[Senate Hearing 111-707]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-707
 
                          CURRENT WATER BILLS

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                                   ON
                                     

                           S. 2891                               S. 2779

                           S. 3387                               S. 3404

                           H.R. 3671                             H.R. 4252



                                     

                               __________

                              JUNE 9, 2010


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



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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

BYRON L. DORGAN, North Dakota        LISA MURKOWSKI, Alaska
RON WYDEN, Oregon                    RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey          JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan            BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                   DEBBIE STABENOW, Michigan Chairman

BYRON L. DORGAN, North Dakota        SAM BROWNBACK, Kansas
TIM JOHNSON, South Dakota            JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           JOHN McCAIN, ARIZONA
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
JEANNE SHAHEEN, New Hampshire

    Jeff Bingaman and Lisa Murkowski are Ex Officio Members of the 
                              Subcommittee

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Baca, Hon. Joe, U.S. Representative From California..............    19
Brownback, Hon. Sam, U.S. Senator From Kansas....................     8
Caan, George M., Executive Driector, Colorado River Commission of 
  Nevada, Las Vegas, NV..........................................    10
Connor, Michael L., Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................    26
Currie, Phyllis, General Manager, Pasadena Water and Power, 
  Pasadena, CA...................................................    15
Ensign, Hon. John, U.S. Senator From Nevada......................     9
Meeks, Timothy J., Administrator, Western Area Power 
  Administration, Department of Energy...........................     4
Mueller, Andrew A., President,Board of Directors, Colorado River 
  Water Conservation District, Glenwood Springs, CO..............    36
Olsen, Kenneth L., Chairman, Lake County Colorado Board of 
  Commissioner, Leadville, CO....................................    23
Peterson, Doug, President, Minnesota Farmers Union, St. Paul, MN.    33
Walden, Richard S., Board Member, Arizona Power Authority, 
  Phoenix, AZ....................................................    11
Stabenow, Hon. Debbie, U.S. Senator From Michigan................     1

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    43

                              Appendix II

Additional material submitted for the record.....................    65


                          CURRENT WATER BILLS

                              ----------                              


                        WEDNESDAY, JUNE 9, 2010

                                       U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:58 p.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Debbie Stabenow 
presiding.

 OPENING STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM 
                            MICHIGAN

    Senator Stabenow. Good afternoon. I'd like to call to order 
the subcommittee hearing of the Water and Power Subcommittee. 
It's my pleasure to welcome everyone today. We are including 
several bills, important bills, before the subcommittee today.
    Let me say as we start that we've just found out that we 
will be having a series of votes coming up in the next little 
bit, up to 6 votes. So it's my intent to take testimony from 
our witnesses, as we know a number of you have come in from 
quite a ways away. We want to make sure we hear from you. We 
may or may not do questions. We may do them for the record if 
we're not able to do that because of the votes. So I do want to 
make sure we have an opportunity to hear from everyone who has 
come about these important bills.
    Senator Harry Reid had expected to join us, but has been 
called to the floor. I know that Senator Ensign--Congressman 
Baca I believe is on his way. But I think what we will do for 
the moment, until they have arrived, again in the interest of 
time, is to proceed and ask our other witnesses to join us, and 
then we will turn to the Senator and the Congressman when they 
get here.
    While we are doing that, let me just say we are covering 
several different topics today: S. 2891, introduced by Senator 
Reid, to allocate and expand the availability of hydroelectric 
power generated at Hoover Dam. Incidentally, I understand the 
corresponding bill passed the House today, which is good news.
    Also, S. 2779 and H.R. 3671, introduced by Senator 
Klobuchar, to authorize a study of groundwater on the Upper 
Mississippi River Basin, that is important to Minnesota 
farmers.
    S. 3387, introduced by Senator Mark Udall, to provide for 
the release of water from Ruedi Reservoir, to promote fish 
habitat conservation in the Colorado River;
    S. 3404, also introduced by Senator Udall, to require the 
Secretary of the Interior, acting through the Bureau of 
Reclamation, to take actions to clean up the pollution at 
Leadville Mine Drainage Tunnel in Lake County, Colorado;
    H.R. 4252, introduced by Representative Baca, to direct the 
Secretary of the Interior to conduct a study of certain water 
resources in California.
    I know that Senator Brownback will be joining me as ranking 
member as well, and when he comes I certainly will turn to him 
for any opening comments as well.
    So we know again that Senator Ensign and Congressman Baca 
will be joining us as they arrive. But let me thank our first 
panel for joining us and taking the time to be with us today: 
Timothy Meeks, the Administrator of the Western Area Power 
Administration, Department of Energy; George Caan, welcome, the 
Executive Director of the Colorado Commission of Nevada; 
Richard Walden, welcome as well, Chairman of the Arizona Power 
Authority; and Phyllis Currie, General Manager of Pasadena 
Water and Power Department.
    Welcome to the subcommittee. We've asked each of you to 
share 5 minutes and summarize your testimony, and then we will 
proceed from there. So first we will turn things over to Mr. 
Meeks, Administrator Meeks. Welcome.
    [The prepared statements of Senators Reid, Klobuchar and 
Ensign follow:]

   Prepared Statement of Hon. Harry Reid, U.S. Senator From Nevada, 
                               on S. 2891

    Thank you Chairman Stabenow and Senator Brownback for the 
opportunity to address your subcommittee about our bipartisan proposal 
to reauthorize power allocations from the Hoover Dam.
    Completing the Hoover Dam and harnessing the Colorado River over 70 
years ago was a game-changer for the southwest. The dam allowed new 
communities to thrive using water from the river, while also providing 
reliable clean power to millions in Nevada, California and Arizona.
    Congress first distributed the clean renewable power from Hoover 
Dam in 1928--though it was called Boulder Canyon Dam at that time--and 
then again in 1984, through allocations to three states, and several 
municipalities and utilities. The contracts for delivery of the power 
between the Western Area Power Administration and these entities will 
expire in 2017, and Western has announced that it will distribute 
Hoover power allocations in the event that Congress does not 
reauthorize those allocations first.
    To ensure that power continues to be delivered reliably to 
Nevadans, Arizonans, and Californians, and that there is no legal 
uncertainty, I think it's important that Congress reauthorize these 
power allocations as soon as possible and while we have broad 
bipartisan agreement between the major stakeholders.
    Last December, I introduced the Hoover Power Allocation Act of 
2009, together with Senators John Ensign, Barbara Boxer, and Dianne 
Feinstein. Congresswoman Grace Napolitano introduced a companion bill, 
which attracted 43 cosponsors, and was reported by the House Committee 
on Natural Resources in May. I'm glad to note that the House passed the 
Congresswoman's bill yesterday on suspension.
    The Hoover Power Allocation Act was developed after two years of 
negotiations, securing the consensus of the States of Nevada, 
California and Arizona. Under the modified allocation formula, Nevada 
will retain its share of nearly 25 percent of Hoover power. At the same 
time, Hoover power will be made available to even more entities through 
a five percent resource pool. Indian tribes and other entities that are 
currently ineligible to buy low-cost Hoover power will have access to 
the new resource pool.
    At a time when we're looking for good, clean energy investments, it 
is fitting and timely to ensure access to reliable, low-cost, zero-
emission power from Hoover Dam. The Hoover Dam is also one of the 
Southwest's largest clean energy projects. And in exchange for 2,080 
megawatts of reliable, clean baseload electricity, Hoover power users--
not the Federal Government--pay for the operations, maintenance, and 
replacement of Hoover Dam's power equipment.
    By 2017, they will have invested nearly $2 billion, and they will 
pay another $1.6 billion through the life of this Act. This investment 
will employ hundreds of people and supply clean hydroelectric power to 
over 29 million in Nevada, California and Arizona.
    It is difficult to overestimate the importance of reauthorizing 
Hoover power allocations. Hoover power plays a vital role in municipal 
and industrial operations in southern Nevada. For example:
    The Southern Nevada Water Authority draws about 10 percent of its 
power from the dam for the utility's water works operations;

   NV Energy receives about 53 percent of Nevada's allocation, 
        which helps Nevadans meet peak demands at lower costs; and
   The Colorado River Commission delivers Hoover power to 
        municipalities like: Boulder City; Lincoln County; Overton 
        Power District; Valley Electric Association. The Commission 
        also delivers power to Nevada industries at the Basic 
        Management Industrial Complex near Henderson.

