[Senate Hearing 109-460]
[From the U.S. Government Publishing Office]
S. Hrg. 109-460
MISCELLANEOUS WATER BILLS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WATER AND POWER
of the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
SECOND SESSIONQ08
ON
S. 1577 S. 1962
S. 2028 S. 2035
S. 2054 S. 2205
H.R. 3812
__________
MARCH 30, 2006
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
LARRY E. CRAIG, Idaho JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska RON WYDEN, Oregon
RICHARD M. BURR, North Carolina, TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri DIANNE FEINSTEIN, California
CONRAD BURNS, Montana MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia KEN SALAZAR, Colorado
GORDON SMITH, Oregon ROBERT MENENDEZ, New Jersey
JIM BUNNING, Kentucky
Bruce M. Evans, 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
GORDON SMITH, Oregon, Vice Chairman
LARRY E. CRAIG, Idaho TIM JOHNSON, South Dakota
RICHARD M. BURR, North Carolina BYRON L. DORGAN, North Dakota
MEL MARTINEZ, Florida RON WYDEN, Oregon
CONRAD BURNS, Montana DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky MARIA CANTWELL, Washington
JAMES M. TALENT, Missouri KEN SALAZAR, Colorado
ROBERT MENENDEZ, New Jersey
Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the
Subcommittee
Nate Gentry, Counsel
Mike Connor, Democratic Counsel
C O N T E N T S
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STATEMENTS
Page
Becker, Laurence R., State Geologist and Director, Vermont
Geological
Survey, Vermont Department of Environmental Conservation,
Vermont
Agency of Natural Resources.................................... 28
Boyer, Jerry J., President, Spearfish Canyon Society............. 41
Craig, Hon. Larry E., U.S. Senator From Idaho.................... 3
Hill, Catherine L., Northeast Regional Hydrologist, U.S.
Geological Survey, Department of the Interior.................. 16
Jeffords, Hon. James M., U.S. Senator From Vermont............... 22
Johnson, Hon. Tim, U.S. Senator From South Dakota................ 4
Keys, John, III, Commissioner, Bureau of Reclamation, Department
of the Interior................................................ 7
Krambeck, Jerry, Mayor, City of Spearfish, SD.................... 26
Lytle, C. Mel, Water Resource Coordinator, San Joaquin County, CA 29
Murkowski, Hon. Lisa, U.S. Senator From Alaska................... 1
Pollman Rogers, Darla, Riter, Rogers, Wattier & Brown, LLP,
Pierre, SD..................................................... 34
Robinson, J. Mark, Director, Office of Energy Projects, Federal
Energy
Regulatory Commission.......................................... 13
Thune, Hon. John, U.S. Senator From South Dakota................. 1
APPENDIXES
Appendix I
Responses to additional questions................................ 47
Appendix II
Additional material submitted for the record..................... 65
MISCELLANEOUS WATER BILLS
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THURSDAY, MARCH 30, 2006
U.S. Senate,
Subcommittee on Water and Power,
Committee on Energy and Natural Resources,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:37 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. Call to order the Subcommittee on Water
and Power. It is my pleasure to welcome you all here this
afternoon. We have seven bills before the committee this
afternoon.
We have S. 1577, which is sponsored by Senators Johnson and
Thune, exempting a South Dakota hydropower project from FERC
licensing requirements. We have S. 1962, sponsored by Senators
Roberts, Brownback, Nelson, and Hagel. This authorizes an
extension of Reclamation repayment contracts. S. 2028,
sponsored by Senators Byrd and Rockefeller, reinstates a FERC
hydropower license, extending the time for construction
commencement. S. 2035, sponsored by Senators Craig and Crapo,
reinstates a FERC hydropower license. S. 2054, sponsored by
Senator Jeffords, authorizes a water resources study for the
State of Vermont. S. 2205, sponsored by Senators Thune and
Johnson, authorizes the reconveyance of Reclamation land in
South Dakota. And H.R. 3812, coming from Congressman Pombo,
authorizes a Mokelumne River feasibility study.
Senator Thune, you have joined the subcommittee here this
afternoon. We welcome your comments.
I will note, for those that will be here this afternoon,
we're scheduled to have a vote at 3 o'clock, from what I
understand, so we're going to try to do this in an expedited
manner.
With that, Senator Thune, I will invite you to provide
whatever comments you may have on your legislation, and then
you, Senator Craig, for your comments, as well, before we go to
the witnesses.
Senator Thune, welcome.
STATEMENT OF HON. JOHN THUNE, U.S. SENATOR
FROM SOUTH DAKOTA
Senator Thune. Thank you, Madam Chairman, Senator Craig,
fellow subcommittee members. I appreciate very much the
opportunity to appear before your committee to speak in support
of a bill that I have advocated since my service in the House
of Representatives.
This noncontroversial legislation is something that Senator
Johnson and I have supported for a number of years. The Senate
Energy Committee reported out an identical bill last Congress,
and the full Senate approved the legislation by unanimous
consent. However, it ultimately died, because the House did not
act before the end of the 108th Congress.
I'm here today to ask for your assistance in seeing that
this legislation is again reported out of your committee so it
could be passed by the Senate and ultimately signed into law.
For those who may not know, S. 2205, the Blunt Reservoir
and Pierre Canal Land Conveyance Act of 2006, would provide a
long-overdue remedy to a failed Federal irrigation project in
my home State of South Dakota. The Flood Control Act of 1944,
otherwise known as the Pick-Sloan Project, authorized the
creation of the 750,000-acre Oahe Irrigation Project in central
South Dakota. This project never became a reality. Therefore,
the bill before the committee today seeks to de-authorize the
Blunt Reservoir and Pierre Canal features. This would allow the
original landowners the option of purchasing the land they lost
to the Blunt Reservoir and Pierre Canal Project, thereby
putting the land back onto the local tax rolls.
This legislation also seeks to transfer to the State of
South Dakota some parcels of land as partial mitigation for the
536,875 acres of wildlife habitat that were permanently flooded
in South Dakota. This flooding occurred to allow downstream
States the benefits of flood-control navigation and municipal
and industrial water supplies.
Madam Chairman, as you can imagine, there are a number of
original landowners who would like their land back. It's been
roughly 30 years since landowners either sold their land to the
Federal Government or had it taken, through condemnation. My
bill addresses the roughly 20,000 acres of land that are
currently owned by the Federal Government and managed by the
Bureau of Reclamation.
While this legislation is widely supported by landowners
and the Governor of South Dakota, I do want to point out that a
minor modification may need to be made to the purchase-option
section of the bill. This is largely due to the fact that the
State of South Dakota and landowners reached an initial
agreement in 2001 regarding how the 20,000 acres currently
owned by the Federal Government would be repurchased. As Darla
Pollman Rogers will testify following my remarks, since 2001
there's been a noticeable increase in land valuations in Sully
and Hughes Counties in South Dakota. Nevertheless, even with
this recent development, I am confident that this issue can be
dealt with before S. 2205 goes before the full committee.
Madam Chairman, I appreciate the opportunity to appear
before your committee this afternoon. With your help, I'm
hopeful that we can work together to expedite passage of this
long-overdue bill.
And I might just say, last and not least, I would also like
to welcome Mayor Jerry Krambeck, of Spearfish, South Dakota. He
will be testifying, on another bill that you referenced
earlier, before your subcommittee this afternoon, and that's S.
1577. This is a bill of which I am a cosponsor, along with
Senator Johnson, that would transfer the Spearfish
Hydroelectric Plant No. 1 to the city of Spearfish, South
Dakota.
I appreciate this committee's interest and commitment to
this issue. And, again, I thank you, Madam Chairman, for the
opportunity to testify before your committee this afternoon.
Senator Murkowski. Thank you. I appreciate you being here
with us, and thank you for your comments.
With that, Senator Craig.
And Senator Johnson, if you want to speak to any of the
bills that are before us, you'll be invited after Senator
Craig.
STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR
FROM IDAHO
Senator Craig. Madam Chairman, thank you very much for
holding this hearing and covering the issues that are before
you in bill form.
I'm here today to speak in support of S. 2035, the
Arrowrock Hydro Project, and to help the committee understand
the need for this legislation.
The purpose of this legislation is to provide the
irrigation districts of Arrowrock Dam with an extension of the
original license in order to initiate construction.
Respectfully, I feel that FERC is lost in a bureaucratic maze
regarding the construction license of the Arrowrock Project.
The Energy Policy Act of 2005 contained several provisions
that encourage the development of projects which meet both the
requirements of being a hydro project built at an existing dam
and a hydro project that is a conduit.
In Idaho, the Arrowrock Hydroelectric Project fits squarely
within these frameworks. The irrigation districts have
finalized a power sales agreement with the Clatskanie PUD to
take all of the power of that plant. The irrigation districts
have engaged in productive consultation with the U.S. Fish and
Wildlife Service to evaluate and protect threatened species in
the vicinity of the project, primarily bull trout. They have
engaged an engineer of national reputation to design and build
the contract. Last, they have financed--they have financing
lined up to build the project. In short, the project is
literally ready to go forward.
This project was unable to meet the March 20, 2005, start-
of-construction deadline, because--guess what?--the U.S. Fish
and Wildlife Service would not begin consultation on the
project until after it completed consultation on all of the
Reclamation projects in the Upper Snake River Basin. The Upper
Snake River consultation was a direct outgrowth of the
requirements of the Snake River Water Rights Act of 2004. So,
it was simply a matter of lining up and timing.
This project has been given an extension in the past, and
another is needed to--because of the circumstances out of the
control of the Arrowrock people. Without this amendment, the
irrigation district would have to completely start the FERC
licensing process over; thus, spending and wasting unnecessary
resources of the agency and the irrigation district because of
all the required collaboration and consultation needed that is,
in part, already completed.
So, I look forward to working with my colleagues to see if
we can't move this legislation to keep this project on track.
Thank you for its consideration, Madam Chairman.
[The prepared statement of Senator Craig follows:]
Prepared Statement of Hon. Larry E. Craig, U.S. Senator From Idaho
Madam Chairman, thank you for holding this hearing today.
I am here today to speak in support of S. 2035; the Arrowrock
Hydroelectric Project and to help the Committee understand the need for
this legislation. The purpose of this legislation is to provide the
irrigation districts of Arrowrock Dam with an extension of the original
license in order to initiate construction.
Respectfully, I feel that FERC is lost in a bureaucratic maze
regarding the construction license for the Arrowrock Project.
The Energy Policy Act of 2005 contains several provisions that
encourage the development of projects which meet both the requirements
of being a hydropower project built at an existing dam and a hydropower
project that is a conduit.
In Idaho, the Arrowrock Hydroelectric Project fits squarely within
this framework. The irrigation districts have finalized a power sales
agreement with Clatskanie PUD to take all of the power from the plant.
The irrigation districts have engaged in productive consultation
with the Fish & Wildlife Service to evaluate and protect threatened
species in the vicinity of the project, primarily bull trout. They have
engaged an engineer of national reputation to design and build the
contract. Last, they have financing lined up to build the project.
In short, the project is ready to go forward.
This project was unable to meet the March 20, 2005 start of
construction because the Fish & Wildlife Service would not begin
consultation on the project until after it completed consultation on
all of the Reclamation projects in the Upper Snake River Basin. That
Upper Snake consultation was a direct outgrowth of the requirements of
the Snake River Water Rights Act of 2004.
This project has been given an extension in the past and another is
needed because of circumstances out of their control. Without this
amendment, the irrigation districts would have to completely start the
FERC licensing process over. Thus, spending and wasting unnecessary
resources of agencies and the irrigation districts because all of the
required collaboration and consultation is complete and the project is
ready to move forward.
I look forward to working with my colleagues to pass this
legislation.
Senator Murkowski. Thank you, Senator Craig.
Senator Johnson.
STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR
FROM SOUTH DAKOTA
Senator Johnson. Thank you, Senator Murkowski.
I've just come from a Banking Committee markup, and I'm
told to anticipate a vote on the floor at around 3:00, so this
may turn out to be more disjointed than we would like, but I
appreciate your chairing this and your working with us on these
key issues.
I want to thank my colleague, Senator Thune. I know he has
an intensely busy schedule. So, if there reaches a point where
you've got to get back to your office, we understand that, as
well.
I appreciate, Madam Chairman, your working with me, along
with the committee staff, to include two bills in today's
agenda that are important to South Dakota.
Before I describe the bills, I want to recognize a few
folks from back home in South Dakota. Obviously, my colleague
Senator Thune, who is sponsoring both of these bills in today's
agenda. Traveling from South Dakota today is the mayor of
Spearfish, South Dakota, Jerry Krambeck, who will outline for
the committee how the city is working to balance a basket of
multiple uses in operating a century-old hydroelectric facility
in the northern Black Hills. And, Mayor, I want to thank you
for traveling a good deal of distance to present your testimony
today.
I'm also pleased that Darla Pollman Rogers could provide
testimony in a powerful narrative on behalf of South Dakota
landowners affected by the Blunt Reservoir and Pierre Canal
Land Conveyance Act of 2006. Darla, welcome back to Washington,
DC, as well.
The historic Spearfish Hydro Plant Unit No. 1 in Spearfish,
South Dakota, has operated continuously since 1912. In 2004,
the city acquired the facility from the Barrick Mining Company,
and intends to continue operation of the hydroelectric plant
for the benefit of that community.
Prior to the Federal Energy Regulatory Commission's order
asserting jurisdiction to license the power plant, the project
has been operating for more than 90 years under a 1909 right-
of-way permit allowing the project to occupy U.S. Forest
Service land in the Black Hills National Forest. The 1909
right-of-way permit was granted through a 1905 Act of Congress
providing use for municipal or mining purposes.
Over the past 90 years, the city of Spearfish has literally
grown up around the hydroelectric plant, with the historic D.C.
Booth Fish Hatchery drawing water through the facility's
diversion pipe. With a vibrant tourism and recreation economy,
along with traditional ranching and timber enterprises, the
northern Black Hills is also working to capture the potential
of the historic Homestake Mine through a world-class research
laboratory. As the northern Black Hills economy diversifies and
grows, clean sources of energy generation, such as the
Spearfish Hydroelectric Plant, can meet these energy
requirements.
The city and the Spearfish Canyon homeowners have
recognized the value, also, of protecting water resources in
the Spearfish Creek. As the stream from which the city takes
its name, it is incumbent on all residents to ensure the
continued balance of uses and values of the creek. Accordingly,
I have encouraged the city, the Spearfish Canyon homeowners,
and other stakeholders to continue work over managing
waterflows along Spearfish Creek. Solving the question of
apportioning waterflows in the creek is as important as
providing the community with certainty over operation of the
hydroelectric facility. We need to make sure that those values
are protected through balanced streamflows and a commitment to
environmental protection. Spearfish Canyon is one of the
natural wonders of our State--in fact, of our Nation--drawing
visitors and binding lifelong residents to the stunning beauty
of the northern Black Hills. Accordingly, we need to ensure
regulatory continuity while also enhancing stream flows and
recreational values.
The second bill coming before the subcommittee, the Blunt
Reservoir and Pierre Canal Land Conveyance Act of 2006, is
emblematic of the historic circumstances challenging South
Dakota since the construction of the large-scale Missouri River
reservoirs in Montana and the Dakotas. Through the Flood
Control Act of 1944, the Corps of Engineers executed a massive
flood-control and water-resources plan commonly referred to as
the Pick-Sloan Missouri Basin Program. Stretching from Missouri
to Montana, the Corps of Engineers and the Bureau of
Reclamation permanently altered the pace and direction of what
had been one of the longest freeflowing rivers in the United
States. In exchange for flooding hundreds of thousands of acres
of valuable riverbottom lands and sacred tribal sites in
Montana and the Dakotas, producers in rural communities would
receive the benefits of irrigation and productive farmland.
The Blunt Reservoir and Pierre Canal are two chapters in
the Pick-Sloan master plan of reservoirs, levees, and canals.
Envisioned in Hughes, Stanley, and Sully Counties was a
190,000-acre irrigation project surrounding portions of Lake
Oahe. As Darla will further explain, in the 1970's that vision
did not become a reality, and the Bureau of Reclamation, the
State, and local residents have grappled with a proper and fair
solution ever since.
The Blunt Reservoir and Pierre Canal Land Conveyance Act of
2006 provides a mechanism for preferential leaseholders, the
original landowners who leased their land from the Bureau of
Reclamation, to purchase back their property. Many of these
landowners and their direct descendants have paid tens of
thousands of dollars in lease payments over the past 30 years
to the Federal Government. Significantly, the South Dakota
Department of Game, Fish, and Parks will acquire a second
smaller set of lands through nonpreferential leaseholders. This
provision is an important component to the bill, as South
Dakota continues efforts required by Federal laws to mitigate
for damage to fish and wildlife habitat from the Missouri River
impoundments.
In 2001, former Senator Tom Daschle and I introduced a
similar version of the bill, and, in 2003, during the 108th
Congress, the U.S. Senate passed the bill, only to have the
clock run out in the House of Representatives.
In the course of the past 5 years, farm-ground land values
throughout South Dakota have increased markedly. Increased land
valuations should be taken into account in judging whether
preferential landowners can afford to acquire their lands. This
is an issue that the subcommittee could resolve prior to full-
committee consideration of the bill, and an issue that I do not
feel will impede timely action.
In conclusion, I look forward to the testimony of all the
assembled witnesses, and hope that the committee can make
significant progress on these bills in a very timely manner.
Thank you, Madam Chairman.
Senator Murkowski. Thank you, Senator Johnson.
Now let's go ahead and turn to our witnesses today. I'd
like to welcome the administration witness, Mr. John Keys, the
commissioner of Bureau of Reclamation; Ms. Catherine Hill, from
the USGS; and Mr. Mark Robinson, from the Federal Energy
Regulatory Commission.
I want to also note that this subcommittee has received
some written testimony on several of the bills that will come
before the subcommittee today, and that will be made part of
the official record.
I also want to take just a quick moment to recognize you,
Commissioner Keys. I understand it's been 34 years that you've
been with the Bureau of Reclamation. And we're told that this
is the last time that you will appear before this committee in
your capacity as commissioner before you retire in, apparently,
a couple of weeks. You have done a terrific job out there. It's
tough work. We recognize that. Your performance as a
commissioner during some pretty tough times is a testament,
truly, to your talent and your dedication. We certainly
appreciate it. I have certainly enjoyed the opportunity to work
with you, and wish you the best of luck in the future.
With that, go ahead with your testimony, your final swan
song here before the committee.
Mr. Keys. In other words, ``Do good your last time.''
[Laughter.]
Senator Murkowski. We have no doubt.
Mr. Keys. It's been my pleasure to work with you. The 34
years is what I had before. It's almost 40, now. So, it's time
to go do something else.
Senator Murkowski. Wow.
STATEMENT OF JOHN KEYS, III, COMMISSIONER, BUREAU OF
RECLAMATION, DEPARTMENT OF THE INTERIOR
Mr. Keys. Madam Chairman and members of the subcommittee, I
am John Keys, commissioner of the Bureau of Reclamation. We
appreciate the opportunity to appear here today and talk about
these bills.
I have submitted testimony that I would appreciate being
made part of the permanent record.
Senator Murkowski. It will be made part of the official
record.
Mr. Keys. Thank you.
Madam Chairman, the administration supports S. 1962. Four
water districts--the Kansas Bostwick Irrigation District No. 2
and the Webster Irrigation District No. 4, both in Kansas, and
the Bostwick Irrigation District and the Frenchman-Cambridge
Irrigation District, both in Nebraska--are served by
Reclamation projects of the Pick-Sloan Missouri Basin Program.
Despite the recent prolonged drought in the West and a
continually declining water supply, the district's contracts
require that they continue to pay operation-and-maintenance
costs and construction obligations to the United States. These
districts have sought, and have been granted, annual deferments
to their payments under Reclamation law.
When an annual payment is deferred, it's rescheduled, to be
repaid later. It's just spread out longer, at a higher level,
during the accepted repayment period.
The deferments have helped the districts to weather the
drought in the short run, but have also caused the
distribution-work payments to be substantially longer over the
remaining terms of the contracts.
The participating districts have done an exemplary job of
communicating with Reclamation. They contacted us early in 2005
to explore opportunities where--available to them under
existing law to address their financial concerns. None existed.
The legislation would spread the distribution-works
repayment over a longer period, coinciding with the water-
supply works repayment term. In addition, slated increases in
the reserve-fund payments under the existing contracts would be
delayed for about 10 years.
This legislation would provide needed financial relief to
the districts, while not erasing their financial obligations to
the United States. The districts' continued economic viability
is important because of what they produce for the U.S. economy
and to ensure that repayment will ultimately be possible.
Therefore, the administration is pleased to support this
legislation.
S. 2205 directs the Secretary of the Interior to convey
certain parcels of land acquired for the Blunt Reservoir and
Pierre Canal to the State of South Dakota for the purpose of
mitigating lost wildlife habitat or to preferential
leaseholders, which are original landowners of the acquired
land. The administration supports the intent of the bill, but
we have some concerns with a few of its--pieces of its content.
The basic concept of S. 2205, to allow original landowners
to regain title to lands that Reclamation purchased in
anticipation of a project that was never built, is
straightforward and fair. Further, the sponsors of S. 2205 have
addressed many of the technical issues that were raised in past
related--in the past, related to liability, land descriptions,
return of land-sale proceeds back to the Federal Treasury, and
reimbursement of Federal implementation costs.
However, the Department still finds the bill fails to
adequately protect taxpayers' interest, for a number of reasons
outlined in my testimony.
There's also a constitutional issue. The bill would require
South Dakota to agree to accept specified lands and act as an
agent for the Secretary. Requiring States to take actions to
administer Federal regulatory programs may not be
constitutional. We suggest amending the bill to clarify that
South Dakota may voluntarily choose to accept or reject the
land conveyance and associated responsibilities.
We appreciate the work done by the sponsors to address
several technical issues that had been raised in the past, and
we look forward to working with your committee and those
sponsors and the local people to address those outstanding
issues and make this happen.
H.R. 3812 would authorize a feasibility study of the
Mokelumne Regional Water Storage and Conjunctive Use Project,
an initiative to provide additional water supply within the San
Joaquin Valley. The focus would be on new water storage and
conjunctive-use programs.
In fiscal year 2005, Congress appropriated $300,000 for an
appraisal investigation of the project. The appraisal report is
in draft form at this time, and it is our hope to have it
completed soon.
It is unusual for a feasibility study to be authorized
before the appraisal-level work is completed. The $3 million
authorized for feasibility work would be matched, 50-50, by
non-Federal cost sharing. In H.R. 3812, the time allowed for
completing the work is 2 years. Typically, feasibility studies
that include environmental-impact statements require about 3
years to complete.
Therefore, the administration recommends the bill be
amended to extend the study period to a minimum of 3 years for
completing the feasibility study.
Notwithstanding this change, the administration cannot
support H.R. 3812, because the bill authorizes the feasibility
study prior to the appraisal process being complete, and the
authorization would compete with already scarce budget
resources.
Madam Chairman, that completes my testimony, and I would
certainly stand to any questions that you and the panel may
have.
[The prepared statement of Mr. Keys follows:]
Prepared Statement of John Keys, III, Commissioner of Reclamation,
Department of the Interior
ON S. 1962
Madam Chairman and Members of the Subcommittee, I am John Keys,
Commissioner of the Bureau of Reclamation. I am pleased to be here
today to give the Administration's view on S. 1962, a bill to revise
certain repayment contracts of four irrigation districts that are part
of the Pick-Sloan Missouri Basin Program.
The Irrigation Projects Reauthorization Council (IPRC) represents
four member irrigation districts in support of this legislation. The
districts--the Kansas Bostwick Irrigation District No. 2 and the
Webster Irrigation District No. 4, both in Kansas, and the Bostwick
Irrigation District in Nebraska and the Frenchman-Cambridge Irrigation
District (also in Nebraska), are served by Reclamation projects built
as part of the Pick-Sloan Missouri Basin Program. Webster Irrigation
District No. 4 is located in the Solomon River basin; the others are in
the Republican River basin, both tributaries to the Kansas River.
The districts recently renewed their contracts with Reclamation.
The contract renewal addressed repayment of a portion of the water
supply works construction cost over a 40 year term. Webster Irrigation
District No. 4 renewed its contract in 2002; the others renewed their
contracts in 2000. However, each District's repayment of the
distribution works construction cost obligation remained unchanged
during contract renewal. Thus, the remaining term for repayment of the
distribution works is, in each case, significantly less than that
remaining for the water supply works. Under Reclamation law, the
irrigation districts repay irrigation capital costs without interest
charges.
As discussed above, currently each of these districts' contracts
has two different repayment periods: a water supply works repayment
term which extends until 2040 or 2042 (40 years from when the
respective district's contract was renewed) and a distribution works
repayment period which extends 40 years from their first payment for
the distribution works (to sometime between 2009 and 2015 depending on
the particular district). This legislation would allow the repayment
periods for the distribution works to be extended to match the
repayment period for the water supply works, and allow for equal annual
payments over that period. Additionally, reserve fund payments were
slated to increase significantly in about 5 years, following scheduled
completion of repayment of the distribution works construction costs
obligation. Anticipating that this time horizon is too short for the
districts to ensure financial recovery sufficient to make the increased
reserve fund payments, this bill delays these increases for an
additional 10 years.
Drought conditions in southwest Nebraska and northwest Kansas have
significantly impacted inflows to reservoirs providing a water supply
to Kansas Bostwick Irrigation District, Bostwick Irrigation District in
Nebraska, Frenchman-Cambridge Irrigation District and Webster
Irrigation District. Annual inflow into reservoirs providing these
districts' water supplies has reached new historical lows in the last
three years. Four of the five canals in the Bostwick Irrigation
District in Nebraska did not divert water the past two years. The
Kansas Bostwick Irrigation District has not delivered a substantial
amount of water to acres above Lovewell Reservoir the past two years.
Three of the four canals in the Frenchman-Cambridge Irrigation District
have not diverted any water the past three years. The Webster
Irrigation District did not divert water into Osborne Canal this past
year.
Despite the declining water supply available to these Projects, the
districts' contracts require that they pay a portion of annual
operation and maintenance costs for the water supply works and repay
construction cost obligations to the United States. This payment
obligation to Reclamation is in addition to the districts'
responsibility for 100 percent of the operation and maintenance costs
of the distribution works and those water supply works that have been
transferred to the districts. Even with no water or a diminished
supply, the need for maintenance of these facilities continues.
The districts assess their irrigators in order to pay the
districts' annual expenses and repayment obligations. These irrigators
have received a diminished or no supply in recent years. For the last
couple of years most of these districts have sought and been granted
annual deferments to their payments under Reclamation law (the Act of
September 21, 1959, 73 Stat. 584). In order to grant a deferment,
Reclamation requires a determination that payment of the installments
will cause an undue burden on the water users and that there is no
alternative source of funds available to pay the installments. When an
annual payment is deferred, it is rescheduled to be repaid as quickly
as possible within the remaining term of the contract. The deferments
have helped the districts to weather the drought in the short run, but
have also caused the annual distribution works payments to be
substantially larger over their remaining repayment period, because
deferments do not extend the total time period allowed for repayment.
For example, Kansas-Bostwick Irrigation District #2 would, after
execution of the annual deferment currently being processed, have
annual distribution works payments of $421,353 due through 2015, with
annual water supply works payments of $21,841 through 2015, increasing
to $96,512 for 2016 and 2017, then decreasing to $85,591 from 2018
through 2040. This results in an annual repayment total for this
district of $443,194 through 2015 when the distribution works are
scheduled to pay out in the absence of this legislation. If S. 1962
becomes law, the district will have consistent annual payments of
$188,387 from 2006 through 2040, thus providing relief to help the
district through the current financial crisis.
The total repayment obligation for the distribution works and water
supply works for all four districts together is $12,442,447. This
legislation does not change the dollar amount of this repayment
obligation. However, because Reclamation law provides that irrigators
do not pay interest on capital costs, this bill would reduce the
present value of expected Treasury receipts. The difference between the
present value of the payout stream of the contracts as they currently
exist and as they would be amended by this bill is $1,620,637. This
assumes that, in the absence of this legislation, the districts would
pay the minimum payments due on time over the life of these contracts.
The IPRC and the participating districts have done an exemplary job
of communicating with Reclamation as they sought this legislation. They
contacted us in early 2005 to explore what opportunities were available
to them under existing law to address their financial concerns. Other
than the deferments discussed above, none existed. Reclamation also
very much appreciates the manner by which IPRC has kept us informed and
worked with us to identify issues. They addressed the possible effect
to power repayments through ``aid to irrigation'' early on by working
closely with Midwest Electric Consumers Association and with
Reclamation. It is our understanding that ``aid to irrigation'' is not
affected by this legislation.
The legislation would provide needed financial relief to the
districts by rescheduling their financial obligations to the United
States. Extension of the repayment period will not be a permanent
solution to the water scarcity facing these districts. However, taking
this action will provide needed relief for the districts and increase
the likelihood that they will be able to attain long-term financial
viability and fulfill their repayment obligation to the United States.
Therefore, the Department supports this legislation.
I am happy to respond to any questions.
ON S. 2205
Madam Chairman and Members of the Subcommittee, I am John Keys,
Commissioner of the Bureau of Reclamation. Thank you for the
opportunity to testify on S. 2205.
