[Senate Hearing 108-271]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-271
 
          MISCELLANEOUS WATER AND HYDROELECTRIC PROJECT BILLS


                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   on
                                     

                           S. 943                                S. 1355
 
                           S. 1027                               S. 1577
 
                           S. 1058                               H.R. 1284
 
                           S. 1071                               H.R. 2040
 
                           S. 1307                               S. Res. 183
 
                           S. 1308
 

                                     
                               __________

                            OCTOBER 15, 2003


                       Printed for the use of the
               Committee on Energy and Natural Resources




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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
DON NICKLES, Oklahoma                JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho                DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee           RON WYDEN, Oregon
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri            MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana                EVAN BAYH, Indiana
GORDON SMITH, Oregon                 DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                CHARLES E. SCHUMER, New York
JON KYL, Arizona                     MARIA CANTWELL, Washington

                       Alex Flint, Staff Director
                   Judith K. Pensabene, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                    LISA MURKOWSKI, Alaska, Chairman
            BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman

GORDON SMITH, Oregon                 BYRON L. DORGAN, North Dakota
JON KYL, Arizona                     BOB GRAHAM, Florida
LARRY E. CRAIG, Idaho                RON WYDEN, Oregon
JAMES M. TALENT, Missouri            TIM JOHNSON, South Dakota
JIM BUNNING, Kentucky                DIANNE FEINSTEIN, California
CRAIG THOMAS, Wyoming                CHARLES E. SCHUMER, New York
                                     MARIA CANTWELL, Washington

   Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the 
                              Subcommittee

                         Shelly Randel, Counsel
                Patty Beneke, Democratic Senior Counsel






                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Allard, Hon. Wayne, U.S. Senator from Colorado...................     3
Bingaman, Hon. Jeff, U.S. Senator from New Mexico................    12
Broderick, Jim, General Manager, Southeastern Colorado Water 
  Conservancy District, Pueblo, CO...............................    33
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado........     2
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............     2
Dorgan, Hon. Byron L., U.S. Senator from North Dakota............    12
Hon. Ron Wyden, U.S. Senator from Oregon.........................    20
Keys, John W., III, Commissioner, Bureau of Reclamation, 
  Department of the Interior on:
    S. 943.......................................................    13
    S. 1027......................................................    21
    S. 1058......................................................    16
    S. 1071......................................................    22
    S. 1307......................................................    24
    S. 1308......................................................    26
    S. 1355......................................................    29
    H.R. 1284....................................................    30
Murkowski, Hon. Lisa, U.S. Senator from Alaska...................     1
Musgrave, Hon. Marilyn, U.S. Representative from Colorado........     8
Smith, Hon. Gordon, U.S. Senator from Oregon.....................    10
Wood, Pat, III, Chairman, Federal Energy Regulatory Commission...    31



                                APPENDIX

Additional material submitted for the record.....................    39




          MISCELLANEOUS WATER AND HYDROELECTRIC PROJECT BILLS

                              ----------                              


                      WEDNESDAY, OCTOBER 15, 2003

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.

    The subcommittee met, pursuant to notice, at 2:35 p.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski presiding.

           OPENING STATEMENT OF HON. LISA MURKOWSKI, 
                    U.S. SENATOR FROM ALASKA

    Senator Murkowski. I'm calling to order the Subcommittee on 
Water and Power. Welcome to all who are with us this afternoon. 
Special welcome to you, Senator Allard. I understand we're also 
going to be expecting Congresswoman Musgrave in about 20 
minutes or so.
    We have nine bills and one resolution before the 
subcommittee today. We have S. 943, a bill to authorize the 
Secretary of the Interior to enter into one or more contracts 
with the city of Cheyenne, Wyoming, for the storage of water in 
the Kendrick Project. We have S. 1027 and H.R. 2040, which are 
bills to amend the Irrigation Project Contract Extension Act of 
1998 to extend certain contracts between the Bureau of 
Reclamation and certain irrigation water contractors in Wyoming 
and Nebraska. We have S. 1058, a bill to provide a cost-sharing 
requirement for the construction of the Arkansas Valley Conduit 
in Colorado. We have S. 1071, a bill to authorize the Secretary 
of the Interior, through the Bureau of Reclamation, to conduct 
a feasibility study on a water conservation project within the 
Arch Hurley Conservancy District in New Mexico; S. 1307, a bill 
to authorize the Secretary of the Interior, through the Bureau 
of Reclamation, to assist in the implementation of fish passage 
and screening facilities at non-Federal water projects.
    We have S. 1308, a bill to authorize the Secretary of the 
Interior to pursue and complete actions related to the 
implementation of a U.S. District Court Consent Decree; S. 
1355, a bill to authorize the Bureau of Reclamation to 
participate in the rehabilitation of the Wallowa Lake Dam in 
Oregon; and S. 1577, a bill to extend the deadline for 
commencement of construction of a hydroelectric project in 
Wyoming; H.R. 1284, a bill to amend the Reclamation Projects 
Authorization and Adjustment Act of 1992 to increase the 
Federal share of the cost of the San Gabriel Basin 
demonstration project; and S. Res. 183, a resolution 
commemorating 50 years of adjudication under the McCarran 
Amendment of rights to the use of water.
    Just reading the titles probably will take as long as some 
of the testimony we may hear this afternoon. I know many of the 
bill proponents have submitted written testimony, and I will 
look forward to reading that, as well as hearing from the 
administration and other witnesses.
    [The prepared statements of Senators Domenici and Campbell 
follow:]
       Prepared Statement of Hon. Pete V. Domenici, U.S. Senator 
                            From New Mexico
    Madam Chairman, thank you for holding this subcommittee hearing 
today and for including S. 1071, authorization for a feasibility study 
on a water conservation project within the Arch Hurley Conservancy 
District in New Mexico including cost sharing options and debt relief. 
I also want to commend Senator Bingaman for introducing this 
legislation.
    Arch Hurley is a small conservancy district on the eastern side of 
New Mexico. The District historically receives little or no water 
supply and has consistently had trouble meeting its repayment 
obligation to the Bureau of Reclamation. Additionally, as a result of 
receiving so little water, the system has lacked adequate maintenance 
and substantial parts of the system have fallen into disrepair.
    As you know, Madam Chairman, New Mexico, along with other western 
states, is facing a severe drought. While authorizing this study to 
determine the feasibility of a water conservation project does not seem 
like a huge undertaking, it will make a big difference to the members 
of this district who are already feeling the effects of this worsening 
drought. Conserving water, no matter how vast or small, is a worthy 
goal.
    Last year, I began helping the Arch Hurley Conservancy district get 
a start on some of their conservation objectives by providing funds 
through the energy and water appropriations bill. I believe this bill 
is the next step in helping them move forward.
    I'm not certain where the results of this study will lead. I don't 
know if some of the ideas being proposed, specifically taking water 
saved from the Arch Hurley Conservancy District and conveying it to the 
Pecos River Basin, will work. However, I know that the Pecos River 
Basin is very water short and yet, has so many competing demands--
including agriculture, endangered species and compact delivery 
obligations. The drought has created some extreme circumstances and in 
these desperate times, we ought to give every option a good hard look.
    Madam Chairman, thank you again for holding this hearing. I look 
forward to hearing the testimony.
                                 ______
                                 
          Prepared Statement of Hon. Ben Nighthorse Campbell, 
                       U.S. Senator From Colorado
    Mr. Chairman, I would like to briefly talk about my Resolution 
commemorating 50 years of adjudicating water rights under the McCarran 
Amendment and commending Western states' management of water.
    In the West, water is as precious and scarce a resource today as 
ever. As the primary limiting resource for communities, industry, and 
agriculture in our region, water must be managed in a way that takes 
into account their diverse interests.
    Correspondingly, water law out West is as distinct from the East as 
are the histories of these two great regions of our nation. In the 
West, water is a rare commodity, and is therefore regarded under the 
law as a property right sold apart from the land.
    Traditionally, each state managed water based on its particular 
resources, geography, population, and municipal and industrial needs. 
Western states all recognized and favored water adjudication systems 
according to the doctrines of prior appropriation and beneficial use.
    However, during the New Deal's expansive programs, the federal 
government sought to limit established states' jurisdiction over water 
and rode roughshod over State interests, often completely ignoring 
private property rights and resisting cooperative agreements to manage 
water. The States fought federal arm-twisting, but couldn't do much 
against the U.S. as sovereign. The federal bullying got so bad that in 
1951, a Reader's Digest article criticized the U.S.'s strongarm tactics 
in the famous Santa Margarita water conflict stating, ``the lack of 
moral sensitivity in our Government has put into jeopardy thousands of 
our small landowners; their property, homes, savings and their 
future.''
    Thankfully, Senator Patrick McCarran of Nevada and other like-
minded Senators, successfully defended States' interests and got a very 
simple provision passed into law. In short, the law that we are 
celebrating today waives the United States' sovereign immunity that it 
can be joined in general state adjudications of rights to use water.
    Although a simple concept, the McCarran Amendment effectively 
leveled the playing field, requiring Uncle Sam to work within the State 
system he implicitly helped to establish.
    The breadth of the McCarran Amendment has been defined by several 
U.S. Supreme Court cases. The Court concluded that though the amendment 
itself might be short in length, its effect was far-reaching. The High 
Court stated that McCarran was ``an all-inclusive statute concerning 
the adjudication of `the rights to the use of water of a river system' 
'' which ``has no exceptions'' and ``includes appropriat[ive] rights, 
riparian rights, and reserved rights.''
    It is undeniable that the history of the West is linked to the 
federal government. Since the federal government maintains vast 
landholdings, the future of the West will continue to be linked to 
Uncle Sam. Similarly, the management of property and natural resources, 
of which water is both, has been and shall remain a state function.
    The purpose of the McCarran Amendment was to prevent federal 
bullying of private and state interests in managing water, and to 
recognize water as a state resource. McCarran encourages the federal 
government to work together with the States.
    My resolution comes at a time when much of the West continues to 
experience record drought conditions. Recognizing this, the federal 
government must remember the history of the McCarran amendment and look 
to the states in adjudicating water.
    Thank you.

    Senator Murkowski. Since there are no Senators present to 
make any opening statements, I would invite you, Senator 
Allard, if you would like to make your remarks at this time.

         STATEMENT OF HON. WAYNE ALLARD, U.S. SENATOR 
                         FROM COLORADO

    Senator Allard. Thank you very much, Madam Chairman, for 
convening this hearing on the Arkansas Valley Conduit. I also 
want to thank the many people from Colorado who are here this 
morning and who have helped make this moment possible. It is an 
important day for an important bill. It's not always easy for 
them to get away from their daily duties, as you're well aware 
of, when we're from the western part of the United States and 
you're in the extreme far western part.
    If you will excuse a little demonstration here as we pan 
the committee, I thought it was only appropriate that we start 
with this visual aid, Madam Chair, because when we're talking 
about the Arkansas Fryingpan project, which is a project that 
came into being some 50 years ago, this was one of the 
fundraising mechanisms. They had to create the project. And in 
Colorado, we have--I will just use kind of a pointer here--we 
have the western part of the State, and the eastern plains that 
start over here. And the Fryingpan project actually started 
right in there, and brings water clear down here, and then over 
into Kansas. So these are pretty large projects. And Colorado 
has been known worldwide for the way it manages its water, and 
we do live in a semi-arid area, and water is a very valuable 
resource to us.
    I will now go ahead and talk a little bit about the bill 
after just giving you this brief outline, and I will refer to 
the chart a little bit later on in my testimony. But, first of 
all, I would like to thank the Governor of Colorado, Bill 
Owens, for his support of the conduit, and I would like to 
introduce our witnesses. In addition to Congresswoman Musgrave, 
when she shows up, Jim Broderick, general manager of the 
Southeastern Water District, is here. You should be hearing 
from him, and he will provide the primary testimony on behalf 
of the conduit. And then he is accompanied by Kevin Kearney, 
Ohio County Commissioner, and Chuck Hannigan, trustee for the 
town of Swink. So they're all here, and we appreciate your 
being here.
    I want to welcome the Commissioner, also, and thank him for 
taking the time to meet with me several weeks ago. And your 
commitment to working with me on the bill is much appreciated, 
and I'm confident we can work through any outstanding issues in 
order to reach an agreeable solution.
    Madam Chairman, a historian and poet, once penned that the 
history of Colorado would be written in water. In southeastern 
Colorado, home of the Arkansas River, our history tells a story 
of an economically depressed area struggling to find clean, 
inexpensive water that meets ever-increasing Federal water 
standards.
    It is for this reason that Senator Campbell and I have 
introduced S. 1058, and that Congresswoman Musgrave and 
Congressman McInnis introduced an identical version in the 
House of Representatives. S. 1058 will ensure the construction 
of the Arkansas Valley Conduit, which is a pipeline that will 
provide the small, financially-strapped towns and water 
agencies along the lower Arkansas River with safe, clean, 
affordable water by creating a 75 Federal, 25 local, cost-share 
formula for them to help offset the construction costs of the 
conduit. This legislation will protect the future of 
southeastern Colorado's drinking-water supplies and prevent 
further economic hardship.
    It is extremely important to note that the Arkansas Valley 
Conduit was originally authorized by Congress over 40 years 
ago, in 1962, as a part of the Fryingpan-Arkansas Project. The 
original Fry-Ark Project--we've shortened it down--authorizing 
legislation, which is Public Law 87-50 and House Document 
number 187, Project Plan Report, grants the Secretary of the 
Interior the authority to construct the Arkansas Valley 
Conduit.
    Because of the authorizing statute's lack of a cost-share 
provision and Southeastern Colorado's depressed economic 
status, this conduit was never built. Until recently, there was 
no need for it. The region was fortunate enough to enjoy an 
economical and safe alternative to pipeline transportation of 
the project water, the Arkansas River. Unfortunately, this is 
no longer the case. As far back as 1950, the Bureau of 
Reclamation determined that the quality of local drinking-water 
supplies were unacceptable, and this can be found in House 
Document number 187 in the 83rd Congress in response to a 
number of water providers falling out of compliance with 
existing EPA water quality standards.
    The local communities formed a committee to evaluate 
alternative approaches to solving this problem. The committee 
ultimately hired an independent engineering firm to evaluate 
two competing options, constructing a series of treatment 
facilities and constructing the Arkansas Valley Conduit. The 
engineers concluded that local communities are unable to fund 
either solution.
    Under existing circumstances, the long-term cost of water 
treatment, including potential new Federal standards and the 
cost of disposal of treatment facility waste, removed treatment 
as a viable long-term solution. The fixed long-term cost of the 
pipeline contributed to the engineers recommending this conduit 
as the most viable solution. The communities cannot afford to 
construct the pipeline alone, nor can they afford to build 
individual treatment plants, and yet they have these onerous 
regulations from the Environmental Protection Agency there to 
not only maintain good quality water, but safe water.
    The report found that the full financial capabilities of 
the counties, cities, and water agencies in the project area 
could finance approximately 25 percent of the projected cost. 
You will see that reflected in the bill that we have before 
you. In other words, the communities may be too poor not to 
spend the 176 million on the conduit, in partnership with the 
Federal Government. When you weigh the promise of the conduit 
versus the fate of building new individual water treatment 
facilities, it is clear that the conduit is the best choice of 
action.
    The Arkansas Valley Conduit will deliver fresh, clean water 
to dozens of valley communities and tens of thousands of people 
along the river. To be exact, the conduit will supply 16 cities 
and 25 water agencies in Bent, Crowley, Kiowa, Prowers, Pueblo, 
and Otero Counties with water when completed. The largest city 
served by the conduit is La Junta, Colorado, which has a 
population of around 12,000.
    At this time, if the members of the committee will direct 
their attention to the map, they will see exactly where the 
conduit's beneficiaries are situated. You will see it outlined 
here on the map. That area is about the size of the State of 
New Hampshire if you want to draw some sort of comparison. And 
after we've transferred the water over here from Pitkin County 
down to Pueblo, then we have the Pueblo Reservoir, and they 
actually have constructed in that area, right there, a conduit 
out. There's no conduit, because they couldn't afford it. And 
the communities that are poor and struggling along the Arkansas 
River is right down here. This is all an agricultural area.
    And like I said, the largest community we have in there is 
12,000. And it is just impossible, without having the cost-
share, that they're ever going to meet the EPA requirement. So 
this is very viable to an area of Colorado that is suffering 
from the very severe drought that we had last year, and one 
that over the years whose economy has changed to the point 
where it's just not possible for the communities to go back to 
the residents and realistically expect them to pay a full cost 
of the project. And so we have put in the bill the 75/25 
percent match, the consultants feeling that the 25 percent 
match, although a challenge, is something that is doable for 
the area.
    As I mentioned, the local sponsors of the project have 
completed an independently funded feasibility study of the 
conduit and have developed a coalition of support from water 
users in southeastern Colorado. I'm also pleased that the State 
of Colorado has contributed a great deal of funding for the 
study through the Colorado Water Conservation Board. These 
local stakeholders continue to explore options for financing 
their share of the costs and are working hard to complete the 
final details surrounding the organization that will oversee 
the conduit project.
    At this time, I would ask that a letter of support from the 
Southeastern Colorado Water Conservancy District, the entity 
responsible for the Fry-Ark Project, be entered into the 
record.*
---------------------------------------------------------------------------
    * The referenced material has been retained in subcommittee files.
---------------------------------------------------------------------------
    Senator Murkowski. Without objection.
    Senator Allard. I also would like to point out a letter 
written last year by the Bureau of Reclamation that applauded 
the effort made to introduce the legislation and stated, and I 
quote, ``Reclamation has a long demonstrated capability of 
designing and constructing projects like the conduit,'' and 
that the Bureau looked forward to working with the local 
stakeholders on the project. With the help of my colleagues, 
the promise made by Congress 40 years ago to the people of 
Southeastern Colorado will finally become a reality.
    Before I conclude my remarks, I ask that my extended 
remarks be printed in the record, and the extended remarks 
contain additional points regarding additional concerns and 
justifications.
    Senator Murkowski. Thank you. Those remarks will be 
included in the record.
    [The prepared statement of Senator Allard follows:]
  Prepared Statement of Hon. Wayne Allard, U.S. Senator From Colorado
    Madam Chairman, a historian and poet once penned that the history 
of Colorado would be written in water. Today, in the midst of the third 
year of unprecedented drought, this prediction has proven an accurate 
account of life in the headwater state. The drought is also a strong 
reminder that water is indeed our most precious natural resource. In 
Southwestern Colorado, home of the Arkansas River, it is difficult to 
find clean, inexpensive water that meets the ever increasing scrutiny 
of federal water standards.
    It is for this reason that Senator Campbell and I introduced S. 
1058, and that Congresswoman Musgrave introduced an identical version 
in the House of Representatives. S. 1058 will ensure the construction 
of the Arkansas Valley Conduit, which is a pipeline that will provide 
the small, financially strapped towns and water agencies along the 
lower Arkansas River with safe, clean, affordable water. By creating a 
75 federal/25 local cost share formula to help offset the construction 
costs of the Conduit, this legislation will protect the future of 
Southeastern Colorado's drinking water supplies, and prevent further 
economic hardship.
    It is extremely important to note that the Arkansas Valley Conduit 
was originally authorized by Congress over forty years ago, in 1962, as 
a part of the Fryingpan-Arkansas Project. The original Fry-Ark Project 
authorizing legislation (Public Law 87-50 and House Document No. 187--
Project Plan Report) grants the Secretary of the Interior the authority 
to construct the Arkansas Valley Conduit. Our legislation simply adds a 
cost-share to the already-existing provision. Due to the authorizing 
statute's lack of a cost share provision and Southeastern Colorado's 
depressed economic status, the Conduit was never built. Until recently, 
there was no need for it--the region was fortunate to enjoy an 
economical and safe alternative to pipeline-transportation of Project 
Water: the Arkansas River. Unfortunately, this is no longer the case. 
While the federal government has continued to strengthen its unfunded 
water quality standards, these communities have fallen further and 
further behind in attaining them. As far back as 1950, the Bureau of 
Reclamation determined that the quality of local drinking water 
supplies were ``unacceptable'' (House Document Numbered 187, Eighty-
third Congress).
    In response to a number of water providers falling out of 
compliance with existing EPA water quality standards, the local 
communities formed a committee to evaluate alternative approaches to 
solving this problem. The committee ultimately hired an independent 
engineering firm to evaluate two competing options: constructing a 
series of treatment facilities and constructing the Arkansas Valley 
Conduit. Under the treatment facility scenario, individual 
municipalities would face construction costs of $20 million to $40 
million each. This so-called ``no action'' alternative could cost 
communities as much as $187 million in total. Estimates on the cost of 
the Conduit hover around $176 million for the federal government share 
(this figure may be inflated because it is based on a $235 million net-
present value over 50 years, and includes operation and maintenance 
costs that we have assured the Bureau are not to be included in their 
match requirement).
    The engineers concluded that local communities are unable to fund 
either solution under existing circumstances. The long-term costs of 
water treatment, including potential new federal standards and the cost 
of disposal of treatment facility waste, remove treatment as a viable 
long-term solution. The fixed long-term costs of the Conduit 
contributed to the engineers recommending this solution. The report 
found that the ``full financial capabilities of the counties, cities, 
and water agencies in the project area could finance approximately 25 
percent of the project cost'' for the Conduit. In other words, the 
communities may be too poor not to spend the $235 million in 
partnership with the federal government. When you weigh the promise of 
the conduit versus the fate of building new individual water treatment 
facilities, it is clear that the conduit is the best choice of action. 
S. 1058 is essential if we are to bring local water providers into 
compliance with federal water quality standards and it will finally 
provide a long term solution to the region's water quality concerns.
    The Arkansas Valley Conduit will deliver fresh, clean water to 
dozens of valley communities and thousands of people along the river. 
To be exact, the Conduit will supply 16 cities and 25 water agencies in 
Bent, Crowley, Kiowa, Prowers, Pueblo and Otero counties, with water 
when completed. The largest city served by the Conduit is La Junta, 
Colorado (population nearly 12,000). At this time, if the members would 
direct their attention to the maps, they will see exactly where the 
Conduit's beneficiaries are situated. One of the most stunning facts 
that I would like to point out--the Conduit will serve an area slightly 
larger than the state of New Hampshire.
    As I mentioned, the local sponsors of the project have completed an 
independently funded feasibility study of the Conduit, and have 
developed a coalition of support from water users in Southeastern 
Colorado. I am also pleased that the State of Colorado has contributed 
a great deal of funding for the study through the Colorado Water 
Conservation Board. These local stakeholders continue to explore 
options for financing their share of the costs, and are working hard to 
complete the final details surrounding the organization that will 
oversee the Conduit project.
    At this time, I would ask that a letter of support from the 
Southeastern Colorado Water Conservancy District, the entity 
responsible for the Fryingpan-Arkansas Project, be entered into the 
record, along with the list of potential beneficiaries of the Conduit. 
I would also like to point out a letter written last year by the Bureau 
of Reclamation that applauded the effort made to introduce the 
legislation, and stated that ``Reclamation has a long demonstrated 
capability of designing and constructing projects like the Conduit,'' 
and that the Bureau looked forward to working with the local 
stakeholders on the project. In addition, I ask that an editorial from 
the Denver Post be entered into the record as well.
    Now I would like to turn my attention to the Bureau of Reclamation 
and some of the questions they have raised pertaining to the 
legislation. I first want to make it clear that the purpose of the 
legislation is to provide a 75 federal/25 local cost share formula for 
the costs of construction. The local beneficiaries are to be 100 
percent responsible for operation and maintenance. If the Bureau of 
Reclamation believes that the language of S. 1058 does not reflect this 
commitment, I am prepared to make such changes as are necessary to 
ensure local payment of O&M. I also want to make it clear that the 
current language of S. 1058 will be modified so that it clearly states 
the local share will be 25 percent, no more, no less, and that the 
federal share shall be 75 percent of construction costs, no more, no 
less.
    I also understand that the Bureau of Reclamation may be concerned 
about the cost of the project. As a member of the United States Senate, 
you have my full commitment that, if the cost-share language is 
approved, I will work tirelessly on behalf of this project to make sure 
that it does not impact other important Reclamation projects. This 
project was authorized 40 years ago. If the money is not spent now, it 
will be spent later as communities seek federal grants to fund their 
projects individually instead of using a system-wide conduit approach.
    I have also received a revised copy of the legislation from Senate 
Legislative Counsel. The new draft includes provisions for an overall 
cost-ceiling on the construction costs of the conduit. Should the 
Bureau of Reclamation prefer a bill with a cost-share, I have no doubt 
that an agreeable cost-ceiling mechanism can be incorporated into the 
bill.
    I would also like to note that it has been 23 years since the last 
feasibility study was performed. However, the local sponsors have 
completed a feasibility study that examined alternatives to 
construction of the Conduit. Its conclusion is that the alternative 
(i.e., to build a system of regional water treatment facilities) is too 
expensive for the communities involved. In addition, the Bureau of 
Reclamation, when presented with the question of whether a 
Reconnaissance Study was necessary, informed the beneficiaries that a 
Re-Evaluation Statement of the conduit was the proper course of action. 
It is my understanding that Reclamation intends to use the 
beneficiaries' feasibility study.
    The Bureau of Reclamation is also concerned that the cost-share 
legislation will create a new precedent and that it opposes changes to 
the Bureau's standard 100 percent repayment policy. I realize that my 
legislation is a change to standard policy--indeed that is the very 
purpose of the legislation. However, there are at least 9 other 
authorized projects that legislatively change the standard repayment 
policy. Therefore, the Arkansas Valley Conduit cost-share would not set 
a precedent--the precedent has already been made.
    I also note the speculation regarding the introduction of a 
comprehensive rural water bill. While I may be supportive of such 
legislation, it should not undermine the effort of the Arkansas Valley 
Conduit, a project authorized by Congress over 40 years ago. The 
economic reality that spurred introduction of the Conduit legislation 
in the first place will not change upon the introduction of a new 
policy. Nor can the communities wait.
    With the help of my colleagues, the promise made by Congress forty 
years ago to the people of Southeastern Colorado, will finally become a 
reality.
    Madam Chairman, thank you for your leadership and for holding this 
hearing today.