    In addition to ensuring reliable, clean electricity for millions of 
people, reauthorizing Hoover power allocations also supports continued 
environmental protection on the Lower Colorado River.
    Hoover contractors are committed to providing over $150 million 
over 50 years for the Lower Colorado River Multi-Species Conservation 
Program (MSCP). This program maintains wildlife habitat on the Lower 
Colorado River, protecting 26 endangered, threatened and sensitive 
species along 400 river miles. And it will create more than 8,100 acres 
of riparian, marsh and backwater habitat for Lower Colorado River 
species.
    Passing the Hoover Power Allocation Act is important to ensuring 
these environmental benefits and securing much-needed investments in 
the Hoover Power facilities over the next 50 years.
    Thank you again for the opportunity to be here with you today. I 
request that my statement be included in the record, as well as eight 
letters of support for the Hoover Power Allocation Act from Nevada 
utilities and industries.
                                 ______
                                 
Prepared Statement of Hon. Amy Klobuchar, U.S. Senator From Minnesota, 
                               on S. 2779

    Thank you, Madame Chair, for convening this hearing on my bill, the 
Upper Mississippi River Protection Act (S. 2779).
    As you know, I come from the land of 10,000 lakes. But my state is 
also home to a great river. We are in fact home to the headwaters of 
the mighty Mississippi.
    But the Mississippi is more than just a river. It is a means of 
transport for more than 472-million tons of cargo each year, including 
46 percent of the grain exported from the United States. It is place 
where we hunt, fish, swim, and enjoy the cool water in the summer.
    Unfortunately, the Mississippi river is also facing many 
challenges. Soil erosion in the Upper Mississippi River basin is 
reducing the long-term sustainability and income of the family farm. 
Collectively, farmers lose hundreds of millions of dollars per year in 
applied nitrogen.
    Some of that sediment finds its way to shipping channels of the 
river, and result in tens of millions of dollars in increased dredging 
costs for the shipping industry each year. And those costs in turn get 
passed back to the shippers including our farmers, who face higher 
prices to ship their goods.
    This bill aims to provide data to help scientists and farmers 
better understand this problem and how best to address it. 
Specifically, the bill aims to provide baseline data about the 
quantity, timing, and location--the what, when, and where--of sediment 
and nutrient production from its source in the landscape to its 
destination in the rivers and lakes of the Upper Mississippi River 
basin. The bill directs the U.S. Geological Survey to utilize a long-
term, basin-wide, coordinated network of monitoring stations involving 
state and private land managers. Additionally, the bill calls for the 
establishment of a computer modeling program utilizing Geographic 
Information System technology.
    The bill is cosponsored by Senator Feingold and has the support of 
the following organizations including:

   The National Farmers Union
   Trout Unlimited
   The Nature Conservancy
   Friends of the Mississippi River
   The Upper Mississippi River Basin Association

    I am also pleased, Madame Chair, that you have invited the 
President of the Minnesota Farmers Union, Doug Peterson, to testify 
about this legislation.
    Doug has served as the President of the Minnesota Farmers Union 
since for more than eight years. Prior to serving the Farmers Union, 
Doug served in the Minnesota House of Representatives for 12 years, 
representing a district in western Minnesota. He and his wife, Elly, 
live on their family farm near Madison, Minnesota, on the North Dakota 
Border and I am confident that his testimony will be sound and helpful 
to your committee as you consider the merits of this bill.
    Additionally, I would also like to thank Congressman Ron Kind of 
Wisconsin, who has a companion bill that was passed by the House of 
Representatives (H.R. 3671) earlier this year. Congressman Kind's bill 
was sponsored by a number of other representatives from Arkansas, 
Illinois, Iowa, and Minnesota.
    I urge my colleagues to carefully consider this important piece of 
legislation and again thank you Chairman Stabenow and Ranking Member 
Brownback for holding this important hearing.
                                 ______
                                 
   Prepared Statement of Hon. John Ensign, U.S. Senator From Nevada, 
                               on S. 2891

    Good afternoon, Madam Chairwoman, Ranking Member Brownback, and 
members of the Subcommittee. Thank you for holding this hearing today 
on a very important piece of legislation. I appreciate the opportunity 
to come before you today and testify in support of S. 2891, the Hoover 
Power Allocation Act of 2009. As you know, this is a multi-state, 
bipartisan effort that is essential to residents of Nevada, Arizona, 
and California who rely on electricity generated from the Hoover Dam 
located in Boulder City, Nevada.As you are aware, Hoover power was 
first allocated in the Boulder Canyon Project Act of 1928. In 1984, 
Congress again allocated power through contracts with state, municipal, 
and utility contractors. Over 29 million people rely on this power, 
which is a clean, renewable, and reliable source of energy.
    The legislation this committee is considering today, The Hoover 
Power Allocation Act, is the result of extensive negotiations with 
multiple partners all of whom have worked diligently to strike a 
delicate balance for the continued allocation of power. The contracts 
that currently allocate the power to Nevada, Arizona, and California 
will expire in 2017. This legislation would reauthorize the power 
allocations from 2017 to 2067 and would provide Hoover contractors the 
certainty they need to continue to commit hundreds of millions of 
dollars to construct, upgrade, operate, maintain, and replace equipment 
as needed to deliver the power. In fact, the contractors are set to 
invest an additional $1.6 billion beginning in 2017 if this legislation 
is enacted.
    As part of this agreement, the Hoover Dam contractors have also 
agreed to contribute five percent of their existing power allocation to 
a pool that could be distributed to eligible entities that do not 
currently purchase Hoover power, including federally recognized Indian 
Tribes. This allocation pool will help needed entities access power and 
encourage their future growth.
    The power that is generated by the Hoover Dam is essential and 
critical to southern Nevada. We owe it to the contractors who have 
made, and will continue to make, enormous financial investments the 
certainty they need to continue. But most of all, we owe the 29 million 
people who are the beneficiaries of this power. I appreciate the 
efforts of the staff of the Colorado River Commission, this Committee, 
and stakeholders who so carefully negotiated this reallocation over the 
past two years. These groups, working together, have done a great job 
and should be commended for their hard work.
    Again, thank you for holding this hearing and allowing me the 
opportunity to testify in support of the Hoover Power Allocation Act of 
2009. I urge the Committee to act favorably on this legislation.

