Discussion Paper: The role of the Northwest Power Planning Council

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Background

The Northwest Power Act of 1980 gave the Governors of the four Northwest states valuable tools for addressing regional energy, fish and wildlife issues: an important voice in what is otherwise a federally and utility-dominated hydropower system, significant influence over the investment of ratepayer money in energy, fish and wildlife initiatives, an open forum for public debate, and the capability to provide high-quality, independent analysis of complex resource issues ? the Northwest Power Planning Council. Since its creation, the Council has developed significant expertise in finding integrated solutions for key economic and environmental issues. It is arguable that no four governors and no region in the country have such important tools for managing interstate resources.

The Act also set a challenging agenda, however. For the Act to work, the region has to face issues that are among the most complex, high-stakes natural resource issues anywhere in the world. In dealing with these issues, the region must find a perspective that transcends individual state interests and respects the rights of the region's Indian tribes. And this broader perspective must accommodate a disparate and sometimes conflicting set of federal mandates.

The issues that face the region now are more complex and important than ever before, and they arise in a much different world than that of 1980. The advent of competition in the energy industry has eroded the relevance of energy planning per se, which was one of the Northwest Power Act's central features. Endangered Species Act listings have muted the regional voice in federal hydropower operations that the Northwest Power Act had amplified through the governors. The role of the Bonneville Power Administration, principal financier of energy conservation and fish and wildlife measures under the Act, is changing dramatically. In the midst of these developments, Congress is considering energy legislation that will shape national and regional energy policy for years to come.

These developments raise fundamental questions about the continuing role of the Council. As a regional body, the Council has value if it can address problems that the governors of the four states cannot solve otherwise. There was broad agreement on the need for regional solutions to the problems of 1980. Is this still true in 1998 and beyond? Do regional solutions for a deregulated energy system and conflicting uses of the Columbia River still make sense? Are these problems that can only be effectively addressed through a regional body? Or can the governors deal with them individually?

The Power Planning Council in a time of transition

The Council begins with the proposition that a debate over the continuing role of the Northwest Power Act and the Council is already underway, and that the Act may be amended over the next few years. The region needs to understand the issues that arise in the current transition and determine how its common interest should be represented in the future.

The Council takes the view that one of the primary ways it can add value during this transition is by continuing to provide high-quality, objective analysis. By clarifying regional choices and impacts, measuring them against the purposes of the Northwest Power Act, and generating open, informed debate, the Council can lay a foundation for regional consensus. The Council's work under the governors? auspices in facilitating the Comprehensive Review of the Northwest Energy System, the Transition Board, and the Bonneville Cost Review are examples of this kind of work. Similarly, the Council has undertaken pursuant to congressional request reviews of proposed federal capital investments at the dams, hatchery investments, and fish and wildlife governance. The Council's analysis of Bonneville's potential stranded cost exposure and development of a multi-species framework for fish and wildlife policy are additional examples of these kinds of activities.

Although this work may tend to be analytical and informational, the Council will also continue play an active role in finding regional consensus on these issues. It is true that many of the questions that face the region ? how the region fits into national energy restructuring legislation, the configuration of Snake and Columbia River dams, and the region's future influence in energy and fish and wildlife policy ? are likely to be determined by federal agencies or Congress, not just by the region. However, it is also true that the Northwest will play a powerful role in this debate if it develops an informed consensus on these matters. The Council intends to help the region forge and maintain this consensus so that these issues are not decided without the region's voice.

At the same time, the Council must continue to examine the region's investment in energy alternatives and fish and wildlife recovery. In recent years, the Council has become more and more involved in examining Bonneville Power Administration energy and fish and wildlife costs. The Council sees these activities as valuable both to the region and to Congress.

These observations, together with specific requests from Congress and the Council's statutory responsibilities, suggest several important areas of work:

1. Fish and wildlife

The Northwest Power Act requires the Council to develop a program to ?protect, mitigate and enhance fish and wildlife affected by the development, operation and management of [hydropower] facilities while assuring the Pacific Northwest an adequate, efficient, economical and reliable power supply.? The program, ?to the greatest extent possible, shall be designed to deal with that river and its tributaries as a system.? Moreover, 1996 amendments to the Northwest Power Act require the Council to take advice from an Independent Scientific Review Panel regarding annual Bonneville fish and wildlife funding.

Pursuant to the 1996 legislation, the Council, the region's Indian tribes, fish and wildlife managers, Bonneville and the Council's independent scientific review panel have made progress in establishing a system for ensuring that fish and wildlife funds are well spent. The Council's Independent Economic Analysis Board has helped to ensure the cost-effectiveness of recommended measures. This process will continue to need refinement, including sounder footings in science, clearer policy direction, and wise choices among competing proposals.

Congress has asked the Council to oversee major reviews of proposals for federal capital investments at mainstem dams, and funding for artificial production of anadromous fish. The Council puts a high priority on conducting these activities in an open, public process.