    Senator Allard. Thank you, Madam Chairman. And thank you, 
Commissioner Keys, for working with my office on the 
legislation and for the dedicated work of your staff. And, as 
always, thank you, Madam Chairman, for your leadership and for 
holding this hearing today.
    And now, Madam Chairman, it gives me a great deal of 
pleasure to introduce to you our new Congressperson from 
Colorado for the 4th District--which is the District that I 
represented before I was elected to the U.S. Senate, 
Congresswoman Marilyn Musgrave.
    Senator Murkowski. Thank you. Welcome to the subcommittee.

              STATEMENT OF HON. MARILYN MUSGRAVE, 
               U.S. REPRESENTATIVE FROM COLORADO

    Ms. Musgrave. Thank you, Madam Chairman, members of the 
subcommittee. Thank you for holding this important hearing and 
for allowing me to come before you today and talk about one my 
highest legislative priorities, building the Arkansas Valley 
Conduit.
    First, let me begin by commending Senator Allard for 
introducing S. 1058 and for continually fighting to secure 
quality drinking water for the people of southeastern Colorado. 
My colleague, Mr. McInnis, and I have introduced a companion 
measure in the House, H.R. 2102, which has been cosponsored by 
Representative Chris Cannon, chairman of the House Western 
Caucus. H.R. 2102 would provide the much-needed 75-percent-
Federal/25-percent-local cost-share requirement to ensure that 
residents of the economically depressed Arkansas Valley will 
not face even more years of poor water quality. As you may 
know, the Arkansas Valley Conduit was first authorized in 1962 
as part of the Fryingpan-Arkansas Project. However, lawmakers 
recognized the poor water quality found in the Arkansas Valley 
as early as 1950, when the Secretary of the Interior in the 
Bureau of Reclamation called for improved municipal water in 
every town in the valley, except for Colorado Springs. Today, 
residents of southeastern Colorado are still waiting for the 
clean, safe, and affordable drinking water they were promised 
over 40 years ago. It is crucial that we pass this legislation, 
because the conduit is even needed more today than it was in 
1962.
    In its February 2002 report, the Colorado Department of 
Public Health and Environment stated that, quote, ``Lower 
Arkansas River in Colorado is the most saline stream of its 
size in the United States. The average salinity levels 
increased from 300 parts per million, TDS, east of Pueblo, to 
over 4,000 parts per million near the Kansas State line,'' end 
of quote. Treating the water for saline and other water-quality 
constituents such as iron and manganese is a major expense, 
which places a tremendous financial burden on these small 
communities.
    Instead of forcing these local communities to continually 
reinvest in treatment facilities that will no doubt have to be 
updated to fit ever-changing environmental regulations, we 
should carry out the plans Congress envisioned 40 years ago and 
build a conduit. These communities cannot afford to pay the 
entire expense of constructing the conduit or the cost of 
continually updating expensive treatment facilities. But, even 
more important is that these communities cannot afford to 
continue drinking the water flowing through the lower Arkansas 
Valley.
    As time has passed, the cost of construction has gone up, 
while the water quality has gone down. This year, we have an 
opportunity to end this cycle by building the conduit through 
the financially feasible cost-share requirement. Without this 
cost-share, the families of Southeastern Colorado will never be 
able to afford the clean water they need or be able to meet the 
long-term Federal mandates and costly environmental standards 
we impose on them.
    However, water quality is not the only issue at stake here. 
Water availability is equally important to the agricultural 
economy of the Arkansas Valley, which has been plagued for 5 
years of disastrous drought. Building the conduit would not 
only protect the water quality, but it also would prevent 
excess moisture from seeping into the ground or being absorbed 
by tamarisks, a water-wasting plant meant to prevent erosion. 
Building the Arkansas Valley Conduit is the best alternative 
for the water quality problems in southeastern Colorado. The 
cost to the Federal Government is worth the benefits of 
providing these small economically depressed communities with 
clean, safe, affordable drinking water.
    Thank you so much, Madam Chairman, for allowing me to 
testify. And thank you, Senator Allard. Building the Arkansas 
Valley Conduit is the right thing to do, and I respectfully ask 
you and your committee to move this legislation forward.
    Senator Murkowski. Thank you very much. Senator Allard, if 
you would like to join us up here.
    Senator Allard. Thank you, Madam Chairman, I would be 
pleased to join you for awhile.
    Senator Murkowski. Before we move to Commissioner Keys, I 
would ask any of the committee members if they would like to 
make opening statements.
    Senator Smith.

         STATEMENT OF HON. GORDON SMITH, U.S. SENATOR 
                          FROM OREGON

    Senator Smith. Thank you, Madam Chairwoman. I have a rather 
lengthy opening statement, so I would just ask that it be 
included in the record.
    Senator Murkowski. Without objection.
    Senator Smith. I would summarize by simply noting the three 
Oregon bills you have included in today's hearing. S. 1355, 
which I have cosponsored with Senator Wyden. It involves a 
rehabilitation of the Wallowa Lake and Dam, and it's important 
that this happen. It has widespread local support, I tell you 
up front. It is not a Federal dam, but it achieves enormous 
Federal purposes, from the tribal trust and in recovering 
endangered species.
    And I would ask that statements from Jeff Obeson of the 
Grand Ronde Watershed Council, and from Anthony Dean Johnson, 
chairman of the Nez Perce Tribal Executive Committee, be 
included in the record.
    Also, Madam Chairman, a second bill, which is S. 1308, 
again which Senator Wyden and I have introduced--or Senator 
Wyden introduced and I have cosponsored. It allows the Federal 
Government to undertake Federal implementation of a district 
court consent decree involving the Savage Rapids Dam. Again, 
this would, in summation, allow a dam to be removed, pumps to 
be provided. So we would leave the agricultural community 
whole, but allow tremendous additional salmon spawning grounds 
to be added to the Grand Ronde River of Oregon.
    Finally, the last bill that involves my State is S. 1307, 
which allows the Bureau of Reclamation to assist in the 
implementation of fish passage and fish screening facilities at 
a non-Federal water project in the Columbia River Basin. This 
is very critical to hydropower operations, along with meeting 
endangered species obligations, and will go a long way to help 
closing the chasm between farmers, people who use electricity, 
and creating a more fish-friendly environment in that part of 
my State.
    Thank you, Madam Chair.
    [The prepared statement of Senator Smith Follows:]
   Prepared Statement of Hon. Gordon Smith, U.S. Senator From Oregon
    Madam Chairwoman, I appreciate your convening this legislative 
hearing today to take testimony on several water bills pending before 
the subcommittee. I know that these bills are important to many of our 
colleagues and to a number of communities throughout the western United 
States. Three of these bills would affect water users in Oregon, and I 
want to thank you for considering those bills today. I look forward to 
hearing from the witnesses.
    The first bill I have introduced, S. 1355, which is cosponsored by 
my colleague from Oregon, would authorize the Secretary of the 
Interior, acting through the Commissioner of Reclamation, to 
participate in both the rehabilitation of Wallowa Lake Dam and in the 
Wallowa Valley Water Management Plan. Identical legislation passed the 
Senate last Congress, but was not enacted into law.
    The actions authorized by S. 1355 enjoy widespread local support--
including water users, the Nez Perce Tribe, and the local watershed 
council--and will improve water management and salmon habitat in the 
watershed. The local entities have developed these two projects in 
consultation with numerous state and federal agencies. The projects 
provide a positive approach to resolving the water challenges facing 
the basin. I am proud of all of the work done to date by the project 
proponents to ensure broad-based support for their efforts.
    I would like to ask unanimous consent to include statements from 
Jeff Oveson of the Grand Ronde Model Watershed Council and from Anthony 
D. Johnson, Chairman of the Nez Perce Tribal Executive Committee, in 
the record. I would also like to submit for the hearing record an 
updated version of the Wallowa Lake Dam Rehabilitation Program,* dated 
December 27, 2002, which details the extensive assessments and design 
that have already gone into this dam rehabilitation effort.
---------------------------------------------------------------------------
    * Retained in subcommittee files.
---------------------------------------------------------------------------
    While Wallowa Lake Dam is not a federal facility, I view the 
projects authorized in this bill as critical to meeting the federal 
government's tribal trust obligations in the basin, as well as helping 
to recover federally listed endangered species. It even achieves the 
objectives--on a site-specific basis--of the authority for off-site 
mitigation being sought by Reclamation under the terms of the December 
2000 biological opinion for Columbia River hydropower operations.
    The second Oregon-specific bill to be heard today is S. 1308, which 
Senator Wyden introduced and I have cosponsored. This bill authorizes 
the Secretary of the Interior, acting through the Bureau of 
Reclamation, to undertake activities for federal implementation 
(including construction) in accordance with U.S. District Court Consent 
Decree ``United States, et al., v. Grants Pass Irrigation District, 
Civil No. 98-3034-HO,'' entered into on August 27, 2001.
    The consent decree ended years of litigation about the impact of 
Savage Rapids Dam on salmon runs in the Rogue River. Under the terms of 
the decree, the District is to install pumps to deliver its irrigation 
water supplies. Following the installation and testing of those pumps, 
the dam will be removed.
    This consent decree stipulates that the Grants Pass Irrigation 
District may no longer operate the Savage Rapids Dam after November 1, 
2005, although the court may grant a one-year extension. However, in 
order to ensure that the District's patrons continue to receive 
irrigation water, it is crucial that the new pumps be designed, built 
and tested before the district is required to stop using the dam.
    The Bureau of Reclamation has been working with the District for 
several decades, having completed a study on fish passage improvements 
in 1995. Reclamation is operating under existing authority to design 
the pumps, but additional authority is needed to build and install 
them.
    Early on, I made a commitment to help the Grants Pass Irrigation 
District resolve the controversies surrounding the dam in a manner 
acceptable to the District and its patrons, and in a way that left the 
District economically viable. This bill achieves both those goals.
    I recognize that dam removal proposals can be controversial. This 
facility, however, is not a large multi-purpose dam. It does not 
generate electricity, does not provide flood control, and does not 
affect commercial navigation. It is owned by the Grants Pass Irrigation 
District, whose patrons and board have voted to accept the terms of the 
consent decree.
    The District has agreed to give up its use of the dam and to allow 
for its removal in order to benefit fisheries, not because the dam is 
no longer usable for irrigation purposes.
    Because of this benefit, neither the consent decree nor the 
legislation includes any requirement for the District to repay the 
federal government for the costs associated with the installation of 
the pumps or the removal of the dam. If Reclamation is going to seek 
repayment, we will clarify our intent that no repayment by the District 
is required by amending the legislation to stipulate that the funds 
made available are non-reimbursable and non-returnable.
    I look forward to working with the Grants Pass Irrigation District 
and the other stakeholders to complete this effort. This is an 
opportunity to restore salmon runs while maintaining an agricultural 
way of life for the patrons of the District.
    Finally, Madam Chairwoman, the Subcommittee will take testimony on 
S. 1307, legislation which I sponsored to enable the Bureau of 
Reclamation to assist in the implementation of fish passage and fish 
screening facilities at non-federal water projects in much of the 
Columbia River basin. This bill is similar to legislation submitted to 
the Congress by the Administration during the 107th Congress.
    The bill is necessary to ensure that the Bureau of Reclamation can 
fulfill its obligations under the December 2000 biological opinion for 
Columbia River hydropower operations. It is my understanding that this 
authority is still needed, even though the biological opinion itself is 
being modified as a result of a federal court ruling.
    Before introducing this bill, I circulated the Administration's 
draft legislation to numerous stakeholders throughout the basin. To the 
extent possible, I have incorporated changes to address issues and 
concerns raised at that time.
    In closing, Madam Chairwoman, I appreciate your leadership on these 
water issues of importance to so many Oregonians. I look forward to 
working with you to move these bills through the process in an 
expeditious manner.

    Senator Murkowski. Thank you. And your extended comments 
will be included in the record.
    Senator Bingaman.

         STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Bingaman. Thank you very much, Senator Murkowski, 
for conducting the hearing today; both to you and to Senator 
Dorgan, thanks for doing this.
    Let me mention just one of the bills that does relate to my 
State and which I sponsored, and am very appreciative at being 
included as one of the bills to be considered. This is S. 1071. 
It concerns possible water conservation project involving the 
Arch Hurley Water Conservation District in eastern New Mexico. 
It authorizes the Secretary of the Interior to conduct a 
feasibility study on the proposed water conservation project in 
consultation with the Arch Hurley Conservation District and 
with the New Mexico State Engineer.
    The project concept that was involved here was developed by 
the conservation district. It could play a very significant 
role in addressing the chronic water supply issues that are 
faced by some communities there in the eastern part of our 
State. Clearly, we do need to do more investigation as to the 
feasibility of the project.
    I would note that enactment of the bill and completion of 
the feasibility study will be timely if we can pass this in the 
near future. The State of New Mexico is currently developing a 
State water plan. S. 1071 is consistent with that State water 
plan, and would contribute to it. I've had a chance to review 
the testimony by Commissioner Keys, and my understanding is 
that the Department of the Interior and the Bureau of 
Reclamation will support S. 1071, with some modifications. I 
very much appreciate Commissioner Keys' willingness to do that, 
and I certainly have no problem with the modifications that 
he's going to be suggesting here.
    So, again, thank you. And thank you for including us in 
today's hearing.
    Senator Murkowski. Thank you.
    Senator Dorgan.

        STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR 
                       FROM NORTH DAKOTA

    Senator Dorgan. Madam Chairman, thank you very much. Thank 
you for holding the hearing. I was a bit late, but the agenda 
for this hearing is an agenda with some legislation that is 
very important, and I am supportive and will be happy to work 
with you to advance these pieces of legislation we're having 
hearings on today.
    Senator Murkowski. Thank you.
    With that, I would like to recognize Commissioner John 
Keys, Bureau of Reclamation, to present the administration's 
testimony on the bills we have before us. Thank you.

    STATEMENT OF JOHN W. KEYS, III, COMMISSIONER, BUREAU OF 
            RECLAMATION, DEPARTMENT OF THE INTERIOR

    Mr. Keys. Madam Chairman, it is my pleasure to be here, 
certainly. Let me ask you, before we start, how you would like 
to do this. Would you like me to do the testimony on all eight 
of the bills and then answer questions, or would you like to go 
one at a time. And if you want to go one at a time, what order 
would you like to go in?
    Senator Murkowski. Well, you can go in whatever order you 
have there. Who knows, it might even be consistent with the 
order I have up here. But since you're giving the testimony, 
you can certainly go in order. It would probably be helpful if, 
after you have given your summary on the legislation, if you 
wanted to just pause and ask if there's any questions at that 
moment, then we can move forward.
    Mr. Keys. That sounds good. Certainly I would ask that all 
of the written statements be included as a part of the record.
    Senator Murkowski. They shall be.
    Mr. Keys. Madam Chairman, S. 943 would authorize the 
Secretary of the Interior to enter into one or more contracts 
with the city of Cheyenne, Wyoming, for the storage of water in 
the Kendrick Project. Madam Chairman, the Department could 
support S. 943 if our recommended modifications are made. S. 
943 would authorize the Secretary to enter long-term contracts 
with the State of Wyoming to store water in Seminoe Reservoir 
for industrial and residential purposes. Our reason for our 
changes is the current language is vague regarding whose water 
is to be stored in Seminoe and the disposition of revenues 
received for that storage. We have included the recommended 
changes and a copy of the entire bill with those additions and 
deletions noted in a written statement. With these changes, the 
Department of the Interior would support S. 943, and we would 
certainly be willing to sit down with the subcommittee and Mr. 
Enzi and other sponsors of the bill to discuss the details of 
those changes and to see if they're acceptable. That's our 
testimony on S. 943.

    [The prepared statement of Mr. Keys follows:]

        Prepared Statement of John W. Keys, III, Commissioner, 
      Bureau of Reclamation, Department of the Interior, on S. 943

    My name is John Keys, and I am the Commissioner of the Bureau of 
Reclamation. I appreciate the opportunity to provide the 
Administration's views on S. 943, legislation to authorize the 
Secretary of the Interior to enter into one or more contracts with the 
City of Cheyenne, Wyoming, for the storage of water in the Kendrick 
Project in the State of Wyoming.
    Madam Chairman, the Department could support S. 943 subject to 
modifications recommended in this statement.
    The Bureau of Reclamation has several dams and reservoirs located 
on the North Platte River in Wyoming. The North Platte River System is 
operated to optimize irrigation and power benefits. To accomplish these 
activities, vacant space becomes available in Seminoe Reservoir as 
water is released to other downstream Reclamation reservoirs.
    By enacting S. 943, the Secretary of the Interior would be 
authorized to enter into long-term contracts with the City of Cheyenne 
to store water in Seminoe Reservoir for municipal and industrial use.
    The Department does not support S. 943 as drafted because it is 
vague regarding whose water is to be stored in Seminoe Reservoir and 
the disposition of revenues received. To provide clarity, the 
Department recommends the amendment attached to my statement be adopted 
by the Committee.
    Thank you for the opportunity to appear before you today. To assist 
the Subcommittee in understanding the modifications offered here today, 
I am including a copy of the entire bill with the additions and 
deletions. Again, Madam Chairman, with the above modifications, the 
Department could support this legislation.
                     Attachment: Proposed Revisions
    1. Modify the Introduction to read: ``To authorize the Secretary of 
the Interior to contract with the city of Cheyenne, Wyoming, for the 
storage of the City's water in the Kendrick Project, Wyoming.''

    2. Modify Section 1(a)(2) to read:

          (2) KENDRICK PROJECT--The term ``Kendrick Project'' shall 
        mean the Bureau of Reclamation project on the North Platte 
        River, authorized by a finding of feasibility approved by the 
        President on August 30, 1935, constructed for irrigation and 
        electric power generation whose major features include Seminoe 
        Dam, Reservoir, and Powerplant; and Alcova Dam, and Powerplant.

    3. Modify Section 1(b) and (c) to read:

          (b) CONTRACTS--The Secretary is authorized to enter into one 
        or more contracts with the City for annual storage of the 
        City's water for municipal and industrial use in Seminoe Dam 
        and Reservoir of the Kendrick Project.

          (c) CONDITIONS--

                  (1) TERM; RENEWAL--Any contract under subsection (b) 
                shall--

                          (A) have a term of not to exceed 40 years; 
                        and
                          (B) may be renewed upon terms mutually 
                        agreeable to the Secretary and the City, for 
                        successive periods not to exceed 40 years each.

                  (2) REVENUES--Without regard to the Act of May 9, 
                1938, (52 Stat. 322; U.S.C. Sec. 392a), the revenues 
                received under any contract executed pursuant to this 
                section shall be credited as follows: All operation and 
                maintenance charges shall be credited against 
                applicable operation and maintenance costs of the 
                Kendrick Project; all remaining revenues shall be 
                credited to the Reclamation Fund as a credit to the 
                construction costs of the Kendrick Project.
                  (3) IMPACTS TO EXISTING CONTRACTORS--Contracts under 
                subsection (c) shall not negatively impact the Kendrick 
                Project, any existing Kendrick Project contractor, or 
                any existing Reclamation contractor on the North Platte 
                River System.