  STATEMENT OF TIMOTHY J. MEEKS, ADMINISTRATOR, WESTERN AREA 
           POWER ADMINISTRATION, DEPARTMENT OF ENERGY

    Mr. Meeks. Thank you, Madam Chair. I am Timothy J. Meeks, 
Administrator of the Western Area Power Administration, and I 
am happy to be here today to discuss S. 2891, the Hoover Power 
Allocation Act of 2009.
    Western's mission is to market and deliver reliable, cost-
based, hydroelectric power from facilities such as Hoover Dam. 
The Hoover power plant is a significant hydroelectric power 
resource in the desert Southwest. Hoover power is considered 
low-cost, clean energy, with a minimal carbon footprint. The 
Hoover Dam power plant is used by contractors for various 
power-related ancillary services. For these reasons, Hoover 
power is an extremely valuable resource in the southwestern 
United States.
    Western's public process to allocate Hoover Dam electricity 
was initiated in November 2009 in a Federal Register notice. 
This Federal Register notice proposed the extension of 95 
percent of the marketable resource to existing contractors, 
reserving 5 percent for a resource pool to be allocated to new 
contractors, and provides for a 30-year contract term.
    Western conducted 3 public information forums in December 
2009. These public information forums were well attended by 
current customers and interested parties. Public comment forums 
were held in January 2010. Again, interested parties were 
provided an opportunity to submit comments. The comment period 
was extended through September 2010.
    In the event that a resource pool is established, Western 
will conduct a public process to determine what marketing 
criteria would be applicable to the disposition of the resource 
pool. Western projects that final allocations will be 
determined and contracts executed by the spring of 2013, giving 
other entities time to plan prior to expiration of the 
contracts in 2017.
    Western has reviewed S. 2891. There are several 
similarities between the legislation and Western's initial 
proposals and there are some distinct departures. I will 
address some of these differences below.
    This bill directs Western to allocate certain amounts of 
Hoover power within 18 months of enactment. This timeframe may 
not be sufficient to thoroughly solicit and integrate public 
input into our marketing criteria and final allocation. Western 
supports the action that the House of Representatives took 
revising the amount of time allowed for the allocation of power 
to new customers to 36 months after enactment.
    Both S. 2891 and Western's administrative effort propose an 
amount of resource to be allocated to new customers. Western's 
process affords the opportunity of full public input and 
ensures all interested parties are considered in the power's 
allocation process. Western supports the House of 
Representatives' elimination of language that would have 
required a State role in developing criteria associated with 
the allocation of power to new customers. This language 
potentially restricts the open public process for creating 
marketing criteria for those power allocations.
    In addition, Western proposed to market 30 megawatts below 
the maximum rating of 2074 megawatts. The retention of 30 
megawatts of capacity for project integration purposes would 
ensure Western's ability to meet reliability requirements in an 
economic fashion.
    Also, Western proposed a 30-year contract term. As drafted 
in this bill, the adoption of a 50-year contract term could 
potentially exclude evolving classes of customers in decades to 
come.
    I would welcome to opportunity to work with this 
subcommittee to address the technical concerns I have raised as 
work continues on this legislation. This concludes my remarks. 
I'd be pleased to answer any questions you may have.
    [The prepared statement of Mr. Meeks follows:]

  Prepared Statement of Timothy J. Meeks, Administrator, Western Area 
               Power Administration, Department of Energy