S. 2205 directs the Secretary of the Interior (Secretary) to convey
certain parcels of land acquired for the Blunt Reservoir and Pierre
Canal--features of the Oahe Irrigation Project in South Dakota--to the
State of South Dakota for the purpose of mitigating lost wildlife
habitat, or to the original land owners of the acquired lands or their
descendants (preferential leaseholders). The bill directs that the
proceeds of sales of preferential lease lands be deposited as
miscellaneous funds in the treasury and that such funds shall be made
available, subject to appropriations, to the State for the
establishment of a trust fund to pay the county taxes on the lands
received by the State Department of Game, Fish, and Parks under the
bill. The Administration supports the intent of the bill but has some
concern with its content, as I will discuss later.
The basic concept of S. 2205--to allow original landowners to
regain title to lands that Reclamation purchased in anticipation of a
project that was never built--is straightforward and equitable.
Further, the sponsors of S. 2205 have addressed, in whole or in part, a
number of the technical issues that were raised in the past related to
liability, land descriptions, return of land sale proceeds back to the
Federal treasury, and reimbursement of Federal implementation costs.
However, the Department still finds that the bill fails to adequately
protect taxpayers' interests for four reasons. First, the bill directs
Reclamation to sell the land to preferential leaseholders for less than
fair market value. Second, it directs Reclamation to convey to the
State the non-preferential lease parcels and the preferential lease
parcels that current lessees choose not to purchase without
compensation for the initial taxpayer investment in those lands. Third,
after conveyance Reclamation would still be responsible for
administrative costs associated with the acquisition of those lands,
such as curation of project archeological collections. Finally, the
bill provides that parcels may be swapped for other land elsewhere in
the State, which may alter the potential environmental mitigation
benefits of the land, potentially undermining one of the purposes of
the Act.
Background
As background, Reclamation purchased approximately 19,292 acres of
land between 1972 and 1977 in preparation for building the Blunt
Reservoir and the Pierre Canal. In many cases, Reclamation leased the
land back to the seller. Currently, Reclamation is leasing some 13,000
acres of Blunt Reservoir lands to 18 preferential leaseholders and
about 1,100 acres of Pierre Canal lands to 11 preferential
leaseholders. Although not reflected in title documents, the sellers
expected they would be able to purchase their lands back if they were
not needed for the project.
Nearly three decades later, construction has not commenced for the
Blunt Reservoir, although some earth-moving has been done for the
Pierre Canal. Because it is unlikely this project will be built,
Reclamation no longer needs to hold title to the acquired lands. Under
S. 2205, the preferential leaseholders (the original landowners or
their descendants) would be offered an option to purchase the land they
currently lease within 5 years of enactment. Section 2(d) of the bill
provides that the land could be sold to preferential leaseholders for
10% less than fair market value for agricultural purposes of the land.
Purchases would be from the South Dakota Commission of Schools and
Public Lands, acting as an agent for the Secretary of the Interior. If
a preferential leaseholder declines to purchase the land, the
Commission is to convey the parcel to the South Dakota Department of
Game, Fish, and Parks for wildlife habitat mitigation. Reclamation's
interest in the 5,000 acres currently unleased or leased to parties who
are not preferential leaseholders would be conveyed to the State of
South Dakota Department of Game, Fish, and Parks to be used in
mitigation of wildlife habitat lost as a result of Pick-Sloan
development.
Valuation and Payment
S. 2205 directs that proceeds of sales of land under the Act be
deposited as miscellaneous funds in the Treasury and such funds shall
be made available, subject to appropriations, to the State for the
establishment of a trust fund to pay the county taxes on the lands
received by the State Department of Game, Fish, and Parks under the
bill. While this partially addresses the Administration's previous
concerns (stated in testimony provided on S. 1028 in the 107th
Congress) about recovering the taxpayer investment in these lands, the
Administration remains opposed to the transfer of unleased or non-
preferential leased lands to the State without compensation to
Treasury. Furthermore, the Administration believes that all lands
conveyed under this bill should be sold for no less than fair market
value. In this situation we agree that equitable considerations support
offering preferential leaseholders the right of first refusal to
purchase these lands, which their families have been using for many
years, at appraised fair market value. We do not agree with the
provisions of the bill effectively subsidizing this sale. Moreover, we
note that the best practice for determining market value and ensuring
that the lands are used for their highest and best use is to sell the
parcels at an auction, and this would be our preferred way to dispose
of Federal lands in situations that do not present the circumstances
that exist here.
Constitutional Concern
We have an additional concern about the constitutionality of the
bill as currently written. The bill contains mandatory language stating
that South Dakota ``shall agree to accept'' specified lands and ``act
as an agent for the Secretary.'' Provisions of Federal law that require
States to take actions to administer Federal regulatory programs are
unconstitutional. This could be addressed by amending the bill to
clarify that South Dakota may voluntarily choose to accept or reject
the land conveyance and associated responsibilities.
Conclusion
We appreciate work done by the sponsors to address several
technical issues that have been raised in the past. We look forward to
working with the sponsors and the Committee to address any outstanding
issues that remain.
I would be pleased to answer any questions.
ON H.R. 3812
My name is John Keys, and I am Commissioner of the U.S. Bureau of
Reclamation. I am pleased to provide the Administration's views on H.R.
3812, a bill to authorize the Secretary of the Interior to prepare a
feasibility study for the Mokelumne River Regional Water Storage and
Conjunctive Use Project (known as the MORE WATER Project), San Joaquin
County, California. The Administration cannot support this bill because
it is premature, and given scarce Federal budgetary resources, an
expansion of the Federal role in the Mokelumne River cannot be
justified.
Specifically, this bill would authorize the Secretary to study the
feasibility of constructing a project to provide additional water
supply and improve water management reliability through the development
of new water storage and conjunctive use programs. The bill would
authorize an appropriation of $3,300,000 for the Federal cost share of
the study, with the proviso that the Federal share shall not exceed 50
percent of the total cost of the study. Clearly there are many water
supply issues in the San Joaquin Valley and in San Joaquin County in
particular. I am proud of the work our people in the Mid-Pacific Region
have done to understand the issues, the local interests and the role
Reclamation might play in solving problems.
I would like to provide some background relative to current
investigations of Mokelumne River water supplies and planning
investigation costs. In Fiscal Year 2005, Congress appropriated
$300,000 for the initiation of an appraisal investigation of the
Mokelumne River Regional Water Storage and Conjunctive Use Project. The
Appraisal Report is in draft form at this time. It is our hope to have
it completed soon.
H.R. 3812 directs the Secretary, not later than 2 years from date
of enactment, to complete a feasibility study and provide copies to the
Committee on Resources of the House of Representatives and to the
Committee on Energy and Natural Resources of the Senate. Feasibility
studies, which integrate National Environmental Policy Act compliance
documentation, and are completed in conformance with the Principles and
Guidelines for such studies, require a minimum of 3 years to complete.
The Administration recommends the bill be amended to extend the study
period to a minimum of 3 years for completing the feasibility study and
to providing the copies to the appropriate Congressional committees.
The Mokelumne River is tributary to the Sacramento-San Joaquin
Delta. There is no clear justification for expanding federal
involvement into the Mokelumne River. Although this broad area is
impacted by the Central Valley Project and CALFED, the Mokelumne River
does not have a Bureau of Reclamation water project.
It is premature to authorize a feasibility study before the
appraisal study has been completed and reviewed. Moreover, this study
would compete for funding with other currently authorized projects,
including several authorized storage feasibility studies authorized
under CALFED. I should also note that Reclamation did not seek funding
for this project in the President's Fiscal Year 2006 or 2007 budgets.
The Administration appreciates local efforts to address future
water issues. However, in light of the concerns expressed above, we
cannot support this bill authorizing Reclamation participation in a
feasibility study. That concludes my prepared remarks. I would be
pleased to answer any questions.
Senator Murkowski. Thank you. I appreciate your comments,
Commissioner Keys.
With that, let's go to Mr. Robinson, with the Federal
Energy Regulatory Commission.
STATEMENT OF J. MARK ROBINSON, DIRECTOR, OFFICE OF ENERGY
PROJECTS, FEDERAL ENERGY REGULATORY COMMISSION
Mr. Robinson. Madam Chairman, Senator, I am Mark Robinson,
and I appreciate the opportunity to speak today on S. 1577,
which would exempt the Spearfish Project from the licensing
requirements under the Federal Power Act that the Commission
administers.
Just as a matter of background, I'm the director of the
Office of Energy Projects. We authorize the siting of liquified
natural gas facilities, interstate natural gas pipelines, and,
more significantly here today, the licensing, administration,
compliance of, and dam safety of hydroelectric projects, some
1,700 hydroelectric projects across the country.
Our jurisdiction for hydroelectric projects derives from
the Federal Power Act, and really falls into four areas. If a
project exists on Federal lands, then it falls under the
Commission's jurisdiction; or if it's on navigable waters, or
if it's on waters that Congress exerts Commerce Clause
jurisdiction over, or the fourth rationale is if they are at
Federal dams. Any of those bring hydroelectric projects under
the Federal Energy Regulatory Commission's jurisdiction,
pursuant to the Federal Power Act.
The standard we use, found in the Federal Power Act--and
actually it was originally in the Federal Water Power Act of
1920--that we use to license projects is that the project has
to be found to be consistent with comprehensive development of
the basin. We take into consideration all of the public-
interest issues associated with that project. More directly, we
must give equal consideration, as required by Congress, to both
the developmental and nondevelopmental values of the--of these
projects. By ``developmental values,'' I mean power generation,
irrigation, flood control, things of that sort. By
``nondevelopmental values,'' they're mostly environmental
issues--fish and wildlife issues, recreation, public safety,
things of that sort.
Specific to the Spearfish Project, our history on this
project started in April 2000, when we received a complaint
that the Spearfish 1 and 2 developments, which both had about
5-mile bypass reaches on the Spearfish--Creek, I believe it's
called--were not releasing water, and there were trout, fish
kills associated with it. That's typically what prompts us to
look into an operating, nonlicensed hydroelectric project; it's
a complaint from someone else that the project is not being
operated consistent with public-interest values.
We did look into this project, and found that it--part of
the project, at least, existed on Federal lands. And, for that
reason, the Commission, in August 2001, concluded that the
project was jurisdictional and ordered that it become--that
they apply for a license.
In March 2002, however, a new piece of information came to
the Commission, and the Commission reversed itself, in that the
project--that portion of the project that existed on Federal
lands was actually permitted by a pre-1920 Federal
authorization. So, the Commission concluded, at that point,
that, as long as that Federal authorization was active, that it
did not require to be licensed. Unfortunately, that
authorization expired shortly thereafter, so in about 2 months,
in June 2002, the Commission reestablished that the project
needed to be licensed again.
And then, in May 2002, the Commission, trying very hard to
work with the operator of the project, granted a 3-year
extension for the operator to defer starting the active
licensing, which, in itself, was going to be a 3-year grant, to
allow them to do the necessary work to bring it under license.
But they granted a 3-year extension at that point. And then we
find ourselves here today with S. 1577.
In passing the Federal Power Act, Congress decided that the
method of licensing projects prior to 1920, the--I'm sorry, the
Federal Water Power Act, in 1920, did not give a consistent
review for hydroelectric projects, and didn't ensure the
protection of the public interest, and they vested that power
in the Commission to ensure that, in fact, projects were
licensed and authorized consistently across the country to
protect all the public interest--not just power production or
other aspects, but all public interests.
I know of nothing about this project that would separate it
from the other 1,700 projects that we have under license or
exemption. And we have looked. It just doesn't seem to be
there.
Licensing a project does ensure that we give equal
consideration to those developmental and nondevelopmental
values--the fish and wildlife resources and power production.
And, therefore, I would recommend that this project undergo
that same scrutiny to ensure that it is operated to the full
benefit of the public.
Thank you very much.
[The prepared statement of Mr. Robinson follows:]
Prepared Statement of J. Mark Robinson, Director, Office of Energy
Projects, Federal Energy Regulatory Commission
Madam Chairman and Members of the Subcommittee: I appreciate the
opportunity to comment on S. 1577, a bill to exempt the Spearfish
Project, located in South Dakota, from the otherwise applicable
licensing requirements of the Federal Power Act (FPA). My name is J.
Mark Robinson, and I am the director of the Office of Energy Projects
at the Federal Energy Regulatory Commission. Our office is responsible
for non-federal hydroelectric licensing, administration, and safety;
certification of interstate natural gas pipelines and storage
facilities; and, authorization and oversight over the construction,
operation, and safety of Liquefied Natural Gas (LNG) terminals. I
appear today as a Commission staff witness speaking with the approval
of the Chairman of the Commission. The views I express are my own and
not necessarily those of the Commission or of any individual
Commissioner.
Under Part 1 of the Federal Power Act, the Commission issues
licenses to non-Federal interests authorizing the construction,
operation and maintenance of water power projects on navigable waters
of the United States, on federal lands and on streams over which the
Congress has jurisdiction. Licenses are also required to utilize
surplus water or waterpower from government dams.
Licenses may be issued under the FPA only if, in the judgment of
the Commission, the proposed project is best adapted to a comprehensive
plan for the development and utilization of the water resources of the
river basin involved for all public purposes. The licenses are issued
for terms up to 50 years and contain terms and conditions that are
designed to ensure that the comprehensive development standard is met.
The terms and conditions reflect consideration of all environmental and
developmental aspects of the project, including such factors as the
effect of project construction and operation on fish and wildlife
resources, irrigation, flood control, water supply, recreation, and the
safety of the public.
LEGISLATIVE BACKGROUND
Prior to passage on June 20, 1920, of the Federal Water Power Act,
the responsibility for licensing and overseeing hydroelectric
facilities was dispersed among several arms of government. The
construction and operation of dams in navigable waters, in non-
navigable tributaries whose flows affected such waters, and on federal
lands were regulated under four general statutes: Section 7 of the
River and Harbor Act of 1890, as amended; sections 9 and 10 of the
River and Harbor Act of March 3, 1899; the General Dam Act of 1906;
and, the General Dam Act of 1910.
If a hydroelectric project was located on a navigable water of the
United States, it needed Congressional authorization. In addition, if
the project was located on public lands of the United States, it
required authorization from the Secretary of the Interior. If the
project was located on federal forest reserves (i.e., National Forest
lands), it required authorization from the Secretary of Agriculture.
The passage of the Federal Water Power Act of 1920 (FWPA)
superseded prior statutes. The FWPA created the Federal Power
Commission and made it unlawful to operate a hydroelectric project in
navigable waters or on federal lands without a license from the Federal
Power Commission. The Federal Water Power Act established firmly the
principle of federal regulation of water power projects and established
a national policy in the use and development of water power projects on
public lands and navigable streams.
Section 23(b) of the FPA requires either a Commission license or a
valid pre-1920 federal permit for a hydropower project covered by Part
I of the statute. Such permits were issued before the FPA was passed.
They were grandfathered by Section 23(b), under which the permittee
could either operate under the permit until it expired or apply for a
license under the FPA. Although most of these permits have expired or
been converted into licenses, the problem of determining what
constitutes a valid permit or right-of-way still arises (as in case of
the Spearfish Project). In 1935, the FPA was amended to broaden the
Commission's authority and jurisdiction over water power projects to
include projects that are located on commerce clause waters and which
would also affect the interests of interstate or foreign commerce.
SPEARFISH PROJECT
S. 1577 would exempt the Spearfish Project, located in South
Dakota, from the otherwise applicable licensing requirements of the
FPA. As noted previously, under Part I of the FPA, hydropower projects
are required to be licensed, if, among other things, they are located
on the public lands or reservations of the United States.
In September 2000, following receipt of an environmental complaint,
the Commission began a review of the jurisdictional status of the
Spearfish Project, operated by the Homestake Mining Company
(Homestake). The complaint concerned the alleged dewatering of the
Spearfish Creek downstream of the Spearfish Project, especially in the
summer, to the detriment of resident trout. In August 2001, the
Commission found that the project was required to be licensed, because
it was located on federal lands, within the Black Hills National
Forest.
However, the Commission subsequently reversed this finding on March
1, 2002 (Order Granting Rehearing and Denying Late Intervention)
because Homestake had demonstrated that it held a valid right-of-way
under a 1905 Act that permitted rights-of-way in National Forests for
projects, such as Spearfish, that operated for mining purposes (at the
time of the Commission order, the project's power was being used for
mining operations). The Commission therefore concluded that the project
need not be licensed.
In April 2002, Homestake informed the Commission that it had ceased
mining operations as of December 31, 2001, but that it interpreted the
FPA as allowing it to continue generating for activities associated
with mine reclamation. In an order issued June 17, 2002, the Commission
ruled that the 1905 Act made no reference to reclamation, and that
since mining operations had ceased, Homestake or any successor could
not generate electricity at the project without a Commission license.
Homestake did not seek judicial review of this order. To date, the
Spearfish Project is still operating. It is my understanding that for
several years the City of Spearfish has been exploring the possibility
of acquiring and operating the project.
In passing the FPA, Congress made the decision that, to protect
public resources, projects located on federal lands and reservations
must be licensed by the Commission. The Spearfish Project, being
located in part on National Forest lands, meets this criterion. I am
aware of no reason why this project should be treated differently than
others that are similarly situated. Exempting the project from the
requirements of the FPA would set a precedent for exempting individual
projects from the otherwise applicable requirements of the FPA.
Congress has charged the Commission with examining thoroughly all of
the environmental and developmental aspects of projects such as the
Spearfish Project, and of licensing those projects with appropriate
conditions to ensure that they are best adapted to the comprehensive
development of affected waterways. In the absence of the Commission's
licensing jurisdiction, there is no guarantee that there will be any
consideration of the resources that the Commission is charged with
weighing and protecting.
Exempting this project would also remove Commission oversight for
dam safety. Therefore, Homestake would not need to comply with Part 12
of the Commission's dam safety regulations. Currently, Homestake has an
approved Emergency Action Plan and is inspected by the Commission every
three years. Conformance with the Congressional intent expressed in the
Federal Power Act requires that the Spearfish Project be licensed.
As a result of these concerns, I do not support S. 1577.
I appreciate the opportunity to present my views to the
Subcommittee. Thank you.
Senator Murkowski. Thank you, Mr. Robinson.
And next, let's go to Ms. Catherine Hill, from the United
States Geological Survey.
STATEMENT OF CATHERINE L. HILL, NORTHEAST REGIONAL HYDROLOGIST,
U.S. GEOLOGICAL SURVEY, DEPARTMENT OF THE INTERIOR
Ms. Hill. Madam Chairman and Senator Johnson, I'm Catherine
Hill, northeast regional hydrologist for the U.S. Geological
Survey. Thank you for the opportunity to provide the views of
the Department of the Interior on S. 2054, a bill to conduct a
Vermont water resources study.
The Department of the Interior agrees that the goals of the
bill are commendable and the needs that could be addressed are
real. However, we note that studies similar to this have been
carried out by the USGS in other States, generally carried out
within the USGS Cooperative Water Program. This is a
longstanding cost-share program using Federal and State
dollars. Given the existing authorities for our Cooperative
Water Program, we feel congressional authorization of this
study is not necessary.
S. 2054 directs the Secretary of the Interior, acting
through the director of the USGS and in coordination with the
State of Vermont, to conduct a study on water resources in the
State of Vermont. The role identified for the Department in
this bill is consistent with USGS's leadership role in
surveying and characterizing groundwater resources.
The bill requires a survey of groundwater supplies and
aquifers available for water supply by municipalities
throughout the State as part of a study to determine whether
these supplies provide water of potable quality.
The USGS has a long history of conducting groundwater
resources on both local and regional scales. In the 1950's and
1960's, studies were conducted across the Nation to provide a
basic understanding of geologic--geohydrologic conditions at a
county-level scale. In the 1980's, 25 regional aquifer systems
were studied in detail, including the aquifer systems in
Vermont. However, these studies provided a regional and
national context for--of groundwater that are often not
detailed enough for State and municipalities.
In Vermont, USGS has been actively working with the Vermont
Geological Survey in the creation of a new bedrock geologic map
that is scheduled to be completed soon. This new geologic map
will provide a variety of information that can be used to help
define groundwater availability and quality.
In 2003, USGS provided information on possible approaches
for groundwater assessment and aquifer mapping to the State of
Vermont for a report to the State legislature on the status of
groundwater and aquifer mapping. In this report, a plan for
future statewide groundwater and aquifer assessments was
presented. This document provides a foundation for how work
proposed by this legislation could be performed.
The USGS has extensive data bases that include geochemical
characteristics of rocks, soils, stream sediments, and water,
long-term groundwater levels and stream flows, and water use
and well inventories. We also have a number of ongoing studies
that relate to groundwater in Vermont. For example, USGS, in
cooperation with the Vermont Geological Survey, is looking at
radionuclide content of wells in the Barre West and Montpelier
quadrangles. We are also analyzing the presence of arsenic in
bedrock wells throughout New England as part of a project with
the National Institutes of Health. This work will identify the
probability of bedrock wells having detectable levels of
arsenic. In addition, we are evaluating how radon and uranium
vary from aquifer to aquifer in northern portions of the United
States, including Vermont.
In New Hampshire, USGS has already performed statewide
surficial and bedrock aquifer mapping and characterization.
This work, conducted through the USGS's Cooperative Water
Program, now serves as the benchmark for groundwater
characterization in the State, and is the basis for State and
local planning and resource protection programs. We envision
that a statewide aquifer mapping and groundwater
characterization effort in Vermont would be similar in many
respects to the New Hampshire effort.
The proposed legislation also requires an assessment of how
groundwater recharges and interacts with surface water. This is
critical, because groundwater can be a major source of water
for streams. Vermont's rivers and streams provide habitat for
its trout and other fisheries, and supply flows to its many
lakes and ponds. A better understanding of groundwater
aquifers, the areas that contribute to both ground- and
surface-water systems, and how current and future water demands
could influence these systems will help decisionmakers ensure
that sufficient supplies are present for the multiple uses of
Vermont's water.
USGS concurs with the goals of S. 2054. Such an effort will
help ensure long-term water supplies for Vermont's citizens,
businesses, industries, and natural features. However, we feel
that such a proposed study would take 5 or more years to
complete, rather than the 2-year timeframe. We recommend that
studies of this type be conducted under USGS's Cooperative
Water Program.
We look forward to working with the State of Vermont,
particularly the Vermont Geological Survey, in future
groundwater resource and aquifer studies.
Thank you, Madam Chairman, for the opportunity to present
this testimony. I look forward to any questions.
[The prepared statement of Ms. Hill follows:]
Prepared Statement of Catherine L. Hill, Northeast Regional
Hydrologist, U.S. Geological Survey, Department of the Interior, on S.
2054
Madam Chairman and Members of the Subcommittee, I am Catherine L.
Hill, Northeast Regional Hydrologist for Water for the U.S. Geological
Survey (USGS). I thank you for the opportunity to provide the views of
the Department of the Interior (Department) on S. 2054, a bill to
conduct a Vermont water resources study.
The Department agrees that the goals of the bill are commendable
but has concerns with the bill. We note that studies similar to this
have been done by USGS in other States, generally carried out within
the USGS Cooperative Water Program, which is a long-standing cost-
sharing program using Federal and State funds. Given the existing
authorities for our Cooperative Water Program, congressional
authorization of this study is not necessary.
S. 2054, VERMONT WATER RESOURCES STUDY
S. 2054 directs the Secretary of the Interior, acting through the
Director of the USGS and in coordination with the State of Vermont, to
conduct a study on water resources in the State of Vermont. The role
identified for the Department in this bill is consistent with USGS's
leadership role in surveying and characterizing ground-water resources.
The bill requires a survey of ground-water supplies and aquifers
available for water supply by municipalities throughout the State, as
part of a study to determine whether these supplies provide water of
potable (drinkable) quality.
The USGS has a long history of conducting ground-water assessments
on both local and regional scales. In the 1950s and 1960s, studies were
conducted across the Nation to provide a basic understanding of
geohydrologic conditions at a county-level scale. In the 1980s, 25
regional aquifer systems were studied in detail, including the aquifer
systems in Vermont. However, these studies provide a regional and
national context of ground water that are often not detailed enough for
State and municipal needs.
As stated, the goals of the S. 2054 can be met through existing
authorities, and many related activities are being implemented on the
ground in Vermont. USGS has been actively working with the Vermont
Geological Survey in the creation of a new bedrock geologic map that is
scheduled to be completed in the next few years. This new geologic map
will provide a variety of information that can be used to help define
ground-water availability and quality. Map information will include
bedrock types that may be correlated with high yield wells or bedrock
types that may be associated with natural contaminants (for example
arsenic or radon). In 2003, USGS provided information on possible
approaches for ground-water assessment and aquifer mapping to the State
of Vermont for a report to the State Legislature on the status of
ground-water and aquifer mapping. In this report, a plan for future
statewide ground-water and aquifer assessments was presented. This
document provides a foundation for how work proposed by this
legislation could be performed.
The USGS has extensive databases that would provide useful
information in evaluating potential ground-water resources in Vermont.
These databases include the location and characteristics of most
mineral occurrences throughout the United States; geochemical
characteristics of rocks, soils, stream sediments, and water; long-term
ground-water level and stream flows; and water-use and well
inventories.
The USGS also has a number of on-going studies that relate to
ground water in Vermont. USGS, through the Mineral Resources Program
and in cooperation with the U.S. Environmental Protection Agency, is
determining the water quality effects of three abandoned mines on local
streams and ground water. Another USGS study, in cooperation with the
Vermont Geological Survey, is looking at the radionuclide content of
wells in the Barre West and Montpelier quadrangles. USGS is also
analyzing the presence of arsenic in bedrock wells throughout New
England as part of a project with the National Institutes of Health.
This work will identify the probability of bedrock wells having
detectable levels of arsenic. In addition, through the USGS National
Water-Quality Assessment Program, we are evaluating how radon and
uranium vary from aquifer to aquifer in the northern portions of the
United States, including Vermont.
In New Hampshire, USGS has already performed statewide surficial
and bedrock aquifer mapping and characterization. This work, conducted
through the USGS Cooperative Water Program, occurred in the 1980s and
90s and now serves as the benchmark for ground-water characterization
in the State and is the basis for State and local planning and resource
protection programs. We envision that a statewide aquifer mapping and
ground-water characterization effort in Vermont would be similar in
many respects to the New Hampshire effort.
Ground water is the source of water for two-thirds of Vermont's
residents. From 1950 to 2000, the amount of ground water used in the
State is estimated to have increased by at least 60 percent. While
Vermont is blessed with a major surface-water supply source in Lake
Champlain to serve its largest cities, most communities, businesses,
and homes away from the Lake rely on ground water for their water
supply.
The proposed legislation also requires an assessment of how ground
water recharges and interacts with surface water. This is critical
because ground water can be a major source of water for streams,
especially in headwater areas. Vermont's rivers and streams are an
important natural resource--providing habitat for its trout and other
fisheries and supplying flows to its many lakes and ponds. As stated
previously, USGS is currently working with the States to provide a
better understanding of ground-water aquifers, the areas that
contribute to both ground-and surface-water systems, and how current
and future water demands could influence these systems, will help
decision makers ensure that sufficient supplies are present for the
multiple uses of Vermont's water resources.
CONCLUSION
In conclusion, the USGS concurs with the goals of the bill to meet
Vermont's need for a detailed ground-water assessment and aquifer
mapping program, but notes that there are already ongoing efforts to
address these goals. Such an effort would help ensure long-term water
supplies for its citizens, businesses, industry, and natural features.
However, we feel that such a proposed study would take 5 or more years
to complete and that the 2-year time frame for completing the study
would not yield comprehensive results. We recommend that studies of
this type be conducted under the USGS Cooperative Water Program,
through a cost-share arrangement. The USGS looks forward to working
with the State of Vermont, particularly the Vermont Geological Survey,
in future ground-water resource and aquifer studies.
Thank you, Madam Chairman, for the opportunity to present this
testimony. I will be pleased to respond to questions you and other
Members of the Subcommittee may have.
Senator Murkowski. Thank you, Ms. Hill.
I haven't been told that we've got a vote yet, so we'll
keep going for as long as we can here.
Commissioner Keys, S. 2205, the Blunt Reservoir and the
Pierre Canal Land Conveyance, you've indicated that the Bureau
supports the intent of this legislation. Just in understanding
some of the background, I have been led to believe that the
preferential leaseholders here have paid rent on what was
originally their land over these past 30 years. Does this
warrant or suggest a reduced sales price because of these
rental payments that have gone on prior to this point in time?
Mr. Keys. Chairman Murkowski, no, it does not. All of our
transactions there would be based on fair market value.
Senator Murkowski. So, what has been paid, historically, in
terms of rent, has nothing to do with fair market value at
today's time and date?
Mr. Keys. No, ma'am, it does not.
Senator Murkowski. Okay. I also understand that some of the
leaseholders claim that there was a commitment made by the
Federal Government to sell back the land at the same price that
it was purchased at 30 years ago. Is that your understanding?
Or, again, do you still go back to, ``We've got to operate on--
based on what's fair market value today''?
Mr. Keys. Madam Chairman, I have no knowledge that there
were any promise made to sell it back at the price that it was
paid before.
Senator Murkowski. You still would have been commissioner
back then.
[Laughter.]
Mr. Keys. Madam Chairman, I worked on the project before,
when I was working for a living.