    Senator Murkowski. I have no questions of Commissioner 
Keys. Do any of the committee members?
    [No response.]
    Senator Murkowski. With that, thank you.
    Mr. Keys. S. 1058 would provide a cost-sharing requirement 
for the construction of the Arkansas Valley Conduit in the 
State of Colorado. Madam Chairman, S. 1058, as introduced, 
states that the non-Federal share of the total cost of 
construction of the Arkansas Valley Conduit shall be no more 
than 25 percent. This language would allow the Federal share to 
be up to 100 percent.
    The legislation further authorizes to be appropriated such 
funds as necessary to pay the Federal share of the construction 
cost and directs that the Federal share be non-reimbursable. 
These provisions are contrary to the Fryingpan-Arkansas Project 
Act, and current Reclamation law and policy. Existing 
Reclamation law includes the Fryinpan-Arkansas Project Act of 
1962, which has already authorized the Arkansas Valley Conduit 
and requires municipal and industrial project beneficiaries to 
repay 100 percent of appropriated project costs. Madam 
Chairman, with these differences the administration cannot 
support S. 1058, as introduced.
    I would digress for just a second here and say that we have 
sat down with Mr. Allard and talked about these cost-share 
provisions, and certainly offer our services to him to try to 
come up with a way, another way, to try to, you might say, 
finance or work with them on developing a project that would 
produce the benefits there.
    Another area of concern is the cost-share and appropriation 
language in the bill. It's implied that the sponsor's 
contributions would be provided at dates and times that would 
support the project's funding requirements. However, it appears 
that the intent of the bill is that the sponsors enter into a 
contract with Reclamation for repayment of 25 percent of the 
total project cost, and this payment be treated like other 
Reclamation repayment processes. If such is the case, the 
project would be funded 100 percent from appropriations, with 
the sponsor's 25 percent share to be repaid over many years 
following completion of construction.
    Let me emphasize that this bill is precedent-setting for 
Reclamation. Current municipal and industrial water 
beneficiaries across the 17 Western States pay 100 percent of 
the cost for that allocated portion to municipal and industrial 
purposes, and they pay interest on that money. Across the 
Western United States, there are currently about 287 districts 
that have M&I contracts, and there is in excess of 300 of them. 
All of them pay 100 percent, with interest.
    Now, I do understand that Senator Allard is working to 
change some of this language that clarifies the 25 percent and 
when it would be paid. Madam Chairman, I would note that the 
Senate Energy and Water Appropriations Subcommittee recognized 
the danger of such a precedent by including the following 
language in the fiscal year 2004 committee report language. The 
committee has included an additional $200,000 to continue the 
reevaluation report. The committee supports these efforts, but 
believes that the project needs appropriate review by the 
authorizing committee. In particular, the committee notes that 
``The project should follow the standard Reclamation policy of 
an M&I project of the beneficiaries paying 100 percent of the 
allocated costs.'' Additionally, S. 1058 does not address the 
repayment for operation maintenance and replacement of the 
conduit. It is Reclamation's position that such costs should be 
paid by the project beneficiaries.
    One last point. Should any legislation proceed, it should 
be clarified to assure that the cost ceiling for the Fryingpan-
Arkansas Project is increased to accommodate the Arkansas 
Valley Conduit construction cost.
    In conclusion, Madam Chairman, the administration cannot 
support S. 1058 with the Federal cost-share that is contrary to 
existing Reclamation law. I would like to emphasize that the 
existing Fryingpan-Arkansas Project authorization appropriately 
addresses the responsibility of the beneficiaries to pay for 
the project benefits they would receive, as in the case of all 
Reclamation projects across the Western United States. The 
administration does recognize the water quality and water 
supply issues facing the Arkansas River Valley, and we look 
forward to working with the project sponsors, with your 
subcommittee, with Mr. Allard, with members of the committee to 
address the concerns that we have raised about S. 1058 and to 
explore other legislative alternatives.
    That's my testimony on S. 1058.
    [The prepared statement of Mr. Keys follows:]
   Prepared Statement of John W. Keys, III, Commissioner, Bureau of 
          Reclamation, Department of the Interior, on S. 1058
    My name is John Keys and I am Commissioner of the Bureau of 
Reclamation. I appreciate the opportunity to provide the 
Administration's views on S. 1058, legislation to provide a cost 
sharing requirement for the construction of the Arkansas Valley Conduit 
(Conduit) in the State of Colorado.
    S. 1058, as introduced, states that the non-Federal share of the 
total costs of construction shall not be more than 25 percent. This 
language would allow the Federal share to be up to 100 percent. The 
legislation further authorizes to be appropriated such sums as 
necessary to pay the Federal share of the Conduit construction costs, 
and directs the Federal share to be non-reimbursable. This is contrary 
to the Fryingpan-Arkansas Project Act and current Reclamation law and 
policy. Therefore, the Administration cannot support S. 1058, as 
introduced, because it is contrary to existing Reclamation law which 
calls for inclusion of the Fryingpan-Arkansas Project Act of August 16, 
1962 (which already authorizes the Conduit) requiring municipal and 
industrial project beneficiaries to repay 100 percent of appropriate 
project costs.
    The Administration is aware of the interest Arkansas River Valley 
residents have in seeking alternative means of obtaining safe and clean 
water supplies. We understand that the beneficiaries are looking for 
Federal financing for the Conduit, given that some of the communities 
in the Arkansas River Valley may be facing considerable expense to 
comply with federally-mandated water quality standards. The need for a 
pipeline was recognized back in 1962 when Congress authorized the 
Conduit.
    The Conduit is an authorized, but never built, feature of the 
Fryingpan-Arkansas Project (Project). The 1962 Fryingpan-Arkansas 
Project (Fry-Ark) Act, which authorized the Project, required that 
municipal water supply works either be constructed by communities 
themselves, or, if that is infeasible, by the Secretary, with repayment 
of actual costs and interest within 50 years.
    During development of the Project, Reclamation found the Conduit to 
be economically feasible, but the beneficiaries lacked the bonding 
capability to construct the works themselves. The beneficiaries of the 
Conduit found that it also was financially infeasible to repay 
Reclamation within 50 years if Reclamation were to construct the 
Conduit. It was agreed at that time to reconsider construction of the 
Conduit in the future if proposals with viable support were 
forthcoming.
    Increased water treatment costs, due to the poor quality of locally 
available groundwater, and requirements of the Safe Drinking Water Act 
have renewed local interest in the Conduit. The Conduit would transport 
water from Pueblo Dam, a feature of the Fry-Ark Project, to communities 
along the Arkansas River, extending about 110 miles to near Lamar, 
Colorado. The Lower Arkansas River Basin is comprised of rural 
communities, with the largest town, Lamar, having an estimated 
population of 8,600.
    The legislation permits inclusion of Fiscal Year 2002 and 
subsequent year's costs related to constructing the Conduit. However, 
the definition of ``construction'' is not clear and would need to 
include all project activities including planning activities, if 2002 
and 2003 costs are to qualify.
    Additionally, the cost share and appropriations language in the 
bill imply that the sponsor's contributions will be provided at rates 
and times that support the project's funding requirements, much like 
activities funded under a cooperative agreement. However, apparently 
the intent of the legislation is that the sponsors enter into a 
contract with Reclamation for repayment of 25 percent of total project 
costs and that this repayment be treated like other Reclamation 
repayment processes. If this is the case then the project would be 
funded 100 percent from appropriations and the sponsor's 25 percent 
share repaid over many years following completion of construction. We 
emphasize again, that this bill is precedent setting for Reclamation in 
that current beneficiaries across the 17 Western States projects pay 
100 percent. We note that the Senate Energy and Water Appropriation 
Subcommittee recognized this by inclusion of the following in the 
Fiscal Year 2004 Committee report language (S. RPT. 108-105): ``The 
Committee has included an additional $200,000 to continue the 
reevaluation report. The committee supports these efforts but believes 
that the project needs appropriate review by the authorizing committee, 
in particular, the Committee notes that the project, if authorized, 
should follow the standard Reclamation policy of an M&I project of the 
beneficiaries paying 100 percent of the allocated costs.''
    In addition, this legislation does not address the payment for 
operation, maintenance and replacement of the Conduit. It is 
Reclamation's position that such costs should be paid by the Conduit 
beneficiaries. Also, should any legislation proceed, it should be 
clarified to assure that the cost ceiling for the Fryingpan-Arkansas 
Project is increased to accommodate Conduit construction costs.
    In conclusion, Mr. Chairman, the Administration can not support S. 
1058 with a Federal cost share that is contrary to existing Reclamation 
law. I would like to emphasize that the existing Fry-Ark Project 
authorization appropriately addresses the responsibility of the 
beneficiaries to pay for the direct benefits they would receive, as is 
the case at all Reclamation projects across the west.
    The Administration recognizes the water quality issues facing the 
Arkansas River Valley and is open to working with the project sponsors, 
Senator Allard, and members of the Committee to address the concerns we 
have raised with S. 1058 or to explore other legislative alternatives.
    This concludes my statement. I would be pleased to answer any 
questions.

    Senator Murkowski. A very quick question for you. You 
mentioned the operation and maintenance and replacement costs. 
Does the Bureau have any estimate on what the these costs would 
be annually if this project were to go forward?
    Senator Allard. Madam Chairman, may I interject at this 
point with a question? In meeting with Mr. Keys, we have 
indicated that it's not the desire of the communities or the 
area to saddle the Federal Government with operation and 
maintenance costs. And so your question almost becomes moot 
because we're willing to take that out of the bill and not make 
that a part of the requirement on the Federal Government. And I 
think that they understand their obligations and have no 
intention of saddling the Federal Government with that 
obligation.
    Mr. Keys. Madam Chairman, I would add we don't know yet 
what the OM&R costs are, because we would do the reevaluation 
and certainly the feasibility work and decide what that is.
    Senator Murkowski. Question, Senator Allard?
    Senator Allard. Thank you, Madam Chairman.
    I appreciate the testimony of Mr. Keys. Now, the written 
statement that has been submitted to the committee had rather 
strong language in opposition to the legislation. Since then, 
Mr. Keys and I have sat down and visited a little bit, and I 
just want to have him confirm that you will be willing to work 
with us. There are some differences there that you've 
expressed. One of them is the operation and maintenance costs. 
We've talked about that. We're willing to take that out of the 
bill. And you said that potentially the Federal Government 
could be saddled with 100 percent of the cost. That's certainly 
possible, I guess, with the language that you point out. That 
wasn't the intent of this sponsor, because the communities had 
indicated to me that they feel they have the capability, based 
on an independent survey by an engineering firm that looked at 
the cost and everything, that they feel that they could pay for 
25 percent, and they're more than willing to saddle themselves 
with that obligation. And if we need language within the bill 
that is necessary to make that clear, again, we would be 
willing to work with Mr. Keys and the Department. And all I 
would hope from Mr. Keys and my question at this point is, will 
you continue to work with us in trying to get some of these 
objections resolved within the bill?
    Mr. Keys. Madam Chairman, Mr. Allard, certainly we would be 
more than willing to work with you through that authorization, 
through the original Fryingpan-Arkansas Project Act, or any 
other legislative solution that may be available to us at the 
time.
    Senator Allard. Madam Chairman, one other. My staff asked 
me a question to put to you, and I'm not sure I understand the 
basis for this question, but it may need clarification, and if 
you need clarification, I would be glad to provide it. The 
committee report is not entirely accurate, they say, and the 
committee is reviewing it, and it has been authorized. Do you 
agree?
    Mr. Keys. Do I agree the project has already been 
authorized? If that is the question----
    Senator Allard. We're talking about the energy and water 
development report language that says that it's not authorized. 
But, in reality, the project has been authorized. What we're 
discussing here is the match. Do you agree?
    Mr. Keys. Madam Chairman, Mr. Allard, I do agree that their 
language says ``if authorized.'' I would say that they are 
talking about this legislation and not the project itself. I 
would never be a person to point out that one of our committees 
was wrong, but the language is not quite right.
    Senator Allard. Thank you. And that is one thing I wanted 
to clarify, Madam Chairman, for the record.
    Thank you very much.
    Senator Murkowski. Senator Dorgan, did you have questions?
    Senator Dorgan. Madam Chairman, thank you very much.
    First of all, thanks for your testimony on the legislation 
we're having a hearing on today. I want to take the 
opportunity, however, to ask you, Mr. Keys, about another 
issue.
    You know that we've had substantial concerns about the 
water studies that are necessary as a part of the Dakota Water 
Resources Act. The Bureau is undertaking those studies that 
deal with the water needs and how those needs might be solved 
or resolved with respect to the Red River Valley. I had a 
hearing in Fargo, North Dakota, and your office was represented 
at that hearing. And at that hearing, we learned that the 
Bureau will miss the deadline in the underlying law by about 4 
years. You indicated that the study should be completed in the 
year 2005, and that misses the deadline by about 4 years. I've 
written you letters expressing as much angst as a Lutheran 
Norwegian could express to a Federal agency, and you've 
responded to them, but let me ask you where you are in this 
process.
    I have, from those letters, your response about what the 
targets are and what the way points might be. One of them is 
finalize water needs in the Red River Valley, North Dakota, 
September 2003. Can you tell me if that's been done?
    Mr. Keys. Madam Chairman, Mr. Dorgan, I was in North Dakota 
in August, sat down with my folks, and got a briefing on the 
study. At that time, the studies were on schedule. I have not 
seen the interim report on those water requirements yet, but I 
understand they're on schedule. I know that our overall 
schedule is still the dates that we are going to meet.
    Senator Dorgan. Could you provide for me the September 2003 
target date information, which would be finalized water needs 
in Red River Valley? If that is done on time, then I will be 
more satisfied, but I would like to see what has been done in 
order to satisfy that particular target date which you've 
provided with me.
    Mr. Keys. Madam Chairman, Mr. Dorgan, I'd be happy to do 
that.
    Senator Dorgan. And that's--the next major target date 
would be October 2004, which is complete hydrology modeling. 
But I'm especially interested in the September 2003 target 
date, because that's the first one following a number of public 
input opportunities. It's the first one where something is 
supposed to have been done, and I would like to see what was 
done or even if it's done.
    Commissioner Keys, we had the Secretary testify here. We're 
going to have a hearing on rural water issues in the future, 
and I will not go into this in great depth, but I have real 
difficulties with what's happened with respect to the budget 
dealing with rural water issues. You are well familiar with the 
rural water projects that were zeroed out of the President's 
budget. North Dakota had a project called the NAWS Project. The 
project is underway. Groundbreaking has been held. And the 
project is being built. It's desperately needed by the 
communities for fresh water, good quality water, and we were 
told that all these projects were zeroed out. And then I 
discovered later that was not the case.
    In fact, money was restored, and I was told it was restored 
because the President gave a speech in South Dakota, and I 
said, ``Show me the speech,'' and it turns out they restored 
money for two water projects. He gave a speech in South Dakota 
saying he supported one. These are identical projects to the 
North Dakota Project.
    As you know, they are part of the same generic area of 
rural water projects that we have been told by the Secretary 
had been zeroed out because OMB has been evaluating them with a 
PART, P-A-R-T, program. And so I believe that we were told by 
OMB the things that were not true, and I let the Secretary know 
it wasn't true.
    It turns out the testimony was not accurate, and I want to 
work with you when we have the next hearing. I'll go into this 
in greater depth, because I understand even if one makes a 
mistake, if you make a mistake consistently, that's fine, but 
if there are politics here with respect to water funding 
because a deal was made someplace, and we're told that all 
projects are treated the same, and then we discover, quite by 
accident, that was not the case, that is difficult. And your 
job is not to be the politician here.
    You're running the Bureau, and I appreciate the work you 
do, and you're not going to be--answer this today, but I did 
want to tell you, I'm meeting with OMB about this. I will meet 
with the Secretary, as well. But when we have the rural water 
hearing, I will want to plumb the depths of this just a bit 
with you, because, as you know, rural water projects are very, 
very important.
    The NAWS Project, which, in fact, you're well familiar with 
the NAWS Project and have been helpful on that project, and you 
understand its importance, so you understand my anxiety when we 
see a zeroing out of the funding for it and are told something 
that I believe now is not necessarily the case.
    Commissioner, thank you. You will provide for me, then, the 
finalized water needs, and then I will look forward to our next 
gathering, when we talk about rural water in some greater 
depth. And, again, let me also say thanks for your testimony on 
the array of bills today. And thanks for your past help, as 
well, on the NAWS Project and related issues that you've been 
involved with. Thank you very much.
    Senator Murkowski. Thank you.
    Senator Wyden, we have made opening statements from the 
committee members. If you would care to make one at this point 
in time, or reserve it for when you ask Commissioner Keys 
questions, what he is doing at this point in time is going down 
through the bills giving his brief summary. And then if we have 
questions on these specific bills, we are taking that time to 
ask them.

           STATEMENT OF HON. RON WYDEN, U.S. SENATOR 
                          FROM OREGON

    Senator Wyden. Madam Chair, if I could just very briefly 
touch on a couple of points, and I really appreciate your 
thoughtfulness. You have to almost have a juggling act these 
days as we move to the end of the session to get done, and I 
appreciate your thoughtfulness.
    I just want to highlight for the Commissioner some of my 
concerns, as my friend has mentioned, particularly with respect 
to the Savage Rapids Dam issue. Madam Chair, I would ask first 
that testimony from some Oregon stakeholders--there are an 
array of environmental groups, industry groups, and, if I could 
just ask that they be submitted for the record. They're all in 
support of the Smith-Wyden legislation.
    Senator Murkowski. You can submit those for the record.
    Senator Wyden. Madam Chair, it's our understanding the 
administration is going to testify that the costs associated 
with this project should be reimbursed to the Federal 
Government from the Grants Pass Irrigation District. The point 
of this landmark compromise is to benefit fisheries--not the 
irrigation district--which has agreed to give up its use of the 
dam and to allow for its removal: not because the dam is no 
longer usable for irrigation purposes, but just to benefit the 
fish. It's because of this that the consent decree in the 
legislation doesn't include any requirement with the district 
to repay the Federal Government for the cost associated with 
the pumping a dam removal plan, nor have we ever intended for 
such costs to be repaid.
    And, Commissioner, again, my apologies for the bad manners, 
but the committee is aware of the fiscal situation. You've 
indicated that the Bureau's priority is to complete existing 
obligations prior to initiating new projects. But we feel, our 
State and our two Senators, that the Bureau is certainly well 
along the way in terms of working on the process. It has been 
studied since 1971. The R&D was completed in 1995, and so it is 
an ongoing project. And given the urgency of getting the pumps 
installed and operational by November 2005, and assuming we 
give you the new authority so you can comply with the consent 
decree, I'm very hopeful that you will be able to give the 
committee, and particularly Oregon's two Senators, greater 
assurances that you would budget appropriately for the project 
in 2005.
    If it were not for the frenzied nature of my afternoon, I 
would stay and get into this in greater detail, Madam Chair, 
but you are nice to let me make this short statement, 
particularly with the concern I have today.
    Commissioner, you may want to take some additional time to 
get back to us for the record on that, but it's certainly the 
concern of myself and Senator Smith. We very much want 
assurances with respect to budgeting so that it would be 
appropriate for the project, and particularly with that 2005 
date in mind.
    Madam Chair, thank you again for your thoughtfulness.
    Senator Murkowski. Thank you. And I should note for the 
record that we have received submitted written statements and 
supporting materials from Senator Nelson and Congresswoman 
Napolitano on S. 1027 and H.R. 1284, respectively.
    So, with that, Commissioner Keys, if you want to proceed to 
the next on your list?
    Mr. Keys. Madam Chairman, S. 1027 would amend the 
Irrigation Project Contract Extension Act of 1998 to extend 
certain contracts between the Bureau of Reclamation and certain 
irrigation water contractors in the States of Wyoming and 
Nebraska. Madam Chairman, the Department supports the language 
of S. 1027, as written. S. 1027 would allow Reclamation to 
extend each of the water service and repayment contracts for 
the Glendo unit of the Missouri River Basin Project for a 
period of two years, until December 31, 2005, or the term of 
the cooperative agreement entered into by the States of 
Wyoming, Colorado, and Nebraska and the Secretary of the 
Interior.
    That agreement covers an ongoing research study and 
Endangered Species Act consultations for the entire Platte 
River Basin that are not scheduled for completion until late 
2004. S. 1027 will allow Reclamation to proceed with completing 
the renewal of the Glendo contracts following the record of 
decision that would result from that Platte River process. In 
summary, the Department supports the legislation for extension 
of the Glendo contracts provided by S. 1027.
    [The prepared statement of Mr. Keyes follows:]
   Prepared Statement of John W. Keys, III, Commissioner, Bureau of 
          Reclamation, Department of the Interior, on S. 1027
    Madam Chairman, and members of the Subcommittee, my name is John 
Keys and I am the Commissioner of the Bureau of Reclamation. Thank you 
for the opportunity to appear today to provide the Administration's 
views on S. 1027.
    S. 1027 would amend the Irrigation Project Contract Extension Act 
of 1998 to require the Secretary of the Interior to extend each of the 
water service or repayment contracts for the Glendo Unit of the 
Missouri River Basin Project for a period of 2 years until December 31, 
2005, or for the term of the cooperative agreement entered into by the 
states of Wyoming, Nebraska, Colorado and the Secretary of the 
Interior.
    Madam Chairman, the Department supports the S. 1027 language as 
written.
    On July 1, 1997, the States of Wyoming, Nebraska, and Colorado 
entered into a cooperative agreement for Platte River research and 
other efforts relating to endangered species habitats along the Central 
Platte River in Nebraska with the United States Department of the 
Interior. The purpose of the cooperative agreement is to jointly 
undertake a basin-wide effort to improve the habitat of four threatened 
and endangered species that use the Platte River. Successful completion 
of the cooperative study will lead to development of a basin-wide 
program that will serve as the reasonable and prudent alternative to 
offset the effects of existing and new water related activities in the 
Platte River Basin.
    Glendo Dam and Reservoir is one of several Bureau of Reclamation 
dams and reservoirs on the North Platte River that operate as an 
integrated system. The Bureau of Reclamation has been proceeding with a 
process to consult under the Endangered Species Act on the entire 
reservoir system operations.
    To successfully renew long-term contracts for Glendo Reservoir 
water will require the completion of Endangered Species Act 
consultation on the Bureau of Reclamation's North Platte River system 
operations. Such consultation will not be completed until after the 
study and final programmatic environmental impact statement have been 
completed. The final programmatic environmental impact statement is 
scheduled to be completed by November 2004, with the record of decision 
to follow in December 2004. S. 1027 will allow Reclamation to proceed 
with completing the renewal of the Glendo contracts following the 
record of decision.
    Madam Chairman, in summary, the Department supports the legislation 
for extension of the Glendo contracts provided by S. 1027. I would be 
happy to answer any questions.

    Senator Murkowski. Thank you. The Chair has no questions.
    Mr. Keys. Madam Chairman, S. 1071 would authorize a 
feasibility study on water conservation within the Arch Hurley 
Conservancy District in Texas--or in New Mexico. The 
feasibility study would also identify options for using saved 
water and cost-sharing options, including debt relief for the 
district. We could support S. 1071 with modifications to 
section 2(a), the authorization of appropriations. The district 
is currently suffering from severe drought. I personally 
visited the district about 3 weeks ago, and in walking the 
district with those people, they've not had water since the 
middle of June 2002. In other words, no water for a year and a 
half. The low water supplies had significant impacts on the 
irrigation system. Primarily, maintenance has been deferred and 
portions of the system are in disrepair.
    If the feasibility study identifies debt relief as a 
benefit for the district, the funds once used for debt payments 
will be available for maintenance of the irrigation system. 
Furthermore, the feasibility study will consider making some of 
the saved water available to the district resulting in an 
increased water supply.
    We believe that a feasibility study is appropriate to 
consider whether conveying saved water to the Pecos River, if 
possible. Importation of the saved water into the Pecos River 
Basin will reduce impacts from the Endangered Species Act to 
Pecos Valley farmers. The Department is primarily concerned 
with the amount of $500,000 authorized in section 2(a) to 
complete the study. Our total cost estimate for the feasibility 
study is $2\1/2\ million. Reclamation recommends up to two and 
a half million dollars be authorized for the feasibility study 
for Arch Hurley Conservancy District.
    [The prepared statement of Mr. Keys follows:]
   Prepared Statement of John W. Keys, III, Commissioner, Bureau of 
          Reclamation, Department of the Interior, on S. 1071
    Madam Chairman, my name is John Keys III and I am the Commissioner 
of the Bureau of Reclamation (Reclamation). I am pleased to be here 
today to present the views of the Department of the Interior 
(Department) regarding S. 1071, which would authorize a feasibility 
study on water conservation within the Arch Hurley Conservancy District 
(District). The feasibility study will also identify options for using 
saved water and cost sharing options, including debt relief for the 
District. We could support S. 1071 with modifications to Section 2(a), 
authorization of appropriations.
    The District is currently suffering from a severe drought. In 2002 
the District members received 3 inches of water per acre, only 17% of 
their maximum allotment. The water was delivered in a period of six-
weeks. In 2003, no water was delivered to any of the District members. 
The District has a history of low water supply and has experienced 
trouble meeting repayment obligations. Deferrals of the annual 
repayment were made in 1975, 1976, 2002, and 2003.
    The low water supply has had significant impacts on the irrigation 
system. Primarily, maintenance has been deferred and portions of the 
system are in disrepair. If the feasibility study identifies debt 
relief as a benefit for the District, the funds once used for debt 
payments will be available for maintenance of the irrigation system. 
Furthermore, the feasibility study will consider making some of the 
saved water available to the District, resulting in an increased water 
supply.
    We believe that a feasibility study is appropriate to consider 
whether conveying saved water to the Pecos River is practicable. 
Conveying the water to the Pecos River has many benefits. Like many 
other western rivers, the Pecos River is over allocated, contains a 
threatened species, and is in danger of violating an interstate 
compact. This year the state of New Mexico delivery shortfall to Texas 
may reach 6,000 acre-feet. Under no circumstances is the state of New 
Mexico allowed to provide less than required by the compact. 
Additionally, the Pecos River has target flows to prevent jeopardy of 
the threatened Pecos Bluntnose Shiner. Conserved water from the 
District will provide flexibility when meeting the identified target 
flows. Importation of the saved water into the Pecos River Basin will 
reduce impacts from the Endangered Species Act to Pecos Valley farmers.
    With respect to S. 1071, the Department is primarily concerned with 
the amount of $500,000 authorized in Section 2(a) to complete the 
study. Our total cost estimate for the feasibility study is $2,500,000. 
Reclamation recommends up to $2,500,000 be authorized.
    Madam Chairman that concludes my remarks and I would be happy to 
respond to any questions the Committee may have.

