back,
there must be increases in operation and maintenance (O&M) budgets
over the next several years, he indicated.
If you put all of the pieces together, the forecast for Bonneville's
financial results over the 2002 to 2006 period shows net revenue of $860
million across the period, Wright stated. there's about a 20
percent chance ?we would not lose money? without further cost cuts or
rate adjustments, he said.
There are alternatives to the money-losing scenario, Wright
stated. Bonneville has been talking to people in the region about
possible scenarios and has developed four options for 2002 to 2006 based
on what it has heard, he said.
Under Option One, we would raise rates without additional cost-cutting,
Wright explained. It would take a 5 percent to 10 percent increase
annually to assure the agency wouldn?t lose money, he indicated.
Option Two lays out a very aggressive ? ?I?d call it Draconian?
? scenario of cost-cutting, Wright continued. Under this option,
Bonneville would make any cuts ?that wouldn?t violate the statutes,?
including eliminating the incentive payments for those who own and operate
the federal generating resources; reducing renewables and conservation
initiatives; achieving more efficient fish and wildlife efforts; and
revamping Bonneville's contracts with Enron, he explained.
Option Three would move more risk to the U.S. Treasury, Wright
said. Under this scenario, there's ?a reasonably high
probability? we wouldn?t make the Treasury payment every year, he
pointed out.
Option Four pushes the financial problem out into the future, Wright
continued. We?d be borrowing to cover operating expenses and
pushing those costs off to the future, he explained.
I?m not a fan of options three and four, Wright acknowledged, adding
that those options ?aren?t consistent with our values? of being good
long-term stewards of the federal power resources. But, he said,
there is an argument that given the unique circumstances we face and the
economic conditions in the region, the situation calls for a unique
solution.
Wright asked the Council to step back and look at its fish and wildlife
program. Our current costs for fish exceed $500 million a year,
compared to $150 million in the early 1990s, he said. Wright urged
the Council to consider whether the region is getting the most
cost-effective fish and wildlife program. We?re doing this kind of
evaluation in all other parts of our operation, and we ask that you join
in a partnership to look at this program, he said. I provided you a
budget estimate on fish and wildlife, and I?m not pulling back from it,
Wright said. But he said he is looking at a $50 million reduction in
Bonneville's fish and wildlife spending. ?it's an arbitrary
number,? Wright acknowledged, but it reflects the challenge of getting
costs to a point they can be supported with flat rates.
I?ve met with ratepayers around the region, and I?ve heard some
things that are encouraging, Wright said. We?ve asked people how
they feel about the values we?ve been operating under and laid out for
them the choices we face, he noted. I?d urge you to join with us
and come to our meetings across the region, Wright said. it's
powerful to hear about the impacts of rate increases and also about
reductions in spending, he said. ?We are stewards, not owners of
the asset,? and we need to reflect the values of the region as we come
to terms with our financial situation, Wright concluded.
Council chairman Larry Cassidy thanked Wright for his bluntly delivered
message. This Council is willing to participate with you ? ?we
can?t stand out in the cold? on this, he said. The Council has
undertaken a zero-based budget process for 2004-2005, which may help you
some, but the most serious area for us is fish and wildlife funding,
Cassidy said, adding that the situation calls for careful management so
the region continues to meet its trust and treaty responsibilities to
tribes.
Treasury default is potentially more devastating than the other
alternatives, according to Tom Karier. It threatens the long-term
benefits of the system ? ?we don?t want to lose the whole thing,?
he added. Karier asked if Bonneville is refinancing its non-federal
debt. We are currently refinancing the Washington Public Power
Supply System (WPPSS) debt, Wright responded. We can produce
interest savings that way, and we have taken the debt and pushed it out in
time because we have a problem with access to capital, he said. With
the savings, Bonneville is paying more of its federal debt, Wright
stated.
Much of what we can do on the fish and wildlife side depends on the
quality of the data we have, Eric Bloch said. He urged Wright not to
cut Bonneville's investments in software and other tools that would
increase the agency's capability to track information on fish and
wildlife spending. Wright acknowledged that some infrastructure
investments are necessary. Bloch encouraged Bonneville to reach
beyond the ratepayers in its discussions and talk to fish and wildlife
managers. Have direct conversations with them, he urged.
John Hines wondered whether the region understands Bonneville's
financial situation clearly. If we can further the education
process, I am willing to help, he offered. Hines said that for fish
and wildlife spending, the emphasis should be put on outcomes and not on
dollars spent. If we can continue to increase productivity at less
cost, then we should, he added. Let?s look at what is working and
what's not to make the tough decisions, Hines recommended.