    Madam Chairwoman and Members of the Subcommittee, I am Timothy J. 
Meeks, Administrator of the United States Department of Energy's 
Western Area Power Administration (Western). I am pleased to be here 
today to discuss S. 2891, the Hoover Power Allocation Act of 2009. This 
legislation seeks to amend the Hoover Power Plant Act of 1984. The 
legislation proposes revised allocations of the generation capacity and 
energy from the Hoover Dam power plant, a feature of the Boulder Canyon 
Project (BCP), after the existing contracts expire on September 30, 
2017.
    Western's mission is to market and deliver reliable, cost-based 
hydroelectric power from facilities such as Hoover Dam. Hoover Dam was 
authorized and constructed in accordance with the Boulder Canyon 
Project Act of 1928. Pursuant to this Act, the Secretary of the 
Interior was authorized to contract for the sale of generation based 
upon general regulations as he may prescribe. Subsequent power sales 
contracts were executed that committed Hoover power through May 31, 
1987. With the passage of the Hoover Power Plant Act of 1984, Congress 
authorized the Secretary of the Interior to implement an uprating 
program, which increased the generation capacity of the Hoover Dam 
facilities, to make additional facility modifications, and to resolve 
issues over the disposition of Hoover power post-1987. In the 1984 Act, 
Congress directed the Secretary of Energy to offer renewal contracts to 
existing contractors and provided guidance for marketing the capacity 
gained through the uprating program.
    Western proceeded to market Hoover Dam power and entered into 30-
year term contracts with the current Hoover contractors in accordance 
with the Hoover Power Plant Act of 1984 and Western's Conformed General 
Consolidated Power Marketing Criteria. This process resulted in the 
allocation of 1,951 megawatts of contingent capacity with an associated 
4,527,001 megawatt-hours of firm energy. Contingent capacity is 
capacity that is available on an as-available basis, while the firm 
energy entails Western's assurance to deliver.
    The Hoover power plant is a significant hydroelectric power 
resource in the desert Southwest with a maximum rated capacity of 2,074 
megawatts. Under existing Federal law and policy, Western markets 
Hoover power at cost. Hoover power is hydropower and is considered 
``clean energy'' with a minimal carbon footprint. The Hoover Dam power 
plant is able to ramp up and down rapidly and is used by contractors 
for various power-related ancillary services. For these reasons, Hoover 
power is an extremely valuable resource for power contractors in the 
southwestern United States.
    The existing power sales contracts between Western and the 
contractors will expire on September 30, 2017. As this expiration date 
becomes more prominent on the planning horizon, efforts have progressed 
among both Federal and non-Federal sectors to determine the allocation 
of Hoover Dam power after 2017.
    In accordance with policy and existing Federal law, Western's post-
2017 power allocation effort is composed of a series of proposals 
introduced to the public through Federal Register notices, public 
information forums and public comment forums. Western makes policy 
decisions only after all interested parties have been provided ample 
opportunity to be engaged in the process and public input has been 
carefully considered to develop new Hoover Dam allocations that are in 
the public's best interest and provide the most widespread use of this 
Federal resource.
    Western's public process to allocate Hoover Dam electricity was 
initiated on November 20, 2009, in a Federal Register notice that 
proposes several key aspects of the allocation effort. Among other 
things, this Federal Register notice proposes the application of 
Western's Energy Planning and Management Program, extends a major 
percentage of the marketable resource to existing contractors, reserves 
an approximate 5 percent resource pool to be allocated to new 
contractors, and provides for 30-year contract terms. Western conducted 
three public information forums from December 1-3, 2009. These public 
information forums were well attended by current customers and 
interested parties and engaged the attendees through question and 
answer sessions. Public comment forums were held from January 19-21, 
2010. Interested parties were provided an opportunity to submit 
comments related to Western's proposals contained in the November 
Federal Register notice. The comment period was extended from January 
29, 2010, to September 30, 2010, via a Federal Register notice dated 
April 16, 2010. Western is in the process of reviewing the submissions 
received to date. Depending on the public input received, Western 
projects that some initial decisions will be made later this year. In 
the event that a resource pool is established, Western will conduct a 
public process to determine what marketing criteria would be applicable 
to the disposition of the resource pool. Western projects that final 
allocations will be determined and contracts executed by the spring of 
2013, giving other entities time to plan prior to the expiration of the 
contracts in 2017.
    Western has reviewed S. 2891. There are several similarities 
between the draft legislation and Western's initial proposals brought 
forward in the November Federal Register notice, and there are some 
distinct departures. To provide background that may be useful to the 
Subcommittee members as this bill is considered, I'll address some of 
these differences in my comments.
    All of Western's allocation efforts are open to public 
participation and conducted in accordance with the Administrative 
Procedures Act. At each stage of the process, Western proposes actions 
and/or policy to be considered and is open for public comment and 
input. Western believes soliciting and integrating the public input 
into policy decisions allows Western to progress to results that are in 
the public's best interest and lead to the most widespread use of this 
resource.
    S. 2891 directs Western to allocate certain amounts of Hoover power 
within eighteen (18) months after enactment. Based on historical 
practice and in review of Western's marketing project plans, an 18-
month time frame may not be sufficient to thoroughly solicit and 
integrate public input into our marketing criteria and final 
allocations. Western supports the action that the House of 
Representatives Committee on Natural Resources took on H.R. 4349, which 
revised the amount of time allowed for the allocation of power to new 
customers from 18 months to thirty-six (36) months after enactment.
    Western has 15 current contractors who receive an allocation of 
Hoover power. Two of those existing contractors are the Colorado River 
Agency (CRC) and the Arizona Power Authority (APA). APA and CRC sub-
allocate their allocations to customers under State prescribed 
guidelines and regulations. Both S. 2891 and Western's administrative 
effort propose an amount of resource to be allocated to new customers. 
Western's process affords the opportunity of full public input and 
ensures all interested parties are considered in the power's 
allocation. Western supports the House of Representatives Committee on 
Natural Resources elimination of language in H.R. 4349 that would have 
required a state role in developing criteria associated with the 
allocation of power to new customers. This language potentially 
restricted the open public process for creating marketing criteria for 
those power allocations. Western has received numerous written comments 
and statements from Native American tribes expressing concern that 
their interests have not yet been fully vetted and considered. In 
recent history, tribes have been active in Western's remarketing 
efforts, and one goal of Western's Strategic Plan is to seek 
partnerships with tribes on numerous initiatives. I believe that 
soliciting input from tribes and other entities that do not have an 
allocation of Hoover power is in the public interest. Western has 
identified 59 federally recognized Native American Tribes in the BCP 
marketing area and is in the process of ensuring they are afforded an 
opportunity to participate in the public process. Western supports the 
revision made to the House version of this bill that expressly provides 
for the tribes to contract directly with Western to obtain a Hoover 
allocation.
    S. 2891 would direct that Hoover's full maximum rating of 2,074 
megawatts of capacity be allocated to Hoover customers in a multi-
faceted approach. As described in Western's November 20, 2009, Federal 
Register notice, Western proposes to market 2,044 megawatts of 
contingent capacity; 30 megawatts below the maximum rating. The 
retention of 30 megawatts of contingent Hoover Dam capacity for use by 
Western for project integration purposes would assist in providing the 
tools needed to meet our mission and statutory requirement of 
delivering reliable Federal hydro-generation. Western manages multiple 
federally owned generation and transmission projects in the Desert 
Southwest on a minute-by-minute basis. While these projects are 
financially segregated, they are operated as an integrated system. This 
30-megawatt capacity to be held by the Federal Government would provide 
significant benefit to the operation of the integrated projects and the 
Western Area Lower Colorado balancing authority that Western operates. 
Should Western be unable to retain approximately 30 megawatts, Western 
expects to procure replacement power from the market at a higher cost, 
if it is available. These higher costs would in turn be passed through 
to Western's customers in the form of higher rates.
    S. 2891 would direct that the existing contractual amounts totaling 
4,527,001 megawatt-hours annually be allocated. In consultation with 
the Bureau of Reclamation (Reclamation) and in review of the most 
recent hydrologic studies, Western observed and proposed that 4,116,000 
megawatt-hours would better align with the actual availability of the 
resource. Western's historical practice is to market an amount of 
generation that is based upon projected available generation. 
Remarketing the existing 4,527,001 megawatt-hours is possible; however, 
the 4,527,001 megawatt-hour level of generation has only been achieved 
a few times in the last 30 years. Reclamation's forecast studies 
exhibit that this level of generation would be fairly improbable.
    S. 2891 expressly requires that each contract offered to a new 
allottee for Hoover Dam power should require the new allottee to 
execute the Boulder Canyon Project Implementation Agreement Contract 
No. 95-PAO-10616. Western finds significant value in the provisions and 
results of the Implementation Agreement. However, this agreement was 
constructed for unique circumstances that existed in 1994. Should we 
retain this feature, I recommend that the current Implementation 
Agreement be evaluated and potentially revised to accommodate current 
conditions. We support the universal benefits achieved by the 
Implementation Agreement and will work with our customers to determine 
the appropriate documentation to meet all of our customers' needs; both 
current and future.
    S. 2891 expressly requires that each contract offered to a new 
allottee for Hoover Dam power includes a provision requiring the new 
allottee to pay a proportional share of its State's funding 
contribution for the Lower Colorado River Multi-Species Conservation 
Program, known as the LCR MSCP.
    The LCR MSCP is a 50-year, multi-stakeholder, Federal and non-
Federal partnership, responding to the need to balance the use of lower 
Colorado River water resources and the conservation of native species 
and their habitats in compliance with the Endangered Species Act (ESA). 
The LCR MSCP is a comprehensive approach to species protection 
developed after nearly a decade of work. This program is funded on a 
costshare basis comprised of 50-percent Federal and 50-percent non-
Federal. The States of Arizona, California and Nevada have worked 
internally with water and power customers to fund each State's 
respective share. S. 2891 recognizes these funding requirements and 
obligates new power customers to contribute to this funding in a 
proportional manner. Supporters of S. 2891 note that the 50-year 
obligation of the LCR MSCP is, in part, reason to proceed with 50-year 
Hoover power supply contracts. Western's position is that the 50-year 
LCR MSCP term need not coincide with the Hoover Dam power sales 
contracts' term. The adoption of a 50-year contract term could 
potentially exclude evolving classes of customers in decades to come. 
The modern day electrical industry is dynamic in its regulations, 
technologies, operations and participants. The landscape of potential 
customers in decades to come has the capability to yield new 
prospective customers, and we strive to meet the needs of all our 
customers; existing and future.
    Western respectfully recognizes that our administrative process is 
not the exclusive means of allocating Hoover power. I would welcome the 
opportunity to work with this Subcommittee to address the technical 
concerns I have raised as work continues on this legislation. In the 
absence of congressional action, Western will uphold its authority and 
responsibility to market Hoover power consistent with historical 
statutes and in concert with the rules and regulations as the Secretary 
of Energy prescribes. This concludes my prepared remarks. I would be 
pleased to answer any questions you or Members of the Subcommittee 
might have.

    Senator Stabenow. Thank you, Administrator Meeks.
    Before turning to Senator Ensign, who I know has arrived--
welcome--I'd like to turn to Senator Brownback if there is any 
opening statement you'd like to make.

         STATEMENT OF HON. SAM BROWNBACK, U.S. SENATOR 
                          FROM KANSAS

    Senator Brownback. Thanks, Madam Chairman. I have a written 
one I'll submit for the record in the interest of time, because 
we have a series of votes coming up. I am interested in the 
topics because it's very important for a number of areas in the 
country. I look forward to hearing from the presentations.
    Senator Stabenow. Thank you. Thank you very much.
    Senator Ensign, welcome.