[Laughter.]
Mr. Keys. That didn't sound right, did it?
[Laughter.]
Senator Murkowski. We understand.
Mr. Keys. When Reclamation purchased that land for the
construction of the canal and the reservoir, we paid fair--at
least fair market value for it in all cases. In some cases,
where we had to condemn it and it went into court, we paid more
than fair market value, within the limits allowed by the law.
And what we're suggesting in the current legislation is the
same thing apply now, that when we sell it back to them, it be
at fair market value.
Senator Murkowski. Okay. With S. 1962, to revise the
repayment contracts, do you anticipate that the irrigation
districts will be able to meet this proposed new repayment
schedule if, in fact, this is enacted? You've cited the
hardship faced in the districts by the drought; will they be
able to make these repayments?
Mr. Keys. Madam Chairman, we think so. In the discussions
that we've had with all four of those districts, it appears
that stretching it out would give them the opportunity to
recover their reserve funds, and then keep up with their
payment schedule. Of course, none of us can predict the
drought. The drought in some of those areas has lasted 6 years,
up to now, and, if it continues, that same hardship would be
there. But everything that we see now is that, if it gets back
to some normal precipitation situation, that they would be able
to meet that schedule.
Senator Murkowski. Okay. Then the last question for you--
and this is as it relates to the Mokelumne River feasibility
study--at this point, is it your belief that this proposed
project is the best alternative for alternate water--or
additional water for the San Joaquin Valley?
Mr. Keys. Madam----
Senator Murkowski. I heard your concerns that you have
expressed on the record, but is this the best project?
Mr. Keys. Madam Chairman, in that portion of the San
Joaquin Valley, it's a good project. Our preference is to
finish the appraisal study that's underway. The funding is
there. The plans are to have it done at the end of this fiscal
year. And certainly we would like to finish that so that we
know what to spend our feasibility-study money on. But it's a
good project. And certainly we would look forward to working
with you for additional legislation later, and working with the
project sponsors.
Senator Murkowski. Okay.
Mr. Robinson, as it relates to the Spearfish Hydropower
Project, if the city did go though this licensing process, can
you estimate how long that might take, and how much it might
cost the city? What are you looking at?
Mr. Robinson. It's hard to put a precise estimate on it,
but we typically allow about 3 years to develop a license
application. That allows a couple of sample seasons, which is
not unusual for developing information on fish and wildlife
issues, and then about a year to prepare the application.
Depending upon the issues that kind of drive the costs--
here I don't think there's any issue associated with fish
passage facilities, which can be very expensive--there would
be--I think the main focus would be on what flow regimes are
necessary. There's a very long bypass reach between the dam
itself and the powerhouse. It's 5 to 6 miles long. How much
water you have to leave in that section of the stream to
provide for fish and wildlife, versus putting it through the
tunnel, the penstock, and the turbines, would probably occupy
most of everyone's attention, and the costs associated with it.
I just--I don't have a real estimate on that.
Senator Murkowski. Does that extend the time period
involved, as well?
Mr. Robinson. No, I don't think that would extend the time
period. I think that could easily be done within that 3 years.
It's just the type of study that you do, typically. It's called
an instream flow study, an IFIM, instream flow incremental
methodology. Those studies can run a couple of hundred-thousand
dollars to perform, to determine what type of habitat exists
and what water levels are necessary to protect that habitat.
Senator Murkowski. Does the U.S. Forest Service administer
the right-of-way that we're talking about here?
Mr. Robinson. Yes, for the transmission line.
Senator Murkowski. And did--has the Forest Service
determined, then, that the right-of-way is valid, and is
transferable, then, to the city?
Mr. Robinson. That, I can't answer, ma'am. I just don't
know.
Senator Murkowski. Okay. All right. That's something that
we had wanted some clarification on.
Just so that you're aware of these buzzers in the
background, we are in the midst of a vote. Senator Johnson is
going to do his duty. And when he returns, I will escape
quickly and go cast my vote, as well.
Ms. Hill, with regard to the Vermont groundwater study, I
guess I'm trying to determine what it is that USGS is
suggesting would help the people of Vermont in more fully
understanding their water resources. You've indicated that you
support the goals, that they're commendable, but you've
indicated that this particular legislation, as it's drafted,
you don't believe is needed. What kinds of studies--and you've
mentioned the USGS Cooperative Program is the way to go; is
there anything else that can be done, in terms of providing the
assistance that the people of Vermont are looking for in
understanding what the water resource is? Is there something
legislatively that we can do more--I guess I'm trying to
understand whether or not you believe that this legislation, or
any aspect of it, should move forward.
Ms. Hill. Let me--I'm not trying to be evasive, but we have
done a similar study in New Hampshire. Typically it's a
wonderful project, and I think it definitely is needed, but we
like to put it in something such as the Water Co-op Program, so
that you have a Federal share and a State share.
Senator Murkowski. Does that dilute the--excuse the pun,
but does that dilute an individual State's ability to get focus
to their resource, when it is part of an entire cooperative
program?
Ms. Hill. No, I don't believe that it does, because you're
in a partnership, and we have strong partnerships with the
State. So, I don't think it would dilute it. It would be a
joint partnership that you would develop the scope together,
which has already been done, in fact.
Senator Murkowski. And so, then, to push a little bit
further as it relates to S. 2054, are there any aspects of the
legislation that we should be working to advance?
Ms. Hill. Well, Vermont would be in the forefront of any
legislation that would help move forward a comprehensive study
of groundwater resources. That just hasn't been done very
often, nationwide.
Senator Murkowski. Is there an appropriate non-Federal cost
share for a study of this kind that's being proposed in this
legislation?
Ms. Hill. I don't think there's one being proposed. Well, I
shouldn't say that. I guess I would have to get back to you on
that. I'm not sure.
Senator Murkowski. Okay. All right.
Well, I'm going to--that is the extent of the questions
that I have for the panel. If I can just ask that you stay a
few more minutes, until Senator Johnson comes back, we will
take a brief recess, and I'll let him assume the gavel, so that
we don't miss a beat here. He'll have a chance to ask his
questions of the panel, and then, when I return from the vote,
we will take up the second panel.
So, with that, we'll just stand in brief recess. Thank you.
[Recess.]
Senator Johnson [presiding]. The committee will be back in
session while Chairman Murkowski takes care of her vote on the
floor. And she'll be returning, I'm certain, but in order to
move things along--and, obviously, this is all on the record--
we'll proceed here from this point.
Again, Mr. Keys, I want to commend you, and thank you, for
your years of great service to America through the Bureau of
Reclamation. And I know that you've been of great service and
cooperation to my office and my State on numerous water
projects and other BOR initiatives in South Dakota. And we wish
you the very best on your future plans.
And I have a statement here from Senator Jeffords that I'll
put in the record. This is an opening statement from Mr.
Jeffords relative to S. 2054. And, without objection, it is
accepted into the record.
[The prepared statement of Senator Jeffords follows:]
Prepared Statement of Hon. Jim Jeffords, U.S. Senator From Vermont,
on S. 2054
I want to thank the Energy and Natural Resources Committee for
holding today's hearing on my legislation, S. 2054, which would direct
the Secretary of Interior, through the U.S. Geological Survey, to
conduct a study of Vermont's groundwater resources.
This is a critical issue for Vermont. Vermont's population is
relatively small--just over 600,000 people. But, about two-thirds of
our population's drinking water comes from groundwater, both from
public water systems and from private wells.
We have our share of contamination and supply issues. Naturally--
occurring contaminants like uranium threaten the viability of local
water supplies. Proposals for increased withdrawals raise the ire of
locals who fear for the long-term impact on water supplies.
A groundwater map is step one in the process of figuring out how to
address these issues. Without the basic data that will be provided by
the groundwater study, it is difficult to make informed decisions about
Vermont's groundwater.
Today you'll be hearing from Larry Becker, Vermont's State
Geologist, who will be speaking more about the state's commitment to
addressing its need for a groundwater map during the hearing. Mr.
Becker has worked for the State of Vermont since 1981 serving as
Technical Services Chief for the Vermont Geological Service, and as a
hydrogeologist, groundwater planner, and geology consultant for the
Vermont Department of Environmental Conservation. He is the Chair of
the Association of American State Geologist's Earth Science Education
Committee. His Master's Degree from the University of Vermont focused
on shoreline dynamics and sediment transport in Lake Champlain's
Appletree Bay in Vermont. He received his B.S. Geology degree from the
State University of New York at Buffalo.
S. 2054 would authorize the U.S. Geological Survey to create a
groundwater map that could be used as a decision-making tool in the
state of Vermont. With the state as a partner, USGS brings technical
expertise and financial assistance to this project that Vermont could
not duplicate on the state level alone. This effort is consistent with
other similar projects completed by USGS in the northeast and other
proposals moved through this committee and the full Senate in recent
months. I look forward to working with you to move this bill through
the full Senate, and I thank the Committee again for holding this
hearing today.
Senator Johnson. Commissioner Keys, how much does the
Bureau of Reclamation spend to manage the lands acquired for
the Pierre Canal and Blunt Reservoir?
Mr. Keys. Mr. Johnson, currently we spend about $282,000--
I'm sorry, that's how much we get. We spend about $151,000 a
year to manage those lands.
Senator Johnson. Okay. In your testimony you stated that
the Bureau will be still responsible for some administrative
fees even if the Blunt Reservoir bill is enacted. Could you
elaborate on the nature of those fees, and do you have an
estimate of the total amount of those costs?
Mr. Keys. Mr. Johnson, the one feature that we would still
have to take care of with provisions of the bill is to take
care of the historic--the cultural resources that are there. We
would have to do those surveys, and then take care of the
curation of whatever artifacts were found.
I am thumbing my notes to see how much that would cost. I
would certainly provide that figure for the record.
Senator Johnson. Yes, if you could take a look at that and
then provide that quickly, it would be very helpful.
Mr. Keys. I'd be glad to.
Senator Johnson. Could you tell the committee the
difference between the BOR's cost to manage these lands today
versus the cost if H.R. 4301 was enacted? Excuse me, S. 2205--
the cost between management of the lands today versus if we
were to enact 2205?
Mr. Keys. Mr. Johnson, I would assume that's the cost
between 2001 and 2006. I would have to provide that for the
record, also. I don't have those numbers at my fingertips.
Senator Johnson. Well, I think what that would come down to
is the difference between the $151,000 of management
expenditures, less what you are investing in historic and
cultural resources. So, again, that would depend on your
getting back to us on that number, I suppose.
When lands are taken out of Federal ownership, are they
always disposed of at fair market value? And, if not, what
exceptions are there to those rules?
Mr. Keys. Mr. Johnson, certainly, any transfer like that is
subject to whatever bill is passed to make it happen.
Senator Johnson. Right.
Mr. Keys. In most cases--and I know of no exceptions now--
when we dispose of land, it's done at fair market value.
Senator Johnson. And so, it's really the discretion or the
judgment of the Congress to determine whether there's any
special circumstances that might justify a different rule;
essentially, that is what you're saying?
Mr. Keys. Senator, that's correct. I would take it back to
the original purchase of the land. There, fair market value was
offered to the people that we were purchasing the land from. If
they didn't like that, they didn't take it, and we had to
condemn it and go into court. And, in some cases, they got more
for it, whatever the court allowed them.
Senator Johnson. Right.
Mr. Keys. And certainly the action of the Congress would
prevail here.
Senator Johnson. All right. Well, we look forward to
working with you, and with the BOR, as we try to come to a
satisfactory and equitable resolution of that particular aspect
of the bill. And we look forward to working with you in good
faith in that regard.
Mr. Keys. Senator Johnson, I might just add, our goal is
the same as yours and the same as the project sponsors here,
and that's to get that land back onto tax rolls, back into the
hands of those people that purchased it. I think it's--we will
work with you on the details to get that done.
Senator Johnson. Yes. And we'll also work with you relative
to the constitutional issues you raised pertaining to the State
of South Dakota's Game, Fish, and Parks Department on what we
need to do to make sure that BOR is satisfied with the legal
basis for that transfer, as well.
Mr. Keys. Okay.
Senator Johnson. And we'll be sharing language with you,
and work with you closely on that.
Relative to Mr. Robinson, first let me start out by stating
that I do believe that the licensing and administrative of our
Nation's public hydroelectric plants is an important regulatory
tool to balance the often competing multiple uses of the
Nation's water resources. Several Senators on the Energy
Committee have devoted a good deal of time toward improving the
Federal license process for non-Federal hydropower plants. That
being the case, I believe that the set of circumstances
surrounding this small--very small--hydroelectric plant in
Spearfish are unique, and therefore provides for a re-
examination, in this instance, of the Federal license
requirements.
So, my first question, Mr. Robinson, is that it's my
understanding that FERC is asserting jurisdiction to require a
license on the basis that certain right-of-way grants and
permits which were issued by the Federal Government prior to
the enactment of the 1920 Federal Power Act had expired. Is
that your argument, the basis for your jurisdictional claim?
Mr. Robinson. Well, the basis is the existence of the
transmission lines on Federal lands. Those particular lands
were covered by a pre-1920 Federal authorization, which the
Commission, in its last order, found had expired, and,
therefore, no longer provided that exemption from the Federal
Water Power--the Federal Power Act.
Senator Johnson. Now, I've learned that these right-of-way
grants and permits were not issued by the FERC, or that the
rights-of-way are administered by the FERC. In fact, the
rights-of-way permits are administered exclusively by the U.S.
Forest Service, which recently found that they had not expired,
and, in fact, were validly transferred from the Homestake
Mining Company to the city of Spearfish. In light of these sets
of circumstances, isn't it fair to believe that the FERC is
overreaching in asserting jurisdiction, particularly in light
of the long-held administration of the rights-of-way by the
U.S. Forest Service?
Mr. Robinson. I think the Commission would always be in a
posture of reviewing any of their findings if new information
was provided to them. What you just mentioned, about the Forest
Service making a finding, is something that doesn't exist, I
don't believe, in our record right now. The Commission, when
they made their determination that the pre-1920 permits had
expired, based that on the statute, itself, and its language,
which went to power being produced for mining purposes. And the
mining operation has ceased to function there. There's no
argument on that. The Commission concluded from that that--
therefore, that those permits were no longer valid. But we
would always be interested in seeing any new information that
anyone had on it.
Senator Johnson. All right. I want to ask you a question
about the time and cost of licensing this project. I understand
that the median amount of time for a hydro relicense applicant
is about 64 months, from the beginning to the end, and that,
under the traditional process, costs average about $2.3
million. Who bears the costs for the license? And, in
proportion to other hydro projects, what could the city of
Spearfish expect, in terms of cost and time, to license this
very small, century-old hydro plant?
Mr. Robinson. To answer your first question, the proponent,
or the applicant, bears the cost for that. Agencies and others
bear their own costs for participating. NGO's--nongovernmental
organizations--and private citizens all bear their own costs.
As far as the timeframe for licensing, it's our objective--and
we just modified our licensing process with the integrated
licensing process--it's our objective to license all projects
within 2 years after the application is filed. Not 64 months,
but 2 years. I think some of those numbers that you're quoting
go back to the 1990's, prior to two iterations of improvements
in the licensing process, the 64 months.
The $2.5 million, I have not heard that number before, but
we certainly have projects that go well beyond that, in terms
of their costs. We license projects up to the size of the
1,800-megawatt Priest Rapids project in the mid-Columbia
system. And it's very expensive to authorize--or to license
large projects like that. And it tends to skew the average cost
associated with it. But it doesn't mean that it's cheap to
license even a small project like this. It would be a
significant investment to go through licensing.
Senator Johnson. Yes.
Mr. Robinson. That's indisputable.
Senator Johnson. And you could understand, from the
community-of-Spearfish perspective, the electricity production
here is a secondary and incidental issue, and that the real
issue is the water flow and the water access into the community
of Spearfish.
Mr. Robinson. I've been involved with licensing projects
for 28 years, and, during that 28 years, the shift from power
being the significant factor that we looked at to nonpower
values being the overwhelming aspect of licensing projects is
across the country.
Senator Johnson. Well, thank you, Mr. Keys, Mr. Robinson,
Ms. Hill. And I would presume that, in the case of the South
Dakota projects, that Mr. Keys and Mr. Robinson would be
willing to accept any written questions that we may--that the
committee may submit----
Mr. Robinson. Absolutely.
Senator Johnson [continuing]. After the conclusion of this
hearing.
Mr. Keys. Yes, we would.
Senator Johnson. Well, thank you very much.
And I'll turn it back over to Chairwoman Murkowski.
Senator Murkowski [presiding]. Thank you for helping out
with the tag team there. It makes it work a little bit better.
I want to thank the witnesses for your time this afternoon,
for coming in and helping out on these issues of importance
within the region.
With that, let's call up the second panel here. Welcome to
the committee this afternoon. And I think what we will do is,
we'll start with you, Mayor Krambeck, and just go down the line
in the order that you are seated.
So, with that, welcome. I appreciate the fact that several
of you have come from a relative distance to be here this
afternoon. We appreciate your willingness to appear and the
time that you are giving to us on these respective issues. So,
thank you, and welcome.
Mayor Krambeck.
STATEMENT OF JERRY KRAMBECK, MAYOR, CITY OF SPEARFISH, SD
Mr. Krambeck. Thank you. My name is Jerry Krambeck. For the
past 6 years, I've served as the mayor of Spearfish, South
Dakota, a municipality of approximately 9,000 people located in
the heart of South Dakota's Black Hills.
I'm here today to testify in support of S. 1577. I would
like to submit for the record letters from some elected
officials, public agencies, and water user groups in South
Dakota that support this legislation being championed by
Senators Johnson and Thune.*
---------------------------------------------------------------------------
* The letters have been retained in subcommittee files.
---------------------------------------------------------------------------
When visiting our city, one cannot help but appreciate the
scenic beauty of Spearfish Canyon. Frank Lloyd Wright said it
best during his 1935 visit to Spearfish Canyon when he declared
that it's the best, the most magnificent canyon in the West.
We're proud of this heritage, and take seriously our
responsibility to preserve it for the future generations to
enjoy and appreciate.
The city is located at the base of Spearfish Canyon,
through which Spearfish Creek runs. Spearfish Creek is the
lifeblood to the many farms and ranches that operate in our
area. Farmers have been irrigating the fields for nearly 150
years in Spearfish, with some water rights dating back to the
mid-19th century. Our community also has a rich mining history.
For years, many citizens in our community were employed by the
Homestake Mine, in Lead, South Dakota.
These values prompt our city, in 2004, to purchase the
small 4,000 kilowatt Spearfish Hydroelectric Plant No. 1 from
Homestake Mining Company. At that time, Homestake was closing
its gold mine in Lead, and no longer needed the hydropower from
this plant to supports its operations. The project had been in
continuous operation since 1912, and had been meticulously
maintained and preserved. The city saw an opportunity to
preserve this historical landmark, which stands as a reminder
of resilience, ingenuity that was required of those early
settlers in the West.
This project is important for more than its historical
value. And for a very real way, it supports these deeply held
values in--of our community. For example, the hydro facility
bypasses a significant sinkhole in Spearfish Creek where
surface waters are lost to the underlying aquifer. By diverting
flows around the sinkhole, the project provides additional
water for recreation, irrigation, fire protection, and the
National Historic D.C. Booth Fish Hatchery. In addition, since
acquiring the hydro facility, the city has worked to develop an
agreement with the Spearfish Canyon Howeowners Association to
provide for additional water to be left in Spearfish Creek for
aesthetic and environmental benefit.
The reason I'm here today is that the multiple benefits
provided by this project are in danger of being forever lost.
In the series of orders issued in 2001 and 2002, the Federal
Energy Regulatory Commission ruled that this hydroelectric
facility, which, at the time, had been operating for about 80
years, falls under its mandatory licensing jurisdiction under
the Federal Power Act. The statute was enacted about a decade
after Homestake started generating electricity at the facility.
FERC justified its claim of jurisdiction over the project by
finding that certain right-of-way grants issued by the Federal
Government for the project in the early 20th century had
expired.
These grants are currently administrated by the U.S. Forest
Service. FERC issued its rulings without even consulting with
the Forest Service. In fact, the Forest Service is on record
that right-of-way grants continue to be valid, even after the
hydro facility was conveyed from Homestake to the city of
Spearfish. Despite the urging of the entire South Dakota
congressional delegation, FERC refuses to change its
jurisdictional rulings.
The city does not oppose the goals of the Federal Power
Act, making sure that our Nation's waterways are best managed
for multiple public interests such as power development, energy
conservation, the protection of fish and wildlife resources,
recreation, and flood control. We believe that we have already
accomplished this in Spearfish Creek.
Our objection is that FERC's licensing of this facility
would be an unnecessary exercise, at a tremendous cost. As this
committee well knows, the FERC licensing process is an enormous
undertaking. Studies conducted by FERC find that even small
projects like this one can take over 6 years to license, at a
cost that could approach millions of dollars.
Costs of this magnitude alone would require that the city
mothball the project and shut it down. The city does not
believe that policies and goals of the Federal Power Act
support this result, discriminating against a source of clean,
renewable energy that is already operated in a manner that best
balances public interest considerations, through the sheer
imposition of overwhelming administrative costs.
Thank you very much for letting me testify today.
Senator Murkowski. Thank you.
Mr. Becker.
STATEMENT OF LAURENCE R. BECKER, STATE GEOLOGIST AND DIRECTOR,
VERMONT GEOLOGICAL SURVEY, VERMONT DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, VERMONT AGENCY OF NATURAL RESOURCES
Mr. Becker. Thank you, Madam Chairman and members of the
subcommittee. I'm Laurence Becker, Vermont state geologist, and
I direct the Vermont Geological Survey. That's part--a division
of the Vermont Department of Environmental Conservation.
Thanks for the opportunity to represent the State of
Vermont in response to S. 2054, the Vermont Water Resources
Study. And thanks to Senator Jeffords for recognizing the
importance of groundwater through his sponsorship.
The State of Vermont understands that groundwater is a
fundamental resource. We strongly agree that characterizing the
resource to support sound water supply and protection decisions
is a necessary step to plan for the future. We strongly support
this bill and urge this body to move this authorization
forward.
Coordination with Vermont in the proposed language is a
necessary step to create a meaningful partnership between the
State and the Federal Government. Local control is an important
element of the Vermont ideal, and the State can work best with
USGS to bring the operational considerations and results of the
study to our towns and municipalities. It is recognized that
such a study will take financial resources and personnel to
complete.
Sixty-six percent of Vermont's population depends on
groundwater for their drinking-water supply, including
municipalities, fire districts, agricultural, industrial,
commercial users, and homeowners. Fisheries habitat is
supported by groundwater discharge to surface waters.
For future supplies, the State has little knowledge of the
location of potential high-yield aquifers. Natural
contamination in well water from uranium, radium, and arsenic
that exceeds public health standards is an issue in a number of
geologic settings in Vermont. Information on where these
contaminants can be found is needed statewide.
Vermont has seen well-interference problems in tight
geologic formations, made worse by periods of drought. These
areas need characterization. Resource vulnerability can vary,
depending on the nature of the geology overlying groundwater
resources, and this is little characterized in relation to
aquifers.
In Vermont, the primary aquifers are saturated sand and
gravel, and water in fractured bedrock. The State's geology
comprises the vessel that contains Vermont's groundwater.
Surface water and groundwater are connected. Wells in saturated
sand and gravel can meet larger municipal demands, 500 to 1,000
gallons per minute in our State. Domestic users often obtain
water from drilled wells in bedrock that can supply as little
as 2 gallons per minute to meet family demand.
In recent years, with some town partners, the Vermont
Geological Survey has focused on characterizations of the
surficial and bedrock geology to derive groundwater planning
maps at a town scale. These town-by-town studies are
progressing slowly, as limited resources are available to
complete the work. The Vermont Geological Survey has completed
some localized detailed research and mapping in radioactivity,
arsenic, and radon, also in radioactivity in cooperation with
USGS. Comprehensive investigations are needed to protect the
public health. Nitrate in groundwater studies are underway next
to a large farm to ultimately provide best--information for
best nutrient management practices in relation to protecting
groundwater. And, as you heard, the USGS and the Vermont
Geological Survey are already cooperating to produce a new
State bedrock geologic map which would apply to this issue.
A 2003 report that the Vermont legislature identifies three
levels of study to develop groundwater and aquifer maps of
increasing accuracy. Each level builds upon the previous level,
using sophisticated tools, technical expertise and scientific
evaluation. The report concludes that the most obvious obstacle
to completing aquifer mapping statewide is the lack of
dedicated funding sources for employing people to analyze and
compile the data, and to work with partners and purchase
scientific equipment.
In conclusion, the State's compelling interest is that this
valuable and necessary groundwater resource be understood to
protect existing uses, plan for growth, and ensure for the
sustainability of the health and well-being of Vermonters. In
the present information vacuum, towns in the State will be
hard-pressed to balance economic needs against protection of
the resource. This bill is that first necessary step to create
the information template for future planning. Both the USGS and
the State of Vermont bring necessary expertise to the effort. A
strong partnership with USGS that takes the needs of Vermont
into account is a beneficial and necessary step to meet the
goals of S. 2054.
Thank you, Senator Murkowski, for this opportunity. We're
glad to help in any way as you deliberate in this regard.
Senator Murkowski. Thank you, Mr. Becker. I appreciate it.
Dr. Lytle, welcome.
STATEMENT OF C. MEL LYTLE, WATER RESOURCE COORDINATOR, SAN
JOAQUIN COUNTY, CA
Dr. Lytle. Good afternoon, Madam Chairman and committee
members.
I'm Dr. Mel Lytle, the water resource coordinator for San
Joaquin County, California. On behalf of the county and the
Mokelumne River Water and Power Authority, I'm here today to
testify in support of H.R. 3812, the bill sponsored by Chairman
Richard Pombo.
Historic shortfalls in surface water supply in San Joaquin
County have led to an overreliance on their diminishing
groundwater resources. As a result, the county, its cities, and
water agencies are actively engaged in a stakeholder-supported
effort to secure additional water resources to decrease
groundwater overdraft, slow saline intrusion, and improve
water-supply reliability and environmental protection in the
region.
Recognizing the need for a regional approach, this
consensus-based effort has completed significant water
management planning, including recently adopted countywide
water management plans, groundwater basin management plans, and
will complete an integrated regional plan by the end of 2006.
From this effort, the Mokelumne River Regional Water Storage
and Conjunctive Use Project, locally known as the ``MORE WATER
Project,'' has been recognized as a major new element of the
region's Integrated Conjunctive Use Program.
H.R. 3812 will authorize the Department of the Interior to
also participate in this effort on a cost-sharing basis to
complete the necessary studies and environmental protection.
MORE WATER centers on the development of new facilities to
capture floodwaters from the Mokelumne River for beneficial
use, including groundwater recharge in the eastern San Joaquin
Basin. Through improved conjunctive management, the basin's
underground storage potential of approximately 2 million acre-
feet could be realized. In addition, with water banking, MORE
WATER could provide greater regional benefit and permit other
agencies the ability to store and use excess water from the
underlying basin.
MORE WATER has gained considerable regional attention and
was foundational in the formation of the Mokelumne River Forum,
a California Department of Water Resources-sponsored
collaborative effort comprised of nearly 20 stakeholder
agencies that reach from the river's headwaters in the high
Sierra Nevada Mountain range, through Alpine County, downstream
to Amador, Calaveras, and San Joaquin Counties, and on out into
the greater East Bay area.
The stakeholders have elected to participate in this
collaborative effort to develop mutually beneficial and
regionally focused projects to--and programs to meet water
supply and related needs from the Mokelumne River.
Under the Department of the Interior's Water 2025 Program,
MORE WATER could set the standard of success for the forward-
looking focus in the water-deficient areas of the Western
United States. MORE WATER is consistent with the program's key
tools, including removal of institutional barriers and
interagency cooperation, conservation, efficiency in markets,
and improved technology.
We urge your support for the passage of H.R. 3812 in a
timely manner. This effort will establish a significant working
relationship between the county, the Bureau of Reclamation, and
a wide range of regional stakeholders to ultimately provide new
infrastructure to improve water resource management and
sustainability for California's future.
Thank you. That concludes my prepared remarks.
[The prepared statement of Dr. Lytle follows:]
Prepared Statement of Dr. C. Mel Lytle, Water Resource Coordinator,
San Joaquin County, CA, on H.R. 3812
LOCAL AND REGIONAL WATER RESOURCE ISSUES
San Joaquin County is located in the heart of the vibrant
agricultural communities of the Central Valley of California. It is
uniquely situated at the confluence of the Sacramento and San Joaquin
Rivers, the Bay-Delta, the source of water for two-thirds of
California's population, and several eastside rivers flowing from the
Sierra Nevada Mountains (Figure 1).* Grape production, dairy products
and other crops are the major agricultural commodities that come from
fields surrounding the burgeoning Cities of Stockton, Tracy, Lodi,
Manteca, Lathrop, Mountain House and Escalon. In all, approximately
700,000 residents call the County home. Of late, population trends are
dramatically increasing and are expected to double by 2040 due
principally to migration from the San Francisco Bay Area and other
areas of the State.
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* All figures have been retained in subcommittee files.
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Currently, the necessary water supplies to sustain the County's
diverse population, the $1.5 billion agricultural economy, other
industry, and sensitive habitats in the Delta are not adequate.