?You no doubt heard an earful? from irrigated agriculture on the
possibility of another rate increase, John Brogoitti said, referring to
Wright?s recent meeting in Umatilla, Oregon. I?ve been hearing
that the irrigators think it is Bonneville's preferred alternative to
raise rates, he said. That would have a huge impact, and I hope you
will be very careful about doing that, Brogoitti cautioned. Farmers
can?t raise their prices if costs go up, he added. The Umatilla
meeting was powerful in terms of educating us about how rate increases
affect people in the real world, Wright replied.
In the future, if you decide to do some cost-cutting, tell us and be up
front, Ed Bartlett urged. it's extremely important for us to know
why you are making cuts, he said, adding that Bonneville has been up front
in the past and he wants that to continue.
Jim Kempton asked if Wright had talked to state and federal managers
and the tribes about another year of emergency operations to get more
water out of the system for power generation. Our emergency last
year was based on reliability concerns, Wright responded. There were
public health and safety issues involved if we hadn?t had enough money
to buy power, he said. I don?t see that situation this year,
Wright stated.
What we?re trying to do here is predict the future, and that is hard
to do, Bloch observed. The predictors at Bonneville didn?t go into
the rate case wanting to lose $865 million, he commented. What has
changed and how can you provide assurances the situation won?t turn
around again? Bloch asked. The fundamental difference between May
2000 and now is that we thought we?d have $800 million in the bank,
Wright responded. ?We lost a ton of money in 2001 and 2002,? he
acknowledged. Our graph shows there is a 20 percent chance we?ll
have no problem ? it's possible, Wright said. But I think it is
too great a risk to do nothing, he indicated. If all of this were
based on future market prices, I wouldn?t be here, Wright
continued. But it's a combination of factors ? higher costs, no
reduction in expenses, and lower market prices, he explained.
We have gone from one extreme to the other, Karier
observed. Much of this seems to be related to the volatility of a
deregulated market, he stated, adding that he appreciates Bonneville's
willingness to look at various proposals with neutrality and an open mind.
We take your challenge to get involved here, Cassidy told Wright.
If we gave you the whole fish and wildlife budget, it wouldn?t solve
your problem, he added.
Wright said there would be a rate decision in October, and he would
make a decision on the future rate-increase/cost-cutting options in
November/December. The most important thing to realize is we have a
four-year problem, he wrapped up.
Public Comment
Chuck Dawsey, manager of the Benton Rural Electric Association (REA),
told the Council that as a full requirements customer of Bonneville, his
utility saw a 66 percent increase in its power bill last October. We?ve
met several times with Steve Wright, and our board has written to
Bonneville about what this increase is doing to our customers, he
reported. I?m concerned that the region may not be getting the
message about what hardship this rate hike is causing, Dawsey indicated.
The REA has started a program of educating people to what is happening
and encouraging its 13,000 customers to write directly to Bonneville and
other leaders in the region about the impacts of the rate increase, he
continued. We?ve had over 1,700 customers respond with letters,
Dawsey reported. Bonneville has pushed consumers to the edge of
their ability to pay for electricity, he stated. The talk of more
increases in rates ?is absurd,? according to Dawsey. ?We?ve
touched the bottom of the customers? pocket,? he added.
Dawsey presented the Council with copies of the ratepayer
letters. ?I?d urge you to read them, especially the handwritten
ones,? he said. Few of our members have time to attend these
public meetings, and if you want their point of view, I encourage you to
read these letters, Dawsey concluded.
Lynn Hatcher, Virgil Lewis and Charlie Storm, Yakama Indian Nation
Dr. David Fast described the Yakama Indian Nation's training and
education program for fish culturists, which originated with a contract
between Bonneville and the tribe in 1988. Through the
Bonneville-funded program, a number of young people from the Yakama Nation
have entered community college and university programs and gone on to earn
their Bachelor of Science degrees in fish culture, he said. Three
graduates of the program showed slides and reported on their experiences
and current positions as technicians and managers at various Yakama tribal
hatchery facilities. This is a beneficial program with concrete
results, one of the presenters stated. It was an honor to be a
student in the training and education program, said another former
student, who is now the assistant research manager at the Cle Elum
Hatchery. it's clear to me this is one of the best expenditures
and most rewarding of all of our fish and wildlife activities, Cassidy
stated.
12. Public Comment on Council Draft Fiscal Year 2004
Budget and Fiscal Year 2003 Revisions (Council document 2002-8)
No members of the public appeared to comment.
The Council meeting adjourned at 11:55 a.m. on Thursday, July 18.
Approved August 14, 2002
s/s Judi Danielson
Vice-Chairman
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