    Senator Murkowski. Are there any questions?
    [No response.]
    Mr. Keys. Madam Chairman, S. 1307 would authorize the 
Secretary of the Interior to assist in the implementation of 
fish passage and screening facilities at non-Federal water 
projects. The Department supports passage of S. 1307 with some 
suggested modifications. The Congress has provided significant 
support to efforts currently underway in the Pacific Northwest 
to address the needs of many salmon and steelhead species 
listed on the threatened and endangered species list. By 
providing the authority and the funding to necessary Federal 
agencies to address the needs of the various life stages of 
these species, we think we can help solve the problem there. 
Among these efforts is a biological opinion issued by the 
National Marine Fisheries Service in December 2000 concerning 
the operation of the Federal Columbia River Power System.
    The three action agencies--the Bureau of Reclamation, the 
Corps of Engineers, and the Bonneville Power Administration--
have consulted with National Marine Fisheries Service on the 
operation of the power system. As required by section 7 of the 
Endangered Species Act in 2000, National Marine Fisheries found 
the operation and configuration of the hydropower system could 
not be modified enough to prevent jeopardy to eight of the 12 
listed anadromous species affected by the system.
    Consequently, to avoid jeopardy, National Marine Fisheries 
identified a reasonable and prudent alternative, which included 
numerous actions that could improve the survival of the 
species. Among the actions recommended to Reclamation is a 
habitat initiative to improve tributary spawning and rearing 
conditions by working with private parties to screen diversions 
and to provide fish passage at non-Federal water-diversion 
structures. Screening and passage projects provide near-term 
benefits by reducing fish mortality and providing access to 
better tributary migration, spawning, and rearing habitat. 
There is an immediate benefit to the species from these 
projects.
    What we have seen is that every time there is a diversion 
in a stream, the percentage of water taken out by that 
diversion is the same percentage of fish lost to that 
diversion, and certainly the benefits to working with non-
Federal projects is what we are focusing on here.
    Reclamation currently has the authority to provide 
engineering, design, and environmental compliance assistance to 
owners of non-Federal water diversion facilities. But we lack 
the authority to fund the construction of these fish screens 
and ladders at such facilities. In its findings and commitments 
on the 2000 power system biological opinion, Reclamation agreed 
to seek such authority from Congress. The need for this 
authority has been highlighted in the ongoing litigation 
concerning the Federal Columbia Power System biological 
opinion.
    In May of this year, the Federal District Court of Oregon 
ruled that the 2000 biological opinion is flawed because some 
anticipated future actions by Federal agencies are not 
reasonably certain to occur. Reclamation's lack of authority to 
fund the construction and needed screen and migration barrier 
projects on non-Federal facilities is one of the problems. This 
deficiency would be eliminated by the passage of S. 1307. S. 
1307 also provides Reclamation with the authority to address 
similar projects, should they be necessary, to comply with the 
Endangered Species Act related to our other non-power-system 
projects. In the States of Washington and Oregon, at the 
request of the State of Idaho, Reclamation projects in the 
Snake River Basin would not be included under this authority.
    A further provision of S. 1307 specifies that the authority 
would only be utilized when Reclamation determined it would 
enable Reclamation to meet its obligations under section 7 of 
the Endangered Species Act. The administration supports these 
provisions. S. 1307 confirms that the ownership of the project 
features and land operation and maintenance responsibilities 
for those features and their affiliated water rights, as 
defined by State water laws, shall remain with the private 
owner. Also, section 5 specifies that these screen and fish 
passage projects are not Reclamation projects subject to 
Federal Reclamation law. We support these limitations, as well.
    Owners of the non-Federal water diversions to which 
screening and passage would be added receive certain benefits 
associated with bringing these facilities into compliance with 
the Endangered Species Act. The administration believes that 
some level of cost-share should be expected from those 
individuals in return for the benefits that they're likely to 
receive.
    We would suggest that the subcommittee consider a cost-
share requirement of 35 percent, including the value of in-kind 
services.
    S. 1307, if enacted, would allow Reclamation much-needed 
authority and flexibility in avoiding jeopardy to endangered 
and threatened salmon species in compliance with the Endangered 
Species Act. Subject to making provision for an appropriate 
cost-share, we urge the Committee to act expeditiously on this 
bill.
    [The prepared statement of Mr. Keys follows:]
   Prepared Statement of John W. Keys, III, Commissioner, Bureau of 
          Reclamation, Department of the Interior, on S. 1307
    Madam Chair and Members of the Subcommittee, I am John Keys, 
Commissioner of the Bureau of Reclamation (Reclamation). I am pleased 
to be here today to present the Department of the Interior's 
(Department) views on S. 1307, which would authorize the Secretary of 
the Interior, acting through the Bureau of Reclamation, to assist in 
the implementation of fish passage and screening facilities at non-
federal water projects. As discussed more fully below, the 
Administration could support passage of this bill with the suggested 
modifications.
    Let me begin by saying that the Subcommittee is aware of the 
tremendous effort currently underway in the Pacific Northwest to 
address the needs of the many salmon and steelhead species listed as 
threatened and endangered under the Endangered Species Act (ESA). 
Congress has provided significant support to these efforts by providing 
authority and funding to numerous federal agencies to address the needs 
of the various life stages of these species.
    Among these efforts is a Biological Opinion issued by the National 
Marine Fisheries Service (now NOAA Fisheries) in December 2000 
concerning the operation of the Federal Columbia River Power System 
(FCRPS) of the Columbia River. The FCRPS includes 14 major dams on the 
Columbia and Snake Rivers operated as an integrated system by the U.S. 
Army Corps of Engineers and Reclamation for flood control and 
hydropower generation. The Bonneville Power Administration transports 
and markets the power generated by the system. As required by section 7 
of the ESA, these three action agencies have consulted with NOAA 
Fisheries on the operation of the FCRPS.
    In 2000, NOAA Fisheries found that the operation and configuration 
of the hydropower system could not be modified enough to prevent 
jeopardy to 8 of the 12 listed anadromous species affected by the 
system. Consequently, to avoid jeopardy, NOAA Fisheries identified a 
reasonable and prudent alternative which included numerous actions that 
could improve the survival of those species in what are known as the 
other ``H's'' harvest, hatcheries and habitat. Among the actions 
recommended to Reclamation is a habitat initiative to improve tributary 
spawning and rearing conditions by working with private parties to 
screen diversions and to provide fish passage at non-federal water 
diversion structures. Screen and passage projects provide near-term 
benefits. There is an immediate benefit to the species by reducing fish 
mortality and providing access to better tributary migration, spawning, 
and rearing habitat. Improved adult access to tributary habitat 
produces more juveniles, and juveniles enjoy generally higher survival 
rates in the first spawning season in which these projects are in 
place.
    Reclamation currently has the authority to provide engineering 
design and environmental compliance assistance to the owners of non-
federal water diversion facilities, but lacks the authority to fund the 
construction of fish screens and passage at such facilities. In its 
Findings and Commitments on the 2000 FCRPS Biological Opinion, 
Reclamation agreed to seek such authority from the Congress. The 
Administration requested this authority last year in a proposal that 
was provided to Congress. Although S. 1307 would not provide habitat 
restoration authority as requested in the Administration's proposal, it 
does provide much of the same authority as that proposed bill.
    The need for this authority has been highlighted in the ongoing 
litigation concerning the FCRPS Biological Opinion. In May of this 
year, the U.S. District Court for the District of Oregon ruled that the 
2000 Biological Opinion is flawed because some anticipated future 
actions by federal agencies are not reasonably certain to occur. 
Reclamation's lack of authority to fund the construction of needed 
screen and migration barrier projects on non-federal facilities falls 
within this category. This deficiency would be eliminated by the 
passage of S. 1307.
    S. 1307 would also provide Reclamation with the authority to fund 
such screening and passage projects should they be necessary in order 
for the non-FCRPS Reclamation projects within the Columbia River Basin 
in the States of Washington and Oregon to comply with section 7(a)(2) 
of the ESA. At the request of Reclamation water users in Idaho, 
Reclamation projects in the Snake River Basin would not be included 
under this authority. A further provision of S. 1307 specifies that the 
authority would only be utilized when Reclamation determines that it 
would enable the agency to meet its obligations under section 7 of the 
ESA. The Administration supports these provisions.
    The legislation would also confirm that the ownership of non-
federal projects and land, operation and maintenance responsibilities 
for those projects, and their affiliated water rights as defined by 
state water law, shall remain with the private owner. Moreover, section 
5 of the bill specifies that these screen and fish passage projects are 
not Reclamation projects subject to federal reclamation law. We support 
these limitations as well.
    We note that owners of the non-federal projects receiving 
assistance under this legislation will benefit from bringing their 
facilities into compliance with the ESA. It is appropriate to require 
some degree of cost sharing from those individuals who may 
substantially benefit from these actions. We strongly encourage the 
Subcommittee to consider a cost-share requirement of 35 percent, 
including the value of in-kind services.
    In conclusion, if enacted, S. 1307 would provide Reclamation with 
much needed authority and flexibility in helping us comply with the ESA 
by avoiding jeopardy to endangered and threatened salmon species. We 
urge the Subcommittee to act expeditiously on this bill and to include 
an appropriate cost share provision. We stand ready to work with the 
Subcommittee in that regard.
    Madam Chair, this concludes my testimony. I welcome any questions 
that you or Members of the Subcommittee may have.

    Senator Murkowski. Thank you.
    Mr. Keys. Madam Chairman, S. 1308 would authorize the 
Secretaries of the Interior and Commerce, in cooperation with 
the affected State and local entities, to implement the terms 
of the August 27, 2001, U.S. District Court Consent Decree 
addressing permanent resolution of fish passage problems at 
Savage Rapids Dam near Grant's Pass on Oregon's Rogue River. We 
commend the efforts the parties have made to resolve the 
problems in a cooperative spirit to help protect Rogue River 
Basin salmon and steelhead. Savage Rapids Dam is owned and 
operated by the Grant's Pass Irrigation District. It is not a 
Federal facility. Lawsuits filed by the State of Oregon and the 
United States on behalf of the National Marine Fisheries 
Service resulted in the previously mentioned consent decree.
    The bottom line of the decree is that Grant's Pass 
irrigation district must cease irrigation diversions with 
Savage Rapids Dam, using the dam no later than November 1, 
2006. The consent decree is general and open-ended with respect 
to how the financing would work and whether there is any 
repayment obligation for the work performed by Grant's Pass 
Irrigation District. Reclamation's 1995 planning report and 
environmental statement on improving fish passage at the dam 
focuses on construction of pumping facilities, followed by dam 
removal, combined with natural erosion of the sediment trapped 
behind the dam as the preferred alternative.
    The baseline Federal costs for the plan have been 
estimated, in 2003, to be approximately $15 million to build 
the new pumping station and $6 million to remove the existing 
dam. Additional National Environmental Policy Act funding would 
be required in this effort, and those costs are included in 
these estimates.
    It is important to note that this project was not included 
in the administration's fiscal year 2004 budget request. The 
Department of the Interior reserves the right to comment on the 
appropriateness of any appropriations, based on the current 
facts and the latest analysis. Reclamation is facing 
obligations for many previously authorized Federal projects. 
While we recognize that completion of this project would 
permanently eliminate the impacts that operation of the dam 
currently have on coho salmon, which are listed under the 
Endangered Species Act, as well as other anadromous fish, we 
believe completing our existing obligations should have a 
higher priority over work on non-Federal facilities.
    [The prepared statement of Mr. Keys follows:]
   Prepared Statement of John W. Keys, III, Commissioner, Bureau of 
          Reclamation, Department of the Interior, on S. 1308
    I am John Keys, and I am the Commissioner of the Bureau of 
Reclamation. Thank you for the opportunity to testify on S. 1308.
    This legislation authorizes the Secretaries of the Interior and 
Commerce, in cooperation with affected State and local entities, to 
implement the terms of the August 27, 2001 U.S. District Court Consent 
Decree addressing permanent resolution of fish passage problems at 
Savage Rapids Dam (Dam) near Grants Pass on Oregon's Rogue River. We 
commend the efforts the parties have made to resolve the problems in a 
cooperative spirit to help protect Rogue River basin salmon and 
steelhead.
    Savage Rapids Dam is owned and operated by the Grants Pass 
Irrigation District (GPID).
    In 1971, Congress authorized Reclamation to conduct a feasibility 
study of the Grants Pass Division of the Rogue River Basin Project. 
Shortly thereafter, a feasibility study was started to identify 
solutions to fish passage problems at the Dam and ways to improve 
GPID's distribution system. This study was eventually stopped because 
of a lack of local consensus over the alternatives. In 1988, 
Reclamation initiated the Josephine County Water Management Improvement 
Study in response to requests by Josephine County and GPID. The main 
objectives of this study were to (1) help resolve conflicts over water 
uses in Josephine County, and (2) identify a permanent solution to 
salmon and steelhead passage problems as Savage Rapids Dam. Because of 
a number of factors, the study focus narrowed to fish issues at the 
Dam. Reclamation's planning report/final environmental statement was 
filed on August 30, 1995 followed by a Record of Decision.
    Lawsuits filed by the State of Oregon, and the United States (on 
behalf of the National Marine Fisheries Service), resulted in the 
previously mentioned Consent Decree. The bottom line of the Decree is 
that GPID must cease irrigation diversions using the dam no later than 
November 1, 2006.
    The Consent Decree is general and open ended with respect to how 
the financing will work and whether there is any repayment obligation 
for the work performed for GPID. In addition, it presents two possible 
plans. The first plan focuses on construction of pumping facilities 
followed by dam removal combined with natural erosion of the sediment 
trapped behind the dam. This is the preferred alternative from 
Reclamation's 1995 planning report/final environmental statement on 
improving fish passage at the Dam. The second plan, which was 
previously considered by Congress, would add to the first plan by 
providing a subsidy for pumping power and funding for as yet 
unidentified riparian, fishery habitat, and recreation habitat, and 
recreation enhancements.
    The baseline Federal costs for this first plan has been estimated 
in 2003 to be approximately $15 million for the pumping facilities and 
over $6 million for dam removal. Additional NEPA analysis will be 
required in this effort and those costs are included in these 
estimates. The Federal costs for the additional elements in the second 
plan are unclear. The cost for pumping power is currently estimated at 
$250,000 per year. The cost of the remaining plan elements are open 
ended and would depend on what limitations Congress chooses to place on 
them.
    It is important to note that this project was not included in the 
Administration's Fiscal Year 2004 budget request. Reclamation is 
currently preparing its submittal to the FY 2006 budget, which is the 
earliest that the project could be considered in the President's 
request. The Department of the Interior reserves the right to comment 
on the appropriateness of appropriations based on the current facts and 
latest analysis. In summary, Reclamation is facing obligations for many 
previously authorized federal projects. While we recognize that 
completion of this project would permanently eliminate the impacts that 
operation of the Dam currently has on coho salmon (which are listed as 
threatened under the Endangered Species Act) as well as on other 
anadromous fish, we believe completing our existing obligations should 
have a higher priority over work on non-federal facilities.
    This concludes my statement. I will be glad to answer any 
questions.

    Senator Murkowski. Commissioner, on S. 1308, we understand 
that Reclamation completed a final environmental statement in 
1995, on improving fish passage at the dam. Does Reclamation 
support the proposal outlined in that report?
    Mr. Keys. Madam Chairman, the report is a good report. It 
is one that we had a lot of local input on. We worked very 
closely with the State in producing that report. And the 
solution is a good solution. We're saying that it's a good 
report, it's a good project, but that it should not be a Bureau 
of Reclamation responsibility to fund it.
    Senator Murkowski. So I think you support it, but you just 
aren't in agreement with the funding?
    Mr. Keys. Madam Chairman, it's a good report. We just don't 
think the Bureau of Reclamation should pay for it.
    Senator Murkowski. All right, that's fair.
    Okay, if you want to move to the next one, then.
    Mr. Keys. Madam Chairman, S. 1355 would authorize 
Reclamation to participate in implementation of the Wallowa 
Lake Rehabilitation Program and the Wallowa Valley Water 
Management Plan in Oregon. Reclamation believes the Wallowa 
Lake Dam Rehabilitation Program and Water Management Plan are 
potentially worthwhile, with numerous benefits.
    While we believe that there may be merit to this proposed 
project, the Department does not support S. 1355, as currently 
drafted. Wallowa Lake Dam is privately owned and operated by 
the Associated Ditch Companies. Dam safety deficiencies have 
been identified by the Army Corps of Engineers and Army Water--
the Oregon Water Resources Department. The Ditch Companies, in 
conjunction with the Grand Ronde Model Watershed and 
Reclamation and other local, State, and Federal agencies, have 
developed the Wallowa Lake Dam Rehabilitation Program to 
address dam safety deficiencies and develop the Wallowa Valley 
Management Plan to tie correction of these deficiencies to 
larger environmental issues in the Wallowa River Basin. The dam 
rehabilitation program and water management plan is a 6-year 
proposal with an estimated cost of $38.8 million.
    S. 1355 sets an 80/20 cost-share for these estimates for 
these efforts under which the Federal Government would pay $32 
million, funded through the Bureau of Reclamation. While the 
programs developed by the districts and the Model Watershed 
provide a concept, they do not meet Federal standards 
established in the principles and guidelines for planning water 
development programs. Furthermore, the project involves species 
listed under the Endangered Species Act. Should Reclamation be 
authorized to fund this project, it would constitute a major 
Federal action subject to consultation under section 7 of the 
Endangered Species Act. It would also likely require compliance 
with NEPA.
    The bill, as currently drafted, excludes Reclamation's 
participation in the planning stages of the project. 
Consequently, it would be difficult for Reclamation to meet the 
environmental compliance requirements for the Endangered 
Species and the National Environmental Policy Act. Until 
adequate planning can be completed, the administration cannot 
support funding of this project.
    I would emphasize, again, that Wallowa Dam is another non-
Federal facility for which large amounts of Federal money is 
being requested to work on in the same category as Savage 
Rapids. The proposed bill currently would authorize Reclamation 
to provide funding for dam rehabilitation activities. However, 
it does not provide administrative authority to transfer those 
funds. The legislation would need revision to provide 
Reclamation authority to issue grants. We would be ready to 
work with the committee in developing the appropriate language 
to do these if you decided to go ahead with the bill.
    We're also concerned that Reclamation's participation in 
the program would adversely affect ongoing projects and 
operations. S. 1355 would authorize the use of $32 million of 
Reclamation funds for a non-Federal purpose. Reclamation funds 
are limited and are targeted to perform essential functions at 
our projects, such as security, operations, maintenance, 
resource management, dam safety, and construction.
    In addition, despite the very high Federal cost-share for 
the project under S. 1355, there is no provision for repayment 
by project beneficiaries, in accordance with Reclamation law.
    Funding for this project was not included in the 
President's budget, and we cannot support activities which 
might detract from high-priority work on current Bureau of 
Reclamation facilities. The Department cannot, therefore, 
support S. 1355.
    [The prepared statement of Mr. Keys follows:]
   Prepared Statement of John W. Keys, III, Commissioner, Bureau of 
          Reclamation, Department of the Interior, on S. 1355
    Mr. Chairman and Members of the Subcommittee I am John Keys, 
Commissioner of the Bureau of Reclamation. I appreciate the opportunity 
to present the Department's views on S. 1355, a bill that would 
authorize Reclamation to participate in implementation of the Wallowa 
Lake Dam Rehabilitation Program and Wallowa Valley Water Management 
Plan in Oregon. Reclamation believes the Wallowa Lake Dam 
Rehabilitation Program and Wallowa Valley Water Management Plan are 
potentially worthwhile, with numerous benefits. While we believe there 
may be merit to this proposed project, the Department does not support 
S. 1355, as currently drafted.
    Wallowa Lake Dam is a privately-owned dam constructed in 1918 and 
raised in 1929, and is owned and operated by the Associated Ditch 
Companies, Inc. (ADC). Dam safety deficiencies have been identified by 
the United States Army Corps of Engineers and Oregon Water Resources 
Department. ADC, in conjunction with the Grande Ronde Model Watershed, 
Reclamation, and other local, state, and Federal agencies, developed 
the Wallowa Lake Dam Rehabilitation Program to address dam safety 
deficiencies and developed the Wallowa Valley Water Management Plan to 
tie correction of those deficiencies to larger environmental issues in 
the Wallowa River Basin. The Dam Rehabilitation Program and Water 
Management Plan is a six year proposal with an estimated total cost of 
$38,800,000. S. 1355 sets out an 80/20 cost share for these efforts, 
under which the Federal government would pay $32 million funded through 
the Bureau of Reclamation.
    While the programs developed by the ACD and the Model Watershed 
provide a concept, they do not meet Federal standards established in 
the Principals and Guidelines for planning water development programs. 
Furthermore, the project may affect species listed under the Endangered 
Species Act (ESA). Should Reclamation be authorized to fund this 
project, a funding decision may constitute a major Federal action 
subject to consultation under Section 7 of the ESA. It would also 
require environmental analysis in compliance with the National 
Environmental Policy Act (NEPA). The bill, as currently drafted, does 
not provide for Reclamation's participation in the planning stages of 
the dam rehabilitation aspects of the project and separates dam 
rehabilitation from implementation of the water management plan. 
Consequently, it would be difficult for Reclamation to meet the 
environmental compliance requirements for the ESA and NEPA. Until 
adequate planning can be completed, the Administration can not support 
funding this project.
    The proposed bill would authorize Reclamation to provide funding to 
the ADC for dam rehabilitation activities, [nit] however, it does not 
provide administrative authority to transfer those funds. The 
legislation would need revision to provide Reclamation authority to 
issue grants. We would be pleased to work with the Committee in 
developing appropriate language.
    Finally, we are concerned that Reclamation's participation in this 
program would adversely impact ongoing projects and operations. S. 1355 
would authorize the use of Reclamation funds for a non-Federal purpose. 
Reclamation funds are limited and are targeted to perform essential 
functions at our projects, such as security, operations and maintenance 
(O&M), resource management, dam safety, and construction. In addition, 
despite the very high Federal cost share for the project under S. 1355, 
there is no provision for repayment by project beneficiaries in 
accordance with Reclamation law. Funding for this project was not 
included in the President's budget, and we can not support activities 
which detract from high priority work on current Bureau of Reclamation 
facilities. The Department cannot, therefore, support S. 1355.
    Thank you again for the opportunity to provide the Administration's 
position on S. 1355. I would be happy to answer any questions you might 
have.