Opportunities to develop new water supplies are heavily constrained by
current uses and availability including water that has been developed
for use out of the Region by either the Central Valley or State Water
Projects. The County is currently dependent on groundwater for 60% of
its supply. This dependency has impacted the vital groundwater basin,
which is seriously over drafted by 200,000 acre-feet per year. The
California State Department of Water Resources has designated the
Eastern San Joaquin Basin a critically over drafted basin (DWR Bulletin
118). This has placed the groundwater basin and the City of Stockton's
drinking water supply in jeopardy due to intrusion of saline
groundwater underlying the San Joaquin River Delta. Within the Delta,
water quantity and quality is often inadequate for agricultural and
urban users, limiting the types of crops that can be grown and lowering
crop yields of those that are grown. In addition to local threats to
water supplies, the County has been adversely affected by changes in
State and Federal policies, which continue to erode existing supplies
and have upset longstanding plans to develop new supplies. As a result,
new water supply is vital to help sustain social, economic and
environmental viability in the County and surrounding Region.
REGIONAL WATER SUPPLY PLANNING
Independently, county water districts and cities have found it
difficult to wield the political and financial power necessary to
implement large scale water supply projects to mitigate the conditions
of groundwater basin overdraft. Recognizing the need for a regional
approach to water supply planning and implementation and with the aide
of local, State and Federal representatives and a well represented
stakeholder group consisting of over 25 agencies, the County in 2002
adopted the San Joaquin County Water Management Plan (WMP). The purpose
of the WMP was to define the extent of. groundwater overdraft and
identify possible solutions and strategies necessary to secure
supplemental water supplies using a consensus-based collaborative
process.
In addition, the Northeastern San Joaquin County Groundwater
Banking Authority (GBA) was organized to employ a consensus-based
approach in solving this problem and with its goal to develop ``. . .
locally supported groundwater banking and recharge projects that
improve water supply reliability in San Joaquin County . . . .''
Collaboration amongst the GBA member agencies has strengthened the
potential for broad public support for conjunctive management
activities, allowed members to speak with one regional voice as well as
increased their ability to obtain local, state, and federal funding.
Table 1 lists the member agencies of the GBA.
In 2004, the GBA adopted the East San Joaquin Basin Groundwater
Management Plan (GWMP) to enhance and coordinate existing groundwater
management policies and programs and to develop new policies and
programs to ensure the long-term sustainability of groundwater
resources in San Joaquin County. The GWMP establishes four basin
management objectives (BMO) that relate to groundwater levels,
groundwater quality, surface water quality and flow, and inelastic land
subsidence. To meet the established BMO's, the GBA member agencies have
defined the Eastern Basin Integrated Conjunctive Use Program including
possible new supply from the Delta, Calaveras, Stanislaus, American and
Mokelumne Rivers together with Stockton East Water District and the
U.S. Army Corps of Engineers--Farmington Groundwater Recharge Program,
in order to develop new and affordable surface water supplies for
beneficial use and groundwater recharge of the underlying groundwater
basin.
Table 1.--MEMBER AGENCIES OF THE NORTHEASTERN SAN JOAQUIN COUNTY
Groundwater Banking Authority
City of Stockton
City of Lodi
Woodbridge Irrigation District
North San Joaquin Water Conservation District
Central San Joaquin Water Conservation District
Stockton East Water District
Central Delta Water Agency
South Delta Water Agency
San Joaquin County Flood Control and Water Conservation
District
California Water Service Company
San Joaquin Farm Bureau Federation
The Mokelumne River Regional Water Storage and Conjunctive Use
Project (MORE WATER) is a major new supply component of both the WMP
and the GWMP development efforts. Fundamentally, conjunctive use and
groundwater recharge is the major focus of the MORE WATER Project.
Under a proposed project alternative, the Project could develop a new
off-stream storage facility to capture flood waters from the Mokelumne
River and regulate those flows to an integrated system of groundwater
banking and recharge projects to help meet San Joaquin County water
demands (Figure 2). In addition, there is a potential for MORE WATER to
provide substantial regional benefits because of its strategic
proximity to the Delta and East Bay Municipal Utility (EBMUD)
facilities. This conjunctive use program could be utilized to provide
critical year flows to enhance water supply reliability, fisheries and
maintain water quality standards to help meet CALFED Bay-Delta Program
objectives.
MORE WATER PROJECT BACKGROUND
In 1990, San Joaquin County acting as the Mokelumne River Water and
Power Authority (MRWPA) filed a water right application with the
California State Water Resources Control Board (SWRCB) for
unappropriated wet year flows (flood waters) on the Mokelumne River.
The application cited three project concepts including a reservoir at
Middle Bar, an off-stream reservoir at Duck Creek or direct diversions
off the lower Mokelumne River between Camanche Reservoir and Interstate
5. In addition, the MRWPA obtained a Federal Energy Regulatory
Commission (FERC) Preliminary Permit for the proposed Duck Creek
Reservoir, which allows the Authority to study the power generation
potential at the proposed project site.
Initial Studies--in 2003, the MRWPA conducted an initial review of
historic project concepts together with several other project
alternatives that included a wide array of ideas ranging from a new on-
stream reservoir, to desalinization, conservation and wastewater
recycling. Additionally, the Authority began work to devise a
regulatory strategy that would satisfy the requirements of the SWRCB,
CEQA, NEPA, and all applicable permits to develop a preferred project
alternative. By capturing flood flows, studies have shown that
substantial supplies could be made available from the Mokelumne River.
Thus far, efforts to complete the initial project investigations
have been accomplished through local cost-sharing agreements between
the Authority and the Cities of Stockton and Lodi. Other local and
regional support for the MORE WATER Project has come from the GBA
member agencies and others.
Next Steps--at present, Interior's Bureau of Reclamation Mid-
Pacific Region (Bureau) is nearing completion of the initial MORE WATER
Appraisal Study. The MRWPA welcomes the Bureau's involvement in the
development of the preferred MORE WATER alternative that will help meet
the needs of the Region while being sensitive to the rights of other
water users and ensuring that the Mokelumne River will provide a source
of pride and joy for years to come. The principal goal of feasibility
analysis for MORE WATER will be to identify opportunities to capture
flood flows from the Mokelumne River for groundwater storage and
beneficial use consistent with objectives identified in the WMP, GWMP
and the requirements developed for the Department of the Interior. On a
parallel track to the feasibility analysis, the MRWPA in association
with. the Groundwater Banking Authority will complete a programmatic
environmental impact report (EIR) to support the East Basin Conjunctive
Use Program. Subsequently, a project specific EIR and environmental
impact statement (EIS) will be prepared for the MORE WATER preferred
alternative. The approach is indicative of the MRWPA's commitment to
satisfying the California Environmental Quality Act, the National
Environmental Protection Act, and the Federal Clean Water Act.
REGIONAL COOPERATION
MORE WATER has gained considerable regional attention and was
foundational in the formation of the Mokelumne River Forum, a
collaborative effort comprised of 16 stakeholder agencies that reach
from the River's headwaters in Alpine County downstream to San Joaquin
County and the greater East Bay Area. The stakeholders have elected to
participate in this collaborative process to develop mutually
beneficial and regionally focused projects to meet water supply and
related needs from the Mokelumne River. Stakeholder input is genuinely
welcomed in all phases of MORE WATER and is the backbone of regional
planning efforts undertaken in San Joaquin County.
MORE WATER BENEFITS
MORE WATER will provide water to decrease groundwater overdraft,
prevent saline groundwater intrusion, and to improve water supply
reliability and environmental protection for the Region. MORE WATER is
an integral component to the Eastern Basin Integrated Conjunctive Use
Program as a supply and groundwater recharge element.
Consistency with CALFED and Department of the Interior's Water 2025
Program Objectives--while not a component of the CALFED Program, MORE
WATER is consistent with CALFED objectives and will provide information
important to water resource and environmental protection efforts being
conducted under the CALFED aegis. The CALFED Record of Decision
outlines a myriad of program elements intended to implement the goals
and objectives of the CALFED Program. MORE WATER is consistent with the
following Program elements:
Water Storage--Conjunctive use programs hinge on the ability
for entities to capture surface water when available for direct
use and groundwater recharge. Groundwater recharge is an
integral part of the success of MORE WATER.
Ecosystem Restoration--The Mokelumne River system is a
source of pride for the San Joaquin County Community.
Stakeholder led efforts such as the Lower Mokelumne Restoration
Project to replace the aging Woodbridge Irrigation District
Diversion Dam with anadromous fish friendly fish screens and
ladders and the completion of a new fish hatchery at Camanche
Reservoir by EBMUD and the California Department of Fish and
Game are major successes for the Region. MORE WATER will be
developed to maximize enhance or create ecosystem restoration
benefits like these examples where feasible.
Watershed Management--The Mokelumne River Watershed is
represented by water agencies, irrigation districts, grass
roots organizations, interest groups, and authorities such as
the Mokelumne River Forum and the Mokelumne River Authority.
The MRWPA will continue to promote MORE WATER to these groups
and will coordinate formal consultation with federal and State
fisheries and resources agencies and other non-governmental
organizations.
Water Transfers--Groundwater banking in San Joaquin County
has the potential to provide regional and statewide agencies
the ability to store excess water in the underlying basin. San
Joaquin County's proximity to the Sacramento-San Joaquin Delta
would facilitate water transfers and exchanges of banked water
to areas served by the East Bay, State Water Project and the
Central Valley Project. Banked groundwater could also be used
for fisheries needs under the CALFED Environmental Water
Account. The underground storage potential of Eastern San
Joaquin County is estimated at approximately 1.5 to 2 million
acre-feet, enough to supply 12 million people for one year.
MORE WATER would provide the necessary infrastructure and
improvements necessary to utilize a portion of this resource.
Flood Control--The capture of flood flows is a major
objective of MORE WATER. Through the use of a new off-stream
reservoir on Duck Creek, the effects of flooding locally and in
the Delta could be lessened during periods of high water.
Under the Department of the Interior's Water 2025 Program, MORE
WATER could be a new standard of success for the ``forward-looking
focus'' in water deficient areas of the Western United States. MORE
WATER is consistent with the following Program Key Tools:
Removal of Institutional Barriers and Inter Agency
Cooperation--MORE WATER is a high priority project for the
Region. Extensive public outreach is a major component to the
success of MORE WATER. Thus far, MRWPA staff has met with
numerous State and Federal regulatory agencies and are also
participants in numerous stakeholder led watershed group
efforts like the Mokelumne River Forum to resolve differences
and find mutual benefit in the Mokelumne River watershed.
Conservation, Efficiency, and Markets--MORE WATER is
currently being developed as part of a regional conjunctive use
project to enhance urban, agricultural, and environmental water
supplies. MORE WATER will use affordable approaches to capture,
use, and recharge water as part of the Eastern Basin Integrated
Conjunctive Use Program. MORE WATER infrastructure and
improvements will help the Region to secure more reliable water
supplies through the restoration of the underlying basin and
potentially the establishment of a regional groundwater bank
that is accessible to water markets throughout the State and in
particular The East Bay and South of Delta Water Users.
Collaboration--MORE WATER and other regional planning
efforts undertaken by San Joaquin County employ a consensus-
based approach to water supply planning and development.
Recently, successful collaborative efforts in the County
include the Water Management Plan and the Groundwater
Management Plan that involved over 40 local, State and Federal
agencies. Stakeholder input is welcome during all phases of the
MORE WATER process.
Improved Technology--MORE WATER and other similar
conjunctive use projects will require extensive knowledge of
the underlying Basin. San Joaquin County is committed to
establishing a science program for Basin research and
monitoring. Groundwater Banking Authority stakeholders are
currently working together with the California Department of
Water Resources and the U.S. Geological Survey on a $2.5
million, 5-year joint study to determine the source and extent
of saline intrusion in the Basin.
Should the Senate support the passage of H.R. 3812, the MRWPA would
work with the Department of the Interior to complete feasibility
studies together with the necessary environmental documentation and
permitting support documents for the MORE WATER Project.
Senator Murkowski. Thank you, Dr. Lytle.
And now, let's go to Ms. Pollman Rogers.
Ms. Pollman Rogers. Thank you.
STATEMENT OF DARLA POLLMAN ROGERS, RITER, ROGERS, WATTIER &
BROWN, LLP, PIERRE, SD, ACCOMPANIED BY JOHN COOPER, SECRETARY,
SOUTH DAKOTA DEPARTMENT OF GAME, FISH, AND PARKS
Ms. Pollman Rogers. Madam Chair, Senator Johnson, good
afternoon.
My name is Darla Pollman Rogers. I am an attorney engaged
in the private practice of law in Pierre, South Dakota. And I
am here today to testify on behalf of preferential leaseholders
who live in the Pierre Canal and Blunt Reservoir parts of South
Dakota.
I'm also privileged to introduce to you today the secretary
of the South Dakota Game, Fish, and Parks, John Cooper. We have
worked very hard together in negotiations to present you with
the language in S. 2205, and we are both here to answer any
questions and give any assistance we can to this committee to
promote this cause.
My job today, though, is to urge you to focus for a minute
on the preferential leaseholders and to correct what I perceive
to be an ongoing injustice that has occurred to these
leaseholders as a result of the Government's actions, not only
in acquiring private land, but also in their prolonged
ownership of private land for a public project that is now
dead, and actually has been for many years. And I am here to
urge you to correct the injustices by passage of S. 2205, or
something similar thereto.
Before I describe these injustices to you a little--in a
little more detail, I would like to point you to the map that I
have on the easel here, because I think sometimes a picture is
worth a thousand words. The picture on the--or the map on the
easel now, the red portion, depicts the Pierre Canal. And, as
you can see, it extends from the Oahe Dam--the water was to go
down that red canal, traverse all that way, and then go over to
the other map that's on the floor in front of you, which
depicts the Sully County--or the Blunt Reservoir Project. And
the Blunt Reservoir, then, is where the--at least part of where
the land was to actually be--the reservoir was to be on that
land, and then the land from--or the water from there would be
pumped out for irrigation purposes.
The Oahe Project was actually authorized by Congress in
1968, and from 1973 to 1977 is when the Bureau of Reclamation
acquired these lands from the Pierre Canal owners and also the
Blunt Reservoir owners. In 1977, the funds were not renewed, so
the project, at that point, was dead. The Bureau acquired
approximately 19,000 acres along the canal and in the Blunt
Reservoir area.
The first injustice that I want to discuss briefly is the
actual acquisition of the land. And I want to emphasize to you
today that my clients, who owned most of that 19,000 acres of
land, were not willing sellers. The land was acquired under
threat of condemnation. And as part of the enticement to sell,
these landowners were told, No. 1, that they could lease the
land back at the same rate until the project went through, and,
No. 2, that they could buy their land back for the same price
if the project did not materialize. Neither one of those
promises have been fulfilled.
And that leads me to the continuing injustice. We are now
30 years down the road. The preferential leaseholders have
diligently tried to reacquire their land. And so, now you are
faced with, How do you correct the injustice? How do you right
these wrongs in this prolonged period of land ownership by a
public entity?
And I would suggest to you what we have tried to provide
for you in S. 2205 is a possible solution. What the bill will
do, bottom line, is, No. 1, it will give the preferential
leaseholders an option to buy back the land. And that's
approximately 14,000 acres of this land. It will give the rest
of the land, the nonpreferential lease land, to the Department
of Game, Fish, and Parks for purposes of wildlife mitigation.
I would remind you, however, that the terms of S. 2205 were
negotiated back in 2001, and land prices have doubled between
2001 and 2006. The goal here is to give the preferential
leaseholders a meaningful option to buy back the land, so it
needs to be affordable so that they can do so.
I would like to just quickly wrap up with a personal
example. My father, who is 83 years old, sold his land--some of
his land to the Bureau in 1973. And, even at his age, he's
still very intricately involved in our farming operation. He is
still waiting for an opportunity to buy back his land. Time is
running out for him. It's running out for all of the
preferential leaseholders. I would urge you to act now to
correct this injustice.
Thank you for allowing me to testify. I would ask that my
written testimony and exhibits be made part of the record. And
we would be happy to answer any questions. Thank you.
[The prepared statement of Ms. Pollman Rogers follows:]
Prepared Statement of Darla Pollman Rogers, Riter, Rogers, Wattier &
Brown, LLP, Representing Preferential Leaseholders within the Blunt
Reservoir and Pierre Canal, on S. 2205
Members of the Subcommittee, my name is Darla Pollman Rogers. I am
an attorney in private practice in Pierre, South Dakota, and I
represent preferential leaseholders in the Blunt Reservoir and Pierre
Canal areas. Thank you for the opportunity to present testimony to you
on behalf of the preferential leaseholders.
The preferential leaseholders strongly support S. 2205. Since
becoming aware of legislative proposals concerning the Pierre Canal and
Blunt Reservoir lands, as a group, the preferential leaseholders have
spent many hours negotiating for and providing input into S. 2205 and
its predecessors. Please allow me to give you a brief background of the
history surrounding the long struggle this small group of landowners
has had in attempting to regain ownership of their land.
The Blunt Reservoir land and the Pierre Canal land were originally
part of the Oahe Unit, James Division, of the Oahe Irrigation Project
(hereinafter called the ``Oahe Project''), which was authorized as a
component of the Pick-Sloan Plan to provide multi-purpose use of the
Missouri River water in South Dakota. The Oahe Project was authorized
and funded by Congress nearly 30 years ago, but the project never
materialized. The government did, however, acquire approximately 19,000
acres of land in Hughes and Sully Counties for construction of the
Pierre Canal and Blunt Reservoir. All of these acres have been removed
from county property tax rolls since 1977, as the land has literally
been in federal ``limbo.'' Of the 19,000 acres, approximately 13,700
acres are preferential lease acres (approximately 25 original
landowners or descendants who still operate the land as preferential
leaseholders) and 5,300 are nonpreferential lease acres (original land-
owners subsequently relinquished their rights to lease the land, which
is now operated by approximately 9 nonpreferential leaseholders).
I used the word ``acquire'' deliberately, because the circumstances
of the acquisitions were, at best, misleading. The landowners did not
want to give up land that was an integral part of their operations.
(See Exhibit 1,* one map of Pierre Canal; two maps of Blunt Reservoir
area.) The original landowners were in fact ``enticed to sell their
land.'' (See Exhibit 2, May 27, 2005, letter of Governor Rounds.) They
were told that they could sell their land to the Government
voluntarily, or it would be condemned. If they sold voluntarily, they
could lease the land back from the Bureau of Reclamation (which
administered and managed the land), at a lease rate that would not
increase, until the project was completed (thus the term
``preferential'' leaseholders). These landowners were also told that if
for some reason the project was not completed, they would be able to
purchase their land back at the same price they were paid for it.
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* All exhibits have been retained in subcommittee files.
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You may ask how I know what representations were made to the
original landowners. I know because they have told me, and I know
because I was personally involved. My father, Leonard Pollman, was an
original landowner, and we are preferential leaseholders today. In
fact, my father's case is a good example of the unfulfilled promises
made to the original landowners at the time they gave up their land. My
father did not want to go through costly condemnation litigation, so he
reluctantly agreed to sell his land to the government, after he was
told he could lease it back at the same lease rate until his land was
needed for the project. (See Exhibit 3.) In the event the land was not
used, he was told he could buy it back for the same price for which he
sold it. He asked the representative from the Bureau to please put that
assurance in writing. See Exhibit 4, which is a copy of the written
``assurance'' of the Bureau representative, Arthur E. Mischke, that the
lease rate would remain the same. The original lease, dated December
19, 1973, was for $3,700.00. The ``maximum rate'' of $3,700.00 has
steadily increased over the years, and today is nearly double that
amount. (See Exhibits 5 and 6.)
Similar representations were made to other landowners at the time
of sale. See Exhibit 7, which is another ``assurance'' made by a Bureau
representative to Duane and Barb Winkler, landowners in the Blunt
Reservoir area. As in the case of Mr. Pollman, the annual leaseback
rate has more than doubled over the years, yet their Land Purchase Con-
tract has not become null and void.
It is important to know the sincere and honest intentions of these
landowners. They did not wish to be uncooperative, but they wanted to
protect their interests, for as long as possible, in the land they were
in essence being forced to sell. (See Exhibit 8, letter of preferential
leaseholder Aubrey R. Smith.)
That is still the intent of these same landowners today. After all
these years, they are still trying to reacquire their land. While most
of them have leased the land since the government acquired it, the
lease rates have not remained the same, but have increased dramatically
over the years. And to date, these landowners have still not had the
opportunity to buy back their land, as promised.
As early as 1981, deauthorization of the Oahe Project was
considered, and these same landowners testified at a hearing in front
of the Subcommittee on Water and Power of the Committee on Energy and
Natural Resources, United States Senate, as follows:
Their (the original landowners') position is that they should
have the first chance to buy back their land . . . This
dispositional scheme must be written into the deauthorization
legislation itself.
The landowners were supported in their position by the South Dakota
Legislature, which passed a Concurrent Resolution in 1980 favoring
disposing of the land acquired for the Oahe Project by first offering
it to the original landowners. Unfortunately, the matter was not
resolved in 1981.
The issue of deauthorization of the Oahe Project resurfaced again
in January of 1998, in the form of S. 1341. In that bill, all the land
was to have been transferred to the State of South Dakota for wildlife
habitat mitigation (See Exhibit 9). John Cooper, the Secretary of the
South Dakota Department of Game, Fish and Parks, sent a letter to the
preferential leaseholders (among others) concerning deauthorization of
the Pierre Canal and Blunt Reservoir features of the Oahe Project and
transferring those lands in Fee Title to the State of South Dakota for
wildlife mitigation. (See Exhibits 10 and 11.) The landowners were
invited to a public hearing in late January of 1998, and many
landowners attended the meeting. They were told, in essence, that
acquisition of the Pierre Canal and Blunt Reservoir by South Dakota
Game, Fish and Parks was part of a much larger effort to re-store
wildlife habitat that was destroyed by the construction of the Missouri
River Dam. The ultimate effect of S. 1341 would have been that these
preferential leaseholders would have lost their land, probably within a
ten-year period. Preferential leaseholders ex-pressed their strong
opposition to S. 1341, as did then Representative John Thune. (See
Exhibits 12 through 16.)
So the struggle began all over again. The preferential leaseholders
had numerous meetings with each other, with Game, Fish and Parks, and
with their South Dakota Congressional delegates. Senator Daschle
understood the long struggle of these landowners and their unique
situation and agreed to champion their cause. S. 1178 was the result of
said meetings, and it was introduced to you in October of 1999. We
supported S. 1178, but unfortunately, it did not survive the political
process.
Since the defeat of S. 1178, the meetings have continued among
landowners, Game Fish and Parks, South Dakota Congressional delegates,
the Commissioner of School and Public Lands, and the Bureau of
Reclamation. With Secretary John Cooper acting as facilitator, we
stayed in touch intermittently in 2000, and then held a series of
working sessions in 2001. The result of these efforts was S. 1028.
Under S. 1028, the Blunt Reservoir feature of the Oahe Project would
have been deauthorized. The preferential lease land was to have been
transferred to the South Dakota Commission of School and Public Lands,
and the preferential leaseholders in the Blunt Reservoir and Pierre
Canal areas would have had the opportunity to buy back the land that
was acquired from them for a project that never materialized. Non-
preferential lease parcels, unleased parcels, and preferential lease
parcels that were not repurchased by the original landowner (or his or
her descendants) were to have been conveyed to Game, Fish and Parks for
the purposes of wildlife habitat mitigation.
S. 1028 was a better bill than its predecessors, because in this
round of negotiations, the interested parties tried to resolve all
concerns and questions that were articulated with the introduction of
S. 1178. For example, the terms ``nonpreferential leaseholder'' and
``preferential leaseholder'' were redefined to make sure there were no
arguments or questions about who fit into the categories. The issue of
liability was addressed in S. 1028, in response to concerns raised by
the Bureau. The Bureau participated in the working sessions and
submitted the liability language included in the bill. Revisions were
made in response to concerns of county officials. Funding
clarifications were made in response to concerns of the Commissioner of
School and Public Lands. A perpetual easement along the Pierre Canal
land for future water development was added to appease water
development concerns.
Unfortunately, S. 1028 did not pass. What you have before you
today, however, is S. 2205, which is in essence identical to S. 1028.
Preferential leaseholders have the option to buy back their land. Long-
term funding mechanisms are included in an attempt to make the buy-back
a viable option for landowners. Non-preferential leaseholders also have
a ``trade'' opportunity, if the land they currently lease is an
integral part of their home or business.
I would point out, however, that the preferential leaseholders have
concerns about the valuation provisions of the bill. As currently
drafted, Section 2(d)(4) of S. 2205 provides that the purchase price
will be based upon a fair market value appraisal of the land for
agricultural use. The preferential leaseholders agreed to that
provision in 2001, when all the parties sat at the table and negotiated
the terms of this bill's predecessor. From 2001 to the present, the
value of farmground in Hughes and Sully Counties has nearly doubled.
Farmground located in the Blunt Reservoir vicinity sold for $400.00 to
$450.00 per acre in 2001; in 2005, similar property sold for $750.00 to
$844.00 per acre. Because of the lapse in time in getting this issue
resolved, use of 2001 valuations, or granting preferential leaseholders
a discount on the fair market value, may be the only way to make the
buy-back option meaningful for some of the preferential leaseholders
who lost thousands of acres of land to ``public use.''
Many injustices have occurred to the preferential leaseholders
throughout this agonizing process. First, their land was taken from
them based upon false promises and misrepresentations. The
misrepresentations continued through the leasing process that
transpired over the next 30 years. But perhaps an even greater
injustice is the prolonged period of time for which government held
this private land, even though the public project for which the land
was originally acquired has been dead for years. And now, despite the
fact that representatives from the Bureau participated in the
negotiations of the language of this bill and agreed to the terms, the
Bureau appears to oppose the return of the land to the preferential
leaseholders.
S. 2205 is a compromise. Game, Fish and Parks wanted all the land
for wildlife mitigation; leaseholders wanted all the land returned to
private ownership. This compromise is the end result of countless hours
of drafting and redrafting, which has come about as the result of
input, negotiations, and compromise of all parties directly affected by
deauthorization of the Blunt Reservoir feature of the Oahe Project. A
true consensus has been reached in this bill. My clients, this small
group of preferential leaseholders who have struggled all these years
to have the opportunity to repurchase their land, support S. 2205. It
is an appropriate resolution of a long-standing situation.
I will add this. My father is now 83 years old. He is still
actively involved in our family farming operation. While he has had
many promises made to him and broken, his dream is to reacquire his
land during his lifetime.
On behalf of my father and the other preferential leaseholders of
the Blunt Reservoir and Pierre Canal, I urge your support and passage
of S. 2205.
Thank you for the opportunity to present this testimony. I am happy
to try to answer any questions you may have.
Senator Murkowski. Thank you. And, yes, all the exhibits
you've mentioned, and your full testimony, will be included, as
well as that of any of the rest of you.
Just a few very quick questions for the members of this
second panel here, starting with you, Mayor Krambeck. Both
Senator Johnson and I brought up the question to Mr. Robinson,
in terms of the anticipated cost to the city if you did have to
go through a licensing process. You indicated in your comments
that it could theoretically approach millions of dollars. Do
you have anything more specific, in terms of what you
anticipate that cost might be? Have you looked at that? Or are
we just, kind of, estimating that it's going to be a
considerable amount?
Mr. Krambeck. From everything that I can gather from all
the information that we have with the FERC licensing, it could
most definitely get into the millions of dollars.
Senator Murkowski. And for a community like yours, what
does that mean to you?
Mr. Krambeck. It would be very much a hardship for us, and,
as the testimony stated, a possibility of having to mothball
the project.
Senator Murkowski. Thank you.
Mr. Becker, you've indicated in your comments that there's
a fair amount of cooperation working with the USGS on a
groundwater study and analysis within the State. What would you
intend to identify as a priority area of study in cooperation,
or in conjunction, with USGS if you're able to move forward
with this groundwater study?
Mr. Becker. Well, I mentioned local control in my
testimony, and I think that we would--if we did come up with a
program for the State, driven by this bill, that we would need
to check back with our citizens and set up a kind of a protocol
or maybe a priority system by which we could go through that
system, certainly near growth areas, issues like that, where we
would see growth with potential conflict--looking for water,
for growth in economic development, as well as protection. So,
I think that would kind of--just in a general way, how I might
think about it.
Senator Murkowski. Thank you.
And, Dr. Lytle, what progress have you made in acquiring
the rights to the water the proposed project would provide? How
far along are you in that?
Dr. Lytle. What progress we've made? The actual feasibility
study that we're proposing to work, in cooperation with the
Bureau of Reclamation, is the feasibility that'll allow us to
secure those water rights. But, as interest in--as far as the
local and regional groups that are involved in this project,
we've taken it upon ourselves to begin that process by
completing the initial phase--Phase 1 reconnaissance study and
a number of other additional water rights investigations. But
we're looking to H.R. 3812 to provide that cost share that'll
allow us to complete it and move it forward.
Senator Murkowski. But, at this point, you're still in the
preliminary phases?
Dr. Lytle. That's correct.
Senator Murkowski. And, finally, to you, Ms. Pollman Roger,
you mentioned the preferential leaseholders. Do you know of any
nonpreferential leaseholders who would somehow be disadvantaged
by the conveyance to the State Game and Fish Department?