Two major scientific reports on Columbia River fish and wildlife policy have been completed in recent years: the Independent Scientific Group's Return to the River, commissioned by the Northwest Power Planning Council, and the National Research Council's Upstream: Salmon and Society in the Pacific Northwest, commissioned by the U. S. Congress. The Council is working on a scientific and analytical framework for the fish and wildlife policy in the Columbia River based on these reports. The framework would be a system of goals, objectives and strategies that guide fish and wildlife recovery in the Columbia River Basin. It should help provide a scientifically credible way for policy-makers to choose among fish and wildlife recovery strategies; guide the allocation of fish and wildlife funds; and establish yardsticks with which to measure progress and compare effectiveness. Both the Independent Scientific Advisory Board and the Independent Economic Analysis Board could help in this work.

The Northwest governors, the federal agencies and the Basin's Indian tribes are investing considerable time and effort in developing new, collaborative ways to address Columbia River fish and wildlife issues. No process has been formalized, and public review of the specific arrangements for this collaboration needs to take place before any arrangement can be approved. However, if a process is initiated by federal, state and tribal governments, the Council is prepared to help make such a process work.

In addition to these major areas of work, the fish and wildlife division is expected to spend significant amounts of its time providing:

  • Analysis and facilitation of the annual operation of mainstem dams;
  • Staff for the Council-National Marine Fisheries Service Independent Scientific Advisory Board;
  • Analysis of long-term fish and wildlife budget issues; and
  • Facilitation of wildlife, resident fish, and research activities.

2. Energy

The Northwest Power Act requires the Council to develop a power plan ?for implementing conservation measures and developing resources . . . to reduce or meet the Administrator's obligations with due consideration by the Council for (A) environmental quality, (B) compatibility with the existing regional power system, (C) protection, mitigation, and enhancement of fish and wildlife and related spawning grounds and habitat, including sufficient quantities and qualities of flows for successful migration, survival, and propagation of anadromous fish, and (D) other criteria which may be set forth in the plan.? In 1998, the Council is wrapping up a major amendment of the power plan. While the Council believes that power planning, as historically practiced by the Council, will not be useful or necessary in a competitive power market, some elements remain important in the transition to a competitive industry. During this transition, the Council sees several important areas of activity:

The region is taking different approaches to funding and developing conservation and renewable resources than it has taken in the past. The Council was instrumental in establishing the Northwest Energy Efficiency Alliance to focus efforts on transforming markets for promising energy efficiency products and practices. In the future, these activities may be supported by ?public purpose? funding established by the states, local utilities or perhaps federal legislation. The Council's traditional role in establishing benchmarks for cost-effectiveness, identifying market barriers and ways to overcome them; and tracking results is needed to help ensure the effectiveness of ?public purpose? funding.

The Northwest is just beginning the transition from the current vertically integrated, monopoly structure to an open, competitive market. This transition promises to be difficult and drawn out. The changes and institutional shifts are complex. It seems likely that for several years the region may have partial deregulation ? competitive markets for some customers, and continued monopoly service for others. The timing and extent of retail access will differ from state to state. Some issues in this region are unlike those faced by most of the rest of the country. For the Northwest, the challenge is to preserve the benefits of past investments in low-cost resources while creating conditions for efficient markets in the long term. In this environment, the analysis and information the Council can provide can help state and local policy makers ensure that electricity markets are fair, efficient and reliable.

In recent years, the Council has become more involved in examining Bonneville Power Administration energy costs. There is still a debate whether the Council should have an ongoing role in this connection, and there should be further discussion of this subject.

In addition, the Council expects specific work in 1998 to focus in the following areas:

  • Resolving issues surrounding Bonneville and its marketing of power for the 2002-2006 period and beyond. These issues include the subscription process; implementation of the cost review recommendations; evaluation of fish and wildlife costs; stranded costs and stranded cost recovery; and the nature of regulation of Bonneville transmission.
  • Monitoring the role and operation of the Bonneville Power Administration from a regional perspective.
  • Analyzing power system implications of fish and wildlife measures to help policy makers faced with major system configuration and operations decisions.
  • Providing regional representation in the development and implementation of new arrangements for efficient and reliable electricity transmission.

3. Public involvement

The Northwest Power Act requires the Council to ensure widespread public involvement in fish, wildlife and power policies by maintaining comprehensive programs to inform the public, obtaining public views concerning major issues and consulting with Bonneville's customers. The Council remains one of the few places where parties from all parts of the spectrum can stay informed and involved in critical, regional energy and fish and wildlife issues. Public involvement was one of the specific roles identified for a future Council or other regional body by the 1996 Comprehensive Review of Northwest Energy System.

Accordingly, the Council maintains an active and regular outreach to citizen groups, utilities, Indian tribes, fish and wildlife agencies and others. The Council's Public Affairs Division, in concert with state staffs, communicates regularly with these governments and interests, as well as with the news media and members of Congress.

Providing for public involvement in regional energy and fish and wildlife issues, communicating with the public and the news media and disseminating public information will continue to be important objectives for the Council.

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