    Senator Murkowski. If there were the funds for repayment, 
would that change the Administration's position, or are there 
other issues surrounding it that continue to make it 
complicated?
    Mr. Keys. Madam Chairman, there are a number of other 
issues there in this bill that would require attention, even if 
there were cost-share. First, it is not a Federal facility. 
There are certain, I would say, quality--engineering quality 
things that are not there that we would require. The current 
authorization doesn't allow us to get in and do the proper 
planning. That would include the NEPA work and the ESA, 
Endangered Species Act, work. There are a number of changes 
that would need to be made.
    Senator Murkowski. Thank you.
    Mr. Keys. Madam Chairman, H.R. 1284 amends the Reclamation 
Projects Authorization and Adjustment Act of 1992 to increase 
the Federal share of the cost of San Gabriel Basin 
Demonstration Project located in California. Based on our 
investigation of this project, we do not believe a cost-ceiling 
increase is warranted at this time. As we stated in testimony 
before the House Resource Committee on this bill, the 
administration cannot support H. R. 1284, as written. We 
believe there is sufficient funding available to provide the 
Federal cost-share for all projects that are contemplated for 
the San Gabriel Basin cleanup program.
    We believe that the dual funding ceiling provided by title 
XVI authority and the restoration fund, which may also be 
available for these projects, is sufficient to provide the 
Federal cost-share for all projects that are contemplated for 
the San Gabriel Basin cleanup program. This title XVI project 
has more than $8 million remaining under its ceiling after full 
funding of all current project obligations. The restoration 
fund has $25 million remaining under its ceiling after fully 
funding all current project obligations.
    We believe that this will adequately cover future projects 
being contemplated; therefore, the cost ceiling for the San 
Gabriel Basin Demonstration Project authorized by title XVI 
does not need currently to be increased beyond its authorized 
limit. And, thus, the Administration cannot support H.R. 1284.
    I would like to note that we have had an excellent working 
relationship with the San Gabriel Demonstration Project and 
Congressman Napolitano there, and look forward to working with 
them to complete this important project.
    Madam Chairman, that concludes all of my statements.
    [The prepared statement of Mr. Keys follows:]
   Prepared Statement of John W. Keys, III, Commissioner, Bureau of 
         Reclamation, Department of the Interior, on H.R. 1284
    Madam Chairman, and members of the Subcommittee, I am John Keys, 
the Commissioner of the Bureau of Reclamation. I am pleased to be here 
today to comment on H.R. 1284, which amends the Reclamation Projects 
Authorization and Adjustment Act of 1992, to increase the Federal share 
of the costs of the San Gabriel Basin Demonstration Project.
    Based on our investigation of this project, we do not believe a 
cost ceiling increase is warranted at this time and, as we stated in 
testimony before the House Resources Committee on this bill, the 
Administration cannot support H.R. 1284 as written. We believe that 
there is sufficient funding available to provide the Federal cost share 
for all projects that are contemplated for the San Gabriel Basin 
cleanup program.
    Title XVI of P.L. 102-575, enacted in 1992, authorizes Reclamation 
to participate in the San Gabriel Basin Demonstration Project. There 
are three components of the project: the Rio Hondo Water Recycling 
Program, the Central Basin Municipal Water District; the San Gabriel 
Valley Water Reclamation Project with the Upper San Gabriel Valley 
Municipal Water District; and the San Gabriel Basin Demonstration 
Project being done by the San Gabriel Basin Water Quality Authority. 
Reclamation is authorized to provide up to 25 percent of the cost of 
planning, design, and construction of the project components for a 
Federal contribution of no more than $38,090,000.
    Congress provided the initial appropriation for the project in 
Fiscal Year 1994, and through Fiscal Year 2003, a total of $28,852,000 
has been made available for the three components. Of that amount, all 
but $6,000 has been obligated to existing agreements. With the 
exception of Rio Hondo and San Gabriel Valley Reclamation components, 
all existing agreements have been fully funded. The Rio Hondo and San 
Gabriel Valley Reclamation components, which are water recycling 
projects, should be completed within the next two years, and are within 
$700,000 of being fully funded for the 25 percent Federal share. This 
leaves a net available amount of $8.6 million before the ceiling is 
reached.
    The primary component of the San Gabriel Basin Demonstration is the 
groundwater cleanup program that will result in the Basin being used as 
a conjunctive use water resource for the region. Reclamation, working 
closely with the San Gabriel Basin Water Quality Authority since 1994, 
has executed 9 funding agreements with the Authority to fund specific 
portions of the cleanup work. All agreements have been fully funded for 
the 25 percent Federal share.
    Over the last ten years that the project has received funding, the 
schedules for all three components have slipped significantly. In light 
of this, the San Gabriel Basin Demonstration Project has consistently 
carried over significant amounts of unexpended funds every year as a 
result of the extended schedules. Due to these delays, the construction 
schedule is not firm. In addition, smaller agreements to cover cleanup 
projects in the El Monte, South El Monte and Puente Valley Operable 
Units are being implemented. An agreement has been executed with the 
Water Quality Authority to fund design activities for these Operable 
Units. We have executed an agreement for the Monterey Park Treatment 
Facility, which is in the South El Monte Unit. To date we have 
obligated $2.425 million for the project, and spent approximately 
$1,114,000 of that amount.
    We believe that the total funding ceiling provided by the Title XVI 
authority and the Restoration Fund, which may also be available for 
these projects, is sufficient to provide the Federal cost share for all 
projects that are contemplated for the San Gabriel Basin cleanup 
program. This Title XVI project has more than $8 million remaining 
under its ceiling after fully funding all current project obligations. 
The Restoration Fund has $25 million remaining under its ceiling after 
fully funding all current project obligations. We believe that this 
will adequately cover future projects being contemplated. Therefore, 
the cost ceiling for the San Gabriel Basin Demonstration Project 
authorized by Title XVI does not need currently to be increased beyond 
its authorized limit and thus the Administration cannot support H.R. 
1284
    In conclusion, Madam Chairman, I want to add that we have had an 
excellent working relationship with the San Gabriel Demonstration 
Project partners and look forward to working with them to complete this 
important project. This concludes my remarks. I would be happy to 
answer any questions at this time.

    Senator Murkowski. Did we do S. 1577?
    Mr. Keys. I'm sorry?
    Senator Murkowski. I was just asking for clarification, if 
we had gotten anything on S. 1577, but I'm told that FERC had 
submitted something for the record.
    So, great. So, if--well, thank you. I appreciate your 
summations and your testimony on the record this afternoon.
    [The prepared statement of Mr. Woods follows:]
            Prepared Statement of Pat Wood, III, Chairman, 
                  Federal Energy Regulatory Commission
    Madam Chairman and Members of the Subcommittee: I appreciate the 
opportunity to comment on S. 1577, a bill to extend the deadline for 
commencement of construction of a hydroelectric project in the State of 
Wyoming.
    Section 13 of the Federal Power Act requires that construction of a 
licensed project be commenced within two years of issuance of the 
license. Section 13 authorizes the Federal Energy Regulatory Commission 
to extend this deadline once, for a maximum additional two years. If 
project construction has not commenced by this deadline, the Commission 
is required to terminate the license. Section 13 also authorizes the 
Commission to extend the deadline for completion of construction when 
not incompatible with the public interest.
                              the project
    On December 19, 1997, the Commission issued a license to Swift 
Creek Power Company to rehabilitate, operate, and maintain the 1.5-
megawatt Swift Creek Project No. 1651, in Lincoln County, Wyoming. The 
project occupies 20 acres of federal land within the Bridger-Teton 
National Forest. The original deadline in the license for the 
commencement of construction, December 18, 1999, was, at the licensee's 
request, extended by the Commission to December 18, 2001, four years 
after license issuance. The request cited the lack of a power purchase 
contract. The licensee did not ask the Commission for any further 
extensions of the deadline. On November 29, 2002, Swift Creek Power 
Company and the Town of Afton, Wyoming, filed a joint application to 
transfer the project license from the company to the town. In response 
to notice of the application, the U.S. Forest Service filed on February 
28, 2003, a motion to intervene in the transfer proceeding, and 
commented that it supported the transfer if it facilitated either 
placing the project back into operation or removing the project works 
from and restoring National Forest System lands. Action on the 
application remains pending.
    Rehabilitation of the upper development of Project No. 1651 entails 
modifying the upper dam to add one-foot stoplogs, replacing a 36-inch-
diameter penstock with one 48 inches in diameter, dredging around the 
intake structures, refurbishing the powerhouse, and installing two 
generators. Rehabilitation of the project's upper development entails 
dredging behind the lower dam, installing a 2,000-foot-long hurled 
penstock, building a powerhouse, installing two generating units, and 
burying a short new transmission line.
                            the legislation
    S. 1577 would authorize the Commission, at the request of the 
licensee for the project, and after reasonable notice, in accordance 
with the good faith, due diligence, and public interest requirements of 
that section and the Commission's procedures under that section, to 
extend the time period during which the licensee is required to 
commence the construction of the project for three consecutive two-year 
periods from the date of the expiration of the extension originally 
issued by the Commission.
    The Commission interprets the deadlines in Section 13 as applying 
only to the initial construction of a project. Project No. 1651 was in 
existence when the project was issued a new license in 1997, although 
refurbishment of the damaged project entails significant new 
construction. But while Section 13 is not an impediment to the Project 
No. 1651 licensee, the Commission has rarely given a licensee more than 
ten years to commence new construction at an existing project.
    As a general matter, enactment of bills authorizing or requiring 
commencement-of-construction extensions for individual projects delays 
utilization in the public interest of an important energy resource and 
therefore is not recommended. In cases where project specific 
extensions are authorized by the Congress, it has been the position of 
prior Commission chairmen that such extensions should not go beyond ten 
years from the date the project was licensed. I have no reason to 
depart from this extension policy.
    S. 1577 would permit the licensee for Project No. 1651 to extend 
the deadline for commencement of construction for three consecutive 2-
year periods from the date of the expiration of the extension 
originally issued by the Commission. Accordingly, construction could 
commence no later than ten years from the date the license was issued. 
This time frame is therefore consistent with the Commission's policy, 
and I have no objection to the bill.

    Mr. Keys. Madam Chairman, we'll look forward to working 
with you on all of these. We have worked with a number--the 
fact is, most of the sponsors of these bills, and certainly we 
would continue to work with them, certainly some of them we 
like better than others, but we will work on all of them with 
you.
    Senator Murkowski. We appreciate that cooperation. Thank 
you.
    All right. Our final panelist is Mr. Jim Broderick, general 
manager of the Southeastern Colorado Water Conservancy 
District. And Mr. Broderick will be presenting testimony in 
support of S. 1058.
    Welcome. Good afternoon.

   STATEMENT OF JIM BRODERICK, GENERAL MANAGER, SOUTHEASTERN 
        COLORADO WATER CONSERVANCY DISTRICT, PUEBLO, CO

    Mr. Broderick. Good afternoon. Thank you, Madam Chairman.
    My name is Jim Broderick, and I'm the general manager of 
Southeastern Colorado Water Conservancy District. I thank you, 
Madam Chairman, for this opportunity to present testimony on S. 
1058. I also would like to thank Senators Allard and Campbell 
and Congressman Musgrave for their assistance in sponsoring 
this legislation. I also would like to ask Madam Chairman to 
include my written testimony to be included in the record.
    Senator Murkowski. It will be included. Thank you.
    Mr. Broderick. I would like to go over a little bit of the 
history of this project. The Fryingpan-Arkansas Project was 
enacted in 1962. The statute requires 100 percent reimbursement 
of Federal costs and construction of facilities. The Arkansas 
Valley Conduit was authorized in the original Fryingpan-Ark 
Project. The standard Bureau policy of 100 percent 
reimbursement has prevented the conduit construction since 
1962. The needs of the area, in 1950, the Bureau reported, 
identified local water supplies as unacceptable.
    In February 2002, the Colorado Department of Public Health 
and the Environmental Department identified the lower Arkansas 
River as the most saline stream of its size in the United 
States. The local water suppliers are struggling to comply with 
the unfunded Federal water quality mandates. Too many local 
drinking-water suppliers are currently under enforcement orders 
from the Colorado Department of Public Health and Environment. 
The public health and the economy is at risk.
    Searchers for solutions that we've looked at as the local 
water suppliers cannot and will not continue to operate under 
enforcement orders. They need a new source of water to replace 
or blend with local supplies. The local communities formed 
committees in 2000 to search for solutions. The Water Works 
Committee founded a feasibility study to examine the conduits 
and its alternatives.
    The alternatives that were looked at and brought forward 
from the feasibility study identified two alternative 
solutions--treatment facilities or source replacement by 
conduit. A series of treatment facilities, if we looked at 
that, the costs are uncertain and variable. The operation and 
maintenance of those would be approximately 6.62 million per 
year, which is too expensive for the communities. The treatment 
wastes approximately 15 to 20 percent of the water on average, 
and in some cases up to 50 percent. Treatment waste disposal is 
expensive, and, pending new State regulations, could become 
even more so. And local suppliers can't afford the treatment.
    On the conduit side of the alternative, under the status 
quo, costs are certain. The initial construction of $187 
million is too expensive. The local suppliers can't afford the 
conduit under the status quo.
    Under S. 1058, if it is amended, the existing authorization 
to create a 75-Federal/25-local share--cost-sharing requirement 
would be included. The conduit would transport water to 16 
municipalities and 25 water agencies from Pueblo to the Kansas 
border. The costs are acceptable. Local suppliers can afford 
this amount, and the benefits of public health and the economy 
are great.
    In conclusion, I would like to thank you, Madam Chair, for 
allowing me to testify. The existing Bureau policy is the only 
reason the conduit has never been built. The existing Bureau 
policy is the reason one-fifth of our water suppliers are out 
of compliance with the Federal drinking-water standards. Unless 
existing Bureau policy is amended to recognize our unique 
circumstances, our economically depressed region will continue 
to suffer from poor drinking-water supplies. Treatment will be 
saddled with our economy and depressed communities with 
operation and maintenance obligations that we simply can't 
afford.
    The conduit is the only possibility--with the enactment of 
S. 1058--is the only viable option we have to provide safe, 
clean, and affordable water for our communities.
    [The prepared statement of Mr. Broderick follows:]
         Prepared Statement of Jim Broderick, General Manager, 
      Southeastern Colorado Water Conservancy District, Pueblo, CO
                              introduction
    My name is Jim Broderick, General Manager of the Southeastern 
Colorado Water Conservancy District (the District), and I am testifying 
today in support of S. 1058, a bill to provide a cost-sharing 
requirement for the construction of the Arkansas Valley Conduit (the 
Conduit) in the State of Colorado. I would like to thank the 
Subcommittee for the opportunity to testify today. I also thank 
Senators Allard and Campbell and Congresswoman Musgrave for their 
leadership in introducing this legislation and the Subcommittee for 
holding this hearing today.
    Like many other regions in the Western United States, Southeastern 
Colorado is growing. The Lower Arkansas Valley is economically 
disadvantaged and faces projected population growth. It also has a 
historically unsatisfactory quality of drinking water, and faces 
increasingly costly, unfunded federal water quality mandates. The 
District's smaller communities, especially those east of Pueblo who 
rely on groundwater for their main water supply, need to develop a 
higher quality drinking water supply for their residents. The Conduit, 
if constructed, would provide safe, clean, affordable drinking water to 
the communities of Southeastern Colorado's Lower Arkansas Valley.
                                 secwcd
    The District is the local sponsor of the Fryingpan-Arkansas Project 
(the Fry-Ark Project), a multipurpose project authorized by Congress 
and enacted into law in 1962 and amended in 1978. The completed aspects 
of the project constructed by the Bureau of Reclamation (Reclamation) 
store and deliver water for municipal and agricultural use within the 
nine-county service area of the District, Arkansas River basin, 
Colorado. The District, through its Water Activity Enterprise, has 
agreed to manage and organize the efforts necessary to make the Conduit 
a reality. The goal of the Fry-Ark Project legislation was to provide a 
supplemental supply of water and storage for native agricultural and 
municipal water supplies. Both the 1962 and 1978 Acts contemplated the 
construction of the Arkansas Valley Conduit.
                          local water quality
    Our communities face significant challenges from our local water 
supplies. The local water available from the Arkansas River alluvium 
has historically been high in Total Dissolved Solids (TDS), sulfates, 
and calcium, and has objectionable concentrations of iron and 
manganese. The Colorado Department of Public Health and Environment 
(CDPHE), in their most recent report (February 2002) on the status of 
water quality in Colorado, stated that that ``Lower Arkansas River in 
Colorado is the most saline stream of its size in the U.S. The average 
salinity levels increase from 300 parts-per-million (ppm) TDS east of 
Pueblo to over 4,000 ppm near the Kansas state line. The shallow 
alluvial groundwater along the River has similar salinity.'' 
Additionally, various water suppliers have recently reported measurable 
concentrations of radionuclides in their water.
    This is not a new problem. As early as 1950, the Secretary of the 
Interior acknowledged that additional quantity and better quality of 
domestic and municipal water was critically needed for the Arkansas 
Valley, and in particular for those towns and cities east of Pueblo. In 
a 1950 report on the project, the Bureau stated, ``All towns in the 
valley except Colorado Springs need an improved quality of municipal 
water.'' In describing the specific aspects of the Fry-Ark Project's 
municipal water system, the 1950 report anticipated entirely replacing 
``existing unsatisfactory supplies'' for the valley towns East of 
Pueblo. Specifically, the report recommended the construction of a 130-
mile pipeline to supply this replacement water.
    As a result of the poor water quality, many of the water providers 
do not satisfy, or only marginally satisfy, existing drinking water 
standards. Too many of our local water suppliers operate under 
enforcement orders from the CDPHE for carcinogens in the water. 
Generally, all drinking water systems in the Lower Arkansas River 
Basin, from St. Charles Mesa in eastern Pueblo County to Lamar in 
Prowers County, are concerned with the poor water quality in this 
region.
    All communities must meet the state and federal primary drinking 
water standards through treatment or source replacement. Less 
documented, however, is the potential burden placed upon communities by 
high raw water concentrations of various unregulated water quality 
constituents such as iron, manganese and hardness. These constituents 
can cause accelerated infrastructure decay and loss of tax base and 
economic impacts associated with factories and businesses locating 
elsewhere.
                    the conduit and its alternatives
    House Document 187, 83d Congress, 1st Session, and the Fryingpan-
Arkansas Final Environmental Statement dated April 16, 1975, both of 
which have been incorporated by reference into the Fry-Ark Project Act, 
recognized that the Conduit would be an effective way to address these 
needs.
    As much as 50 years later, representatives of local and county 
governments, water districts and other interested citizens of the Lower 
Arkansas River Basin formed a committee in 2000 to consider a 
feasibility study of the Conduit. The interested parties formed the 
WaterWorks! Committee and, through a grant from the Colorado Water 
Conservation Board and support of the District, commissioned a two-
phase feasibility study of the proposed Conduit. As part of the study, 
the Committee sought alternatives to constructing the Conduit.
Treatment
    The extremely poor groundwater quality, combined with increasingly 
stringent water quality regulations of the Safe Drinking Water Act, has 
caused two local water suppliers to invest in expensive water treatment 
facilities to assure a reliable water supply for their customers.
    The feasibility report on the Conduit identified a ``No Action'' 
alternative that anticipated costs of satisfying future drinking water 
regulations while utilizing existing sources of supply. This option 
included construction of a series of treatment facilities, similar to 
those currently in use. The costs associated with treatment are 
significant.
    While initial capital costs are lower than construction of the 
Conduit, annual operations and maintenance (O&M) costs for this option, 
assuming only that current practices would be allowed to continue into 
the future, were $6.62 million per year. This figure is likely to be a 
low estimate. CDPHE is currently reviewing its policy and regulations 
concerning reverse osmosis treatment reject with respect to disposal. 
It is likely that CDPHE will not allow future disposal of waste 
directly into surface waters, which would significantly increase the 
cost of treatment. Additionally, if the EPA issues additional unfunded 
water quality mandates, the cost of treatment will increase with 
necessary retrofits to facilities and heightened O&M costs.
Status Quo
    The status quo includes an authorization for the Bureau to 
construct the Conduit. In fact, Reclamation has been authorized to 
construct the Conduit for more than 40 years. We believe this would 
solve our water quality problems. However, the status quo also requires 
the local beneficiaries to reimburse the Bureau for 100 percent of its 
costs. The feasibility report examined local government borrowing 
capacity and determined that ``Even if all of the jurisdictions used 
all of their debt capacity for this one project, only a fraction of the 
total pipeline costs could be funded by local government borrowings.''
    A study of the Conduit was prepared for the District, the Four 
Corners Regional Commission and Reclamation in 1972. The report's 
recommendations for construction of a water treatment plant, pumping 
station and the Conduit to serve 16 communities and 25 water 
associations east of Pueblo were not implemented at that time due to 
the authorizing statutes' requirement for local reimbursement of 100 
percent of the construction costs.
    Evaluations on the quantity of water needed to satisfy long-range 
objectives for water users in the Southeastern District area were 
prepared in 1998. Additionally, an update of the estimated construction 
costs of the Conduit presented in the 1972 was updated in 1998. Each 
time that construction of the Conduit has been attempted since its 
authorization, the Bureau's standard policy of requiring 100 percent 
reimbursement of construction costs has prevented the local communities 
from participating.
S. 1058
    The feasibility report estimated the financial capabilities of the 
participating agencies to be inadequate to fund either the construction 
of the proposed Arkansas Valley Conduit or the operation of the No 
Action alternative. It also estimated that the full financial 
capabilities of counties, cities, and water agencies in the project 
area could finance approximately 25 percent of the project cost to 
satisfy safe drinking water regulations.
    Recognizing our unique need, Senator Allard introduced legislation, 
S. 1058, to eliminate the one obstacle that has prevented the Conduit's 
construction for the past 40 years: the standard Bureau policy 
requiring 100 percent reimbursement for the project. In it place, S. 
1058 would create a cost-share mechanism similar to those found in 
other municipal water projects constructed by the Bureau and authorized 
by this Committee. The local share would be 25 percent of the 
construction costs of the Conduit. Senator Campbell cosponsored the 
bill in the Senate, and Congresswoman Musgrave introduced a companion 
bill in the House with the cosponsorship of Congressman McInnis.
    The Conduit project, as recommended by the feasibility report, 
would include a welded, all-steel pipeline, land acquisition for 
easements, necessary pipeline appurtenances, and 16 million gallons of 
reinforced concrete water storage tanks located along a preferred 
alignment. The estimated project cost for construction along the 
preferred pipeline alignment, an alignment that does not require 
pumping, is $175 million.
    The estimated Net Present Value of the proposed Arkansas Valley 
Conduit project, including construction and O&M costs, is approximately 
$235 million. The $235 million Net Present Value compares favorably 
with the estimated Net Present Value of the No Action alternative ($187 
million) when O&M costs and the potential for new, unfunded federal 
water standards are taken into account.
                               conclusion
    The citizens and communities of the Lower Arkansas River Basin have 
waited 30 to 50 years for this project that will improve their water 
quality and supply. The need for this project has been well established 
for more than 50 years. S. 1058 fulfills the promise of the Arkansas 
Valley Conduit made 40 years ago with the passage of the Fry-Ark Act by 
providing the one thing that has been missing for all of these years: a 
realistic acknowledgement of these communities' ability to pay and a 
partnership to allow this much-needed project to move forward.
    I urge this Subcommittee to act quickly to move this legislation 
towards enactment. I would be happy to answer any questions the Chair 
or Committee members may have on this legislation.

    Senator Murkowski. Thank you, Mr. Broderick.
    The feasibility study you mentioned, did you consider a 
full range of the potential funding sources for the project, 
beyond the cost-sharing proposal that we see in the 
legislation?
    Mr. Broderick. Madam Chairman, the answer to that is yes. 
The financial evaluation considered the ability of likely 
participating local government's ability to issue and to pay 
back debt. The State funding sources and a number of 
established funding sources at the Federal level tapped fees 
and user charge fees and other customers' contributions. The 
conclusion was that the financial and rate-paying capabilities 
of the participating agencies are estimated to be inadequate to 
fund either the construction of the conduit or the operation of 
the no-action alternative.
    And the full financial capabilities of the counties, 
cities, and water agencies in the project area could finance 
approximately 25 percent of the cost of the projects for the 
feasibility--for the facilities to satisfactorily take care of 
the safe drinking water regulations.
    Senator Murkowski. A question that I had asked of 
Commissioner Keys that was actually answered by Senator Allard 
with regards to the operating maintenance and replacement, 
Senator Allard indicated that that would be picked up, if you 
will, within the communities. I'm assuming you have some kind 
of a framework or a structure in place for the establishing the 
rates and the fees for this end of the project?
    Mr. Broderick. That is correct. We do.
    Senator Murkowski. And was there anything in the 
feasibility report itself that revealed any significant 
environmental problems or any other issues that would preclude 
or argue against this legislation moving forward?
    Mr. Broderick. The final report on the feasibility 
evaluation of the Arkansas Valley Conduit did not identify any 
apparent environmental fatal flaws and would prohibit the 
implementation of the Arkansas Valley Conduit.
    Senator Murkowski. And would not?
    Mr. Broderick. Would not. The conduit has been discussed 
regularly in public hearings and public meetings for the past 
four years, and the environmental interest groups and others 
have raised no objection within that time period.
    Senator Murkowski. Thank you. I appreciate your coming and 
joining us in Washington to provide the testimony this 
afternoon.
    Mr. Broderick. Thank you very much. It's my pleasure.
    Senator Murkowski. With that, we have nothing else before 
us this afternoon, so we are concluded for the day.
    Thank you.
    [Whereupon, at 3:50 p.m., the hearing was adjourned.]
                                APPENDIX

              Additional Material Submitted for the Record

                              ----------                              

                                      United States Senate,
                                  Washington, DC, October 15, 2003.
Hon. Lisa Murkowski,
Chairman, Subcommittee on Water and Power, Committee on Energy and 
        Natural Resources, Dirksen Senate Office Building, Washington, 
        DC.