          STATEMENT OF HON. JOHN ENSIGN, U.S. SENATOR 
                          FROM NEVADA

    Senator Ensign. Thank you, Madam Chairwoman and Ranking 
Member Brownback. I appreciate the opportunity to testify on 
the Hoover Power Allocation Act of 2009, S. 2891.
    As you know, this is a multi-state bipartisan effort that 
is essential to the residents of Nevada, Arizona, and 
California who rely on electricity generated from Hoover Dam, 
located in Boulder City, Nevada. As you are aware, Hoover power 
was first allocated in the Boulder Canyon Project of 1928, and 
in 1984 Congress again allocated power through contracts with 
State, municipal, and utility contractors.
    Over 29 million people rely on this power, which is a 
clean, renewable, and reliable source of energy. The 
legislation this committee is considering today, the Hoover 
Power Allocation Act, is the result of extensive negotiations 
with multiple partners, all of whom have worked diligently to 
strike a delicate balance for continued allocation of power. 
The contracts that currently allocate the power to Nevada, 
Arizona, and California will expire in 2017. This legislation 
before us would authorize the power allocations from 2017 to 
2067 and would provide Hoover contractors the certainty that 
they need to continue to commit the hundreds of millions of 
dollars to construct, upgrade, operate, maintain, and replace 
equipment as needed to deliver the power. In fact, the 
contractors are set to invest an additional $1.6 billion 
beginning in 2017 if this legislation is enacted.
    As part of this agreement, Hoover Dam contractors have also 
agreed to contribute 5 percent of their existing power 
allocation to a pool that could be distributed to eligible 
entities that do not currently purchase Hoover power, including 
federally recognized Indian tribes. This allocation pool will 
help needed entities access power and encourage their future 
growth.
    The power that is generated by Hoover Dam is essential and 
critical to southern Nevada. We owe it to the contractors, who 
have made and will continue to make enormous financial 
investments, the certainty that they need to continue. But most 
of all, we owe it to the 29 million people who are the 
beneficiaries of this power.
    So I appreciate the efforts of the staff of the Colorado 
River Commission, this committee, and the stakeholders who have 
so carefully negotiated this reallocation over the last 2 
years. These groups, working together, have done a great job 
and should be commended for their hard work.
    Again, thank you for holding this hearing and allowing me 
the opportunity to testify on this important legislation. I 
appreciate the time.
    Thank you very much. Thank you to you and to Senator Reid. 
I know this is very important to Nevada and we appreciate your 
leadership and Senator Reid's. I know he had hoped to be here, 
but was called away to the floor.
    But we're glad that you're here representing Nevada.
    Senator Ensign. Thank you very much.
    Senator Stabenow. Thank you.
    We will return. Mr. Caan, welcome.

STATEMENT OF GEORGE M. CAAN, EXECUTIVE DRIECTOR, COLORADO RIVER 
              COMMISSION OF NEVADA, LAS VEGAS, NV

    Mr. Caan. Good afternoon and thank you, Madam Chairman, and 
thank you, Ranking Member Senator Brownback. My name is George 
Caan and I'm the Executive Director of the Colorado River 
Commission of Nevada, and I'm here to strongly support S. 2891, 
the Hoover Power Allocation Act of 2009.
    Hoover Dam is there to provide flood control, water 
delivery, and power production for the 29 million people who 
reside in the Hoover marketing area in the Southwest. This 
project is paid for by those who purchase the power from the 
dam. The project is maintained and operated with the payments 
that we make under the rates charged for Hoover Dam. This bill 
sustains that commitment for another 50 years to ensure that 
this critical infrastructure is maintained.
    As was noted, the bill provides for a 50-year term, 
extending our contracts until 2067. This is consistent with the 
investment that power customers have made in the Lower Colorado 
River multi-species conservation program, which is the ESA 
compliance effort for the Lower Colorado River. It establishes 
a 5 percent pool of energy and capacity taken from all the 
contractors, which is put into a pool, referred to as Schedule 
D in the legislation, which provides 5 percent for use by 
contractors who currently do not have an allocation of Hoover 
power.
    Two-thirds of that pool will be administered by the Western 
Area Power Administration in the marketing area. The remainder 
of the third will be marketed within each State by entities 
such as the Colorado River Commission, the Arizona Power 
Authority in Arizona, and Western in California to entities 
within that State.
    The agreement also provides that new contractors will pay 
their appropriate share of the costs for the Endangered Species 
Act program, the MSCP, and also join the Boulder Canyon Project 
implementation agreement, which is an agreement among the 
Hoover power contractors, the Western Area Power 
Administration, the Bureau of Reclamation, which provides for 
the engineering, operation, maintenance, upkeep, and repair in 
a customer-focused group that provides for the 10-year planning 
processes to keep this important project operating.
    This legislation is important for the United States in that 
it provides a sustainable source of revenue for this important 
infrastructure for the communities that we serve. It's 
important for Nevada, as Senator Ensign mentioned, because of 
the economic resource and the viability and the importance of 
the low-cost, clean, renewable hydrpower provided to our 
community, and it's important for the 29 million people who 
reside in our communities and work in business and industry to 
keep this affordable, clean, renewable resource available to 
them.
    Thank you for this opportunity and I'd be very happy to 
answer any of your questions.
    [The prepared statement of Mr. Caan follows:]

  Prepared Statement of George M. Caan, Executive Director, Colorado 
         River Commission of Nevada, Las Vegas, NV, on S. 2891

    Good morning Madam Chairwoman Stabenow, Senator Brownback, and 
Members of the Subcommittee. My name is George Caan and I am the 
Executive Director of the Colorado River Commission of Nevada. I 
appreciate your invitation to speak to you today regarding S. 2891, and 
I want especially to thank you Madam Chairwoman for your efforts and 
leadership on this bill. I speak today on behalf of the State of 
Nevada, one of the three lower basin states directly affected by the 
Hoover power contracts. The Colorado River Commission of Nevada 
strongly supports S. 2891. I also submit for the record support letters 
from the Nevada customers who benefit from Hoover power including the 
Southern Nevada Water Authority and NV Energy.
    The Colorado River Commission is the state agency responsible for 
receiving and allocating federal hydropower from the Colorado River 
that is provided to the State of Nevada. This legislation is crucial to 
my state. The Colorado River Commission receives electric power 
generated by Hoover Dam through delivery contracts with the Western 
Area Power Administration of the U.S. Department of Energy. The 
Commission, in turn, contracts to deliver Hoover power to retail and 
wholesale customers in Southern Nevada. We also operate a power 
delivery system to deliver this critical resource to our customers.
    The Colorado River Commission of Nevada has worked for over two 
years with representatives of Arizona and California to develop this 
consensus approach to ensuring that the benefits of Hoover power will 
continue to be delivered to the citizens of our three states after 
current contracts expire in 2017.
    S. 2891 extends current Hoover power contracts for fifty years to 
2067. This time frame coincides with the fifty year commitment that 
Hoover power customers made to pay a share of the costs of the Lower 
Colorado Multi-Species Conservation Program that provides protection 
for endangered species in the Lower Colorado River system.
    It also re-directs five percent of Hoover power from current 
contractors to a resource pool for entities who do not receive any 
Hoover power today. This bill will allow federally-recognized Indian 
tribes to apply for the dam's power for the first time, as well as 
entities eligible under section 5 of the Boulder Canyon Project Act 
such as states, municipal corporations, political subdivisions, 
irrigation districts, and rural electric cooperatives.
    The Western Area Power Administration will allocate two-thirds of 
the pool, and the remaining one-third of the pool will be distributed 
in equal shares through the Arizona Power Authority (for new allottees 
in Arizona), the Colorado River Commission of Nevada (for new allottees 
in Nevada), and through Western (for new allottees in California). S. 
2891 requires new allottees to pay a proportionate share of the costs 
borne today by current contractors for operational and environmental 
purposes.
    During House consideration of the identical H.R. 4349, amendments 
were adopted to address tribal sovereignty concerns and to give Western 
the additional time it requested for allocating the new resource pool. 
We urge the Congress to approve S. 2891 with these amendments approved 
by the House.
    Congressional approval is needed to ensure the continued 
availability and reliability of Hoover power to the citizens of Nevada, 
Arizona and California. The State of Nevada supports S. 2891 in its 
entirety and urges the Committee to approve the bill. Thank you again 
for the opportunity to speak with you today. I'd be happy to answer any 
questions you may have.

    Senator Stabenow. Thank you very much.
    Mr. Walden, welcome.