Ms. Pollman Rogers. Yes, Madam Chair. We have tried--some
of the preferential leaseholders are also nonpreferential
leaseholders. And so, some of the land, the nonpreferential
land, is also very much part of their operations today. We have
included a provision in the bill to try to address that, and
that gives nonpreferential leaseholders in that particular
situation the opportunity to go somewhere else in the State of
South Dakota to find land that could be used for wildlife
mitigation, acquire that, and then trade the South Dakota Game,
Fish, and Parks for that piece, so that they can keep their
operations intact. And that would be pursuant to consent of
both parties. But I am sure that the Department of Game, Fish,
and Parks is willing to work with these people who have the
land as part of their operations now.
Senator Murkowski. Good. Thank you.
Senator Johnson, questions?
Senator Johnson. Well, I want to thank the entire panel for
your observations on the various bills before the committee.
It's all very helpful. I have just a few questions for my South
Dakotans.
Mayor Krambeck, the project at Spearfish has been in
continuous operation since 1912. During these past almost 100
years, the project has been a clean source of renewable energy
and assured a stable water supply to the city of Spearfish,
created recreational opportunities within the city, and
supplied water to the D.C. Booth National Historic Fish
Hatchery. Although these multiple uses clearly strike a balance
in the public interest, in the event that S. 1577 becomes law,
do you foresee any operational changes at the project?
Mr. Krambeck. Yes, Senator Johnson. I feel--under public
ownership, I think that there could be many positive changes.
And one positive change is the agreement that I referred to in
my testimony with the Spearfish Canyon Homeowners Association.
This was one of the groups that I met with that basically are
one of the stakeholders within the canyon, and we have a
potential agreement basically signed with them to allow more
water flow in some of the lower reaches of the canyon when the
water flows are at certain levels. And so, this would be a
positive thing. And I think under private ownership, when it
was under Homestake, that they wouldn't allow this so the
studies could be done. And our city council also, in 2004--I
don't remember the resolution number, but we did a resolution
basically saying that we agree that this aquifer recharge area
should be studied, and we will agree to study it.
In fact, I was on vacation last spring, and received a
phone call from my public works director, and she said,
``Jerry, we've got about 120 cubic feet per second in the
creek, and USGS wants to do some studying this week.'' I said,
``Go for it.'' I said, ``Turn the gates open and let some water
down, and let the--let's do what we can do.''
So, I feel, under public ownership, yes, that these things
could be accomplished.
Senator Johnson. Now that the city of Spearfish has assumed
ownership of the hydroelectric facility, how has it made
certain that the project is operated and maintained in a safe
and efficient manner? And does the city have the expertise to
run this facility?
Mr. Krambeck. We were able to, fortunately, hire two of the
operators that Homestake Mining Company had for years. One of
them was about a 35-year employee, and he's retired now and
working part time for us. And the other one was actually the
foreman of the whole mine operation, their electrical foreman.
So, we brought expertise in with us, and they are actually
operating the power plant, the same folks.
And as for any safety issues, or anything like that, that
may come up with the dams and so forth, I would just like to
say that we're very much aware of these types of issues, and if
either one of the dams broke--one, we refer to as the Maurice
Dam--that water would just go down Spearfish Creek, and that's
not a flood situation; the other one is referred to as Forebay,
and that water also, if that dam would breach, would actually
end up back into Spearfish Canyon. So, there aren't any issues
there with safety.
Senator Johnson. Well, thank you, Mayor Krambeck.
And, Madam Chairman, I have a statement from the Spearfish
Canyon Society that I'd like to submit for the record to the
committee.
Senator Murkowski. Absolutely. It'll be included.
[The statement of the Spearfish Canyon Society follows:]
Spearfish Canyon Society,
Spearfish, SD, March 26, 2006.
Hon. Tim Johnson,
U.S. Senate, Washington, DC.
Dear Senator Johnson: On behalf of the board of trustees of the
Spearfish Canyon Society, we thank you for the opportunity to submit
our attached comments on Senate Bill 1577 contained within
Miscellaneous Water and Power Bills to the Water and Power Subcommittee
of the Senate Energy and Natural Resource Committee.
If you have any questions, please feel free to contact us.
The very best,
Jerry J. Boyer,
President & Trustee.
[Enclosures.]
Written Statement to the Water and Power Subcommittee of the Senate
Energy and Natural Resource Committee
INTRODUCTION
My name is Jerry J. Boyer. I am president and trustee of the
Spearfish Canyon Society. The Society is a not-for-profit public
charity whose mission is to establish a legacy of Spearfish Canyon
through conservation partnerships for preservation and enhancement of
the canyon landscape, and its heritage. Through conservation of land,
water, biological and cultural resources, sustainable programs and
projects including public access, and charitable fundraising
activities, the Society promotes effective and balanced solutions
between ecology and economy.
On behalf of the Society's board of trustees, we thank the
Subcommittee for this opportunity to share its 6-page summary views and
attachments by this written statement.
STATEMENT
The Society received an invitation from Senator Johnson's office to
review the purpose of S. 1577 and its impacts on the local community,
and examine its national public policy ramifications.
Although we do not support this bill, we applaud the efforts by
Senator Johnson to achieve a streamflow balance in S. 1577 by inviting
the city to meet with the Society and adopt the ``win-win'' streamflow
plan. We regret the city declined the Senator's invitation.
The Society advances a ``win-win'' streamflow-sharing plan that
reflects national public policy . . . economic development enhanced by
common sense natural resource management. The plan contains a ``shared
pain-shared gain'' streamflow feature that acknowledges the dramatic
hydrological cycles typically experience in Spearfish Canyon (see
attached chart). The plan allows 50cfs through the hydro diversion and
15cfs to flow downstream to increase and enhance the canyon's
aesthetics and natural resource values. The 15cfs downstream flow is
then collected at an existing pipeline 3-miles downstream at the old
Spearfish Intake (the pipe will have to be enlarged) and diverted
around the aquifer recharge zone before merging with the hydro
diversion flow at the City Park. Contrary to the City's position, the
Society's plan also only affects the streamflow for the hydro
operation, and does not affect any flow through the city or to
downstream irrigators. (See Map illustration.*)
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* All illustrations have been retained in subcommittee files.
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The Society views S. 1577 as regressive from established national
procedure that engages all public interests. The City understood the
requirements and associated costs when it acquired the hydroelectric
facility. Further, the City may be encumbering significant other costs
by circumventing an open public process that alienated other interested
parties, and are now seeking relief through S. 1577. The City, without
consideration for other cumulative public economic and environmental
benefits, chose not to share the stream flow, but to seek all stream
flow for its local revenue needs. While the Society supports the City's
acquisition and use of the hydroelectric facility, the Society believes
it is inappropriate for the Congress to reward the municipality for its
self-serving and economically stifling choice in demanding all
streamflow for hydro generation.
S. 1577 will eliminate the possibility for the competing parties to
develop a better public resolution involving the Spearfish Canyon
streamflow. The FERC permit review process provides an opportunity to
objectively catalog the competing values, and facilitate a public
policy choice that provides a balance between ecology and economy. The
City position manifests a very local revenue benefit based on an
unenlightened understanding of the Canyon streamflow. The Society, in
contrast, supports a streamflow plan that increases the total public
economic and environmental values involving tourism, 3-miles of new
fisheries, and wildlife habitat including the American Dipper, to name
a few. The Society's ``win-win'' sharing of the streamflow provides a
balance between ecology and economy. FERC's jurisdictional decision in
2001, re-affirmed on appeal in 2002, provides a public process
opportunity to resolve the conflict between competing parties. This
conflict exemplifies the exact congressional purpose for FERC's
existence.
The Society maintains that S. 1577 is not reflective of
contemporary national values. An enlightened public trust doctrine,
supported by nearly a century of technical research, has demonstrated a
much greater aggregate economic value for our nation's stream resources
rather than those narrowly focused and often destructively consumptive
uses of streams in the past, like Spearfish Creek. This contemporary
value applied locally demonstrates that a hydro constructed in 1914 to
create jobs in the mining industry to foster western Frontier
development in the early 20th Century is not the same national
necessity as a hydro to be operated for mere municipal revenue in the
21st Century.
The Society maintains that S. 1577 is not even reflective of local
values. The City leadership has chosen an extreme position that is not
reflective of the citizens of the city, the state's population centers,
or the one million annual visitors to the canyon. No local public
meetings regarding the contentious streamflow issue were conducted.
Local values manifest an admiration of both the community and the
picturesque canyon, and a desire that all entities benefit from the
streamflow. Spearfish Canyon is a national and state scenic byway. The
public's affection and high value placed on the canyon landscape is
best illustrated by the words of Frank Lloyd Wright in his visit of
1935: ``I may be branded as a heretic, but how is it that I've heard so
little of this miracle and we, toward the Atlantic, have heard so much
of the Grand Canyon when this is even more miraculous. All the better
eventually . . . that the Dakota are not on the through line to the
Coast . . . My hat is off to South Dakota treasures.''
Finally, S. 1577 establishes a harmful policy precedent that will
further erode FERC's jurisdictional authority as other U.S.
congressional representatives seek similar resolve for their
appropriate states.
We urge the Congress to resist S. 1577, and allow the people,
through established public policy and process, the opportunity to
increase the aggregate public benefits by first cataloging the
competing values, and then, develop a science-based stream management
plan that better meets the public needs.
Senator Johnson. Okay.
And to Ms. Pollman Rogers, under our bill, if a
preferential leaseholder decides to exercise their right to
repurchase the land, what price would they pay?
Ms. Pollman Rogers. Section 2(d) of the bill, as it's
currently drafted, really contains the terms of the purchase
option. And what happens under that section, again, as
currently written, is, the value of the land would be
determined by an appraiser, who would appraise it at fair
market value for agricultural purposes. Then the manner of the
purchase or buyback would be at the option of the landowner, as
long as that value was over $10,000. If it's over $10,000, the
preferential leaseholder can either exercise the option to
purchase that land for cash, in which case that preferential
leaseholder would get a 10-percent discount, because you don't
have the carrying costs of a contract. If the preferential
leaseholder chose to purchase it under a contract or the
installment plan, he or she would have 30 years in which to
purchase it. They'd have to pay 10 percent down, 30 years to
purchase it, at 3 percent interest.
Now, I would say, however, I think you've really placed
your finger on the real issue and the concern that some of the
preferential leaseholders have at this point, and that is,
again, when we negotiated the terms of this bill, land prices
were much, much less than they are now. And the whole point is
to make this purchase--repurchase option meaningful. Some of
these people have lost thousands of acres, and they--in order
to give them a meaningful opportunity to buy it back, it has to
be at a price where they can, in fact, exercise their option
and reacquire it. Land prices in Hughes and Sully Counties have
escalated dramatically since 2001.
Senator Johnson. What are some of the specific benefits
from the wildlife mitigation plan that will accompany the lands
conveyed to the State?
Ms. Pollman Rogers. With all due respect, Senator Johnson,
I would like to defer that question to Secretary Cooper, if you
would--
Senator Johnson. Well, if I may, Madam Chairwoman, because
we do have the South Dakota secretary of Game, Fish, and Parks
here, if I may call the secretary to the table to respond to
just a couple of questions I have.
Senator Murkowski. I absolutely have no objection to that.
I do have another commitment at 4 o'clock, but I am happy to
let you continue your line of questioning, Senator Johnson. And
if you want to just wrap up the panel at that time.
Senator Johnson. I'd be honored to do that. And we only
have just a few minutes more, I think, really.
Senator Murkowski. Well, with that, I will thank each and
every one of the panel members again for coming the distance
and providing your testimony. Know that the committee will be
working on these matters with the bill sponsors. But I do
appreciate the level of background that you've been able to
provide us. And thank you.
And, with that, Senator Johnson, I'll pass the gavel back
to you and you can wrap it up.
Senator Johnson. Thank you.
Senator Murkowski. Thank you.
Senator Johnson [presiding]. Secretary Cooper, I think you
heard the question. Would you care to respond to it? What is in
this for the wildlife circumstances in the State of South
Dakota?
Mr. Cooper. Yes, sir. Thank you, Senator Johnson.
As you mentioned in your opening testimony, the Pick-Sloan
Plan provided for the construction of mainstem dams on the
Missouri River, four of which we have in South Dakota. Two of
those dams--the Big Bend Dam backs up Lake Sharpe, and that's
down by the Lower Brule Reservation, the Crow Creek
Reservation; and the Oahe Dam backs up Oahe Reservoir. When we
lost, though, the floodplain and the cottonwood bottoms, we
lost a significant amount of wildlife habitat in the State of
South Dakota. And the 1958 Wildlife Coordination Act required
the Federal Government to mitigate that loss of acres on a one-
to-one basis. Part of the whole Pick-Sloan--or the Oahe
Diversion Project was also involved with not only supplying
water and benefits as a result of the Pierre Canal and the
Blunt Reservoir, but also to do wildlife mitigation projects.
We have never received any wildlife mitigation projects as
a result of the Pick-Sloan Program in the State of South
Dakota. In order to solve that, or at least try to address it,
we recognized we were going to have to compromise somewhat and
try to come up with something that worked with our various
Indian tribes and the State to go back in and try to mitigate
terrestrial habitat. We did receive benefits as a result of the
construction of those reservoirs for fisheries, but the
terrestrial issues have never been solved.
Your support for title VI of the Water Resources
Development Act in 1999 was an attempt to compromise and to
work with South Dakota's need for that mitigation. As a part of
that title VI legislation, we worked with our various Indian
tribes to put together a compromise solution that required the
Federal Government to put forth a trust fund, a $108 million
trust fund, for the State of South Dakota, and various amounts
of trust funds for the Lower Brule Sioux Tribe and the Cheyenne
River Sioux Tribe.
As a part of this turnover, if we could compromise on this
with--which Darla Pollman Rogers talked to you about, is a
compromise. We would have the opportunity in this defunct
project, which no longer is needed by the Federal Government,
to provide the opportunity to return those preferential
leaselands to the landowners who rightfully should have them
back. And there is a sum of 4,000 acres--a little over 4,000
acres, that would be able to come to the Department of Game,
Fish, and Parks and utilized as a game production area in
accordance with our mitigation plan under title VI. That title
VI mitigation plan requires us to look for 27,000 acres that
are already in State or Federal control, so that we don't have
to go out and purchase productive ag lands, and be able to do
what we could to mitigate those losses on terrestrial habitat.
You're not going to ever mitigate the losses for the flooding
of those two reservoirs, to the tune of 385,000 acres, but it's
an opportunity for us to move forward. And that 4,000 acres
would go toward the 27,000-acre bank that we have been able to
construct under title VI.
We have plans for those, for those acres. And they
basically are involved with going back in with grass plantings
and small shrubbery plantings, and the opportunity to have
local farmers become our tenant to work with us on the
development of those lands into wildlife habitat.
Senator Johnson. Mr. Secretary, you may have heard
Commissioner Keys make some observation about a constitutional
concern he had about imposing this land on the State of South
Dakota, and the need to make those a voluntary provision for
South Dakota. I'm fine with that. But my assumption is that the
State of South Dakota is very much inclined to take possession
of these 4,000 acres.
Mr. Cooper. Absolutely. And we're more than willing to work
with the Bureau of Reclamation on trying to construct language
that would help them.
And I might also point out that Commissioner Keys talked
about the Bureau's responsibility, continuing responsibility,
on cultural resource issues in Section 106 of the Historic
Preservation Act. Right now, in our programmatic agreement with
all of the tribes in South Dakota on the Missouri River
corridor, the responsibilities under title VI for the State is
to assume responsibility with the Corps of Engineers, and any
other Federal agency, for the protection of all those cultural-
resource sites. We do it every day in the course of our work on
the Missouri River.
So, from the standpoint of the Bureau of Reclamation being
able to transfer some of its concerns on their cultural
resource, and/or whatever else they need to have done, we do
have a process right now for being able to help them do that.
They would not need anyone specifically from the BOR to be able
to do that.
Senator Johnson. Ms. Pollman Rogers, how many landowners
are we talking about? How many people are involved that would
have preferential----
Ms. Pollman Rogers. There are approximately 25 preferential
leaseholders.
Senator Johnson. Okay.
Well, I want to thank all of you.
Relative to the Blunt Reservoir issue, it seems to me that
this is a win-win solution we're trying to lay out. The
Government gets out from underneath the obligations for its
annual maintenance costs, which is in the hundreds of thousands
of dollars. The landowners are belatedly, but somewhat made
whole. We also wind up with some extraordinarily valuable
wildlife property being managed for those purposes, as at least
partial mitigation. And so, I think the Government saves money,
we serve the public better, and we also serve the private
sector better. So, again, I appreciate your contributions to
this hearing.
Thank you, Mayor Krambeck, for your patience and your
tenacity of the community to work through these issues.
And, again, Mr. Becker and Dr. Lytle, thank you for your
testimony here. It's going to be very valuable to the
committee, as a whole.
So, with that, this hearing is adjourned.
[Whereupon, at 4:12 p.m., the hearing was adjourned.]
APPENDIXES
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Appendix I
Responses to Additional Questions
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Department of the Interior,
Office of Congressional and Legislative Affairs,
Washington, DC, May 25, 2006.
Hon. Lisa Murkowski,
Chairwoman, Subcommittee on Water and Power, Committee on Energy and
Natural Resources, U.S. Senate, Washington, DC.
Dear Madam Chairwoman: Enclosed are responses prepared by the
Bureau of Reclamation to questions submitted following the March 30,
2006, hearing regarding the following bills: S. 1962, S. 2205, and H.R.
3812.
Thank you for the opportunity to provide this material to the
Subcommittee.
Sincerely,
Jane M. Lyder,
Legislative Counsel.
[Enclosures.]
Responses to Questions From Senator Murkowski
Question 1. S. 1962/H.R. 4000--Do you feel that the loss of
revenues to the Treasury if this bill were authorized is justified
considering the recent hardship faced by the irrigation districts as a
result of the drought?
Answer. The Districts are unable to fulfill their repayment
obligations as currently established. If the Districts are unable to
meet their repayment obligations, repayment will shift to Pick-Sloan
Missouri Basin Program (PSMBP) power customers. These customers do not
benefit as directly from the facilities in question. The loss to the
Treasury if this bill is enacted will be in the present value of the
repayment obligation; the loss to the Treasury in the case that the
Districts are unable to make their payments will depend on the way that
the PSMBP allocates the additional financial obligation imposed by the
failure of the Districts. Given that the Districts are being
financially squeezed by a drought over which they have no control,
extending their repayment period is a justified response that increases
the chances that the Districts will regain financial viability and that
costs will not be shifted to power customers unnecessarily.
Question 2. H.R. 3812--How is the proposed project's appraisal-
level study progressing and when do you anticipate it will be complete?
Answer. The appraisal study is in the final draft stage. We
anticipate the study being completed by July, 2006.
Responses to Questions From Senator Bingaman
Question 1a. S. 1962/H.R. 4000--Your testimony establishes that
Reclamation has the authority to grant deferments with respect to the
repayment schedules established by contract, but that those deferments
do not extend the total time period for repayment.
What are the types of situations where Reclamation has historically
granted deferments?
Answer. Deferment of annual repayment obligations has occurred due
to conditions such as (1) severe or adverse weather conditions that
cause a partial or total loss of crops, such as hailstorms, floods,
severe windstorms, and drought; and (2) damage to project facilities
where the repair cost to the District exceeds the District's available
reserve funds.
Question 1b. Should the deferment authority be amended so that
Reclamation has the authority to extend the total time period for
repayment?
Answer. Reclamation recently completed a review of its deferment
policy. This policy review resulted in the issuance of new Directives
and Standards in 2006 for ``Deferment Contracts--Delegation of
Authority,'' and ``Deferment Contracts.'' The existing authority has
provided Reclamation the necessary authority to deal with the vast
majority of hardship cases experienced by our Districts or contractors.
Additional authority to extend the total time period for repayment is
not necessary at this time.
Question 2a. S. 1962/H.R. 4000--Over the past 20 years, how often
has legislation similar to S. 1962 been enacted which provides relief
to water users from an existing repayment contract?
Answer. It is our understanding that legislation similar to S. 1962
has been enacted only once in the last 20 years. Public Law 108-231,
enacted on May 28, 2004, authorized the Secretary of the Interior to
revise the repayment contract with an irrigation district in Texas by
extending the period authorized for repayment of reimbursable
construction costs from 40 to 50 years.
Question 2b. Will this bill create a unique precedent, likely to be
followed by many similar requests?
Answer. P.L. 108-231 already created a precedent that S. 1962 is
following. S. 1962 could encourage others to follow suit.
Question 3a. H.R. 3812--Your testimony indicates that a feasibility
study requires the completion of NEPA compliance documents.
Does Reclamation have a new policy requiring NEPA compliance to be
an integral part of its feasibility studies?
Answer. Reclamation's policy on integrated feasibility studies has
been in place since the early 1980s. The most current version--
Directives and Standards CMP 05-02--(5/01/00) states, ``Feasibility
studies will normally be integrated with compliance under the National
Environmental Policy Act (NEPA), Fish and Wildlife Coordination Act,
Endangered Species Act, National Historical Preservation Act (NHPA),
and other related environmental, and cultural resource laws. These
activities will proceed concurrent with the feasibility study and
culminate in an integrated planning report/NEPA compliance document
(PR/NEPA Document).'' The analysis generated from the NEPA process
provides significant worthwhile information to inform the decision
process as to whether a project should go forward, and advantages and
disadvantages to different project configurations.
Question 3b. If so, is it an efficient use of limited resources to
require a full environmental review while still assessing the technical
and financial feasibility of a project?
Answer. Integrated feasibility studies are normally considered the
most efficient planning approach from a time and resource perspective.
Information developed during an environmental review process could have
a direct influence and bearing on technical and financial feasibility.
Current Reclamation policy does provide some flexibility in the
preparation of feasibility studies. The feasibility study processes
established through the Principles and Guidelines and the NEPA
processes described in Reclamation's NEPA Handbook have similar
preparation and documentation requirements.
Question 4. H.R. 3812--According to testimony, the San Joaquin
County area is not within the CALFED project area.
Is it possible, however, that some of the regional water supply
projects being reviewed by the CALFED program could address the water
supply issues in San Joaquin County?
Answer. The testimony commented only on the lack of a Federal role
along the Mokelumne River. San Joaquin County is included within the
CALFED project area; CALFED, through the State's Proposition 13 grant
program, has funded several groundwater projects within the County.
Stockton East Water District received a $1,341,000 grant for a
groundwater storage pilot project in FY01, and $3,700,630 for a
pipeline construction project related to its groundwater storage
project in FY02. In addition, through the State's Proposition 50 grant
program, San Joaquin County is preparing an integrated regional water
management plan.
Responses to Questions From Senator Johnson
Question 1. S. 2205--How much does the Bureau of Reclamation spend
to manage the lands acquired for the Pierre Canal and Blunt Reservoir?
Answer. Management and O&M costs specific to the Pierre Canal lands
are currently approximately $10,000 per year. Management and O&M costs
for Blunt Reservoir lands are currently approximately $60,000 per year
for land resource management activities related primarily to weed
control, lease administration, fencing, and erosion control.
Additionally, Reclamation spends approximately $130 per year in
curation costs at the South Dakota State Archaeological Research Center
(SARC) in Rapid City, South Dakota, for the storage of artifacts
collected during cultural resource surveys in the mid 1970s.
Question 2. S. 2205--In your testimony, you state that the Bureau
will be still responsible for some administrative fees even if the
Blunt Reservoir Bill is enacted. Could you elaborate on the nature of
these fees? Do you have an estimate on the total amount of these fees?
Answer. The Blunt Reservoir archeological collections include
artifacts collected from Federal and private lands, both prior to and
after the definition of boundaries of the proposed Blunt Reservoir,
under the authority of the National Historic Preservation Act. The
collections are currently curated at the South Dakota State
Archaeological Research Center (SARC) in Rapid City.
The fees referenced in the testimony are, in part, those related to
curation of the archeological collections. The volume of artifacts
collected from surveys and excavations associated with Blunt Reservoir
Project activities is approximately 6.5 cubic feet, out of
approximately 100 cubic feet of Reclamation collections from South
Dakota. A Fiscal Year 2004 cooperative agreement with SARC funds
curatorial services, including the collection of accession and catalog
data, temporary storage costs, and a percentage of the new compact
storage shelf units. Approximately $5,300 has been spent to date on
these activities. Future annual expenditures for collection curation
and storage are estimated to be $20 per cubic foot or approximately
$130 per year in perpetuity, not accounting for inflation. If
authorized by law, SARC would potentially accept a donation of
archeological collections made from Federal lands, given a rigorous
process of evaluation and approval by both Reclamation and the State of
South Dakota. Such a congressional authorization could release the
Federal government from its ongoing curation obligation.
In addition to curation, Reclamation may face additional costs
associated with protection and preservation of cultural properties
located on lands that would be conveyed back to preferential lease
holders. Transfer of historic property out of Federal ownership without
adequate and legally enforceable restrictions or conditions to ensure
long-term preservation of the property's historical significance,
regardless of the mechanism used to do so (title transfer, quit claim
deed, donation, etc.), is defined in 36 CFR 800 as an adverse effect on
the historic property and therefore subject to consultation with the
State Historic Preservation Office (SHPO), Advisory Council on Historic
Preservation (ACHP) and other interested parties. Protection of sites
that leave Federal ownership is usually achieved through preservation
easements or covenants. The ACHP and SHPO expect that a responsible
entity will hold the easements or enforce the terms of the covenants.
If Reclamation retains this responsibility, costs may be incurred if
land use changes are made and/or resources of historic/cultural value
are discovered on the land. The amount of these costs would be
situationally dependent.
Question 3. S. 2205--Can you tell me the difference between the
BOR's cost to manage these lands today versus the cost if H.R. 4301 is
enacted?
Answer. Aside from the cultural resource work necessary for
transfer of the lands, Reclamation's costs of an estimated $70,000 per
year would be eliminated if H.R. 4301 were enacted. Unless Reclamation
is relieved of the post-conveyance obligation to enforce preservation
easements and covenants (by statute, these obligations could be
transferred to Tribes, universities, tribal colleges, or the State of
South Dakota), Reclamation would incur annual costs of $130 per year,
adjusted for inflation, for curation and storage, as well as
undeterminable intermittent costs related to the continued historical
significance of the transferred lands. (From 1997 to 1999, Reclamation
paid the University of North Dakota $40,000 for a cultural resources
survey of 4,106 acres and for relocation and re-documentation of 84
previously recorded cultural resource sites. This may be indicative of
possible future costs.)
The other cost savings to the United States Treasury would be
elimination of the annual payment in lieu of taxes (PILT), currently
estimated at $27,600, to Sully and Hughes Counties in South Dakota. The
bill proposes establishment of a trust fund for the use of the State to
pay county taxes on the lands received by the State Department of Game,
Fish, and Parks under the bill. However, the bill also indicates that
the use of sales proceeds for the establishment of this Trust Fund
would be subject to authorization of appropriations for this purpose.
If funds are appropriated in accordance with this provision, some
potential PILT savings would effectively be lost to the Federal
government and transferred to the State.
Question 4. S. 2205--When lands are taken out of Federal ownership,
are they always disposed of at fair market value? If not, what are the
exceptions?
Answer. The General Services Administration Surplus Real Property
Disposal Regulations contained in 41 CFR 102-75.350 allow disposal
agencies to make surplus real property available to local governments
and certain non-profit institutions or organizations at up to a 100
percent discount. Discounts in the fair market value of the lands are
available only for public benefit purposes such as education, health,
parks and recreation, public airports, highways, correctional
facilities, etc.
Additionally, 41 CFR 102-75.990 allows a Federal agency to donate
to public bodies any Government-owned real property (land and/or
improvements and related personal property), or interests therein in
cases where the estimated cost of the property's continued care and
handling exceeds the estimated proceeds from its sale.
Outside of these exceptions, Reclamation is not aware of any
regulations or laws that allow Reclamation to dispose of lands at less
than fair market value.
______
Federal Energy Regulatory Commission,
Office of Energy Projects,
Washington, DC, April 18, 2006.
Hon. Lisa Murkowski,
Chairman, Subcommittee on Water and Power, Committee on Energy and
Natural Resources, U.S. Senate, Washington, DC.
Dear Chairman Murkowski: Thank you for your letter of April 3
enclosing questions from Senator Tim Johnson for the record of your
Subcommittee's March 30, 2006 hearing on S. 1577, a bill to facilitate
the transfer of Spearfish Hydroelectric Plant Number 1 to the city of
Spearfish, South Dakota, and for other purposes.
Enclosed are my responses to Senator Johnson's questions. If you
have further questions or need additional information, please let me
know.
Sincerely,
J. Mark Robinson,
Director.
[Enclosure.]
Responses to Questions From Senator Johnson
Question 1. First, let me start out by stating that I do believe
the licensing and administration of our nation's public hydro-electric
plants is an important regulatory tool to balance the often competing
multiple uses of the nation's water resources. Several Senators on the
Energy Committee have devoted a good deal of time toward improving the
federal license process for nonfederal hydropower plants. That being
the case, I believe that the set of circumstances surrounding the small
hydroelectric plant in Spearfish are unique and, therefore, provide for
a re-examination in this instance of the federal license requirements.