Hon. Byron L. Dorgan,
Subcommittee on Water and Power, Committee on Energy and Natural 
        Resources, Dirksen Senate Office Building, Washington, DC.
    Dear Chairman Murkowski and Senator Dorgan: The States of Nebraska, 
Colorado and Wyoming have been engaged in negotiations with the U.S. 
Department of the Interior to develop a collaborative basinwide program 
for the recovery of certain endangered species which utilize the 
central Platte area of Nebraska. If that program can be successfully 
implemented, it will serve as compliance under the Endangered Species 
Act for all water use activities in the basin which existed prior to 
July 1, 1997.
    Among the pre-1997 water uses that would benefit from the 
establishment of a basinwide program for endangered species are uses by 
Wyoming and Nebraska irrigation districts that have contracts for a 
portion of the storage of the Glendo Reservoir in Wyoming. Currently, 
there are four Nebraska districts that have contracts, collectively, 
for all of Nebraska's 25,000 acre-feet allocation from that reservoir. 
Wyoming has five irrigation district contractors that together account 
for slightly less than 1/3 of Wyoming's 15,000 acre-feet allocation. 
Originally, all of these contracts were set to expire at the end of 
1998. However, by enacting the Irrigation Project Contract Extension 
Act of 1998, as amended, Congress extended those contracts until 
December 31, 2003, to coincide with then anticipated conclusion of the 
negotiation process referred to above.
    While I am very pleased to report that the negotiations to 
establish a basinwide program are alive and well, I must also report 
that they have not yet reached conclusion. However, much progress has 
been made and the Department of the Interior will release its Draft 
Environmental Impact Statement for the proposed program by the end of 
this year. That puts the process on a track that would lead to a Record 
of Decision by the Secretary of the Interior by the end of 2004 and 
decisions by the governors of each of the three states by June 30, 
2005.
    Obviously, the Glendo contract extensions that Congress granted in 
1998 have proven to be insufficient in length. Assuming that the 
Department's Record of Decision is favorable and that each of the 
states also support and agree to participate in the Program, the 
basinwide program will be capable of providing ESA compliance for the 
Glendo contractors in the latter half of 2005. It is essential that 
Congress provide those contractors the time necessary for that to 
occur. S. 1027 will meet that need by extending the contracts by 
another two years, that is until December 31, 2005. All four of the 
Nebraska districts that have Glendo contracts support the requested 
extension. Copies of their letters or resolutions of support are 
attached to my testimony.*
---------------------------------------------------------------------------
    * The letters and resolution have been retained in subcommittee 
files.
---------------------------------------------------------------------------
    I ask for this subcommittee's prompt action on S. 1027, and its 
House companion bill, H.R. 2040. Thank you for your attention to this 
important matter.
            Sincerely,
                                        E. Benjamin Nelson,
                                                      U.S. Senator.
                                 ______
                                 
                  Northwest Power and Conservation Council,
                                      Portland, OR, August 8, 2003.
Hon. Lisa Murkowski,
Chair, Subcommittee on Water and Power, Committee on Energy and Natural 
        Resources, U.S. Senate, Washington, DC.
    Dear Madame Chair: The Northwest Power and Conservation Council was 
established by Congress in 1980 and created as an interstate compact by 
the states of Idaho, Montana, Oregon and Washington. Its purpose is to 
develop a 20-year regional electric power plan to assure for the 
Pacific Northwest an adequate supply of power at the lowest possible 
cost, and to develop a program to protect, mitigate and enhance fish 
and wildlife resources affected by the hydroelectric development in the 
Columbia River Basin.
    The Council works closely with federal and state agencies, Indian 
tribes, private landowners, and others to implement recovery strategies 
for fish and wildlife recovery in the basin, including efforts to 
implement NOAH Fisheries and the U.S. Fish and Wildlife Service's 
Federal Columbia River Power System biological opinions required under 
the Endangered Species Act. The legal authority for the off-site 
mitigation activities included in NOAA Fisheries' 2000 FCRPS Biological 
Opinion is derived from the Northwest Power Act of 1980 (PL 96-501) 
through the Council's Columbia River Basin Fish and Wildlife Program.
    The Council supports Senator Gordon Smith's legislation, S. 1307, 
which gives the Secretary of the Interior, acting through the Bureau of 
Reclamation, the authority to implement fish passage and screening 
facilities at non-Federal water projects in Oregon, Washington, and 
portions of Idaho. It is critical that this authority be extended to 
the Bureau at the earliest possible opportunity so it can meet its 
habitat mitigation obligations as expressed in the 2000 FCRPS 
Biological Opinion under Reasonable and Prudent Alternative 149. The 
urgency of this need was further heightened by the United States 
District Court of Oregon's May 7, 2003, opinion and order that remanded 
the FCRPS Biological Opinion to NOAA Fisheries to address specific 
flaws that violate the Endangered Species Act and the Administrative 
Procedures Act.
    In his remand, Judge Redden allowed NOAA Fisheries one year to 
modify the biological opinion in a manner that complies with his order. 
He also ordered quarterly progress reports by the federal action 
agencies. The judge ordered that the first report, due October 1, 2003, 
include a discussion of options to modify the hydropower system if the 
off-site mitigation measures cannot be assured.
    Accordingly, the Bureau needs to obtain the authority to meet its 
off-site mitigation habitat obligations as required in RPA 149, as well 
as be in a position to show progress on three fronts in the October 1 
progress report. Those three areas are: 1) the Bureau must show 
progress in obtaining the legal authority; 2) it must have evidence 
that the authority can be implemented (i.e., sufficient funding is 
available); and 3) a Section 7 consultation on the RPA 149 habitat 
program needs to be completed during the one-year duration of the 
remand.
    Due to these requirements, the Council urges you to schedule action 
on S. 1307 at the earliest possible date. By providing the Bureau with 
the authority to construct fish passage facilities and screens at non-
Federal projects, the agency will be able to implement its portions of 
the biological opinion, resulting in increased survival of listed 
salmon and steelhead in the Columbia River basin.
    Thank you for your consideration of this matter.
            Sincerely,
                                            Judi Danielson,
                                                             Chair.
                                 ______
                                 
                           Oregon Water Resources Congress,
                                       Salem, OR, October 15, 2003.
Hon. Lisa Murkowski,
Chairman, Subcommittee on Water and Power, Senate Committee on Energy 
        and Natural Resources.

Subject: Support for S. 1308

    Dear Senator Murkowski: I am writing to express the support of the 
Oregon Water Resources Congress (OWRC) for S. 1308, to authorize the 
Secretary of the Interior, acting through the Bureau of Reclamation, to 
participate in the implementation of a U.S. District Court Consent 
Decree, and for other purposes.
    The OWRC represents irrigation districts and other water supply 
systems serving irrigated agriculture in Oregon. The mission of OWRC is 
to promote the protection and use of water rights and the wise 
stewardship of water resources.
    As a general policy, the OWRC does not support the removal of dams 
that serve irrigated agriculture. There are exceptions to this policy 
based on the benefits resulting from the removal of a particular dam. 
In this case, the removal of the Savage Rapids Dam, the subject of S. 
1308, is an exception to OWRC's policy. Our support for this dam 
removal reflects the benefits to irrigators and fisheries from 
installing new irrigation pumps and removing the dam. The new 
irrigation pumps that will provide water to the Grants Pass Irrigation 
District (GPID), as a replacement for the dam, are key to our decision 
to support this plan.
    As noted in the text of the bill, the removal of the Savage Rapids 
Dam is part of a consent decree involving the GPID a member of the 
OWRC. Based on the fact that GPID is a part to this consent decree and 
our belief that the removal of the Savage Rapids Dam will benefit 
irrigators and fisheries, the OWRC supports the authorization for 
federal participation in the plan outlined in the consent decree.
    On behalf of OWRC, thank you for your consideration of this bill 
that will help the Grants Pass Irrigation District and the other 
parties involved.
            Sincerely,
                                             Anita Winkler,
                                                Executive Director.
                                 ______
                                 
       Statement of Geoffrey M. Huntington, Executive Director, 
                   Oregon Watershed Enhancement Board
    Thank you, Chairwoman Murkowski and members of the committee, for 
the opportunity to present testimony in support of S. 1308, the Savage 
Rapids Dam Act of 2003. I especially want to thank Senator Smith and 
Senator Wyden for introducing this legislation and to encourage the 
committee to favorably report the bill and to see it enacted into law.
    S. 1308 authorizes the U.S. Bureau of Reclamation to pursue and 
carry out actions to implement the U.S. District Court Consent Decree 
United States, et al., v. Grants Pass Irrigation District. The Decree 
represents an agreement reached among the district, community and 
advocacy groups, and the state and federal agencies, that brings to a 
close over 20 years of debate over removal of the dam. The challenge 
now is to execute this consensus-based vision for the Rogue River that 
is a nationally recognized treasure.
    Few projects come along that provide such far-reaching implications 
as removal of Savage Rapids Dam. The Oregon Watershed Enhancement Board 
(OWEB) awarded $3 million in a challenge grant toward this project in 
January 2002. The funds are from the State lottery revenues that are 
constitutionally dedicated to watershed and salmon habitat improvement, 
and are set aside for so long as the participants continue to implement 
the agreed upon schedule for removing the dam and replacing it with 
pumps to supply water to the irrigation district. The state's early 
commitment demonstrates the project's importance and the need to act 
quickly. Timely enactment of the S. 1308 and funding for its 
implementation are critical if the win-win scenario offered by the 
negotiated Consent Decree is to be realized.
    Savage Rapids Dam was built in 1921 to provide a means to divert 
water for the Grants Pass Irrigation District (District) who is the 
sole owner of the facility. The structure is a 39-foot high, 500-foot 
long diversion dam that spans the mainstream of the Rogue River at 
river mile 107. It does not generate electricity, it provides no flood 
control, and it does not affect commercial navigation. The water it 
diverts by impounding the river's flow currently serves 7,700 acres of 
irrigated land located in and around the town of Rogue River in Jackson 
County and the City of Grants Pass in Josephine County. These same uses 
will be satisfied under the Consent Decree using pumps to deliver water 
instead of the existing dam.
    The dam is the most significant barrier to anadromous fish on the 
nationally recognized wild and scenic Rogue River. There are over 500 
miles of salmon and steelhead habitat upstream of the dam, including 50 
miles on the main stem that are impacted by the current facility. The 
dam impedes access to adults and inhibits passage for juveniles. Dam 
removal would eliminate the most significant barrier to federally 
listed salmon stocks in the Rogue Basin, and return this nationally 
recognized river to free flowing condition.
    Years of contentious debate have been set aside as the community, 
public interest groups, and state and federal agencies have arrived at 
two agreements. First, the District will stop diverting water from 
Savage Rapids Dam and allow for its removal by November 2005. Second, 
these numerous entities have signed on to the Consent Decree in support 
of accomplishing this project and the outcomes it represents. Even the 
patrons of the Grants Pass Irrigation District have voted in favor of 
proceeding forward. It was in this collaborative environment that in 
2002, the 17-member OWEB Board voted unanimously in favor of the single 
largest commitment of State funds for a voluntary habitat restoration 
project--$3 million toward removal of Savage Rapids Dam. At that time, 
the citizen board also committed to support efforts to obtain federal 
and private funding to accomplish the goal. S. 1308 is the next step 
toward accomplishing this goal.
    Again, approval of S. 1308 is a critical step,in allowing our 
federal partners to move forward with us to implement a consensus among 
the different interests on how to proceed in a way that preserves the 
integrity of the Grants Pass Irrigation District and accomplishes the 
goal of reestablishing a free flowing main stem Rogue River.
    Thank you for this opportunity to testify in support of S. 1308.
                                 ______
                                 
             Statement of Dan Shepard, Secretary/Manager, 
                    Grants Pass Irrigation District
    Chair Murkowski and members of the Subcommittee: My name is Dan 
Shepard. For ten years I have been the Secretary/Manager of the Grants 
Pass Irrigation District, located in the Rogue River Basin of Southwest 
Oregon. On behalf of my Board of Directors, and on behalf of our 7,900 
water patrons and the entire Southwest region of Oregon, I want to 
thank you for giving me this opportunity to testify in support of S. 
1308.
                    grants pass irrigation district
    The Grants Pass Irrigation District was established in January 1917 
by a vote of the people of the region, and organized as a municipal 
corporation under the laws of the State of Oregon. Almost exactly 83 
years ago, in October 1920, the first concrete for the Savage Rapids 
Dam, built as an irrigation diversion dam spanning the main stem of the 
Rogue River five miles east of the City of Grants Pass, was poured. The 
dam was dedicated on November 5, 1921, and water began flowing through 
the pumps, turbines and irrigation ditches shortly thereafter. It was 
improved and rehabilitated in 1949-1955 by the Bureau of Reclamation. 
The dam's sole purpose is to divert water from the river for 
irrigation. It serves no flood control, storage, navigation or 
hydropower function.
    The dam is approximately 456 feet long and 39 feet high, and 
consists of a 16-bay spillway section and a hydraulic-driven pumping 
plant. A network of 160 miles of canals, laterals, and pipes distribute 
water to 7,900 water patrons. Fishways and ladder facilities have been 
repaired and improved over the years, but despite these efforts fish 
passage is a serious issue. The Rogue River was one of the first 
nationally designated Wild and Scenic Rivers, and five runs of salmon 
and steelhead call this river home. For years, NOAA Fisheries, U.S. 
Fish and Wildlife Service, and the Oregon Departments of Fish and 
Wildlife and Water Resources have supported dam removal as the only 
real solution that works for these endangered runs.
    Since the Dam became operational, it has delivered water to its 
patrons through the Great Depression, World War II, and an era of 
economic and cultural change. The District's operation, and the water 
it delivers, are essential to the well-being of our community. What has 
been true all along is still true today--our patrons need the water 
that the District provides. Water use within our irrigation district 
varies greatly over the 7,700 acres. For example, we provide irrigation 
water to family farms, for pasture lands, hayfields, forage crops, 
vineyards, along with farm-direct produce to the public. These folks 
depend on the water we deliver and realize what a wonderful resource 
they have. It is the very reason why the people began talking back at 
the turn of the previous century about forming an irrigation district; 
they needed water during the summer months.
                      we strongly support s. 1308
    This legislation is vital to the future of our irrigation district. 
It needs to be enacted as soon as possible, hopefully this year. On 
behalf of all the District's patrons and the economy of our region, I 
want to thank Senators Wyden and Smith for introducing the legislation. 
We are just so appreciative of their assistance and to you Madam 
Chairman for having scheduled this hearing.
    Without this legislation, we face a very real threat that in just 
two short years we will not be allowed to use the dam to provide water. 
Why is this so?
    Starting way back in the 60's, the Oregon Dept. of Fish and 
Wildlife determined that our dam was the single biggest fish killer in 
the Rogue River. They studied this for something like twenty years. In 
the early 80's, the U.S. government reached a similar conclusion. In 
1971, Congress authorized the Bureau of Reclamation to initiate a study 
of fish passage at the dam and improvements to the irrigation system. 
In 1990, the District commissioned an engineering study to look at the 
problems of the dam, and in 1994 that study concluded that removal of 
the dam and installation of pumps was the best option for the District. 
In 1995, the Bureau of Reclamation filed a Record of Decision on its 
Planning Report/Final Environmental Statement (PR/FES) on improvements 
at Savage Rapids Dam. Its conclusion and its recommended Preferred 
Alternative chose dam removal and installation of pumps as the most 
cost effective solution with the greatest benefit. In a curious twist 
of history, the official who signed that Record of Decision was the 
Bureau's Pacific Northwest Regional Director, Mr. John Keys. Of course, 
Mr. Keys is now the Commissioner of the Bureau and we have been 
delighted to have his support for our efforts. In 1997, the Rogue's 
coho salmon were listed as threatened under the Endangered Species Act 
(ESA). This forced the District to start working with the National 
Marine Fisheries Service (NMFS) to receive permission to operate the 
dam. Finally, in 1998, all heck broke loose with the District fighting 
lawsuits on several fronts--the State, the Federal government, and a 
bunch of conservation and fishing groups.
    Over three years ago, in an attempt to end years of legal battles 
over the District's water right and fish passage issues, the District 
negotiated a plan to install new pumping facilities in the river and to 
then allow for removal of the dam. The District's patrons voted 
overwhelmingly (63%) in favor of this plan.
    Two years ago, the District made one of the most important 
decisions in its history. We decided to end years of controversy and 
rancorous debate over the Savage Rapids Dam's damage to important 
anadrymous fish runs by signing on to a compromise that is good for the 
District, for the river, and for endangered salmon. We joined the 
Federal government, the State of Oregon and the conservation and 
fishing communities in a legal consent decree filed in U.S. District 
Court (``U.S. District Court Consent Decree,'' United States, et al., 
v. Grants Pass Irrigation District, Civil No. 98-3034-HO--August 27, 
2001).
    This Consent Decree ended the many years of lawsuits on the State 
and Federal levels. It stipulates that the District will continue to 
receive its supplemental water right while all parties work to 
implement a plan to replace the dam with electric irrigation pumps, 
implement conservation and riparian enhancements, and then remove the 
dam. It also stipulates that we shall cease operating the dam as a 
diversion facility by November 1, 2005, and that we must allow the dam 
to be removed after that date.
    Given the ongoing threats of legal battles on the State and Federal 
level, we decided three years ago, and still believe today, that the 
only way to ensure that our patrons will continue to receive the water 
they need is to give up the dam in exchange for an extension of our 
water right from the State and new electric irrigation pumps and other 
conservation and restoration measures.
    As you can imagine, still today there is some local controversy 
over the District's decision. But the overwhelming majority of our 
patrons and the citizens of our region support our effort. You might be 
interested to know that one of our current Board of Directors is a 
gentleman named Phil Kudlac. His grandfather was a charter member on 
the first board of directors of the Grants Pass Irrigation District. 
That three-man board worked very hard to hire the contractors to build 
the dam and to build the many miles of main canals. A brass plaque at 
the dam honors those three men. Even with his personal history and that 
connection to the dam, Mr. Kudlac recognizes and strongly supports the 
plan to install pumps and remove the dam. I think that's quite a 
testament to how far we have come--from years and years of fighting 
removal of the dam--to a new and innovative strategy to find a win-win 
on what had seemed like a no-win situation. The plan is relatively 
straight-forward--new, modern, efficient irrigation pumps go in, and 
the dam comes out. Our patrons get water at a reasonable cost, the 
District survives, and numerous benefits to the river and to fish are 
realized.
    We have very much appreciated funding provided by Congress to the 
Bureau in 2002 and 2003 to do as much work as possible under existing 
authority (P.L. 92-199) to advance the plans for the pumping plant 
design and installation. Work on the pumping plant design and 
engineering has been underway for over two years with a combination of 
federal, state, private, and District funds. In order to accelerate 
work on getting pumps designed, the irrigation district and the Oregon 
Department of Fish and Wildlife Fish Screen Task Force, working with 
the Bureau, provided early funding in excess of $200,000 to begin the 
design work. In addition, the State of Oregon has committed $3,000,000 
toward the overall project. That $3 million is the largest grant award 
of its kind ever made by Oregon's Watershed Enhancement Board. Private 
interests have contributed in excess of $75,000 toward the engineering.
    But now we have that November 2005 deadline staring us in the face 
and as the District's manager I am very nervous. The Bureau has said 
that they can go no further on this project without additional 
authority from Congress. The statutory stuff is kind of complicated to 
us, but we do understand that without the authority there cannot be 
further funding, and the Bureau must get both authority and funding 
this year if there is going to be any chance at all to build and 
install the pumping plant facilities so that they are operational by 
November 2005.
    With all the problems related to water supply, irrigation, and 
endangered species in Southwest Oregon that this Committee has heard so 
much about, I particularly want you to know that these issues on the 
Rogue River have a solution. A solution that is supported by the people 
who need water for irrigation and the people that want more fish 
protected. Now we need your help in authorizing the activities and the 
funding necessary to implement the terms of the Consent Decree. S. 1308 
authorizes the federal government to deliver on fundamental pieces of 
the compromise set out in the consent decree.
    I hope you will approve this legislation as soon as possible. It is 
vitally important to me as the Manager of this irrigation District, it 
is vitally important to our water patrons, it is vitally important to 
conservation and fishing interests, and it is necessary to comply with 
State and Federal policies and laws.
    It took us a very long time to get to your Committee on an issue 
that's been considered and debated since 1960. We are grateful to be 
here today, and we will be even more grateful if you can work with 
Senators Smith and Wyden to get S. 1308 enacted into law this year so 
that we can continue to operate and serve our water patrons.
    Thank you or giving me this opportunity to testify today.
                                 ______
                                 