  STATEMENT OF RICHARD S. WALDEN, BOARD MEMBER, ARIZONA POWER 
                     AUTHORITY, PHOENIX, AZ

    Mr. Walden. Thank you, Madam Chair, Ranking Member 
Brownback, and members of the subcommittee. My name is Richard 
S. Walden. I'm Chairman of the Arizona Power Authority, the 
State agency designated by law to receive and distribute 
Arizona's share of Hoover power. I've been a Commissioner for 
26 years. I'm joined here by other members: our Vice Chairman, 
retired three-star Marine Corps General John Hudson; Executive 
Director Joe Mulholland; and our General Counsel, Doug Font. 
We're here to support the bill.
    Additionally, for the record, in my real life I'm a farmer 
and my farm receives no Hoover power.
    Additionally, I'd like to mention that I served my country 
as a U.S. Army aviator in Vietnam, serving in the years 1965 to 
1968.
    Arizona created the APA in 1944 to take and receive on 
behalf of the State electric power developed from the waters of 
the mainstream of the Colorado River, including Hoover Dam. APA 
currently purchases Hoover power it receives pursuant to the 
30-year contract with Western, a power marketing agency of the 
Department of Energy.
    APA operates on a cost of service basis and sells the 
Hoover power it receives to 30 wholesale nonprofit customers 
within the State. APA's largest customer is the Central Arizona 
Water Conservation District, which uses Hoover power to pump 
Colorado River water to 3.2 million customers, including Native 
Americans. Our second largest customer, the Salt River Project, 
serves the water and power needs of approximately 964,000 
customers.
    The remaining half of our power is sold to irrigation 
districts, electrical districts, and municipalities throughout 
Arizona. This power is absolutely essential as it provides 
efficient electrical energy to the people of Arizona, who've 
been receiving this power for 65 years and who have developed 
an economic infrastructure based on its use.
    As a member of the commission during the 1980s allocation, 
I can attest that APA and its staff makes every effort to 
receive, transmit, and continuously deliver Hoover power to its 
customers in a cost-effective manner. In a normal water year, 
APA receives 370 megawatts of power, more than 1 million 
megawatt hours of energy. This helps reduce the use of fossil 
fuel generation and the associated pollution from that by 
providing power for peaking and load-following.
    In my written statement you have a history of allocations 
beginning in 1928. Under S. 2891, Congress would allocate 
Hoover power pursuant to Schedules A, B, and C. However, each 
of the current Hoover contractors will contribute 5 percent of 
their Schedule A and B power to a new Schedule D, which 
allocates to federally recognized Indian tribes and other 
eligible entities that do not currently purchase Hoover power.
    We recognize that Native American tribes and regionally 
bases electric cooperatives have raised concerns. The APA has 
met separately with each group to listen to their concerns, 
better understand their needs, and assure them that the 
authority, the APA, will work with them to use a fair, 
deliberative, and transparent public process. We are committed 
to this process and in my written statement I have provided 
examples.
    Additionally, APA worked with the House Committee on 
Natural Resources, the Native American tribes, and regionally 
based electric coops to address these issues. APA agreed to the 
compromises to the House version of the bill.
    In summary, S. 2891 offers a forward-thinking and visionary 
approach that enables parties who do not now have direct access 
to Hoover power in Arizona, California, and Nevada to receive a 
significant amount of that power through the creation of this 
Schedule D. S. 2891 preserves the best of governance structure 
which has enabled the people of Arizona, California, and Nevada 
to obtain access to critical power which benefits the overall 
economy. At the same time, the bill recognizes the changes 
within the marketplace and allows for the inclusion of new 
customers through a fair and open process, without devastating 
those current customers whose livelihoods and jobs depend on 
access to Hoover power.
    We respectfully urge you to pass this legislation 
expeditiously so that it can be enacted before the end of the 
111th Congress, and we stand ready to work with the committee 
and all interested parties.
    Thank you for the opportunity to testify before the 
committee today and I look forward to answering any questions 
you may have. Thank you.
    [The prepared statement of Mr. Walden follows:]

 Prepared Statement of Richard S. Walden, Board Member, Arizona Power 
                         Authority, Phoenix, AZ

    Chairman Stabenow and Members of the Subcommittee, my name is 
Richard S. Walden. I am a Board Member of the Arizona Power Authority 
(APA), which is the state agency designated by federal and state law to 
receive and distribute Arizona's share of Hoover power within the state 
of Arizona. I have been a Commissioner for 26 years.
    The State of Arizona created APA in 1944 to take and receive on 
behalf of the state, electric power developed from the waters of the 
mainstream of the Colorado River including Hoover Dam. Arizona's model 
of creating a state-based authority for distribution of federal 
preference power is similar to that used by the State of Nevada, in 
that both manage their Hoover power through a public power entity.
    APA currently purchases the Hoover power it receives pursuant to a 
30-year contract with the Western Area Power Administration (Western). 
Western is a power marketing agency of the United States Department of 
Energy. APA operates on a cost-of-service basis and sells the Hoover 
power it receives to 30 wholesale, non-profit customers within the 
state. (See Exhibit RSW-1.) This distribution is governed by strict 
adherence to the terms of the Boulder Canyon Project Act of 1928, 
subsequent applicable federal statutes and regulations, including the 
Hoover Power Plant Act of 1984, as well as Titles 30 and 45 of the 
Arizona Revised Statutes. As a member of the APA's Commission during 
the last time we deliberated upon the allocation of Hoover Power in the 
1980's, I can personally attest to the fact that APA employed a fair, 
transparent and forward looking process to negotiate contracts in the 
best interest of our region, the State of Arizona and the taxpayers of 
this country.
    APA's largest customer is the Central Arizona Water Conservation 
District (CAWCD) which uses Hoover power to pump Colorado River water 
to supply 3.2 million consumers, including Native Americans, with water 
for home consumption, agriculture, and manufacturing in the desert 
communities of Arizona. CAWCD receives 42.86% of the Hoover power 
allocated to Arizona. APA also sells power to the Salt River Project, 
which serves the electric power needs of approximately 964,000 
customers in Arizona and uses Hoover power to provide the needs of 
152,000 residential, agricultural and industrial water users. The 
remaining one-half of APA's Hoover power is sold to irrigation 
districts, electrical districts and municipalities throughout Arizona. 
This power is absolutely essential to the customers of the APA because 
it provides efficient electric energy to the people of Arizona. It is 
important to understand that the people of Arizona have been receiving 
this power for approximately 65 years; and they have developed an 
economic infrastructure based on its use. Their livelihood depends on 
this resource.
    As an active and long term Board Member of the APA, I can attest 
that APA makes every effort to receive, transmit and deliver the Hoover 
power to its customers in an efficient and cost effective manner. In a 
normal water year, APA receives 377 megawatts of power and more than 
one million megawatt hours of energy on behalf of the state. APA has 
eight full-time employees who carry out their responsibilities on an 
efficient and expeditious schedule and report, on a monthly basis to 
the APA Commission, citizens appointed by the Governor. APA ensures 
that the Hoover power is used in the most efficient manner for load-
following and meeting the peak loads of the state of Arizona. This 
accomplishes two very important goals. First, it provides power to the 
customers of the APA at a reasonable cost. Secondly, it reduces the use 
of fossil fuel for electric generation and associated pollution. This 
is important to understand because by using Hoover power for peaking 
and load-following purposes, APA minimizes the amount of pollution that 
would otherwise be emitted into the atmosphere by fossil fuel 
generating plants.
    That is why APA strongly endorses S. 2891, the Hoover Power 
Allocation Act of 2009. We believe that this forward-looking initiative 
is fair, reasonable and essential to Arizona, the people of the 
southwest and conforms to the energy policy of the United States.
What does this bill do?
    Hoover power was first allocated by the Bureau of Reclamation 
pursuant to the Boulder Canyon Project Act of 1928. In 1984, Congress 
again allocated Hoover power through contracts with state, municipal 
and utility contractors. These contracts will expire in 2017. The 1984 
Hoover Power Plant Act distributed Hoover power to contractors under 
three different schedules--Schedules A, B, and C.
    Under S. 2891, Congress would distribute Hoover power pursuant to 
Schedules A, B and C ; however, each of the current Hoover contractors 
would contribute 5% of their Schedules A and B power to a pool that 
would be distributed under a new Schedule D. Schedule D power would be 
allocated to federally recognized Indian Tribes and other eligible 
entities that do not currently purchase Hoover power.
    Two-thirds of the Schedule D pool would be allocated through the 
Western Area Power Administration; the remaining one-third of the 
Schedule D pool would be distributed in equal shares through the 
Arizona Power Authority (for new contractors in Arizona), through the 
Colorado River Commission of Nevada (for new contractors in Nevada), 
and through Western (for new contractors in California).
    We recognize that Native American tribes and regionally based 
electric cooperatives--who do not now have direct access to Hoover 
power because they did not seek access to it when the APA's existing 
customer contracts were established in the 1980's--have raised concerns 
with this legislation. The APA has met separately with each group to 
listen to their concerns, better understand their needs and assure them 
that the Authority will work with them to use a fair, deliberative and 
transparent public process to allocate power from the proposed new 
Schedule D pool should S. 2891 be enacted. We recognize that our role 
is one that requires a continued commitment to the public trust and we 
intend to maintain our vigilance with regard to this principle. Arizona 
Power Authority personnel have made it their mission to conduct 
themselves accordingly in this open and fair public process and have 
repeatedly engaged with all stakeholders to ensure those affected by S. 
2891 have had ample opportunity to express their opinions, concerns and 
views on the proposed reallocation of Hoover Power in the State of 
Arizona.
    Several examples are as follows:

   On March 5, 2010 APA staff met with representatives of the 
        Mohave Electric Cooperative, Sulphur Springs Valley Electric 
        Cooperative and the Navopache Electric Cooperative.
   Representatives from Arizona Municipal Power Users' 
        Association (AMPUA), which represents the Cooperatives listed 
        above have regularly attended Arizona Power Authority 
        Commission meetings including meetings in January, February, 
        March, April and May of 2009.
   Representatives of the Ak-Chin Indian Community, the Inter 
        Tribal Council of Arizona and the San Carlos Irrigation Project 
        also attended Commission meetings in January and February of 
        2010 and in July, August, September, November and December of 
        2009.
   APA staff met with Inter-Tribal Council of Arizona in 
        February and March of this year to specifically address their 
        issues and concerns.
   APA has also extensively corresponded with all interested 
        parties, expressing the Authority's position and requesting 
        that stakeholders make their concerns known.

    Additionally, APA worked with the House Committee on Natural 
Resources and the Native American tribes and regionally based electric 
cooperatives to address issues raised by those particular stakeholders. 
Specifically, APA agreed to the following compromise changes to the 
House bill:

   Allow Western Area Power Administration (WAPA) 36 months 
        instead of 18 to develop criteria and make allocations.
   Allow tribes to contract directly with WAPA instead of 
        through a state agency.
   Remove a provision that gave states first consultation with 
        WAPA regarding allocation criteria.

    These amendments were agreed upon in advance by the Hoover 
principals and show APA's willingness to work with all stakeholders to 
develop an equitable plan for power distribution.
Why we support the bill?
    S. 2891 offers a forward-thinking and visionary approach that 
enables parties who do not now have direct access to Hoover power in 
Arizona, Nevada and California to receive significant amounts of that 
power through the creation of a new Schedule D. This proposed new 
schedule allocates 5% of the actual capacity (103.7 megawatts annually) 
and energy from Hoover Dam to new customers in the designated marketing 
region for Hoover power.
    S. 2891 preserves the best of the governance structure which has 
enabled the people of Arizona, Nevada and California to obtain access 
to critical power generated on the lower Colorado River resulting in 
regional economic growth that benefits the overall economy. At the same 
time, the bill recognizes the changes within the marketplace and allows 
for the inclusion of new customers to have access to power, through a 
fair and open process, without devastating those current users whose 
livelihoods and jobs depend upon access to Hoover power.
    Finally, the bill maintains the important regional balance in 
distributing public power in the southwestern United States. Efforts to 
dramatically change the terms of reference of this measure could--
however well intentioned--severely and adversely affect this balance, 
injuring consumers and private and public enterprises that depend upon 
Hoover power to sustain their livelihood and use it to create jobs and 
economic growth.
    We respectfully urge you to pass this legislation expeditiously so 
that it can be enacted before the end of the 111th Congress. We stand 
ready to work with you and your colleagues, along with any interested 
parties, to help expedite S. 2891 timely consideration.

    Senator Stabenow. Thank you very much.
    Ms. Currie, welcome.

 STATEMENT OF PHYLLIS CURRIE, GENERAL MANAGER, PASADENA WATER 
                    AND POWER, PASADENA, CA

    Ms. Currie. Thank you. Chairwoman Stabenow and Senator 
Brownback and members of the subcommittee: I'm Phyllis Currie. 
For the past 9 years I've been the General Manager of the 
Pasadena Water and Power Department in the city of Pasadena, 
California.
    I thank you for allowing me the opportunity to participate 
in today's hearing on S. 2891, the Hoover Power Allocation Act. 
The Southern California Public Power Authority is a joint 
powers agency consisting of 11 municipal utilities and one 
irrigation district. Our members deliver electricity to 
approximately 2 million customers over an area of 7,000 square 
miles with a total population of 4.8 million consumers.
    The Southern California Public Power Authority members that 
are Hoover participants include the municipal utilities of the 
cities of Anaheim, Azusa, Banning, Burbank, Colton, Glendale, 
Los Angeles, Pasadena, Riverside, and Vernon.
    The city of Pasadena was one of the original contractors 
for power from Hoover Dam. In 1931 Pasadena, along with the 
cities of Glendale, Burbank, Los Angeles, the Metropolitan 
Water District, Southern California Edison, and the States of 
Arizona and Nevada, agreed to pay rates sufficient to guarantee 
repayment in 50 years to the Federal Government for the 
construction costs of this multi-purpose, almost 1500 megawatt 
dam.
    Hoover Dam and the power plant was entirely paid for by the 
original power users, not by the Federal taxpayers. All the 
benefits of this multi-purpose dam, including the flood 
control, municipal and industrial water supply, irrigation and 
recreation uses, were made possible by the commitments of these 
original power users. Since its inception, Hoover Dam has 
provided its multiple benefits to millions of citizens in 
Arizona, California, and Nevada.
    Pasadena was also one of the parties that agreeed in 1984 
to advance-fund the cost of upgrading the turbines at Hoover, 
which resulted in another 500 megawatts of power. Pasadena 
joined the SCPPA cities of Glendale, Anaheim, Riverside, Azusa, 
Banning, Colton, Vernon, and the States of Arizona and Nevada 
in the effort which, again, used no taxpayer money.
    Power from Hoover Dam has always been allocated by act of 
Congress rather than through an administrative proceeding. The 
Boulder Canyon Project Act of 1928 authorized the construction 
of the dam and related facilities and allocated power to the 
original contractors, including Pasadena. The Hoover Power 
Plant Act of 1984 authorized the Hoover Operating Project, 
which reallocated power to the original contractors and 
allocated the new capacity and energy to the uprating 
participants.
    In anticipation of the expiration of the current contracts 
for Hoover, in 2007, as you've already been advised, the power 
users in the 3 States got together more than 2 years ago to 
begin negotiations that led to this current bill.
    From the city of Pasadena's point of view, passage of this 
legislation will enable us to plan effectively for long-term 
power supplies to meet customer demand. It will also offset the 
higher costs of renewable resources which we will acquire to 
meet the 40 percent by 2020 target that the city of Pasadena 
has adopted. All of the other SCPPA Hoover contractors have 
adopted similar or higher renewable energy targets, and the 
passage of this bill will match the commitments of the power 
users that are made to fund the environmental program with the 
contracts that ensure the benefits of power from Hoover.
    The city of Pasadena is proud that it was one of the 
original Hoover participants and we were participants in the 
upratings authorized in 1984. This unique facility, paid for by 
power users, not by taxpayers, provides immeasurable benefit to 
the citizens of southern California, Arizona, and Nevada.
    Thank you for the opportunity to support this--to present 
this statement. We are gratified by the strong bipartisan 
support for the bill, and I will be happy to answer any 
questions you may have.
    [The prepared statement of Ms. Currie follows:]