It is my understanding that FERC is asserting jurisdiction to
require a license on the basis that certain rights-of-way grants and
permits, which were issued by the federal government prior to the
enactment of the 1920 Federal Power Act, had expired. Is this your
argument?
Answer. Yes, the FERC is asserting jurisdiction over the Spearfish
Project based on the fact that certain pre-1920 rights-of-way and
permits had expired. When a pre-1920 permit expires, the authorization
once provided by the permit must be obtained from the Commission. [See
Scenic Hudson Preservation Conference v. Callaway, 370 F. Supp. 162,
166 (S.D.N.Y. 1973), affd, Scenic Hudson Preservation Conference v.
Callaway, 499 F.2d 127 (4th Cir. 1974)); Wisconsin Power and Light
Company, 55 FERC 61,169 (1991).
Question 2. Now, I've learned that these rights-of-way grants and
permits were not issued by the FERC or that the rights-of-way are
administrated by the FERC. In fact, the rights-of-way permits are
administrated exclusively by the U.S. Forest Service, which recently
found that they had not expired, and in fact, were validly transferred
from the Homestake Mining Company to the City of Spearfish. In light of
these sets of circumstances, don't you believe that FERC is
overreaching in asserting jurisdiction, particularly in light of the
long-held administration of the rights-of-way by the U.S. Forest
Service?
Answer. Pursuant to section 23(b)(1) of the Federal Power Act
(FPA), 16 U.S.C. 817, a non-federal hydroelectric project must,
unless it has a still-valid pre-1920 federal permit, be licensed if it
occupies lands of the United States. The Spearfish project occupies
federal land, so the inquiry turns to whether it has a still valid pre-
1920 federal permit. If not, the FPA requires that the project be
licensed.
By way of further background, Section 4 of the Transfer Act of
February 1, 1905 (1905 Act) [Ch. 288, 33 Stat. 628] states:
Rights-of-way for the construction and maintenance of dams,
reservoirs, water plants, ditches, flumes, pipes, tunnels, and
canals, within and across the national forests of the United
States, are granted to citizens and corporations of the United
States for municipal or mining purposes, and for the purposes
of the milling and reduction of ores, during the period of
their beneficial use, under such rules and regulations as may
be prescribed by the Secretary of the Interior, and subject to
the laws of the State or Territory in which said forests are
respectively situated.
[Emphasis added.]
The 1905 Act also transferred from the Secretary of the Interior to
the Secretary of Agriculture authority over the forest reserves,
together with authority over hydroelectric facilities on those reserves
[Homestake Mining Company, 97 FERC at p. 61,832 n. 18]. It is this Act
that allowed the project to be operated, for mining purposes, without a
license from the Commission.
By Commission order issued November 9, 2001 [Homestake Mining
Company, 97 FERC 61,180], as amended by our order of March 1, 2002
[Homestake Mining Company, 98 FERC 61,236], the Commission found that
the Spearfish No. 1 Project had a valid right of way pursuant to the
1905 Act for those parts of the project's water transmission conduits
and pipelines that occupy National Forest lands. The right of way was
still valid in 2001 because, in compliance with the 1905 Act, the
Spearfish project was built and was still operated for mining and ore-
milling purposes, in that all the power it generated was being
transmitted to and used by Homestake's mining operations in the town of
Lead, South Dakota.
On April 15, 2002, Homestake confirmed that it ceased mining
operations as of December 31, 2001, but argued that the pre-1920 permit
was still in effect, because it permitted ``all requisite mine
reclamation operations.'' However, section 4 of the 1905 Act makes no
reference to mine reclamation, which in 1905 was presumably of less
regulatory concern than it is today. Nor has a search for references to
the 1905 Act in the administrative decisions of the Departments of
Agriculture or the Interior uncovered any suggestion that mine
reclamation should be considered an element of ``mining purposes''
under the 1905 Act. In these circumstances, the Commission concluded
that, since Homestake had ceased mining operations, its pre-1920 permit
did not authorize continues project operation and Homestake or its
successor must, if the projects is to continue generating, apply for a
license pursuant to Part I of the FPA.
The pre-1920 permit issued under the 1905 Act for the project's
water pipes and conduits is distinct from the Forest Service right-of-
way for the project's transmission line facilities. The latter permit
was not issued under the 1905 Act but rather under the Act of February
15, 1901, or the Act of March 4, 1911. While that permit may have been
a valid pre-1920 permit, it ceased to be so when the Forest Service
replaced it in 1969 with a new permit.
Since the Spearfish project no longer has valid pre-1920 permits, a
license from the Commission is required for the project's continued
operation.
Question 3. Mr. Robinson: I want to ask you a question about the
time and cost of licensing this project. I understand that the median
amount of time for a hydro re-license applicant is about 64 months from
the beginning to the end, and that under the Traditional Process costs
average $2.3 million. Who bears the costs for the license? And, in
proportion to other hydro projects, what could the City expect in terms
of cost and time to license this small, century-old hydro plant?
Answer. According to the Commission's ``Report on Hydroelectric
Licensing Policies, Procedures, and Regulations Comprehensive Review
and Recommendations Pursuant to Section 603 of the Energy Act of
2000,'' completed in May of 2001, the range for the amount of time for
a hydro relicense applicant to prepare a license application is 32 to
40 months and from application filing to Commission action is 18 to 43.
The report also found the average application preparation cost to be
about $2.3 million. This average cost includes some license
applications for very large projects that incurred very large costs.
The application preparation costs are borne by the license applicant.
Since 2001, the Commission has issued and implemented the
Integrated Licensing Process (ILP). The ILP was designed to reduce the
time and cost of licensing by providing a predictable and efficient
licensing process. The benefits of the ILP come from early issue
identification and study plan development, better coordination with
other stakeholder processes, established time frames, and early Federal
Energy Regulatory Commission staff assistance. Commission staff
estimates that licensing will be completed in no more than 18 months
after an application is filed and costs will be reduced 30 percent. No
projects using the ILP have been filed yet, so staff has not yet been
able to verify these projections. Results so far from the 14 projects
using the ILP look promising. All projects have met all deadlines.
For the Spearfish No. 1 Project, Commission staff estimates that
the total time from the beginning of pre-filing consultation to
application filing is 36 months and from application filing to
Commission action would be about 18 months. Based upon data contained
in several recently filed license applications for small projects of
similar scope, staff would estimate an application preparation cost of
about $84.2 per kilowatt (kW) of installed capacity or about $338,000
for the 4,000-kW Spearfish No. 1 Project. These values of cost and time
are estimates and they will vary due to the facts of the specific case.
______
City of Spearfish, SD,
Speafish, SD, April 14, 2006.
Hon. Lisa Murkowski,
Chairwoman, Subcommittee on Water and Power, Committee on Energy and
Natural Resources, U.S. Senate, Washington, DC.
Dear Chairwoman Murkowski: It was my pleasure to appear before the
Senate Subcommittee on Water and Power of the Committee on Energy and
Natural Resources on Thursday, March 30, 2006, to give testimony on S.
1577, to facilitate the transfer of Spearfish Hydroelectric Plant
Number 1 to the City of Spearfish, South Dakota, and for other
purposes. The City of Spearfish and its citizens appreciated the
opportunity to convene a hearing on S. 1577, which continues to be a
matter of primary importance to our community. We look forward to
working with the Subcommittee, Senator Tim Johnson, and Senator John
Thune, as this bill progresses through the legislative process.
In your letter dated April 3, 2006, you provided a set of questions
that has been submitted and requested the City's response. As
requested, the City has prepared its response, which is attached to
this letter.
Should you have any further questions regarding this matter, please
do not hesitate to contact me. We again thank you and the Subcommittee
for this opportunity to fully vet all views and interests associated
with S. 1577 and believe that the bill strikes the appropriate balance
between developmental and conservational interests, while preserving
the historic Spearfish Hydroelectric Plant Number 1.
Sincerely,
Jerry A. Krambeck,
Mayor.
[Enclosure.]
Responses to Questions From Senator Murkowski
Question 1. S. 1577 expresses the sense of Congress that the City
should: (I) uphold a 2004 MOA with the Spearfish Canyon Landowners
Association and (2) ensure the release of an additional 5-10 cubic feet
per second between the Intake Dam and the Spearfish Division. Please
explain the significance of this sense of Congress.
Answer. The City believes that the significance of this sense of
Congress is the acknowledgement that the operation and maintenance of
the Spearfish Hydroelectric Plant Number 1 concerns not only the
generation of emissions-free, renewable energy, but also the public's
interests in aesthetic flows, fisheries protection, irrigation, water
supply, and recreation. As Mayor Krambeck testified during the March 30
hearing, the City understands its role to appropriately balance these
interests--which, at times, may be competing--as illustrated by his
recounting of a recent event where the City, in response to a request
by the United States Geological Survey, authorized the release of
additional flows into the bypassed reach of Spearfish Creek for the
purposes of studying the geomorphology and geology of Spearfish Canyon.
In reaching the 2004 Memorandum of Agreement, the City and
Spearfish Canyon Landowners Association worked tirelessly to
investigate historical flow data of Spearfish Canyon, as well as
downstream water uses, in order to strike a scientifically-supported
compromise that would allow for additional flows in the bypassed reach,
while protecting downstream senior water rights and other public uses
of Spearfish Creek. Should S. 1577 preclude Federal Energy Regulatory
Commission involvement in this matter, the City fully intends to
execute and uphold the 2004 MOA, which would satisfy the sense of
Congress expressed in the bill.
Question 2. You testified that the U.S. Forest Service has
determined that the right of way in question remains valid and is fully
transferable to the City. Do you have the Forest Services assessment in
writing so we could make that part of the hearing record?
Answer. While the City was in the process of acquiring Spearfish
Hydroelectric Plant Number 1 from Homestake Mining Company, it sent an
inquiry to the United States Forest Service (USFS) regarding the then-
current status of right-of-way grant, as well as whether the right-of
way grant would be affected by the conveyance to the City. The City's
inquiry cited orders of the Federal Energy Regulatory Commission
holding that the right-of-way grant at issue would expire upon the
cessation of extraction activities at the Homestake Mine in Lead, South
Dakota.
The USFS's response, which is attached, confirmed that ``the 1905
easement transfers automatically upon sale of the pipeline facilities''
and that ``the right-of-way is unaffected by the conveyance unless
there is a change of use of the easement.''
______
U.S. Forest Service,
Northern Hills Ranger District,
Spearfish, SD, July 30, 2004.
E. James Hood,
City Attorney, City of Spearfish, SD.
Dear Jim: Thank you for your draft letter of July 14, 2004
concerning the status of acquisition of Spearfish Hydro Plant No. 1 and
the transfer of right-of-way grant 08861. I appreciate you keeping me
informed as to the City's efforts in acquiring the Hydro Plant.
In your letter, you ask that the USFS confirm that the right-of-way
remains in effect and will be unaffected by the conveyance. I note that
under your footnote #4 on page two of your letter, you state that the
Federal Energy Regulatory Commission (FERC) believes that the right-of-
way expired once Homestake ceased its extraction activities in Lead.
Our position is that the 1905 easement transfers automatically upon
sale of the pipeline facilities. We asked that we be notified upon sale
and transfer of ownership, which you have done. It is also our position
that the right-of-way is unaffected by the conveyance unless there is a
change of use of the easement. In that case, an environmental analysis
and Special Use Permit may become necessary.
The position of the Forest Service in our ability to regulate the
1905 easement is that we may administer projects as long as that
administration does not diminish or reduce any vested right granted by
the 1905 right-of-way. Because of the subsurface nature of the use of
National Forest land, the impact on the National Forest is minimized.
We have the authority under the Organic Act for general resource
protection; and therefore, the Forest Service has authority under 36
CFR 251 to require information from the holder, stop resource damage,
require that the project be maintained in good repair and require
rehabilitation of the project area upon abandonment of the projects.
I have obtained copies of recorded Assignment between Homestake and
the City of Spearfish. If there is other information that I need I will
let you know.
Again, thank you for keeping me informed of your progress with the
acquisition of Hydro Plant No. 1. If you need other information from
me, please let me know.
Sincerely,
Pamela E. Brown,
District Ranger.
______
Responses to Questions From Senator Johnson
Question 1. Mayor Krambeck, this project has been in continuous
operation since 1912. During these past nearly 100 years, the project
has been a clean source of renewable energy, ensured a stable water
supply to the City, created recreational opportunities within the City
of Spearfish, and supplied water to the D.C. Booth National Historic
Fish Hatchery. Although these multiple uses clearly strike a balance in
the public interest, in the event that S. 1577 becomes law, do you
foresee any operational changes at the project?
Answer. While the City would continue to operate Spearfish
Hydroelectric Plant Number 1 for generational purposes, certainly some
changes could occur at the project in the event of enactment of S.
1577. First, the 2004 MOA between the City and the Spearfish Canyon
Landowners Association calls for additional instream flows through the
reach of Spearfish Creek that is bypassed for the operation of the
project. Second, the City's interest in acquiring and operating the
project is not to simply maximize power generation. To the contrary,
the City understands its responsibilities to balance between
developmental and conservational interests, such as aesthetics,
fisheries protection, irrigation, water supply, and recreation. While
the City cannot encroach upon perfected senior water rights, it would
work with its constituencies to best balance among these important
public interests.
Question 2. Mayor Krambeck, now that the City has assumed ownership
of this hydroelectric facility, how has it made certain that the
project is operated and maintained in a safe and efficient manner? Does
the City have the expertise to run this facility?
Answer. The City has implemented appropriate safeguards to ensure
that the hydroelectric facility is operated in a safe and efficient
manner. Most importantly, the City hired former Homestake employees who
operated and maintained the facility for many years. This approach
allowed the City to retain years of institutional knowledge regarding
the facility. At the same time, the City is investigating the
feasibility of upgrading certain communications and control equipment
at the facility, which would allow for a more precise and efficient
operation of the facility. Finally, Federal Energy Regulatory
Commission staff recently inspected the facility and found it to be in
good working condition and classified it as having a low hazard
potential.
______
Responses of C. Mel Lytle to Questions From Senator Murkowski
Question 1. In your testimony, you mention State and Federal
policies that ``erode existing supplies'' and have ``upset new
supplies''. To which policies are you referring?
Answer. Historically, as the Department of the Interior's Central
Valley Project was constructed in California, San Joaquin County was
directed to look to the American River through the Auburn-Folsom South
Unit as a major source of the water it needed to meet its critical
deficiencies and has been consistently denied a water supply from this
source. At the same time, because of the planned availability of
American River water for San Joaquin County, the County was denied
other sources of surface water supply, principally from the San
Joaquin, Stanislaus and Mokelumne Rivers.
In significant part, the County's reliance on American River water
stems from numerous state and federal actions which have foreclosed
other alternatives while always directing us to the American River;
however, the Folsom South Canal extension into San Joaquin County has
never been constructed and San Joaquin County has never received this
contemplated water supply from the American River. In this regard, we
cite the following:
A. Bulletin No. 11 of the State Water Rights Board entitled,
``San Joaquin County Investigation,'' dated June 1955, includes
a description of the Folsom South Canal extending southward to
provide a water supply of approximately 303,000 acre feet
annually to San Joaquin County. Bulletin No. 11 indicates that
this water and canal is the ``probable ultimate supplemental
water requirement for the San Joaquin Area.''
B. In Decision 858, issued on July 3, 1956, the State
Engineer found that the North San Joaquin Water Conservation
District could receive water from the American River through
the Folsom South Canal and that this course would be cheaper
and more dependable then Mokelumne River water which flows
through the District. As a result of these findings, the North
San Joaquin District was granted only a temporary permit to use
water from the Mokelumne River and denied a requested permanent
right.
C. Four entities within San Joaquin County, consisting of the
North San Joaquin Water Conservation District, Stockton and
East San Joaquin Water Conservation District (now Stockton East
Water District), City of Stockton, and the California Water
Service Company, all filed to appropriate water from the
American River. In Decision 893, adopted on March 18, 1958, the
then State Water Rights Board at the request of the Bureau of
Reclamation denied those permits. The Board, in granting the
permits to the Bureau of Reclamation for the Folsom Project,
conditioned the permit to allow time for parties desiring water
within Placer, Sacramento, and San Joaquin Counties to
negotiate a water supply contract. San Joaquin County interests
did diligently negotiate for contracts, approved those
contracts, and signed them, but they were not approved at the
Washington level by the Bureau of Reclamation, as is noted
below.
D. The Bureau of Reclamation report entitled ``Folsom South
Unit'' dated January 1960 clearly identified the needs for
supplemental water within San Joaquin County and service to the
County through the Folsom South Canal. Again, this gave San
Joaquin County reason to rely on a water supply from the
American River.
E. In 1967 and 1971, the Bureau of Reclamation furnished
draft contracts to San Joaquin County and districts within the
County to deliver, in part, American River water through the
proposed Folsom South Canal to San Joaquin County. Negotiations
regarding these contracts resulted in the Stockton East Water
District, the Central San Joaquin Water Conservation District
and the North San Joaquin Water Conservation District approving
contracts for execution. The contracts were approved by the
regional office of the Bureau of Reclamation. Although the
contracts were sent to Washington for approval, none were
executed by the United States. The contracts were not executed,
due to a combination of circumstances and changing policies.
Disapproval was not because San Joaquin County did not need the
water.
F. Following Decision 1400 issued by the State Water
Resources Control Board in April 1972 modifying permits to the
Bureau of Reclamation for American River water from the
proposed Auburn Dam for delivery of water, in part, to San
Joaquin County, San Joaquin County's agencies continued to work
with the Bureau of Reclamation regarding various studies
concerning the Auburn-Folsom South Unit.
G. In Board hearings on Applications 14858, 14859, 19303 and
1904, for Stanislaus River water, which led to Decision 1422 in
1973, the Bureau of Reclamation testified that the portion of
San Joaquin County north of the Calaveras River would be served
by the Folsom South Canal. Furthermore, at the time of adopting
the New Melones Basin Allocation in 1981, the Secretary of
Interior noted that the provision of only a small amount of
water to San Joaquin County from New Melones was acceptable
since water would be provided to Eastern San Joaquin County
from the American River through the Folsom South Canal.
Contrary to these many reports, studies, policies and decisions of
both the State and the Federal Bureau of Reclamation, San Joaquin
County has not received water from the American River through the
contemplated extension of the Folsom South Canal.
For years, the County has sought to obtain additional surface water
supplies to supplement available water supplies, including efforts to
obtain water from a source other than the contemplated American River.
This includes expending substantial efforts and resources (in excess of
65 million dollars for infrastructure alone) to secure a reliable
source of Stanislaus River water. Again, due to changes in State and
Federal decisions and policies this supplemental water supply to San
Joaquin County is not secure. In this regard, we cite the following:
A. As a result of State Water Resources Control Board
Decision 1422 issued in 1973, the Bureau of Reclamation
received conditional permits for Stanislaus River water to be
diverted at New Melones Dam and Reservoir. In order to receive
State permission to appropriate the water from these permits
was to demonstrate ``firm commitments'' within the permitted
four county service area, which included San Joaquin County. In
part, to demonstrate such commitment, the Bureau of Reclamation
entered into contracts with both Stockton East Water District
and Central San Joaquin Water Conservation District in 1983 for
a 155,000 acre-foot annual Stanislaus River water supply.
B. These County districts spent over 65 million dollars on
delivery infrastructure. Despite the completion of these
delivery facilities in 1993, the Bureau did not deliver water
to the districts, but a significant amount of New Melones water
was released in 1993 and 1994 for fish purposes to meet the
needs of the recently adopted Federal CVPIA. Since 1993 the
County districts have only received a small portion of their
contracted Stanislaus River water. Instead, the Bureau of
Reclamation makes discretionary releases from New Melones to
meet Delta flow and salinity standards and for fish purposes
that directly take water away from these County districts.
C. The Bureau of Reclamation's discretionary decision to meet
Delta flow and salinity standards with this Stanislaus River
water occurs despite the State Water Resources Control Board's
Decision 1641 issued in 2000 indicating that these standards
could be meet from other sources including: releases from other
CVP reservoirs such as Friant; recirculation of water through
the Delta Mendota Canal, the Newman Wasteway and the San
Joaquin River; construction of a valley drain; and purchases of
water from willing sellers to release to meet these standards.
D. The Bureau of Reclamation's discretionary decision to
release water from New Melones Reservoir for fish purposes to
satisfy provisions of the CVPIA also deprives these County
districts of their contracts Stanislaus River water. Nothing
within the CVPIA mandates that these releases must be made from
New Melones. The releases of Stanislaus River water is
completely within the Bureau of Reclamation's discretion.
These federal and state decisions are continuing to deprive County
interests of water supplies. As a result, even though it is more
costly, the County recognizes that surface water supplies obtained in
the future for the most part will need to be on a conjunctive use
basis. Any conjunctive use plan will use surface water in times of high
flows and use stored groundwater in dry years. This is the basis of the
MORE WATER Project where flood flows from the Mokelumne River will be
captured with the construction of new infrastructure to be conveyed to
groundwater recharge projects in the San Joaquin County. H.R. 3812 will
authorize $3.3 million in federal appropriations for the Bureau of
Reclamation to participate on a cost-sharing basis in the development
of feasibility studies and environmental documentation required to
complete this project.
Question 2. In your testimony, you state that groundwater recharge
is the primary focus of the project. Do you plan to re-inject project
water, offset groundwater depletions with project water, or both?
Answer. San Joaquin County is faced with numerous water supply
challenges including critical groundwater overdraft, declining
groundwater levels, diminishing surface water supplies, and impending
threat of saline groundwater intrusion. The Eastern Basin Conjunctive
Use Program is intended to help solve many of these challenges by
creating the infrastructure necessary to facilitate both increased
surface water use (in-lieu recharge) and direct groundwater recharge
projects. The MORE WATER Project is an integral component to this
Program. The success of the this Program could also allow regional and
statewide interests to participate in groundwater banking and exchange
programs due to the storage potential of the Basin estimated at 2
million acre feet or the equivalent of either Folsom or New Melones
Reservoirs.
Responses of C. Mel Lytle to Questions From Senator Bingaman
Question 1. Your testimony notes that San Joaquin County has been
adversely affected by changes in State and Federal policies which have
upset longstanding plans to develop new water supplies. Some additional
background would be helpful.
What changes in policies have occurred and how has that impacted
the water supply in San Joaquin County?
Answer. Historically, as the Department of the Interior's Central
Valley Project was constructed in California, San Joaquin County was
directed to look to the American River through the Auburn-Folsom South
Unit as a major source of the water it needed to meet its critical
deficiencies and has been consistently denied a water supply from this
source. At the same time, because of the planned availability of
American River water for San Joaquin County, the County was denied
other sources of surface water supply, principally from the San
Joaquin, Stanislaus and Mokelumne Rivers.
In significant part, the County's reliance on American River water
stems from numerous state and federal actions which have foreclosed
other alternatives while always directing us to the American River;
however, the Folsom South Canal extension into San Joaquin County has
never been constructed and San Joaquin County has never received this
contemplated water supply from the American River. In this regard, we
cite the following:
A. Bulletin No. 11 of the State Water Rights Board entitled,
``San Joaquin County Investigation,'' dated June 1955, includes
a description of the Folsom South Canal extending southward to
provide a water supply of approximately 303,000 acre feet
annually to San Joaquin County. Bulletin No. 11 indicates that
this water and canal is the ``probable ultimate supplemental
water requirement for the San Joaquin Area.''
B. In Decision 858, issued on July 3, 1956, the State
Engineer found that the North San Joaquin Water Conservation
District could receive water from the American River through
the Folsom South Canal and that this course would be cheaper
and more dependable then Mokelumne River water which flows
through the District. As a result of these findings, the North
San Joaquin District was granted only a temporary permit to use
water from the Mokelumne River and denied a requested permanent
right.
C. Four entities within San Joaquin County, consisting of the
North San Joaquin Water Conservation District, Stockton and
East San Joaquin Water Conservation District (now Stockton East
Water District), City of Stockton, and the California Water
Service Company, all filed to appropriate water from the
American River. In Decision 893, adopted on March 18, 1958, the
then State Water Rights Board at the request of the Bureau of
Reclamation denied those permits. The Board, in granting the
permits to the Bureau of Reclamation for the Folsom Project,
conditioned the permit to allow time for parties desiring water
within Placer, Sacramento, and San Joaquin Counties to
negotiate a water supply contract. San Joaquin County interests
did diligently negotiate for contracts, approved those
contracts, and signed them, but they were not approved at the
Washington level by the Bureau of Reclamation, as is noted
below.
D. The Bureau of Reclamation report entitled ``Folsom South
Unit'' dated January 1960 clearly identified the needs for
supplemental water within San Joaquin County and service to the
County through the Folsom South Canal. Again, this gave San
Joaquin County reason to rely on a water supply from the
American River.
E. In 1967 and 1971, the Bureau of Reclamation furnished
draft contracts to San Joaquin County and districts within the
County to deliver, in part, American River water through the
proposed Folsom South Canal to San Joaquin County. Negotiations
regarding these contracts resulted in the Stockton East Water
District, the Central San Joaquin Water Conservation District
and the North San Joaquin Water Conservation District approving
contracts for execution. The contracts were approved by the
regional office of the Bureau of Reclamation. Although the
contracts were sent to Washington for approval, none were
executed by the United States. The contracts were not executed,
due to a combination of circumstances and changing policies.
Disapproval was not because San Joaquin County did not need the
water.
F. Following Decision 1400 issued by the State Water
Resources Control Board in April 1972 modifying permits to the
Bureau of Reclamation for American River water from the
proposed Auburn Dam for delivery of water, in part, to San
Joaquin County, San Joaquin County's agencies continued to work
with the Bureau of Reclamation regarding various studies
concerning the Auburn-Folsom South Unit.
G. In Board hearings on Applications 14858, 14859, 19303 and
1904, for Stanislaus River water, which led to Decision 1422 in
1973, the Bureau of Reclamation testified that the portion of
San Joaquin County north of the Calaveras River would be served
by the Folsom South Canal. Furthermore, at the time of adopting
the New Melones Basin Allocation in 1981, the Secretary of
Interior noted that the provision of only a small amount of
water to San Joaquin County from New Melones was acceptable
since water would be provided to Eastern San Joaquin County
from the American River through the Folsom South Canal.
Contrary to these many reports, studies, policies and decisions of
both the State and the Federal Bureau of Reclamation, San Joaquin
County has not received water from the American River through the
contemplated extension of the Folsom South Canal.
For years, the County has sought to obtain additional surface water
supplies to supplement available water supplies, including efforts to
obtain water from a source other than the contemplated American River.
This includes expending substantial efforts and resources (in excess of
65 million dollars for infrastructure alone) to secure a reliable
source of Stanislaus River water. Again, due to changes in State and
Federal decisions and policies this supplemental water supply to San
Joaquin County is not secure. In this regard, we cite the following:
A. As a result of State Water Resources Control Board
Decision 1422 issued in 1973, the Bureau of Reclamation
received conditional permits for Stanislaus River water to be
diverted at New Melones Dam and Reservoir. In order to receive
State permission to appropriate the water from these permits
was to demonstrate ``firm commitments'' within the permitted
four county service area, which included San Joaquin County. In
part, to demonstrate such commitment, the Bureau of Reclamation
entered into contracts with both Stockton East Water District
and Central San Joaquin Water Conservation District in 1983 for
a 155,000 acre-foot annual Stanislaus River water supply.
B. These County districts spent over 65 million dollars on
delivery infrastructure. Despite the completion of these
delivery facilities in 1993, the Bureau did not deliver water
to the districts, but a significant amount of New Melones water
was released in 1993 and 1994 for fish purposes to meet the
needs of the recently adopted Federal CVPIA. Since 1993 the
County districts have only received a small portion of their
contracted Stanislaus River water. Instead, the Bureau of
Reclamation makes discretionary releases from New Melones to
meet Delta flow and salinity standards and for fish purposes
that directly take water away from these County districts.
C. The Bureau of Reclamation's discretionary decision to meet
Delta flow and salinity standards with this Stanislaus River
water occurs despite the State Water Resources Control Board's
Decision 1641 issued in 2000 indicating that these standards
could be meet from other sources including: releases from other
CVP reservoirs such as Friant; recirculation of water through
the Delta Mendota Canal, the Newman Wasteway and the San
Joaquin River; construction of a valley drain; and purchases of
water from willing sellers to release to meet these standards.
D. The Bureau of Reclamation's discretionary decision to
release water from New Melones Reservoir for fish purposes to
satisfy provisions of the CVPIA also deprives these County
districts of their contracts Stanislaus River water. Nothing
within the CVPIA mandates that these releases must be made from
New Melones. The releases of Stanislaus River water is
completely within the Bureau of Reclamation's discretion.
These federal and state decisions are continuing to deprive County
interests of water supplies. As a result, even though it is more
costly, the County recognizes that its last chance for surface water
supplies obtained in the future for the most part will need to be on a
conjunctive use basis. Any conjunctive use plan will use surface water
in times of high flows and use stored groundwater in dry years. This is
the basis of the MORE WATER Project where flood flows from the
Mokelumne River will be captured with the construction of new
infrastructure to be conveyed to groundwater recharge projects in the
San Joaquin County. H.R. 3812 will authorize $3.3 million in federal
appropriations for the Bureau of Reclamation to participate on a cost-
sharing basis in the development of feasibility studies and
environmental documentation required to complete this project.
Question 2. You note that the water project contemplated in H.R.