  Statement of Robert G. Hunter, Staff Attorney, Waterwatch of Oregon
    Chair Murkowski and Members of the Committee: We urge you to 
support passage of S. 1308. This important legislation gives needed 
authority to the Bureau of Reclamation to implement a settlement 
agreement filed as a Consent Decree in the United States District Court 
of Oregon. The settlement provides for the replacement of the Grants 
Pass Irrigation District's 80-year-old irrigation diversion structure, 
Savage Rapids Dam, with new pumping facilities thereby modernizing the 
irrigation district's diversion system, while at the same time 
eliminating the most harmful fish passage barrier to salmon and 
steelhead in the Rogue River Basin in southwestern Oregon. Enactment of 
S. 1308 will be good for the Grants Pass Irrigation District, good for 
the Rogue River and its fishery resources, good for the local 
community, good for coastal communities in Oregon and California, and 
good for people across the country, who treasure healthy rivers and 
fisheries.
    This legislation is the culmination of years of study and 
negotiation by and between several state and federal agencies, the 
Grants Pass Irrigation District, and many local, regional, and national 
conservation, sport fishing, and commercial fishing organizations. The 
State of Oregon has carried out its responsibilities under the Consent 
Decree and in addition has committed $3,000,000 toward this project. 
(See a copy of a letter from Governor Ted Kulongoski of Oregon 
summarizing the state's activities and urging passage of this bill, 
attached as Attachment A).*
---------------------------------------------------------------------------
    * The attachments have been retained in subcommittee files.
---------------------------------------------------------------------------
    It is essential that the legislation is enacted this year as the 
Grants Pass Irrigation District will only be allowed to operate with 
pumps after the 2005 irrigation season, and if pumps are not installed 
before that time, the irrigation district will not be able to deliver 
water to its patrons. This bill will ensure the survival and economic 
viability of an irrigation district serving over 7,000 patrons and 
provide tremendous benefits to the internationally renowned Rogue River 
and its salmon and steelhead fisheries.
                    the rogue river and its fishery
    Oregon's Rogue River is nationally and internationally known for 
its scenic beauty, white water recreation, and salmon and steelhead 
fisheries. The Rogue River was designated as one of the country's first 
wild and scenic rivers in 1968. It originates near Crater Lake and 
dances westward for 215 miles, cutting its way through the Cascade, 
Siskiyou, and Coast ranges before meeting the sea at Gold Beach, 
Oregon. Because of its abundant fish and wildlife and incredible scenic 
beauty, the Rogue River has become a major vacation destination and 
over the years has drawn such celebrities as Zane Grey, Clark Gable, 
and Ginger Rogers. The river is the cornerstone of the region's 
recreation and tourism industries, one of the fastest growing economic 
sectors in the basin.
    The Rogue River is home to one of the most productive salmon and 
steelhead fisheries on the west coast. It contains five runs of salmon 
and steelhead: spring and fall chinook salmon, coho salmon, and summer 
and winter steelhead. The river's spring chinook salmon are considered 
some of the tastiest anywhere and people come from all over the world 
to fish the Rogue's summer steelhead because of the tremendous 
flyfishing opportunity they present. Guides, outfitters, lodges, 
motels, restaurants, and other service industries rely on the Rogue's 
fish as a major part of their business. The Rogue's fish are also an 
important component of the sport and commercial salmon fishery off the 
coast of southern Oregon and northern California.
                  the grants pass irrigation district
    The Grants Pass Irrigation District, hereinafter ``District'', was 
formed in 1916 to provide irrigation water to lands along the Rogue 
River in southern Oregon. The District serves over 7,000 patrons. The 
District gets its water by diverting it from the Rogue River under a 
water right issued by the State of Oregon. Because its diversion 
operations harm coho salmon, listed under the Endangered Species Act, 
the District also needs an incidental take permit to continue its 
operations. To remain viable the District needs to be able to continue 
to divert adequate amounts of water from the Rogue River, and to 
deliver it to its patrons at an affordable price. The passage of this 
bill will allow the District to continue its operations and remain 
economically viable.
                           savage rapids dam
    Savage Rapids Dam does not serve any storage, flood control, 
navigation, or hydropower purpose. The District is the owner of the dam 
and has agreed to allow its removal. The District built Savage Rapids 
Dam in 1921 solely to divert water from the Rogue River into the 
irrigation canals of the District. The dam's diversion system is over 
80 years old. There have been multiple breakdowns of the system over 
the last three years that have interrupted service for extended periods 
and cost the District over $300,000 in repairs. Savage Rapids Dam can 
be safely removed and new pumps can be installed to better serve the 
District's water delivery needs.
         savage rapids dam's impacts on the rogue river fishery
    The dam is a 39-foot-high, 500-foot-long diversion dam that spans 
the mainstem of Oregon's Rogue River at river mile 107. It is the first 
man-made barrier on the Rogue River that salmon and steelhead encounter 
on their upstream migration from the ocean. There are over 500 miles of 
salmon and steelhead spawning habitat upstream of Savage Rapids Dam, 
including 50 miles on the mainstem of the Rogue River. All spring 
chinook salmon spawn upstream of the dam, and the dam impedes passage 
of significant portions of the four other runs of salmon and steelhead 
in the Rogue, including coho salmon listed as threatened under the 
Endangered Species Act.
    The dam's fish ladders and screens do not meet current standards. 
The north ladder only operates during the irrigation season, has poor 
attraction flows, and is generally inadequate. The south ladder has 
poor attraction flows and it is difficult to regulate flows within the 
ladder. During the spring and fall, when dam operations are starting up 
and shutting down, upstream fish passage can be totally blocked. Adult 
fish are delayed, injured, and sometimes killed while trying to 
navigate the dam in their upstream spawning migration, thereby reducing 
overall spawning success. Downstream traveling juvenile fish are 
impinged on and entrained through the screens over the dam's diversion 
and pump-turbine systems. There is increased predation of juveniles in 
the seasonal reservoir pool created by the dam, and when juveniles pass 
through the dam's bypass systems. There is a loss of 3.5 miles of fall 
chinook salmon spawning habitat that could be reclaimed from the 
elimination of the seasonal reservoir pool when the dam is removed. 
(See Attachment B-2 Summary)
    The dam has long been considered the biggest fish killer on the 
Rogue. NOAA Fisheries, U.S. Fish and Wildlife Service, and Oregon 
Department of Fish and Wildlife all support dam removal as the best, 
most viable, and only permanent solution to the fish passage problems 
at Savage Rapids Dam.
                 benefits of removing savage rapids dam
    According to a 1995 Bureau of Reclamation Planning Report and 
Environmental Statement (PRES), removal of the dam would increase fish 
escapement at the site by 22%. This translates into approximately 
114,000 more salmon and steelhead each year (87,900 that would be 
available for sport and commercial harvest and 26,700 that would escape 
to spawn), valued in 1994 at approximately $5,000,000 annually. (See 
Attachment B-3, 4--selected pages from the PRES that document these 
benefits.) Reclamation's PRES also found removing the dam and replacing 
it with pumps to be more cost effective than trying to fix the ladders 
and screens.
                     benefits of pump installation
    Before removal of the dam, pumping plants with screens meeting all 
federal and state regulations will be installed near the current 
location of the dam. The pumps will be capable of diverting the 
District's full water needs. It is essential that the District be on 
pumps by the end of the 2005 irrigation season in order to stay in 
business. Once the District is on pumps it will be able to get an 
incidental take permit under the Endangered Species Act to continue its 
operations, and will be in compliance with state conditions on its 
water rights and with the settlement agreement filed as a Consent 
Decree in federal court.
    In addition, conversion to pumps will:

          a. eliminate shutoffs due to problems with the pump turbine 
        system at the dam;
          b. allow the District to operate at lower river flows;
          c. allow the District to start its irrigation season a month 
        earlier;
          d. allow the District more control over the amount of water 
        going into its canals;
          e. make it easier and safer for the District to start up and 
        shut down its irrigation system;
          f. eliminate OSHA problems with operating the dam; and
          g. give the District more flexibility in the future to 
        respond to changing land use patterns in the area.
         important studies support the pumping/dam removal plan
    By the mid-1960's, and after 19 years of investigation, the Oregon 
Department of Fish and Wildlife became convinced that Savage Rapids Dam 
caused more fish passage damage than any other single factor on the 
Rogue River. Fish counting data showed that fish runs using the river 
above Savage Rapids Dam declined, while runs below the dam increased.
    In 1981, the United States Fish and Wildlife Service estimated that 
elimination of all fish passage losses at Savage Rapids Dam would 
result in a 22 percent increase in fish escapement at the site.
    In 1990, the District agreed to look at different alternatives for 
solving the fish passage problems caused by Savage Rapids Dam. An 
engineering study commissioned by the District was completed in 1994, 
which recommended removal of the dam and its replacement with pumps as 
the best alternative for the District. (Grants Pass Irrigation District 
Water Management Study, dated March, 1994)
    The Bureau of Reclamation did a parallel study on fish passage at 
the dam. It selected dam removal and replacement with pumps as its 
preferred alternative, because it found removing the dam and replacing 
it with pumps was cheaper than trying to fix it and provided greater 
benefits. (Fish Passage Improvement at Savage Rapids Dam; Planning 
Report and Final Environmental Statement filed August 30, 1995)
    The District recently hired CH2MHill, an engineering firm, to 
review the economic feasibility of the pumping plan for the District. 
In addition conservation interests hired PWA, another engineering firm, 
to review the feasibility of removing the dam. These engineering 
reviews confirmed the feasibility of the pumping/dam removal plan.
                       sediment is not a problem
    In February 2001, the Bureau of Reclamation completed a 
comprehensive study of the sediment behind the dam and concluded that 
if the dam were removed the sediment could be safely managed by natural 
transport. (Savage Rapids Dam Sediment Evaluation Study, Department of 
the Interior, Bureau of Reclamation, February 2001) The study found 
that the sediment was not contaminated, that there was much less 
sediment than was originally believed, and that a large percentage of 
the sediment was gravel and cobble, which is good for downstream salmon 
spawning habitat. This resolved a major concern for many who had 
previously opposed removing the dam.
           patron vote supports the pumping/dam removal plan
    In January 2000, the patrons of the District voted overwhelmingly 
in support of removing Savage Rapids Dam and replacing it with pumps 
(63% of the ballots cast voted in favor of the dam removal/pumping 
plan).
          bipartisan support for the pumping/dam removal plan
    Senator Smith and Senator Wyden from Oregon co-introduced this bill 
and have been working with all interested parties since 2000 to 
authorize and fund the installation of pumps and removal of the dam. 
Local Oregon state legislators in a letter to the two Oregon Senators 
also expressed bipartisan support for federal legislation to authorize 
and fund the pumping/dam removal plan. (See Attachment C--Letter from 
several Oregon lawmakers to Senators Smith and Wyden requesting 
reintroduction of a bill to install pumps and remove the dam)
                  settlement agreement/consent decree
    Based on the District's own study recommending the District convert 
to pumps and allow dam removal, the State of Oregon required the 
District to exercise due diligence toward implementing the pumping/dam 
removal plan as a condition of a temporary water right issued to the 
District in 1994.
    In 1997, the Rogue River's coho salmon were listed as threatened 
under the Endangered Species Act, and the District began negotiations 
with the National Marine Fisheries Service for obtaining an incidental 
take permit for its diversion operations based on converting to pumps 
and the ultimate removal of Savage Rapids Dam.
    In 1998, the District became entangled in litigation with the State 
of Oregon, the United States, and numerous concerned conservation and 
fishing industry organizations over water right issues and fish passage 
problems at the dam.
    On August 27, 2001, parties to the litigation recognized all 
interests would be better served by working together in a cooperative 
manner, and the parties settled their differences in the form of a 
consent decree that was filed in the United States District Court of 
Oregon on August 27, 2001. The settlement was commemorated on October 
12, 2001 in a ceremony with the former Oregon Governor John Kitzhaber. 
(A copy of the Commemorative Declaration signed at the ceremony is 
attached as Attachment D.)
    The settlement agreement secures for the District the water right 
and federal permits it needs to continue to operate. In exchange the 
District has agreed to convert to a pumping system, stop water 
diversions at Savage Rapids Dam, and allow for the dam's removal by 
November 2005. To insure that the settlement agreement is a success and 
a win/win solution for all parties, it is necessary to pass this bill 
to authorize and fund the federal activities anticipated in the Consent 
Decree.
    Important steps have already been taken to implement the Consent 
Decree. The State of Oregon has completed what was required of it under 
the Consent Decree, has contributed $100,000 toward fish screens at the 
pumps, and in addition has committed $3,000,000 toward dam removal, the 
largest single grant made by the Oregon Watershed Enhancement Board. 
The District and conservation and sportfishing interests have 
contributed over $75,000 toward advanced engineering on the pumps and 
dam removal, while the federal government has already contributed 
$500,000 toward planning work on the pumping plants. Federal 
legislation is now needed to get the authority and funding to complete 
implementation of the pumping/dam removal plan outlined in the Consent 
Decree. This legislation guarantees that the parties will be able to 
implement the Consent Decree and will reward the cooperative efforts of 
the parties in resolving the long standing issues regarding fish 
passage at Savage Rapids Dam. (See Attachment E, F and G--editorials 
from the regional paper supporting the pumping/dam removal plan and 
Congressional funding)
         time is of the essence--please enact s. 1308 this year
    Passage of this legislation will provide tremendous benefits to one 
of the nation's great natural treasures, the Rogue River and its salmon 
and steelhead fisheries. At the same time it will ensure the survival 
and continued operation of the Grants Pass Irrigation District, will 
facilitate the implementation of a federal court decree, and will 
reward cooperative efforts to solve difficult resource issues. In order 
to meet the strict timelines in the Consent Decree, it is essential to 
pass S. 1308 this year, or the patrons of the irrigation district will 
no longer have the ability to meet there water needs in two years. For 
these reasons the organizations named below urge you to vote for S. 
1308 and to seek its immediate passage.
                                 ______
                                 
                                    City of South El Monte,
                                South El Monte, CA, March 28, 2003.
Hon. Grace F. Napolitano,
Ranking Member, House Subcommittee on Water and Power, Longworth House 
        Office Building, Washington, DC.
    Dear Congresswoman Napolitano: In June 1999, the City of South El 
Monte together with the cities of El Monte and Industry asked you to 
introduce legislation for a modest expansion of the U.S. Bureau of 
Reclamation's San Gabriel Basin Demonstration Project, which was 
established in 1993. We asked you to raise the budget cap of $38.05 
million imposed on Title XVI in 1996 by $12.5 million. The purpose of 
our request was to assure that the Title XVI had sufficient funds for 
groundwater cleanup and conjunctive use projects throughout the San 
Gabriel Basin, including projects in the cities of El Monte, South El 
Monte and Industry.
    As the mayor of South El Monte, I write to reaffirm the City of 
South El Monte's support for this increased budget authorization. We 
appreciate your efforts to raise the cap through your current bill, 
H.R. 1284, which is co-sponsored by Chairman Dreier and Ranking Member 
Solis, and support the bill's enactment for the current fiscal year.
    As you know, reliable and clean water supply is crucial for many 
Hispanic and minority-owned businesses as well as low-income households 
in the City of South El Monte. My community is physically dominated by 
small industrial businesses with several abandoned warehouses as the 
City is composed of 29% residential and 71% commercial property. South 
El Monte currently represents the lowest income area in the San Gabriel 
Valley within Los Angeles County as unemployment in my City is 
approximately 8.5% and 21.2% of the population is currently living at 
or below the poverty level. Securing reliable and clean water supply 
for my City is essential for me and my colleagues serving on the City 
Council as we work to restore and revitalize our economy for our 
working-class residents.
    Since the three cities wrote you in 1999, planning for groundwater 
cleanup projects throughout the southern part of San Gabriel Basin has 
moved into the final design stages, and some cleanup facilities have 
been constructed. While most of the Title XVI funds have gone to the 
larger cleanup projects in the northern part of the basin, the U.S. 
Bureau of Reclamation and its local partner, the San Gabriel Basin 
Water Quality Authority, have responded to the needs of our cities by 
directing or reserving sonic Title XVI funds to or for projects in 
South El Monte, El Monte and Industry.
    At this point, Title XVI dollars already spent on or earmarked for 
specific projects exhaust the $29.5 previously appropriated for the 
program. Several recent applications pending before the Water Quality 
Authority will take up most of the remaining amount authorized for the 
program. Therefore, little or nothing will remain for new project that 
we anticipate will be proposed over the next few years.
    Once again, we at the City of South El Monte appreciate your 
efforts to secure funds for important groundwater cleanup and supply 
projects throughout the San Gabriel Basin. We arc pleased to reaffirm 
the City's support for H.R. 1284.
            Warm Regards,
                                           Blanca Figueroa,
                                                             Mayor.
                                 ______
                                 
                              Cardinal Industrial Finishes,
                               South El Monte, CA, October 9, 2003.
Hon. Lisa Murkowski,
Chairman, Water and Power Subcommittee, Senate Committee on Energy and 
        Natural Resources, Dirksen Senate Office Building, Washington 
        DC.

Hon. Byron Dorgan,
Ranking Member, Water and Power Subcommittee, Senate Committee on 
        Energy and Natural Resources, Dirksen Senate Office Building, 
        Washington DC.

Re: H.R. 1284--to amend the Reclamation Projects Authorization and 
Adjustment Act of 1992 to increase the Federal share of the costs of 
the San Gabriel Basin demonstration project (H.R. 1284).

    Dear Chairman Murkowski and Ranking Member Dorgan: This letter is 
on behalf of the thirteen businesses and property owners \1\ who have 
cooperated to fund the cleanup of groundwater in the South El Monte 
Operable Unit (``SEMOU'') of the San Gabriel Valley Sugerfund Site 
(``Site''). These Cooperating Parties write this letter in support of 
H.R. 1284 presently before the Subcommittee on Water and Power of the 
Committee on House Resources: As discussed in more detail below, the 
funding provided by H.R. 1284 is essential to bring to fruition the 
landmark cooperative effort to cleanup the groundwater of the SEMOU.
---------------------------------------------------------------------------
    \1\ Andruss Family Trust; and 1987 Survivors Trust under terms of 
Trust; APW North America Inc., formerly known as Zero Corporation and 
Electronic Solutions; Artistic Polishing & Plating, Inc., and Art 1991 
Revocable Living Marital Deduction Trust and Art 1981 Revocable Living 
Exemption Trust; Cardinal Industrial Finishes, and Cardco; Durham 
Transportation, Inc., Durham School Services Inc. and Durham Family 
Limited Partnership; Eemus Manufacturing Corp.; International 
Medication Systems, Ltd.; Norf James Jebbia Testamentary Trust; J.A.B. 
Holdings, Inc., formerly known as J.A. Bozung Company; Roc-Aire Corp.; 
Janneberg Trusts, formerly known as Servex Corp.; Smittybilt, Inc.; 
Southern California Edison Co. (collectively, the ``Cooperating 
Parties'').
---------------------------------------------------------------------------
    By way of background, H.R. 1284 will increase the Federal share of 
funding to the San Gabriel Basin demonstration project (``Project'') 
(42 U.S.C.S. Section 390h-12). The Project is a comprehensive solution 
that addresses the water supply and groundwater contamination problems 
of the Site and to thus adequately protect the groundwater resources of 
the San Gabriel Basin. The Project implements conjunctive use projects 
that will enhance both the groundwater quality and the local and 
regional water supply of the San Gabriel Basin. Such treatment projects 
will remove volatile organic compounds (``VOC'') and other emerging 
contaminants such as perchlorate from the groundwater, and then deliver 
the water for beneficial use. Federal Project funds contribute twenty-
five percent of the total capital cost of a project, but such funds 
cannot be used for the operation and maintenance of such projects. (42 
U.S.C.S. Section 390h-12(b).) Additionally, the Federal funds 
contribution toward share of the funding of the Project cannot exceed 
the amount specified as the ``total Federal obligation'' for the 
Project made by the Bureau of Reclamation for fiscal year 1997 as set 
forth in report of the March 27, 1996 hearing before the Subcommittee 
on Energy and Water Development. (43 U.S.C.S. Section 390h-14(d)(2).) 
Although the spending restrictions would remain in place, H.R. 1284 
allows that the Federal share of the Project may be increased by an 
additional $12,500,000.
    It is vitally important that H.R. 1284 become law. Perhaps the 
significance of H.R. 1284 can be emphasized by examination of the 
importance of the initial outlay of federal funds which H.R. 1284 seeks 
to increase. Approximately seventy private parties have been identified 
for the SEMOU; most have been identified since at least the early to 
mid-1990's. Organizing these parties into a cohesive responsive group 
has proved to be an impossible task. However, certain of these private 
parties chose to work with the United States Environmental Protection 
Agency (``EPA's, the San Gabriel Basin Water Quality Authority 
(``WQA'') and certain water purveyors to reach an agreement to clean 
the SEMOU groundwater resources. These parties sought to avoid 
litigation and transactions costs and instead focus on targeting 
resources upon the remediation of the SEMOU groundwater.
    However, given the economic status of these parties, such an 
agreement was difficult to reach. That is, parties interested in 
contributing funding for the treatment projects could not gather enough 
money to fund these important projects. After years of negotiations, 
the logjam was broken as the private parties sought to access federal 
funds such as funds from the San Gabriel Basin Restoration Project 
(i.e., Restoration Fund) and the San Gabriel Basin Demonstration 
Project (i.e., Title XVI). Even then, only the thirteen Cooperating 
Parties entered into an agreement with the WQA and water purveyors to 
provide funding toward projects to implement the cleanup of the 
groundwater of the SEMOU (``Agreement'').
    There is no question that the Agreement would not have been reached 
but for the ability to include federal funds toward implementation of 
the cleanup. This is perhaps best evidenced by the fact that after 
years of negotiations, the Agreement was entered into after round the 
clock talks culminating on July 1, 2002. Not coincidentally, this was 
also the last day such an agreement could he reached in order to access 
certain federal funds. In a letter dated July 15, 2002, the EPA wrote 
the Cooperating Parties and informed them that it considered work 
described in or performed pursuant to this Agreement that supports the 
SEMOU Interim Record of Decision of the SEMOU RD/RA Statement of Work 
the equivalent of remedy implementation. In short, the access of 
federal funds allowed an agreement to be reached that focused resources 
on addressing the contamination of the SEMOU rather than litigation and 
transactional matters.
    Our Congressional representatives should be heartily commended for 
their wisdom in providing funds that set the stage for remedy 
implementation to take place. Without such, it is likely that 
significant resources would not be devoted toward remedy implementation 
and instead would be squandered in litigation. Nonetheless, the SEMOU 
remedy does not remain fully implemented due in part to two factors; 
both of which could potentially be alleviated by H.R. 1284.
    The first reason is the discovery of perchlorate and other 
``emerging chemicals'' in the SEMOU. Although the Cooperating Parties 
are not responsible for the rocket fuel perchlorate groundwater 
contamination, the SEMOU remedy to address VOC's cannot be implemented 
unless the perchlorate is also addressed. H.R. 1284 can provide the 
funding to assist in addressing the perchlorate contamination and thus 
allow the full VOC remedy implementation to proceed.
    The second reason is that besides the Cooperating Parties' best 
efforts, there remain numerous recalcitrant parties who have not 
contributed their resources toward remedy implementation. Several of 
these recalcitrants are presently embroiled in litigation with the WQA 
and water purveyors. Further, the Cooperating Parties believe that EPA 
will shortly be expending significant resources on enforcement against 
these recalcitrants. Several of these recalcitrants regret failing to 
exercise the initiative and foresight of the Cooperating Parties in 
entering into the Agreement that recognized the availability of federal 
funds. Based upon the Cooperating Parties' experiences, it is likely 
that H.R. 1284 could provide the incentive that allows these 
recalcitrants to enter into a similar agreement and thus devote their 
resources toward the Project implementation.
    For these reasons, the Cooperating Parties urge that H.R. 1284 
become law, and the funds authorized therein be devoted to addressing 
the perchlorate and emerging chemicals contamination in the SEMOU. This 
would allow the full VOC remedy implementation to proceed and would 
encourage further settlement from recalcitrants. In furtherance of 
these goals, if you or other Congressmen and/or Congresswomen have any 
questions regarding the Cooperating Parties' experiences, we would be 
happy to assist.
            Very truly yours,
                                         Lawrence C. Felix,
                                                    Vice President.
                                 ______
                                 
                                  City of El Monte,
                                     City Council's Office,
                                     El Monte, CA, October 9, 2003.
Hon. Lisa Murkowski,
Chairman, Senate Water and Power Subcommittee, Dirksen Senate Office 
        Building, Washington, DC.