3812 is not part of the CALFED program.
Do any of the water supply projects being reviewed as part of the
CALFED program have a connection to San Joaquin County, and might they
help to address some of the issues described in your testimony?
Answer. Much of the water supply development interests of San
Joaquin County were not originally included in the CALFED development
process. Since that time, the MORE WATER Project has developed,
primarily through grass-roots efforts, into a significant conjunctive
use program to correct groundwater basin overdraft with available flood
waters from the Mokelumne River. Currently, it is focused primarily on
the development of local supplies, whereas the focus of CALFED
predominately is to improve water supply reliability for South of Delta
Exporters, water quality and ecosystem restoration in the Delta as it
is impacted by the State and Federal Projects. However, MORE WATER is
consistent with the goals of CALFED, but has not been included as a
major component in the CALFED solution to date.
While not a component of the CALFED Program, MORE WATER will
provide information important to water resource and environmental
protection efforts being conducted under the CALFED aegis. MORE WATER
is consistent with the following Program elements:
Water Storage--Conjunctive use programs hinge on the ability
for entities to capture surface water when available for direct
use and groundwater recharge. Groundwater recharge is an
integral part of the success of MORE WATER.
Ecosystem Restoration--The Mokelumne River and the Delta are
a source of pride for the San Joaquin County Community. MORE
WATER will be developed to maximize enhance or create ecosystem
restoration benefits when feasible.
Watershed Management--The Mokelumne River Watershed is
represented by numerous organizations, interest groups, water
right holders and authorities. The County will continue to
promote MORE WATER to these groups like the Mokelumne River
Forum and coordinate formal consultation with these agencies.
Water Transfers--The underground storage potential of
Eastern San Joaquin County is estimated at approximately 2
million acre-feet, enough to supply 12 million people for one
year. Groundwater banking in San Joaquin County has the
potential to provide regional and statewide agencies the
ability to store excess water in the underlying basin. San
Joaquin County's proximity to the Delta could facilitate water
transfers and exchanges to areas served by the State Water
Project, Central Valley Project and the CALFED Environmental
Water Account.
______
Responses of Darla Pollman Rogers to Questions From Senator Johnson
Question 1. If a preferential leaseholder decides to exercise their
right to repurchase the land, what price will they pay?
Answer. Paragraph (2), Page 6, of S. 2205 sets forth the terms of
repurchase if a preferential leaseholder exercises his/her option to
buy back the land.
A. The value of a preferential lease parcel is its fair
market value for agricultural purposes, as determined by an
independent appraisal.
B. If the appraised value of the land is in excess of
$10,000.00, the preferential leaseholder has the option to pay
cash for the land, or to buy it on an installment contract
basis:
(1) If the preferential leaseholder pays cash, the
purchase price is the appraised value, less a 10%
discount.
(2) If the preferential leaseholder repurchases the
land on an installment basis, the purchase price is the
appraised value of the land.
C. If the appraised value of the land is less than
$10,000.00, the preferential leaseholder must pay cash, and the
purchase price is the appraised value, less a 10% discount.
Question 2. What are some of the specific benefits from the
wildlife mitigation plan that will accompany the lands conveyed to the
state?
Answer. The federal lands conveyed through S. 2205 to the State of
South Dakota (for the use and benefit of the Department of Game, Fish &
Parks) will provide the critical and essential land base on which the
state can move forward with satisfying its Habitat Mitigation Plan as
authorized by Section 602 of title VI of Public Law 105-277 of October
21, 1998. By providing the much needed land base for fully implementing
the state's Habitat Mitigation Plan, the state can finally begin to
adequately address the 30-year-old obligation to South Dakota by the
federal government for wildlife habitat forever lost through inundation
associated with construction of dams through the Pick-Sloan Act. It is
necessary to have an accessible and productive land base on which to
implement wildlife habitat mitigation plan practices such as woody
cover developments, wildlife food plot and upland nesting cover
establishments. Specifically, the citizens of South Dakota and its
visitors will have a place to enjoy and encounter myriad wildlife
species that are the direct result of habitat developments and
improvements made possible by the availability of lands obtained
through S. 2205 and applied to that land through an approved Habitat
Mitigation Plan.
Responses of Darla Pollman Rogers to Questions From Senator Murkowski
Question 1. Do you believe that, if this bill is enacted, a sales
price ten percent below fair market value will compensate the
leaseholders for increase in sales price and lease fees over the last
30 years?
Answer. No, a sales price ten percent below fair market value will
not compensate preferential leaseholders for the increase in the value
of land and lease fees over the last 30 years, for the following
reasons:
1. Under S. 2205 as currently drafted, the 10% discount
applies only if (a) the total purchase price is less than
$10,000.00; or (b) if the preferential leaseholder pays cash to
buy back his/her land. For many of the preferential
leaseholders, especially in the Blunt Reservoir area where the
tracts of lease land are larger, an installment purchase is the
only way they will be able to exercise their option to buy back
their land. Preferential leaseholders who repurchase their land
via installment do not receive a discount from the appraised
value.
2. The value of the land, and especially the larger tracts,
has increased dramatically over the years. Farmground in Hughes
and Sully County is currently worth from $750.00 to $850.00 per
acre. Values in the late seventies were much, much less. In
addition, preferential leaseholders have paid close to fair
market value for lease rates over the years, so their lease
payments have also increased considerably over the 30-year
timeframe.
______
[Responses to the following questions were not received at
the time the hearing went to press.]
Committee on Energy and Natural Resources,
Subcommittee on Water and Power,
Washington, DC, April 3, 2006.
Laurence Becker,
State Geologist, Vermont Department of Environmental Conservation,
Geology and Mineral Resources Division, Waterbury, VT.
Dear Mr. Becker: I would like to take this opportunity to thank you
for appearing before the Senate Subcommittee on Water and Power of the
Committee on Energy and Natural Resources on Thursday, March 30, 2006,
to give testimony on S. 2054, to direct the Secretary of the Interior
to conduct a study of water resources in the State of Vermont.
Enclosed herewith please find a list of questions which have been
submitted for the record. If possible, I would like to have your
response to these questions by Monday, April 17, 2006.
Thank you in advance for your prompt consideration.
Sincerely,
Lisa Murkowski,
Chairman.
[Enclosure.]
Questions From Senator Murkowski
Question 1. If enacted, how would the information provided by this
study help address your groundwater contamination problems?
Question 2. Do you feel that you have an adequate level of
understanding about your surface water resources?
Question 3. In coordination with the USGS, what will you identify
as priority areas of study?
Questions From Senator Bingaman
Question 1. Your testimony indicates that the State of Vermont is
in the process of developing an aggressive program to understand its
groundwater resource to benefit future planning efforts.
Are there areas within the State that are beginning to
experience significant draw down in any of the aquifer systems?
Is water supply growing as an issue or is most of the concern
in the State related to water quality issues?
Is the State able to provide sufficient funding and other
resources to partner with the USGS in a joint study program?
Does the State currently have a permit system in place to
regulate access to, and pumping of groundwater?
______
Committee on Energy and Natural Resources,
Subcommittee on Water and Power,
Washington, DC, April 3, 2006.
Hon. John Keys,
Commissioner, Bureau of Reclamation, Department of the Interior,
Washington, DC.
Dear Commissioner Keys: I would like to take this opportunity to
thank you for appearing before the Senate Subcommittee on Water and
Power of the Committee on Energy and Natural Resources on Thursday,
March 30, 2006 to give testimony on S. 1962, S. 2205, and H.R. 3812.
Enclosed herewith please find a list of questions which have been
submitted for the record. If possible, I would like to have your
response to these questions by Monday, April 17, 2006.
Thank you in advance for your prompt consideration.
Sincerely,
Lisa Murkowski,
Chairman.
[Enclosure.]
Questions From Senator Murkowski
Question 1. S. 1962/H.R. 4000--Do you feel that the loss of
revenues to the Treasury if this bill were authorized is justified
considering the recent hardship faced by the irrigation districts as a
result of the drought?
Question 2. H.R. 3812--How is the proposed project's appraisal-
level study progressing and when do you anticipate it will be complete?
Questions From Senator Bingaman
Question 1. S. 1962/H.R. 4000--Your testimony establishes that
Reclamation has the authority to deferments with respect to the
repayment schedules established by contract, but that grant those
deferments do not extend the total time period for repayment.
What are the types of situations where Reclamation has
historically granted deferments?
Should the deferment authority be amended so that
Reclamation has the authority to extend the total time period
for repayment?
Question 2. S. 1962/H.R. 4000--Over the past 20 years, how often
has legislation similar to S. 1962 been enacted which provides relief
to water users from an existing repayment contract?
Will this bill create a unique precedent, likely to be
followed by many similar requests?
Question 3. H.R. 3812--Your testimony indicates that a feasibility
study requires the completion of NEPA compliance documents.
Does Reclamation have a new policy requiring NEPA compliance
to be an integral part of its feasibility studies?
If so, is it an efficient use of limited resources to
require a full environmental review while still assessing the
technical and financial feasibility of a project?
Question 4. H.R. 3812--According to testimony, the San Joaquin
County area is not within the CALFED project area.
Is it possible, however, that some of the regional water
supply projects being reviewed by the CALFED program could
address the water supply issues in San Joaquin County?
Questions From Senator Johnson
Question 1. S. 2205--How much does the Bureau of Reclamation spend
to manage the lands acquired for the Pierre Canal and Blunt Reservoir?
Question 2. S. 2205--In your testimony, you state that the Bureau
will be still responsible for some administrative fees even if the
Blunt Reservoir Bill is enacted. Could you elaborate on the nature of
these fees? Do you have an estimate on the total amount of these fees?
Question 3. S. 2205--Can you tell me the difference between the
BOR's cost to manage these lands today versus the cost if H.R. 4301 is
enacted?
Question 4. S. 2205--When lands are taken out of Federal ownership,
are they always disposed of at fair market value? If not, what are the
exceptions?
______
Committee on Energy and Natural Resources,
Subcommittee on Water and Power,
Washington, DC, April 3, 2006.
Hon. Jerry Krambeck,
Mayor, The City of Spearfish, SD.
Dear Mayor Krambeck: I would like to take this opportunity to thank
you for appearing before the Senate Subcommittee on Water and Power of
the Committee on Energy and Natural Resources on Thursday, March 30,
2006, to give testimony on S. 1577, to facilitate the transfer of
Spearfish Hydroelectric Plant Number 1 to the city of Spearfish, South
Dakota, and for other purposes.
Enclosed herewith please find a list of questions which have been
submitted for the record. If possible, I would like to have your
response to these questions by Monday, April 17, 2006.
Thank you in advance for your prompt consideration.
Sincerely,
Lisa Murkowski,
Chairman.
[Enclosure.]
Questions From Senator Murkowski
Question 1. S. 1577 expresses the sense of Congress that the City
should: (1) uphold a 2004 MOA with the Spearfish Canyon Landowners
Association and (2) ensure the release of an additional 5--10 cubic
feet per second between the Intake Dam and the Spearfish Division.
Please explain the significance of this sense of Congress.
Question 2. You testified that the U.S. Forest Service has
determined that the right of way in question remains valid and is fully
transferable to the City. Do you have the Forest Service's assessment
in writing so we could make that part of the hearing record?
Questions From Senator Johnson
Question 1. Mayor Krambeck, this project has been in continuous
operation since 1912. During these past nearly 100 years, the project
has been a clean source of renewable energy, ensured a stable water
supply to the City, created recreational opportunities within the City
of Spearfish, and supplied water to the D.C. Booth National Historic
Fish Hatchery. Although these multiple uses clearly strike a balance in
the public interest, in the event that S. 1577 becomes law, do you
foresee any operational changes at the project?
Question 2. Mayor Krambeck, now that the City has assumed ownership
of this hydroelectric facility, how has it made certain that the
project is operated and maintained in a safe and efficient manner? Does
the City have the expertise to run this facility?
______
Committee on Energy and Natural Resources,
Subcommittee on Water and Power,
Washington, DC, April 3, 2006.
Hon. P. Patrick Leahy,
Acting Director, U.S. Geological Survey, Reston, VA.
Dear Mr. Leahy: I would like to take this opportunity to thank you
for sending Ms. Catherine Hill to appear before the Senate Subcommittee
on Water and Power of the Committee on Energy and Natural Resources on
Thursday, March 30, 2006, to give testimony on S. 2054, to direct the
Secretary of the Interior to conduct a study of water resources in the
State of Vermont.
Enclosed herewith please find a list of questions which have been
submitted for the record. If possible, I would like to have your
response to these questions by Monday, April 17, 2006.
Thank you in advance for your prompt consideration.
Sincerely,
Lisa Murkowski,
Chairman.
[Enclosure.]
Question From Senator Murkowski
Question 1. What do you believe would be an appropriate non-Federal
cost share for a study of this kind?
Question From Senator Bingaman
Question 1. Your testimony indicates that authorization of the
study contemplated in S. 2054 is unnecessary given the existing
authorization of the Cooperative Water Program. The President's 2007
budget, however, would cut almost $700,000 in funding for the
Cooperative Water Program.
Without this bill and any specific appropriations that may
be provided by Congress, is there any hope of getting
significant resources from the USGS to partner with the State
of Vermont on this study?
Has the USGS allocated any of its Cooperative Water Program
money to Vermont over the last several years?
Question 2. If S. 2054, as introduced, were enacted into law, would
the USGS require a state/local cost-share? How does the USGS interpret
the language in S. 1338 (a similar bill for Alaska) with respect to
cost-share?
______
Committee on Energy and Natural Resources,
Subcommittee on Water and Power,
Washington, DC, April 3, 2006.
Dr. Mel Lytle,
Water Resources Coordinator, San Joaquin County, Stockton, CA.
Dear Dr. Lytle: I would like to take this opportunity to thank you
for sending Ms. Catherine Hill to appear before the Senate Subcommittee
on Water and Power of the Committee on Energy and Natural Resources on
Thursday, March 30, 2006, to give testimony on H.R. 3812, to authorize
the Secretary of the Interior to prepare a feasibility study with
respect to the Mokelumne River, and for other purposes.
Enclosed herewith please find a list of questions which have been
submitted for the record. If possible, I would like to have your
response to these questions by Monday, April 17, 2006.
Thank you in advance for your prompt consideration.
Sincerely,
Lisa Murkowski,
Chairman.
[Enclosure.]
Questions From Senator Murkowski
Question 1. In your testimony, you mention State and Federal
policies that ``erode existing supplies'' and have ``upset new
supplies''. To which policies are you referring?
Question 2. In your testimony, you state that groundwater recharge
is the primary focus of the project. Do you plan to re-inject project
water, offset groundwater depletions with project water, or both?
Questions From Senator Bingaman
Question 1. Your testimony notes that San Joaquin County has been
adversely affected by changes in State and Federal policies which have
upset longstanding plans to develop new water supplies. Some additional
background would be helpful.
What changes in policies have occurred and how has that
impacted the water supply in San Joaquin County?
Question 2. You note that the water project contemplated in H.R.
3812 is not part of the CALFED program.
Do any of the water supply projects being reviewed as part
of the CALFED program have a connection to San Joaquin County,
and might they help to address some of the issues described in
your testimony?
______
Committee on Energy and Natural Resources,
Subcommittee on Water and Power,
Washington, DC, April 3, 2006.
J. Mark Robinson,
Director of the Office of Energy Projects, Federal Energy Regulatory
Commission, Washington, DC.
Dear Mr. Robinson: I would like to take this opportunity to thank
you for sending Ms. Catherine Hill to appear before the Senate
Subcommittee on Water and Power of the Committee on Energy and Natural
Resources on Thursday, March 30, 2006, to give testimony on S. 1577, to
facilitate the transfer of Spearfish Hydroelectric Plant Number 1 to
the city of Spearfish, South Dakota, and for other purposes.
Enclosed herewith please find a list of questions which have been
submitted for the record. If possible, I would like to have your
response to these questions by Monday, April 17, 2006.
Thank you in advance for your prompt consideration.
Sincerely,
Lisa Murkowski,
Chairman.
[Enclosure.]
Questions From Senator Johnson
First, let me start out by stating that I do believe the licensing
and administration of our nation's public hydro-electric plants is an
important regulatory tool to balance the often competing multiple uses
of the nation's water resources. Several Senators on the Energy
Committee have devoted a good deal of time toward improving the federal
license process for nonfederal hydropower plants. That being the case,
I believe that the set of circumstances surrounding the small
hydroelectric plant in Spearfish are unique and, therefore, provide for
a re-examination in this instance of the federal license requirements.
Question 1. It is my understanding that FERC is asserting
jurisdiction to require a license on the basis that certain rights-of-
way grants and permits, which were issued by the federal government
prior to the enactment of the 1920 Federal Power Act, had expired. Is
this your argument?
Question 2. Now, I've learned that these fights-of-way grants and
permits were not issued by the FERC or that the rights-of-way are
administrated by the FERC. In fact, the rights-of way permits are
administrated exclusively by the U.S. Forest Service, which recently
found that they had not expired, and in fact, were validly transferred
from the Homestake Mining Company to the City of Spearfish. In light of
these sets of circumstances, don't you believe that FERC is
overreaching in asserting jurisdiction, particularly in light of the
long-held administration of the rights-of-way by the U.S. Forest
Service?
Question 3. Mr. Robinson: I want to ask you a question about the
time and cost of licensing this project. I understand that the median
amount of time for a hydro re-license applicant is about 64 months from
the beginning to the end, and that under the Traditional Process costs
average $2.3 million. Who bears the costs for the license? And, in
proportion to other hydro projects, what could the City expect in terms
of cost and time to license this small, century-old hydro plant?
Appendix II
Additional Material Submitted for the Record
----------
Statement of G. Thomas Bartlett III, Mayor, City of Grafton, WV
Chairman Murkowski, Ranking Member Johnson, and distinguished
members of the Committee: I am pleased to have this opportunity to
submit testimony in support of S. 2028, a bill to reinstatement of a
license for Federal Energy Regulatory Commission (FERC) project No.
7307. Reinstatement provides the City of Grafton with a renewed
opportunity to move ahead on a hydroelectric power plant project at the
Tygart Dam just upstream of Grafton on the Tygart Valley River. Our
region is in critical need of the economic impact of this project.
I am encouraged and excited to see the critical factors, which
would influence the progress of this idea, are joining together in
mutual support. I feel much more confident about the prospects of
success as compared with the circumstances of this same opportunity
when it presented itself several years ago. National Renewable
Resources Conemaugh L.P. (NRRC) is currently supported by a management
team which encourages involvement in this type of project. The current
successful operation by NRRC of a hydroelectric plant in nearby
Pennsylvania is a positive influence. The prospect of finding a
customer for the electric power produced by this project is more likely
now than ever before.
I understand that flow of water during winter pool levels have been
considered and NRRC engineering has considered it to be more than
adequate for the sustained power levels. Therefore, no changes to the
Corps of Engineers current operational procedures are needed. Current
generation technology and design will provide for a 20 Megawatt output
at minimum flows. This much energy would provide sufficient electricity
for 10,000 homes. This project would intrude to a minimum extent on the
present dam structure since it would be making use of provisions for
hydroelectric power which were built into the dam 70 years ago.
The City will receive regular income from the operation of this
project. We look forward to the prospect of supporting community
projects with these discretionary funds. Planning responsible and
innovative ways of improving our community would be a delightful
challenge that I would happily undertake.
Revenues provided to the City from this project could be used to
enhance local services to children and the elderly, including the
expansion of our local senior citizen center. This senior center
provides daily meals to Grafton's elderly but is having a difficult
time extending this service to home-bound seniors. Additional funding
would help them to support and expand our local meals of wheels
program. Further, funds would be used to build a memorial to the Sago
mine tragedy--some of the miners lived in our community. In addition,
the City has a laundry list of projects that could move ahead with
revenues from this project, including: preserving and promoting our
International Mother's Day Shrine, preserving the B&O Railroad Station,
enhancing our Taylor County Museum, maintaining the local National
Cemeteries, and preserving our stately one hundred year old U.S. Post
Office. With the discretionary funds that would be received by the City
from this project, all these historical treasures could receive the
attention that they deserve. People from everywhere would come to see
and enjoy these historical treasures in restored splendor. Without this
project the City's discretionary budget is minimal and many of these
initiatives will go unfunded.
Therefore, I encourage you to support S. 2028 which will reinstate
Grafton's FERC license; thus, providing a critical first step toward
harnessing a renewable resource for the benefit of all in the region.
As I read the testimony of Jeffery Kossack, President of NRRC, I am
pleased to say that I support and concur with his representation of the
situation.
We invite you, one and all, to come and join us in the celebration
of our 150th birthday during Memorial Day weekend 2006.
______
Statement of Jeffery Kossack, President, National Renewable Resources
Conemaugh LP, on S. 2028
Chairman Murkowski, Ranking Member Johnson, distinguished members
of the Committee: I respectfully submit to you this testimony in
support of S. 2028, a bill to provide for the reinstatement of a
license for Federal Energy Regulatory Commission (FERC) project number
7307. This bill would allow the City of Grafton, West Virginia, to
obtain an extension to their license for constructing a hydroelectric
facility at the Tygart dam.
As you are no doubt aware, the City of Grafton held a FERC license
to develop a plan to make use of this power tunnel for a period of
time; unfortunately this license has lapsed. During the time when the
City of Grafton's FERC license was valid, the project economics were
very tight and it was impossible to secure utility cooperation to make
the project work. Long-term interest rates are now lower and the demand
for clean fuel sources is now much more robust; both of which now make
the project viable. My firm is actively engaged in securing a buyer for
electricity produced by the proposed facility, we are confident that
such a buyer will be found.
My company, NRR Conemaugh LP, has established an agreement with the
City of Grafton to build the hydroelectric facility in question. This
project would open and utilize a power tunnel that was built into the
Tygart Dam nearly seventy years ago. Unfortunately, the envisioned
power resource has remained unused for the entire life of the dam. The
dam is in fine working order and water is continually running through
the facility. Unsealing the power tunnel would not disrupt the dam's
ability to maintain water levels and would not compromise dam
integrity. Opening the power tunnel for hydroelectric production and
thereby harnessing this resource would provide a clean, safe and
efficient energy resource.
The proposed 20 megawatt hydroelectric project would be located
immediately below Tygart Dam. The facility would have an annual energy
production of 85 gigawatts, on average, which is enough energy fuel a
city the size of Grafton. This $45 million project would be completely
funded by NRR Conemaugh, which has demonstrated success in
hydroelectric production in Pennsylvania.
Our current plan is to finance the Tygart project with
approximately 50 percent of our own capital and approximately 50
percent with long-term bank debt. We have already bid out the equipment
package and have completed a number of the civil drawings. Project
construction could begin within 12 months of FERC license
reinstatement. Our company would commit itself to fast tracking this
work in order to get the project under way as soon as possible.
My company will take on the entire financial cost of the project
and will not request any financial assistance from the City of Grafton,
the State of West Virginia or the federal government. In fact, each of
these governmental entities would gain significant revenues as a direct
result of this project moving forward.
The City of Grafton would receive an annual licensing fee of
approximately $300,000 per year for the life of the facility. These
funds could be used at the City's discretion. It is my understanding
that this revenue source would be the sole source of discretionary
spending for the City. Consequently, many City initiatives that are
currently unfunded could be undertaken.
Not only would this project have local and regional benefits, but
the federal government would receive an annual licensing fee of
$200,000 from this project. This fee is not significant in terms of
federal spending; but it is not often that Congress is confronted with
projects looking to give dollars back to the Treasury.
Passage of this bill would result in approximately 200 construction
jobs with a payroll of over $1 million per month during construction.
This will prove to be a true economic boom for this region of West
Virginia. Our company is committed to utilizing local workforce,
contractors and suppliers when able. Further, this project would create
a few well-paying permanent jobs at the facility in addition to
providing an ongoing regional economic impact of approximately $200,000
per year for the life of the project, which is estimated at 45 years.
This project fits very well into the national energy plan that has
been advanced by Congress and has substantial regional support,
including that of both of West Virginia's U.S. Senators.
Further, Rep. Alan Mollohan of West Virginia has introduced
companion legislation, H.R. 4417, in the House.
With your help in reinstating the City of Grafton's license, I
believe that we can make this project a reality. The passage of S. 2028
is a critical first step to making this important project a success. I
assure you that if the needed legislation is enacted, our company is
totally committed to making this project work.
In conclusion, I respectfully urge the Committee to approve S.
2028. This project is one that will cost the federal government nothing
but will have a significant positive economic impact on Grafton and
will enhance West Virginia's clean fuel production capabilities.
______
Statement of Jon Groveman, Director and General Counsel, Vermont
Natural Resources Council Water Program, on S. 2054
My name is Jon Groveman. I am the Water Program Director and the
General Counsel for the Vermont Natural Resources Council (VNRC).
Founded in 1963 by farmers and foresters, VNRC has over 4,500 dues
paying members and 1,500 activists in the state of Vermont, who are
dedicated to VNRC's mission of protecting Vermont's environment and our
working landscape through research, education and advocacy. Thank you
for this opportunity to submit written testimony on 5.2054.
VNRC strongly supports S. 2054. Groundwater protection is currently
a critical environmental issue facing the state of Vermont. In a small,
rural state like Vermont, most people get their drinking water from
individual wells, rather than large public water supplies. For example,
the most recent statistics available from the Vermont Agency of Natural
Resources indicate that more than 66% of Vermonters are supplied
drinking worker directly through groundwater, as opposed to surface
water.
Despite the number of Vermonters that rely on groundwater as their
primary source of drinking water, Vermonters know very little about the
quality and quantity of their groundwater. Unlike our neighboring
states of New Hampshire and Maine, Vermont has not undertaken a program
to map our groundwater resources. New Hampshire and Maine have received
significant assistance from he United States Geological Survey (USGS)
to map its geologic and groundwater resources, including financial
assistance. There is an intrinsic relationship between geology and
groundwater resources. In New England, groundwater is trapped between
the spaces of rocks beneath the surface. The quantity and quality of
groundwater is directly linked to these geologic formations.
Accordingly, federal agencies like the USGS play a key role in helping
states understand and protect their groundwater resources.
As a result of their work with the USGS, New Hampshire and Maine
have a much better understanding on where its groundwater is located
and what the threats to its groundwater resources are than Vermont. S.
2054 would place Vermont on equal footing with its neighboring states
by ensuring that the federal government will assist Vermont to
inventory and map its groundwater resources. Accordingly, VNRC urges
the Committee to pass S. 2054.
______
Statement of Earl Briggs, Rapid City, SD
My name is Earl Briggs, a retired farmer from Hughes Co. near
Pierre, S. Dak. I am writing testimony in reference to the Pierre Canal
and Blunt Reservoir Conveyance Act (HR-4301) (S-2205) sponsored by
(Stephanie Herseth) (Sen. John Thune).
In the mid 1970's the Bureau of Reclamation acquired a strip of
land (63 acres) across our farm in Section 26-111-78 (640 acres) for
the defunct Oahe Irrigation Project. This was taken against our will by
condemnation. The opposition in the irrigation district grew until
funding on a 3 year contract (21 miles) after one year was cancelled. I
have leased this land from the Bureau since the project was abandoned.
All they done on ours is put in two fences and a $350,000.00 culvert
across Dry Run Creek.
The Bureau in their negotiations promised us we could irrigate from
the canal or they would sell it back to us at purchase price if the
project was abandoned, which proved to be a ploy to get possession of
the land. We. discovered there was no provisions the Master Contract
for canalside irrigation,
In our case we have a strip of land in a S shape, approximately one
mile long, (320 rods) and 30 rods wide going through \1/3\ pasture and
\2/3\ farm ground. If this remnant is appraised at its actual value, I
believe I could live with that and repurchase as the bill is written.
I do have a problem with the portion of the bill that turns over
non-preferential, and preferential lands not purchased to the S. Dak.
Game Fish and Parks. For 30 years we have made up the difference in
property taxes on nearly 20,000 acres of land. In fact the BOR paid
$1.39 per acre in taxes while we paid $6.16 per acre last year.
These lands were all taken by threat of condemnation in the first
place, so rightfully they should be put back in private hands and tax
roll by auction of non-preferential land, not yet another government
entity, The S. Dak. Game Fish and Parks. They keep referring to the
mitigation act of 1958 for lands taken by the reservoirs. I don't think
Hughes and Sully counties should take the brunt of this ill conceived
idea, as this was a whole state issue a half century ago. We raise more
wildlife by accident than they do on purpose.
Being 78 years old and renting it to my neighbor for 14 years who
is 100%, and rightfully the successor, I very much want to get this
resolved before leaving. this earth. This would put this money back
into the Gov't coffers from which it came from in the first place.
Hopefully we can get this bill tweaked and passed making me one
happy farmer along with my neighbors.
Thank you.
______
Statement of The Boise-Kuna Irrigation District, Big Bend Irrigation
District, Nampa & Meridian Irrigation District, New York Irrigation
District, and Wilder Irrigation District, on S. 2035
SHORT STATEMENT OF NEED FOR LEGISLATION
In the last eighteen months, the Irrigation Districts have twice
been poised to begin construction on the Arrowrock Hydroelectric
Project. Twice, they have been stymied by the inaction and refusal to
act by federal agencies. This legislation is needed so the Districts
can salvage the hundreds of thousands of dollars and countless hours of
time and energy invested in the Project. Without the legislation, the
Project will be lost, along with the opportunity to supply clean,
renewable energy from an existing dam, and the opportunity help offset
water delivery costs to the farmers of the Boise River Valley. In 2005,
Congress passed a landmark Energy Bill designed to encourage
development of these clean, renewable power sources. Congress should
not permit the agencies' bureaucratic process to thwart this benign
Project. The Districts can and will deliver a final Project that meets
the highest environmental standards and that coexists with all existing
uses of the Boise River reservoir system, including fish and wildlife.