Hon. Byron Dorgan,
Ranking Member, Senate Water and Power Subcommittee, Dirksen Senate 
        Office Building, Washington, DC.
    Dear Chairman Murkowski and Senator Dorgan: As an El Monte City 
Councilwoman, I write to reaffirm the City of El Monte's support for 
H.R. 1284, bill to increase the cost ceiling on the San Gabriel Basin 
Demonstration Project. I appreciate the bill's efforts to raise the cap 
by $12.5 million, which is cosponsored by Chairman David Dreier and 
Ranking Member Solis, and I also support the bill's enactment in the 
near future.
    In June 1999, the City of El Monte together with the cities of 
South El Monte and Industry asked Congresswoman Grace Napolitano to 
introduce legislation for a modest expansion of the U.S. Bureau of 
Reclamation's San Gabriel Basin Demonstration Project, which was 
established in 1993. We asked the Congresswoman to raise the budget cap 
of $38 million imposed on Title XVI in 1996 by $12.5 million. The 
purpose of our request was to assure that the Title XVI program had 
sufficient funds for groundwater cleanup and conjunctive use projects 
throughout the San Gabriel Basin, including projects in the cities of 
South El Monte and Industry.
    Reliable and clean water supply is crucial for the City of El 
Monte. El Monte currently has one of the lowest household incomes 
within Los Angeles County and very high unemployment. Securing reliable 
and clean water supply for my city is essential for me and my 
colleagues serving on the City Council as we work to restore and 
revitalize our economy for our working class residents.
    Since the three cities wrote Congresswoman Napolitano in 1999, 
planning for groundwater cleanup projects throughout the southern part 
of the San Gabriel Basin has moved into the final design stages, and 
some cleanup facilities have been constructed. While most of the Title 
XVI funds have gone to larger cleanup projects in the northern part of 
the basin, the U.S. Bureau of Reclamation and its local partner, the 
San Gabriel Basin Water Quality Authority, have responded to the needs 
of our cities by directing or reserving some Title XVI funds to or for 
projects in South El Monte, El Monte and Industry.
    At this point, Title XVI dollars already spent on or earmarked for 
specific projects exhaust the $29.5 million previously appropriated for 
the program. Several recent applications pending before the Water 
Quality Authority will take up most of the remaining amount authorized 
for the program. Therefore, little or nothing will remain for new 
projects that we anticipate will be proposed over the next few years.
    Once again, we at the City of El Monte appreciate your efforts to 
secure funds for important groundwater cleanup and supply projects 
throughout the San Gabriel Basin. We are pleased to reaffirm the city's 
support for H.R. 1284.
            Warm regards,
                                          Patricia Wallach,
                                                      Councilwoman.
                                 ______
                                 
                                          City of Industry,
                            City of Industry, CA, October 14, 2003.
Hon. Lisa Murkowski,
Chairwoman, Senate Water and Power Subcommittee, Dirksen Senate Office 
        Building, Washington, DC.

Hon. Byron Dorgan,
Ranking Member, Senate Water and Power Subcommittee, Dirksen Senate 
        Office Building, Washington, DC.

Re: H.R. 1284--Increased Budget Authorization for the U.S. Bureau of 
Reclamation's San Gabriel Basin Demonstration Project Program

    Dear Chairwoman Murkowski and Ranking Member Dorgan: In June 1999, 
the City of Industry, together with the cities of El Monte and South El 
Monte, asked Congresswoman Grace Napolitano to introduce legislation 
for a modest expansion of the U.S. Bureau of Reclamation's San Gabriel 
Basin Demonstration Project, which was established in 1993. We asked 
that the budget cap of $38 million imposed on Title XVI in 1996 be 
raised by $12.5 million. The purpose of our request was to assure that 
Title XV1 had sufficient funds for groundwater cleanup and conjunctive 
use projects throughout the San Gabriel Basin, including projects in 
the cities of El Monte, South El Monte and Industry.
    I write today to reaffirm the City of Industry's support for this 
increased budget authorization. We appreciate Congresswoman 
Napolitano's efforts to raise the cap through her current bill, H.R 
1284, which is co-sponsored by Congressman Dreier and Congresswoman 
Solis, and support the bill's enactment in the near future.
    The City of Industry is home to almost 2,000 businesses, and is a 
major job center in our region. Reliable supplies of clean water are 
critical to keep and grow the large employment base in the City of 
Industry and other San Gabriel Valley communities. Local groundwater 
sources are an increasingly important part of our region's water 
supplies, especially with the recent redirection of Colorado River 
water that formerly came to southern California.
    Since we first wrote Congresswoman Napolitano in 1999, planning for 
groundwater cleanup projects throughout the southern part of the San 
Gabriel Basin has moved into the final design stages, and some cleanup 
facilities have been constructed. While most of the Title XVI funds 
have gone to the largest cleanup projects in the northern part of the 
basin, the U.S. Bureau of Reclamation and its local partner, the San 
Gabriel Basin Water Quality Authority, have responded to the needs of 
our cities by directing or reserving some Tile XVI funds to or for 
projects in El Monte, South El Monte and the City of Industry.
    At this point, Title XVI dollars already spent on or earmarked for 
specific projects exhaust the $29.5 million previously appropriated for 
the program. Several recent applications pending before the Water 
Quality Authority will take up most of the remaining amount authorized 
for the program. Therefore, little or nothing would remain for new 
projects that we anticipate will be proposed over the next few years.
    Again, I am pleased to reaffirm the City's support for H.R. 1284.
            Very truly yours,
                                         Philip L. Iriarte,
                                                      City Manager.
                                 ______
                                 
      Statement of Michael Whitehead, Member, Board of Directors, 
                  San Gabriel Water Quality Authority
    My name is Michael Whitehead and I am a member of the Board of 
Directors of the San Gabriel Basin Water Quality Authority. I 
appreciate the Committee allowing me the opportunity to submit my 
written testimony for the record. Let me also express my appreciation 
to Congresswoman Grace Napolitano for introducing H.R. 1284 and to 
Senator Feinstein for being a champion of water issues throughout the 
state.
    The Title XVI program has provided the San Gabriel Basin with the 
ability to provide much needed wellhead treatment, stem the flow of 
contaminants, stabilize water rates and most importantly deliver safe 
and reliable drinking water to the residents of the San Gabriel Basin.
    By increasing the authorization for the San Gabriel Basin 
Demonstration Project, H.R. 1284 will allow us to continue the 
incredible progress that has been made over the last few years in 
cleaning up and utilizing the groundwater in the San Gabriel Basin. 
Title XVI has allowed us to maximize local dollars as we attempt to 
remediate groundwater contamination that threatens the drinking water 
supply of over 1 million residents of the San Gabriel Basin.
    In the time period since the Title XVI program was made available 
to the San Gabriel Basin Water Quality Authority, 10 projects have been 
allocated funding. Seven projects have been built and another three 
will begin construction in the near future.
    Without the funding for the treatment facilities local water 
producers would have been forced to shut down water wells due to 
migrating contamination. The closures would have forced local water 
purveyors to become reliant on Colorado River water at a time that the 
state's allotment is being cut back. This would have severely impaired 
our ability to provide water for users in the basin and forced us to 
rely on imported water.
    It is vital that we restore the basin's aquifer. Once we are able 
to remediate the contamination it is our belief that Valley will be 
able to use the aquifer to meet all of basin's water needs. Removing 
harmful contaminants from our communities groundwater supply will allow 
local water producers to better meet the needs of local residents at 
affordable rates. Lifting the ceiling on Title XVI makes certain that 
the basin is able to meet the water supply needs of future generations.
    We urge the Committee and their fellow members of Congress to lift 
the ceiling on the Title XVI program to allow us to carry out our 
mission of facilitating groundwater cleanup and providing a clean, 
reliable drinking water supply for the 1 million residents of the San 
Gabriel Basin.
    Again, I appreciate the Subcommittee considering my testimony on 
H.R. 1284.
                                 ______
                                 
      Statement of Hon. Grace F. Napolitano, U.S. Representative 
                            From California
    Chairwoman Murkowski and Ranking Member Dorgan, thank you for 
allowing the Senate Water and Power Subcommittee to conduct a hearing 
on H.R. 1284, a bill that is vital for my constituents in San Gabriel 
Valley located in Southeast Los Angeles County. I am pleased to have 
the support of Chairman David Dreier and Congresswoman Hilda Solis as 
co-sponsors of this bill that aims to provide an opportunity for the 
continuation of a highly successful Bureau of Reclamation project.
    If enacted, H.R. 1284 will simply allow the cities of Industry, El 
Monte and South El Monte in and near my Congressional District to have 
the ability to request funding for assistance from the Bureau of 
Reclamation's San Gabriel Basin Demonstration Project for cleanup of 
volatile organic compounds (VOCs) once they are able to secure 75% 
matching fund.
    The San Gabriel Basin is home to one of the country's largest and 
most complex Superfund sites. The site spans over 170 square miles. The 
groundwater beneath the Basin supplies drinking water to over 1.5 
million people in the San Gabriel Valley. Unfortunately, the 
groundwater has been contaminated by a number of substances over the 
past five decades as a result of manufacturing and agricultural 
activities.
    Local and state governments together with the business community 
have worked long and hard to develop solutions to clean up groundwater 
contamination from volatile organic compounds (VOCs) and perchlorate in 
order to ultimately revitalize the economy of the San Gabriel Basin. 
One important piece of the solution has been a U.S. Bureau of 
Reclamation's San Gabriel Basin Demonstration Project authorized by 
Congress in 1992 which provides 25% federal matching funds for projects 
which combine groundwater cleanup of (VOCs). Among the many benefits of 
the San Gabriel Demonstration Projects are:

   Relieving demand for water from the Colorado River and 
        Northern California, home to the fragile Bay-Delta estuary;
   Providing additional groundwater storage for use during 
        drought periods and emergencies such as earthquakes;
   Protecting the drinking water supply of over 1.5 million 
        residents in the San Gabriel Valley by cleaning up contaminated 
        groundwater;
   Helping to relieve the chronic unemployment in the San 
        Gabriel Valley caused by the recession of the early 1990s by 
        removing the stigma of contamination and attendant potential 
        liability exposure from development of redevelopment of 
        commercial property;
   Creating significant incentives for local governments and 
        businesses to contribute to the cleanup costs in a cooperative, 
        not confrontational spirit.

    When originally authorized in 1992, the Bureau of Reclamation 
project was intended to benefit the entire San Gabriel Basin by 
providing 25% of the costs of projects involving reclamation of 
potential local water supplies.
    Unfortunately, the funding level for this critical Basin program 
was capped at $38 million in 1996, funding only a portion of the 
project that had been designed. Most of the projects originally funded 
were in the northern part of the Basin that excluded the Puente Valley 
Operable Unit, the El Monte Operable Unit, and the South El Monte 
Operable Unit. Since the 1996 funding cap, these operable units in the 
San Gabriel Basin have developed detailed groundwater cleanup plans 
under the supervision of the USEPA. These projects are conjunctive use 
projects and could be funded under the existing Bureau of Reclamation's 
San Gabriel Basin Demonstration Project only if the 1996 budget cap is 
raised.
    The legislation I am introducing will simply raise the allowable 
funding level for this previously authorized project by $12.5 million. 
This will accommodate the conjunctive use projects that have been 
designed since 1996 and which are integral components of the Basin's 
efforts to clean up its groundwater and expand its local water supply 
capacity. Appropriations will still need to be sought. My legislation 
will simply provide that opportunity.
    During the House Water and Power Subcommittee hearing on April 1, 
2003, a compelling need was clearly established for the extension of 
funding for this successful program on behalf of the Cities of 
Industry, El Monte and South El Monte, as we can expect more 
applications from municipalities for funding from the San Gabriel 
Demonstration Project to exceed the current $38 million cap in the near 
future.
    I want to express my appreciation to Chairwoman Murkowski, Ranking 
Member Dorgan, Senator Feinstein and other Members of the Subcommittee 
for today's hearing on H.R. 1284 and I look forward to working with the 
Members on the Senate Water and Power Subcommittee towards the passage 
of this important legislation.
                                 ______
                                 
             Statement of Jeff Oveson, Executive Director, 
                  Grande Ronde Model Watershed Program
    Madam Chairwoman and Members of the Subcommittee on Water and Power 
of the Committee on Energy and Natural Resources, my name is Jeff 
Oveson, Executive Director of the Grande Ronde Model Watershed Program 
(GRMWP or Model Watershed), which is a community-based organization 
embedded in the county governments of Wallowa and Union Counties, the 
political boundaries of which basically encompass the Grande Ronde 
Basin, a tributary of the Snake River, in Northeastern Oregon. The 
Model Watershed Program, since 1992, has been a collaborative 
organization directed by Board Members from both counties representing 
County Government, federal and state natural resource agencies, the Nez 
Perce Tribe, the Confederated Tribes of the Umatilla Indian 
Reservation, Soil & Water Conservation Districts, environmental 
interests, and private landowners.
    The organization, founded with and through the support of the 
Bureau of Reclamation (Reclamation), Bonneville Power Administration 
(BPA), and the Governor's Watershed Enhancement Board (GWEB, now GWEB) 
supports activities principally related to watershed restoration and 
species recovery on both federal and private lands. It is funded 
primarily through BPA's Fish and Wildlife Program, the GWEB, and 
Reclamation. To date, we have facilitated the investment of over 
$17,000,000 in restoration projects throughout the basin.
    I appreciate the opportunity to submit testimony on behalf of the 
steering committee of the Wallowa Lake Dam Rehabilitation and Water 
Management Plan regarding S. 1355, the Wallowa Lake Dam Rehabilitation 
and Water Management Act of 2003. This bill could appropriately be 
titled ``Lostine River Salmon Restoration Plan'', or ``Fish Recovery 
Plan'', or a number of other things that accurately portray the real 
virtues of the plan. It really is an honor to bring to your attention a 
locally developed plan that has such demonstrable environmental, 
economic, and social merits.
    I am going to discuss with you two drainages in Wallowa County: the 
Lostine River, and the Wallowa River, in an attempt to make clear their 
interconnectivity, and the reliance of each on the other in providing 
water for Threatened and Endangered fish species, irrigation, urban 
consumption, recreation, and overall ecosystem balance.
    The Lostine River has its headwaters in the Eagle Cap Wilderness 
Area, flows through a designated Scenic Area, and its lower 10 miles 
through the Middle Valley of Wallowa County, the lower end of which is 
its point of confluence with the Wallowa River. The middle portion of 
the Lostine is home to a number of irrigation diversions that tend to 
dewater the river in the late summer to the point that passage by adult 
salmon migrating to their historic spawning grounds is impossible.
    Hankin and Reeves Surveys in 1994 (Nez Perce Tribe and Oregon Dept. 
of Fish & Wildlife), the Lostine River Instream Flow Study in 1998 (R2 
Resource Consultants, Nez Perce Tribe, and Oregon Dept. of Fish & 
Wildlife, Bonneville Power Administration, and Bureau of Reclamation), 
and the Lostine River Salmonid Passage Enhancement Study of 2001 
(Harza, GRMWP, and Natural Resources Conservation Service) were all 
collaborative efforts to accurately assess conditions in the Lostine, 
and were all funded and completed by partners in fish restoration. 
These studies identified instream flow as the primary limiting factor 
in the spawning, rearing, and migration of Chinook Salmon, summer 
steelhead, and bull trout, all three of which are listed fish. This 
condition is especially onerous during the months of August and 
September. This condition also impacts free migration and rearing of 
all life stages of all three species.
    Over the past decade, irrigators on the Lostine have cooperated 
with Nez Perce Tribal Fisheries and Oregon Department of Fish & 
Wildlife in efforts to improve passage and rearing problems by 
conserving on water diversion, coordinating flushing flows to ease 
upstream migration, and providing access to tribal and agency, 
personnel for management activities. Even now, they are collectively 
and individually working with Natural Resources Conservation Agency and 
Soil & Water Conservation District personnel designing and implementing 
water quantity and quality improvement projects that will affect the 
Lostine. The recently passed Farm Bill will support this effort a great 
deal.
    The fact remains that instream flows are still insufficient on a 
regular annual basis.
    Twenty-odd river miles upstream of the Lostine River-Wallowa River 
confluence is Wallowa Lake, a natural holding facility for water whose 
capacity was augmented by the construction of a dam in 1918, later to 
be increased in size in 1929 when hydropower capabilities were added.
    The lake behind the dam serves a wide range of purposes, among 
them:

   water for irrigation of over 15,000 acres of the county's 
        prime agricultural lands (management of the dam directly 
        affects over 40,000 irrigated acres);
   drinking water for the city of Joseph;
   recreational use by over 800,000 users per year for fishing, 
        boating, water skiing, and sightseeing;
   flood control-active storage that is managed to provide 
        flood protection to the downstream cities of Joseph, 
        Enterprise, and Oregon; and
   stable base flows for the Wallowa and Grande Ronde Rivers, 
        preserving and enhancing riparian habitat, fish stocks, water 
        fowl, and water quality.

    In 1996, Oregon Water Resources Department Division of Dam Safety 
listed the Wallowa Lake Dam as a ``high hazard'' structure, recognizing 
that a sudden failure of the dam would likely result in loss of life as 
well as millions of dollars worth of property, and would have a 
devastating long-term negative impact on the downstream ecology.
    Associated Ditch Company (ADC), builders and owners of the dam, 
began the planning and design of improvements. This assessment fostered 
the realization that they were not the only ones reliant on the 
integrity of the structure, nor were they the only ones who had needs 
that could be addressed by the rehabilitation of the dam. This 
recognition of need and opportunity led ADC to invite input from a wide 
variety of agencies, interests, and the Nez Perce Tribe (41 such 
entities attended the first organizational meeting), with hopes of 
designing a project that would address these needs and opportunities 
and be a lasting positive landmark in Wallowa County environmentally, 
economically, and socially. With that in mind, a mission statement was 
developed:

          ``To rehabilitate Wallowa Lake Dam and implement a water 
        management program for the Wallowa Valley serving the needs of 
        agriculture, salmon recovery, fish and wildlife enhancement, 
        recreation, flood control, municipal water supply, and 
        hydropower generation.''

    To ensure that this mission statement comes to fruition, the 
irrigators of the ADC have agreed to:

   cooperate with Nez Perce Tribal Fisheries in providing fish 
        passage above the dam to allow for restoration of Sockeye and 
        Coho Salmon;
   store and deliver 4,500 acre-feet of water to the Lostine to 
        supplant irrigation withdrawals (thereby assuring a minimum 
        flow of 30 cubic-feet-per-second in the Lostine); and
   screen diversions to avoid luring and trapping Bull Trout in 
        irrigation canals.

    The Endangered Species Act clearly supports this project, but 
overtly threatens the livelihood of irrigators if action is not taken. 
The Clean Water Act does the same. The Tribal Trust nexus is clearly 
triggered by this proposed project, as are the action plans associated 
with Bonneville Power Administration's Fish & Wildlife Program 
Mitigation, the Wallowa County/Nez Perce Tribe Salmon Habitat Recovery 
Plan, the Oregon Watershed Enhancement Board, the GRMWP Action Plan, 
and others.
    There are some clearly identified issues, and risks associated with 
those issues:

   consistent late season low flows in the Lostine put at risk:

          irrigators (third party or regulatory intervention)
          salmon, steelhead, and bull trout, as well as less prominent 
        species associated with them
          Tribal Treaty rights
          local economic structure and land values
          the social fabric of small communities

   the loss of maximum function of the Wallowa Lake Dam 
        jeopardizes:

          thousands of acres of irrigated land
          loss of significant income county-wide from tourism 
        associated with the water resources of Wallowa County
          the continuing decline in populations of threatened and 
        endangered fish
          municipal drinking water supplies
          success of the Nez Perce Tribal/ODFW fish hatchery funded by 
        BPA, scheduled for construction beginning this year

    A fully functioning dam at Wallowa Lake will address these issues 
and more:

   Nez Perce Tribal Fisheries will have the opportunity to 
        restore the historic runs of Sockeye and Coho Salmon to Wallowa 
        Lake;
   over 40,000 acres of irrigated lands will stay in production 
        with little risk of harm to fish or from litigation, avoiding 
        situations such as in the Klamath Falls Basin;
   the cities of Joseph, Enterprise, and Wallowa will be 
        protected from floods;
   the viable population of Chinook Salmon, summer Steeihead, 
        and Bull Trout in the Lostine can be maintained and enhanced; 
        and
   the city of Joseph will have a safe and reliable water 
        supply.

    This bill is not about dam safety. It is not about restoring fish 
populations. It is not about irrigation. It is about needs and 
opportunities to stabilize the environmental, economic, and social 
fabric of a natural resource based community that has clearly 
demonstrated its willingness to preserve all three.
                                 ______
                                 
         Statement of Anthony D. Johnson, Chairman, Nez Perce 
              Tribal Executive Committee, Nez Perce Tribe
    On behalf of the Nez Perce Tribe, I would like to take this 
opportunity to again express the Tribe's support for the Wallowa Lake 
Dam Rehabilitation and Water Management Act. The Tribe presented 
testimony in support of the important dam rehabilitation project 
contemplated in this Act in June of 2002. As each year passes, the need 
for the project intensifies.
    Since time immemorial, the Nez Perce Tribe lived, fished, hunted 
and gathered in the beautiful area of northeastern Oregon, now known as 
Wallowa County. It is from this land that Chief Joseph, Ollicut and 
their bands were removed in 1877 in an action that eventually resulted 
in war between two sovereigns, the United States and the Nez Perce 
Tribe. Despite the wounds of years past, the Tribe retained, and the 
United States has upheld and protected, the treaty reserved rights to 
hunt and fish in the Wallowas. And through these many years, salmon, 
steelhead and other fish species returning to the Wallowas have 
continued to be critically important to Nez Perce religion, culture, 
subsistence and commercial endeavors.
    Before 1900, approximately 24,000 to 30,000 sockeye returned to 
Wallowa Lake each year. In 1890, a small dam was built at the outlet of 
Wallowa Lake to divert water for irrigation. When the Wallowa Lake Dam 
was constructed, it did not include fish passage facilities and no such 
facilities have ever been incorporated into the structure. The dam, in 
conjunction with over-harvest and other factors, resulted in the 
extinction of sockeye from Wallowa Lake by 1904.
    Recently, the Nez Perce Tribe and other local community supporters 
of this Act, have pursued restoration of sockeye as part of a 
comprehensive salmon restoration program in northeastern Oregon. 
Rehabilitation of the Wallowa Lake Dam will include construction of 
necessary fish passage facilities allowing sockeye access back to the 
lake. The Tribe has shown it can bring back an extirpated run of coho 
salmon and dramatically increase the return of listed fall chinook 
salmon. The Tribe believes it can do the same for sockeye.
    In addition to fish passage and sockeye salmon restoration, 
rehabilitation of the dam will provide many other benefits including 
enhanced flood control, improved water conservation and management of 
irrigation withdrawals, and greater stability of the city of Joseph 
water supply. This legislation is needed to implement the Wallowa 
Valley Water Management Plan and is supported by a broad coalition of 
supporters. Wallowa Lake is used by more than 800,000 recreational 
users each year and provides irrigation for 15,000 acres, water for the 
city of Joseph, Oregon, and flood control for Joseph, Wallowa, and 
Enterprise, Oregon. These many water users have been waiting since 
1996, when Oregon Water Resources Department of Dam Safety listed 
Wallowa Lake Dam as a high hazard structure, for this dam to be 
rehabilitated.
    Very importantly, the water exchange actions proposed in the Act 
will result in increased flows in the Lostine River and Bear Creek for 
spring chinook salmon listed under the Endangered Species Act. The 
Tribe and others have worked diligently to bolster these runs of spring 
chinook through implementation of the Northeast Oregon Hatchery 
program. The last few years have demonstrated the great success of the 
program in returning salmon. We now need the stream flow improvements 
encompassed by the Act to sustain the runs.
    The efforts made in Wallowa County, to bolster the runs and to 
support this Act, are tangible demonstrations of a community working to 
develop a healthy ecosystem. The Tribe has carried out virtually all of 
its fisheries restoration activities on private lands in cooperation 
with the local landowners. These actions include conducting the 
inventories necessary to improve fish passage at road culverts, 
monitoring fish runs using traps and weirs, and acclimating juvenile 
salmon for supplementing the runs. During the last few years, local 
irrigators have cooperated with the Tribe and Oregon Department of Fish 
and Wildlife to curtail their water withdrawals at critical low flow 
periods. Passage of the Wallowa Lake Dam Act and supporting the 
collaborative relationship that exists in Wallowa County will serve as 
a great example of how to avoid volatile situations like that in the 
Klamath Basin in recent years.
    The Tribe strongly supports the Wallowa Lake Dam Rehabilitation and 
Water Management Act. Passage of the Act will insure that the legal and 
trust obligations of the United States, to protect and enhance treaty-
reserved fishing rights, are honored, and will demonstrate the 
importance of national commitment to collaborative restoration actions 
for salmon in the Pacific Northwest.

                                    

      
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