They just need the time extension this legislation offers. The
Districts are not seeking any federal appropriations for the Project.
The Project is supported by a broad range of Idaho and Oregon
interests, including an Oregon public power entity which has contracted
to purchase the output from this plant. The time is now for this
Project.
THE INTERAGENCY CONFLICTS
Five Idaho and Oregon Irrigation Districts hold the FERC license to
develop a hydroelectric powerplant at Arrowrock Dam. FERC License No.
4656. In the last eighteen months, their efforts to build this Project
have been stymied, not by any lack of diligence or effort on their
part, but because of the interactions of two federal agencies--the Fish
& Wildlife Service and the Federal Energy Regulatory Commission. The
Districts first received. word in January of 2004 that the licensed
start of construction deadline for this Project would be March of 2005.
They immediately went to work and selected a contractor to design and
build the Project. A plan was developed over the course of summer of
2004 to reduce the size of-the Project and presented to FERC staff in
submissions and in a meeting in FERC's offices in August of 2004. Based
on this consultation with FERC staff, the Districts planned to meet the
start of construction date by beginning manufacture of the component
parts as permitted by Commission precedent and regulations. There was
sufficient time in the schedule to meet the deadline.
The Fish & Wildlife Service had been insisting for some time that
FERC consult with the Service on this Project under Section 7 of the
Endangered Species Act because of the presence of bull trout in
Arrowrock Reservoir.\1\ FERC had taken the position that there was no
new discretionary federal action that required consultation.\2\ In
2004, the Service again requested that FERC engage in consultation.\3\
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\1\ FWS Letter April 27, 2001
\2\ FERC Letter August 16, 2001
\3\ FWS Letter February 25, 2004
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After the Districts' meeting with FERC staff in August of 2004 to
discuss the scope of the Project, FERC responded to the Service's
request for consultation with a letter requesting the Service's
concurrence that the Licensees' proposed modification will not affect
or is not likely to adversely affect bull trout or any listed
species.\4\ The Commission concluded that using of the existing intake
structure and existing operations of the dam, the fact that no
reservoir draw-down was required and that the Districts' proposed
elimination of some transmission lines were all positive benefits and
unlikely to affect any listed species. The Commission also noted that
Arrowrock Reservoir was no longer under consideration as critical
habitat for bull trout. Finally, FERC requested that the Service engage
in informal discussions with the Districts to resolve any issues the
Service might have.
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\4\ FERC Letter September 29, 2004
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With the understandings reached with the staff concerning
development of the Project to meet the March 2005 start of construction
date, the Districts worked diligently with their contractor and had a
feasibility study completed by December of 2004, which contemplated the
start of construction by fabrication of component parts in March of
2005.\5\ The Districts' representative previously met with the Service
and provided them with all the information provided to FERC. However,
the Service did not act on the FERC's letter until three months had
passed. At the end of December 2004, the Fish & Wildlife Service
advised FERC and Licensees that it disagreed with the Commission's
determination of no affect or not-likely to adversely affect bull
trout, and insisted on formal consultation, but stated that it would
not be in a position to begin consultation on the Project until the end
of March 2005, after the deadline for start of construction.\6\ The
Service was engaged in a comprehensive consultation which covered
multiple species at all Reclamation projects on the Upper Snake River
Basin, including Arrowrock Reservoir and wanted to complete that
consultation before engaging on this smaller consultation.
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\5\ SSW Feasibility Study December 2004 (excerpts)
\6\ FWS Letter December 21, 2004
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Faced with the inability to start construction to meet the deadline
because of the Service's stance, the Districts filed a request with
FERC to stay the license deadline. The Commission has authority to stay
deadlines where the delay is caused by action or inaction of another
federal agency. In response to the request for stay, the Service wrote
to FERC supporting the stay.\7\ The Service advised FERC that the Upper
Snake River Basin consultation had recently been completed and that
Reclamation's operations would not jeopardize any threatened or
endangered species. The Service advised FERC that they had been engaged
in informal consultation with the Districts, were cooperating in
developing the necessary information, and requested that FERC request
formal consultation by June 15, 2005. They anticipated completing
formal consultation in sixty (60) days. The Districts continued to
consult with the Service, the contractor, and--Reclamation to provide
the necessary information for a Biological Opinion.
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\7\ FWS Letter April 29, 2005
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Despite's the Service's willingness to resolve the ESA issues, the
Commission denied the request for stay. 111 FERC 61,271 (May 27,
2005). In denying the request for stay, the Commission took the
position that the changes proposed by the Districts required a
preconstruction amendment to the license. The Commission also expressed
its skepticism that the Fish & Wildlife Service could complete the
consultation in the timeframe it suggested. These conclusions came as a
complete surprise to the Districts. They had been operating under the
working assumption that, as a result of the meetings with the staff, no
preconstruction license amendment was necessary. They were also quite
surprised that the Commission had directed the Districts to work with
the Service to satisfy the needs to the Service and then the Commission
would reject the stay request because it did not believe that the
Service would engage in a timely consultation with the Districts as the
Service indicated.
Accordingly, the Districts filed a timely motion for rehearing,
supplying the Commission with additional evidence of the work that the
Service, the contractor, and the Districts had done in moving the
Project forward. The Districts also provided significant information
about the status of the power sales agreement for the output of this
Project. In July of 2005, the Districts filed a supplemental memorandum
in support of its petition for rehearing and reconsideration. Later, in
July, the Districts advised FERC staff that the informal consultation
was completed and that the Service was requesting again that FERC
engage in formal consultation. The response of the staff was that they
could not even discuss the matter with the Districts because of the
motion for rehearing.\8\
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\8\ FERC Email July 29, 2005
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The Commission, on September 1, 2005, entered an order denying the
motion for rehearing. 112 FERC 61, 240 (Sept. 1, 2005). The
Commission made a number of factual errors in doing so. First, the
Commission contended that the staff ``clearly informed'' the Districts
that a preconstruction license amendment was essential for this
Project. This is not correct. After meeting with the staff, the
Districts\9\ and Licensees\10\ both understood that no preconstruction
amendment was necessary. Indeed, the Commission issued its. no affect
letter to the Service which would have allowed construction to begin in
2005 (if the Service had concurred) and provided information to the
Districts and their contractor about how to meet the existing deadline
by construction of major component parts. The Districts followed up the
August 25, 2004 meeting with a memo to staff in which the Districts
stated their understanding that no license amendments would be
necessary.\11\ The Commission's Order, however, claimed that the
Districts were not entitled to rely upon either their meeting with the
staff or the previous experience with the Commission in determining
whether a license amendment was necessary. See 56 FERC 62, 061
(October 24, 1991) (Districts' Lucky Peak Power Plant Project did not
require preconstruction amendments). The Commission's Order contended
that the Districts had made no progress towards a power sales
agreement. In reaching this conclusion, the Commission ignored
information supplied to the Commission that, at the time the Commission
made its final ruling, the power sales agreement had been finalized.
Yet, the Commission's Order claimed that no progress had been made and
that all the Districts had was a draft of a letter of intent. Finally,
the Commission contended that the Fish & Wildlife Service was not able
to carry out its agreement to consult with the agency and Districts.
The Commission's Order ignored the extensive informal consultation
between the Licensees and the Service since April 2005 and ignored the
fact that the agency was prepared to complete this consultation
expeditiously, as soon as the Commission requested formal consultation.
The Service even wrote to the Commission on September 1, 2005 again
requesting formal consultation and advising that they had everything
they needed to complete consultation.\12\ In other words, everything
was ready, but the Commission chose to believe that the Districts and
the Service were not committed-to-the consultation.
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\9\ Kukla Testimony
\10\ SSW Letter March 21, 2005
\11\ Email to FERC staff September 1, 2004
\12\ FWS Letter September 1, 2005
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These egregious bureaucratic errors will deprive the Districts of
the opportunity to build this Project. If allowed to stand, it will
deprive the Districts of hundreds of thousands of dollars in
investments over the years and will deprive them of the opportunity to
provide services to the landowners in the Irrigation Districts. It will
deprive Clatskanie PUD of an independent source of power. The Districts
urge Congress to pass this legislation. The construction of the Project
will provide significant benefits to the nation's energy supply, to the
local economy, to the Irrigation Districts and thousands of their
patrons, and to a small, publicly owned Oregon Public Utility District,
who will utilize the power to supply its customers.
BRIEF DESCRIPTION OF THE PROJECT
The Arrowrock Hydroelectric Project is proposed as a 15 megawatt
powerplant built at an existing Bureau of Reclamation dam. The dam is
located just east of Boise, Idaho, on the Boise River. The dam was
completed in 1918, and the Districts are the major spaceholders for the
irrigation water stored behind the dam. No new impoundments will be
built. No reservoir draw-downs are required. Existing transmission
routes will be utilized. Detailed construction and operation summaries
were developed for consultation-with and provided to the Service and
other agencies.\13\
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\13\ Reservoir Operations & Construction Approach
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The Districts are experienced in building and operating
hydroelectric facilities, as they also own, and under contract with the
Seattle City Light, operate the Lucky Peak Power Plant Project (FERC
Project 2832) immediately downstream of the Arrowrock Hydroelectric
Project.
GENERAL BACKGROUND
The Boise-Kuna, Big Bend, Nampa & Meridian, New York and Wilder
Irrigation Districts are all public entities formed under the laws of
the State of Idaho, and, Big Bend Irrigation District, is formed under
the laws of State of Oregon. These Districts hold storage rights to the
water held behind the reservoirs on the Boise River, including the
Arrowrock Reservoir. The Districts serve 167,000 acres of irrigated
farm land in the Boise Valley. Most of the land in these Irrigation
Districts is in small farms, with an average size of less than of 100
acres.
The Districts have been diligently trying to develop the
hydroelectric resource at Arrowrock Dam for many years. They are the
logical entities to develop that resource, since, as the spaceholders
of the irrigation water, they control the vast majority of the water
stored behind Arrowrock Dam. The Districts pay the Bureau of
Reclamation a significant portion of the Bureau's cost of operation and
maintenance of that Dam. Development of the Project over the years has
been difficult and beset with problems from the very beginning. Shortly
after the license was originally issued in 1989, a severe drought hit
the Northwest, including Boise River, making any hydroelectric
development of major concern. In the mid-1990s, a listing of anadorous
fish downstream in the Columbia and Snake Rivers caused greater
uncertainty about the uses to which water would be put in the
tributaries above, including on the Boise. Even though there are no
anadorous fish in the vicinity of the Arrowrock Dam, or even in the
Boise River, the uncertainty about the uses of stored water cause
greater uncertainties in the viability of any hydroelectric facility,
even one not within the habitat of the listed anadorous species. In
2001, the energy crisis and accompanying volatility of energy prices
made a long-term power purchase agreement. difficult or impossible to
obtain for a hydroelectric facility with its inherent variability in
output. Operational issues concerning the location of the Lucky Peak
Reservoir and the Arrowrock Dam, as the Bureau of Reclamation operates
the Arrowrock Reservoir and the Lucky Peak Reservoir so as to cause
difficulty in maintaining sufficient head between the two reservoirs to
insure adequate generation.
In dealing with these various obstacles, the Districts have
examined a number of variations on this Project. The Project was
originally licensed as a 60 megawatt facility, which would be supplied
by drilling large tunnels through the Arrowrock Dam, a concrete
structure almost 100 years old. Later, the Districts evaluated a 30
megawatt project. They had a power purchaser willing to purchase the
output of a 30 megawatt project but ran into problems when the former
developer was not able to deliver the Project for the price that was
quoted. Since the spring of 2004, the Districts have been working with
Shaw/Stone & Webster, an engineering and construction firm of national
prominence in the hydroelectric industry, to develop a project of 15
megawatts. Recent modifications to the Arrowrock outlet works
downstream of the dam by the Bureau of Reclamation have created the
configuration where the Districts will be able to tie the powerplant
into the modified outlet works and use the water that is otherwise
being released through the dam by the Bureau of Reclamation without
having to drill additional tunnels through the dam. Shaw/Stone &
Webster has consulted with Reclamation\14\ and completed a feasibility
study\6\ and updated the study in September 2005\15\ The Project is
constructible, financeable, and will generate sufficient revenues in
power sales to pay for itself over the remaining course of the FERC
license. The Districts have entered into a power purchase and sales
agreement with an Oregon public power entity, the Clatskanie Peoples-
Utilities District, to develop the Project, and for Clatskanie to
purchase all of the output of the facility.\16\
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\14\ SSW email to Reclamation August 26, 2005
\15\ SSW Amended Feasibility Study September 2005
\16\ Power Purchase & Sale Agreement (executed)
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Clatskanie PUD sells 1.2 million megawatt hours of electricity
yearly to retail customers in northern Columbia County and eastern
Clatsop County and to industrial facilities in Bellingham, Washington,
and Halsey, Oregon. The output of a 15 megawatt project is, in the view
of Clatskanie PUD, a perfect fit for their system, which is otherwise
heavily dependent on the Bonneville Power Administration. Clatskanie
PUD is a strong supporter of this Project and this
legislation.17,18
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\17\ Clatskanie PUD Brochure
\18\ Clatskanie PUD Press Release
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POWER SALES AGREEMENT
The Districts and Clatskanie People's Utility District have
executed a Power Purchase and Sale Agreement for all of the output of
this Project.\15\ In 2005, the Districts negotiated a memorandum of
understanding with Clatskanie PUD for the development of the
Project.\19\ By July, the Irrigation Districts and Clatskanie PUD had
completed extensive negotiations on a power purchase agreement. The
power purchase and sale agreement was put in final form and approved by
the Boards of each of the Irrigation Districts for a vote of the
electors of the Irrigation District. The final form was also approved
by Clatskanie. In an election held in August of 2005, the voters of the
Irrigation Districts overwhelmingly approved the power sales contract
with Clatskanie PuD.\20\ A two-thirds majority vote was required, and
the lowest approval rate of any of the Irrigation Districts was in
excess of 75%. One District's (New York) electors unanimously approved
the agreement. The Irrigation Districts and Clatskanie were prepared to
execute the final agreement in September of 2005, when FERC untimely
denied the petition for rehearing. Even though FERC has refused to
permit construction to begin, the Irrigation Districts and Clatskanie
PUD believe in this Project so strongly that they recently executed the
final agreement approved in the summer of 2005 by the Irrigation
Districts' voters and by Clatskanie.\16\ A formal signing ceremony of
this agreement was held at Arrowrock Dam March 10, 2006 by the
parties.18,21 Clatskanie PUD and the Irrigation Districts
have held their first Steering Committee Meeting and will continue to
hold regular Steering Committee meetings through the course of the
development and construction of the Project.
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\19\ Clatskanie--Districts MOU
\20\ Canvassing Resolutions
\21\ Photographs (separate file)
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EXPENDITURES
The Districts and Clatskanie have agreed to share in the future
development cost of the Project on a 50/50 basis. Over the years, the
Districts have expended in excess of $900,000.00 on this Project.\22\
The only way the Districts will recover these expenditures is for the
Project to be constructed and begin generating electricity.
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\22\ Arrowrock Expenditures
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FINANCING
The Districts have been working with Lehman Brothers as a bond
underwriter for several years in trying to bring this Project online.
Lehman Brothers has carefully scrutinized the power sales agreement and
determined that the agreement is financeable with Clatskanie as a power
purchaser.\23\ The Districts have the ability as public entities to
issue bonds for the development of this Project. The Districts have the
authority under Idaho Code 43-2301 to sell bonds for the development
of a hydroelectric Project as long as the bonds are approved by the
voters. Overwhelming voter approval of the bond issuances was obtained
in the August 2005.
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\23\ Lehman Bros. Letter March 16, 2006
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EPC Contractor
In 2004, the Districts issued requests for proposals for design and
construction of the Arrowrock Project. As a result of a rigorous
selection process, Shaw/Stone & Webster was determined to offer the
best proposal. Shaw/Stone & Webster has prepared two feasibility
studies--one in December of 2004,\6\ and an amended feasibility study
in September 2005.\15\ The feasibility studies demonstrate that the
Project will generate sufficient electricity to pay the cost of the
Project on a project financing basis. Shaw/Stone & Webster remains
solidly committed to this Project.\10\
OTHER CONSULTATIONS
Idaho Power conducted an updated system interconnection study of
the reduced project generation capacity to 15 megawatts in 2004. This
alternative will minimize impact from the Project by significantly
reducing power line construction from that authorized by the License.
The License authorizes 15 miles of transmission lines. This current
plan approved by Idaho Power will allow a tie-in to existing lines at a
location only 5 miles from Project No. 4656. Idaho Power confirmed the
tie-in and described the interconnection facilities on October 28,
2004.\24\ In addition, the transmission line route will upgrade an
existing Reclamation line to Arrowrock Dam at no additional cost to
Reclamation, so no new power line routes will be required. Line
specifications and easement information have been provided to SSW and
the Bureau of Reclamation, and are incorporated in the Project plans
developed by SSW. In addition to the interconnection studies,
Clatskanie has conducted negotiations with Idaho Power on wheeling the
output across Idaho Power's transmission system. Idaho Power has also
determined there is system capacity for the wheeling to meet
Clatskanie's needs.
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\24\ IPCo Interconnection Approval
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The Districts also have a valid water license from the Idaho
Department of Water Resources for use and generation of
electricity.\25\ Representatives of the Districts have engaged in
consultations with various other agencies, including the Corps of
Engineers--the operator of Lucky Peak Reservoir just downstream of the
Arrowrock Dam where the powerhouse will be located. The Corps has
advised the Districts that no additional consultation will be necessary
for placement of the powerhouse, other than a 404 permit.\26\ The
Districts have engaged in extensive consultation with all of the other
agencies and are prepared to complete that consultation as required by
the terms of the existing FERC license.
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\25\ IDWR Permit
\26\ COE Email
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Finally, it should be noted that this Project enjoys extensive
support. Of course, the Districts' landowners overwhelmingly approved
the contract with Clatskanie PUD.\19\ Clatskanie is a strong supporter.
The Bureau of Reclamation worked with the Districts and the contractor
and is committed to finalizing an agreement with the Districts to
review and approve the Districts' construction activities as required
by the FERC license. The Project is supported by the Idaho Water Users
Association, a statewide organization.\27\ In addition, the Boise Metro
Chamber of Commerce has expressed its support of the Project, and the
Chamber's Board unanimously voted to support the Project because of the
energy and economic development benefits that the Project will
bring.\28\
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\27\ IWUA Letter March 6, 2006
\28\ Boise Metro Chamber of Commerce Letter March 15, 2006
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The Districts have put forth an extensive effort to develop this
Project. They have the ability to bring the Project online, with all of
the support from the regulatory agencies, the contractor, the power
purchaser, and the community at large. The Districts urge Congress to
pass this legislation and to allow this clean, renewable hydro project
to come online.
______
Statement of Mike D. Kukla, Member, Board of Directors of the Boise-
Kuna Irrigation District
I am a director of the Boise-Kuna Irrigation District. I was first
elected to the Board of Directors of the Boise-Kuna Irrigation District
in 1998. I have served continuously since that time. I have fanned
ground in the Boise-Kuna Irrigation District for most of my adult life.
Shortly after my election to the Board of Directors of Boise-Kuna
Irrigation District, I was appointed to the Steering Committee for the
Lucky Peak Power Plant Project and for the Power Committee which
oversees the Arrowrock Hydroelectric Project. The revenues from the
Lucky Peak Hydroelectric Project are critical to our District's ability
to deliver water to the District's landowners, as the revenues are used
to help offset the costs of delivery. The goal of the Irrigation
Districts with the Arrowrock Hydroelectric Project would be to provide
a similar source of income to help pay costs of the operation of the
irrigation delivery system. The Boise-Kuna Irrigation District is a
non-profit, governmental entity. All revenues are used for operation
and maintenance of the. system.
Boise-Kura Irrigation System is one of five Irrigation District
that make up the Boise Project Board of Control. Collectively, these
Districts irrigate 167,000 acres of land in the Boise Valley. As fuel
costs grow and commodity prices drop, farming is a very difficult
business with small margins. Using the power revenues to help keep the
costs of delivery of water under control is critical to many of the
farmers in our Irrigation District and throughout the Boise Project
As part of my responsibilities with the Power Committee, I have
attended all the Power Committee meetings. The Districts have been
working very hard over the last several years to build a project at
Arrowrock Dam. Many of the difficulties we have experienced have been
due to bureaucratic delays in various governmental agencies,
particularly with the Fish & Wildlife Service and with the Federal
Energy Regulatory Commission.
In March of 2003, we submitted to FERC an application for an
extension of time to start construction of the project. FERC did not
rule on that request for extension of time until January of 2004, at
which time we had a little more than one year left to actually get the
project-under construction. The Power Committee met several times a
month during 2004 to issue requests for proposals, evaluate and select
a new contractor for the project, and to reconfigure the project so
that it was economically viable. We also met on a regular basis with
potential power purchasers. Of course, those power purchasers needed to
be assured that the project could be built and that the regulatory
agencies had approved the project.
The Districts selected Shaw Stone & Webster to help them redesign
the project to meet the needs of the power purchasers. We worked
closely with Shaw Stone & Webster over the course of the summer of 2004
and came up with a project that would significantly reduce the impact
of the powerplant by eliminating tunnels through the Arrowrock Darn and
to connect into the newly refurbished outlet works on the downstream
face of the Dam. Realizing that FERC approval of what we were trying to
accomplish was critical and that the deadline for start of construction
of March of 2005 was quickly approaching, we scheduled a meeting with
the staff of FERC. That meeting took place on August 25, 2004, with
approximately six members of the FERC staff. I was present at this
meeting, along with our attorney and representatives from Shaw Stone &
Webster. We explained the proposal for the project, and had drawings
available for review of the new configuration. The new configuration
involved placing the powerhouse in the exact same location as the
powerhouse for the licensed project. The only significant differences
were a reduction in the generation capacity and elimination of a
penetration through the Dam. The powerline would follow the licensed
route using the existing Bureau of Reclamation powerline right of way,
but would not require extension to a substation in Boise because of the
reduction output from the smaller facility.
At this meeting, the initial reaction to the proposal from members
of the staff was that these changes would require a license amendment,
and that a license amendment would require a significant processing
time. We discussed at length the schedule for building the project. It
did not appear that we could meet the start of construction date for
the proposal if a license application would have to have been processed
as originally suggested by FERC staff. Accordingly, we began discussing
alternatives. From my perspective, I thought we had reached consensus
by the time we left the meeting that a license amendment would not he
required and that we could meet the start of construction date by start
of manufacturing of component parts or ``bending of metal.'' In fact,
when we left, the staff agreed to provide the contractor, Shaw Stone &
Webster, with information on ``bending of metal'' as meeting the
deadline for start of construction.
The other significant issue related to a potential license
amendment was the question of bull trout. Between the time the license
was originally issued and the time of the meeting with FER.0 in August
2004, the Fish & Wildlife Service had listed bull trout as a threatened
species. The Fish & Wildlife Service had advised us and FERC that the
Service insisted on consultation over the operations of the Arrowrock
hydroelectric facility. With the modifications to the project
eliminating the tunnels through the Dam, it was clear to us at this
meeting that the potential for impact to the bull trout in Arrowrock
Reservoir from the hydroplant was limited or nonexistent. This was so
because the Arrowrock powerplant can only use water that is released
for irrigation purposes and has no independent authority to demand
water releases. No longer would the releases all go through the
powerplant and a separate tunnel, but would go through the existing
outlet works. The decision was reached at that meeting by FERC staff
that FERC would send a letter to the Fish & Wildlife Service advising
the Service that, with the revised configuration of the facility, there
would be no effect on the species. A determination that the
hydroelectric plant would not affect the species would allow the
project to start construction by the March 2005 start of construction
date. Therefore, no amendment to the license would be necessary to
trigger a Section 7 consultation with the Fish & Wildlife Service
because the Service should concur in the no effect determination.
Ultimately, the Fish & Wildlife Service did not agree with the no
effect determination, although it took three months for the Service to
make that decision. At that time, the Service advised us that it would
not even begin consultation on the project until after the deadline for
start of construction because of other consultation the Service was
conducting. Without approval of the project from the Fish & Wildlife
Service, there was no way that the Districts would have been able to
issue bonds to fund the project, and the start of construction date was
doomed.
The Districts then asked FERC for a stay of the license conditions
just to give us sufficient time to complete the consultation with Fish
& Wildlife Service, because Fish & Wildlife Service was willing to
initiate consultation after March of 2005. FERC turned us down on the
stay request asserting that the staff had told us that we were required
to amend the license, and, because we had not sought a license
amendment, we could not even hope to start construction. This
conclusion in the FERC order was a shock to me because it directly
contradicted what 1 understood the direction of FERC staff to have been
when we left the meeting in August of 2004. We then sought rehearing,
and FERC again turned us down. This time, they also asserted we had no
hopes of getting Fish & Wildlife Service approval, and that we did not
have a real power sales contract in place. Both of these assertions are
false. We worked with Fish & Wildlife Service over the course the
spring and summer of 2005, and the Fish & Wildlife Service was prepared
to, and in fact advised us that they could have issued a biological
opinion within as little as thirty days once formal consultation began
because of the consultations that we had been engaged with them in
advance and because of the previous work that Fish & Wildlife Service
had done on Arrowrock Reservoir operations. In addition, FERC totally
ignored the fact that we finalized a power sales contract with
Clatskanie People's Utility District, and that the Irrigation
Districts' voters overwhelmingly approved this contract in elections
held in August of 2005. Under our state law, the voters are required to
approve any power sales agreements and borrowing money for financing of
hydroelectric facilities. A two-thirds majority is required, and each
of the Districts approved that by far more than two-thirds majority. In
fact, in Boise-Kuna, the voters approved the contract by an excess of
90% approval.
This vote shows that the Arrowrock Hydroelectric Project is very
important to the farmers and landowners of the District. It will
provide a tremendous benefit to the landowners at no cost to the
federal government. We will provide significant employment in building
the project, and we will do our small part in helping to reduce this
country's reliance on foreign oil and natural gas and other fossil
fuels. On behalf of the people of the Boise-Kuna Irrigation District
and all of the farmers and landowners throughout the Boise Project, I
strongly urge Congress to pass this legislation.
______
Statement of The Clatskanie People's Utility District
The Clatskanie People's Utility District and five Idaho and Oregon
Irrigation Districts recently signed an agreement to jointly develop
the 15 megawatt Arrowrock Hydro-Electric Project on the Boise River
northeast of Boise, Idaho. Pending extension of the Federal license by
Congress, construction could proceed by November of this year, and be
completed by 2008.
The Arrowrock Dam, owned by the U.S. Bureau of Reclamation, was
built in 1915 and is 353 feet high. When built, it was the highest dam
in the world. Water is currently released from Arrowrock Dam with a
series of outlet-valves and a spillway.
The project, to be financed by the Boise-Kuna, Nampa & Meridian,
New York, Wilder, and Big Bend Irrigation Districts is expected to cost
$41 million and produce an average of 81,000 megawatt-hours of
electricity per year, which will be purchased by Clatskanie PUD. The
project will consist of placing 2--7.5 MW turbines on two existing dam
outlets, and reconstructing a 5.5 mile power line to a nearby
substation.
``This clean renewable energy project would produce enough
electricity to power 5,400 average homes, or about 8% of Clatskanie
PUD's current energy needs,'' according to Greg Booth, General Manager
at the PUD. The project has-no anadromous fishery impact and will have
very little impact on the environment. ``This project will be a long
term, low-cost resource for the PUD and, with minimal environmental
impact, is as green as it gets,'' according to Booth.
Clatskanie PUD is a joint owner of the 36 megawatt Wauna
Cogeneration Power-Plant and owns the 11 megawatt Alden-Bailey Natural
Gas Power Plant.
Clatskanie PUD sells 1.2 million megawatt hours of electricity
yearly to retail customers in northern Columbia County and eastern
Clatsop County and to industrial facilities in Bellingham, Washington,
and Halsey, Oregon. It has annual revenues of approximately $45 million
and has the third lowest residential rate in the country.
The Irrigation Districts are also public entities. They own the
storage rights to the water behind Arrowrock Dam. The Irrigation
Districts supply water to irrigate 167,000 acres in the Boise River
Valley and most of the land is farmed in small parcels of less than 160
acres. The Irrigation Districts currently own and operate the 101
megawatt Lucky Peak Hydro-Electric Power Plant located on the Boise
River just a few miles downstream from the Arrowrock Dam. The Lucky
Peak powerhouse has been operating since 1988.
The voters of the Irrigation Districts overwhelmingly approved the
agreement with Clatskanie PUD. ``This vote shows that the Arrowrock
Hydroelectric Project is very important to the farmers and landowners
of the District'', according to Mike Kukla, a Director of the Boise-
Kuna District and member of the Irrigation Districts' Power Committee.
``It will provide a tremendous benefit to the landowners at no cost to
the federal government.''