 Prepared Statement of Phyllis Currie, General Manager, Pasadena Water 
                        and Power, Pasadena, CA

    Chairwoman Stabenow, Sen. Brownback and Members of the 
Subcommittee, thank you for inviting me to participate in today's 
hearing on S. 2891, the Hoover Power Allocation Act.
    The Southern California Public Power Authority (SCPPA) is a joint 
powers authority consisting of 11 municipal utilities and one 
irrigation district. Our members deliver electricity to approximately 2 
million customers over an area of 7,000 square miles, with a total 
population of 4.8 million consumers. SCPPA members that are Hoover 
participants include the municipal utilities of the cities of Anaheim, 
Azusa, Banning, Burbank, Colton, Glendale, Los Angeles, Pasadena, 
Riverside and Vernon.
    Pasadena was one of the original contractors for power from Hoover 
Dam. In 1931, the city of Pasadena, along with Glendale, Burbank, Los 
Angeles, Metropolitan Water District, Southern California Edison and 
the States of Arizona and Nevada agreed to pay rates sufficient to 
guarantee the federal government that construction costs of the multi-
purpose, almost 1500 megawatt dam would be repaid in 50 years.
    Hoover Dam and power plant was entirely paid for by the original 
power users--not by the federal taxpayers. All the benefits of this 
multi-purpose dam, including flood control, municipal and industrial 
water supply, irrigation and recreation were made possible by the 
commitment of these original power users to pay for the dam. Since its 
inception, Hoover Dam has provided these multiple benefits to millions 
of citizens in Arizona, California and Nevada.
    Pasadena was also one of the parties that agreed, in 1984, to 
advance fund the costs of uprating the turbines at Hoover, which 
resulted in another 500 MW of generation from the dam. Pasadena joined 
SCPPA cities Glendale, Anaheim, Riverside, Azusa, Banning, Colton, 
Vernon and the States of Arizona and Nevada in that uprating effort 
which, again, used no taxpayer money.
    Power from Hoover Dam has always been allocated by Act of Congress, 
rather than through an administrative proceeding. The Boulder Canyon 
Project Act of 1928 authorized construction of the dam and related 
facilities and allocated power to the original contractors, including 
Pasadena. The Hoover Power Plant Act of 1984 authorized the Hoover 
uprating project, re-allocated power to the original contractors and 
allocated the new capacity and energy to the uprating participants.
    In anticipation of the expiration of current contracts for Hoover, 
in 2017, power users in Arizona, California and Nevada got together 
more than two years ago to begin negotiations that led to the S. 2891. 
These negotiations led to the legislation before you today, which:

   Authorizes the Secretary of Energy to enter into 50-year 
        contracts with existing contractors for 95% of the capacity and 
        energy they now receive;
   Gives power users a contract term that matches the financial 
        commitment made by water and power contractors in the Lower 
        Colorado River Multi-Species Conservation Plan (MSCP) 
        legislation signed into law in 2009. The MSCP funds will be 
        used for 50 years of environmental mitigation on the Lower 
        Colorado River; and
   Creates a 5% ``set aside'' of capacity and energy for new 
        entrants, including Indian tribes, municipalities, rural 
        electric cooperatives and irrigation districts that do not now 
        receive Hoover power.

    From Pasadena's point of view, passage of this legislation will 
enable us to plan effectively for long-term power supplies to meet 
customer demand. It will also offset the higher cost of renewable 
resources we will acquire to meet the 40% by 2020 target Pasadena has 
adopted. All of the other SCPPA Hoover contractors have adopted 
similar, or higher, renewable energy targets.
    And, passage of this bill will match the commitment water and power 
users made to fund the MSCP with contracts that ensure the benefits of 
the power generated at Hoover.
    Pasadena is proud that it was one of the original Hoover 
participants and that we were participants in the upratings authorized 
in 1984. This unique facility, paid for by power users, not by 
taxpayers, provides immeasurable benefits to citizens Southern 
California, Arizona and Nevada.
    We are also proud that the legislation we are discussing today was 
agreed-to unanimously by Hoover contractors in the three states. And, 
we are gratified to have strong bi-partisan support for the bill in the 
House and the Senate. Thank you for the opportunity to present this 
statement and I would be happy to answer any questions you may have.

    Senator Stabenow. Thank you very much to each of you. As I 
indicated, in the interest of time, in that we will have votes 
coming shortly, I have just one question. That is, given the 
fact that we now have a House bill that has passed, are you all 
saying that you support the changes that the House made? I 
know, Administrator Meeks, you had some technical points you 
were talking about. But I wonder if you would at least indicate 
whether or not you're supporting the version passed by the 
House.
    Mr. Meeks. The version passed by the House definitely moved 
toward the straw man that we put out in our Federal Register 
notice, particularly the 36-month allowance for us to do the 
new customer power allocations. That was definitely a positive, 
and the elimination of consultation with the States as we go 
forward with the new resource pool was definitely a positive in 
our direction. So it did take care of some of the technical 
concerns we had.
    Mr. Caan. Madam Chairwoman, we strongly support the version 
that came out of the House with the amendments, we strongly 
support that.
    Senator Stabenow. Thank you.
    Mr. Walden. Madam Chair, for Arizona, we too strongly 
support the House version as passed.
    Ms. Currie. Madam Chairwoman, for the California 
participants, we also support the version that has been passed.
    Senator Stabenow. Thank you very much. I appreciate that.
    Senator Brownback, do you have any questions?
    Senator Brownback. No, in the interest of time I'll let 
colleagues if they'd like to ask questions.
    Senator Stabenow. Thank you very much.
    I know that Senator Udall has joined us and you have bills 
that are on the next panel, so I don't know if you wish to ask 
any questions at this time of this panel?
    [No response.]
    All right. Senator McCain, welcome.
    Senator McCain. Thank you, Madam Chairman.
    Mr. Walden, obviously the importance of the APA, Arizona 
Power Authority's, role in allocating Arizona's share of Hoover 
power demands that its process be handled in an open and 
transparent manner. Can you speak to the concerns that have 
been raised by representatives of the electric cooperatives and 
the Inter-tribal Council of Arizona, and have you addressed 
some of these concerns?
    Mr. Walden. Yes, sir, Senator McCain, we have. We've 
addressed those concerns via several ways. No. 1, we've had 
numerous meetings with both the cooperatives and the tribal 
members. No. 2, the cooperatives did not participate in the 
last round, they did not request to be part of the last round 
of allocations they are now requesting.
    As it relates to the tribes, we have come up with this 
scheme called Schedule D, which provides them with roughly 70 
megawatts. I don't remember the exact number. That in itself 
means that the tribes will have something over 20 percent of 
the total resources out of the Colorado River. So they are well 
served and well represented in this process.
    As to the open and fair process, it will be a public 
process and I assure you as a member of the commission that 
that will be the case.
    Senator McCain. I thank you.
    I thank you, Madam Chairman.
    Senator Stabenow. Thank you, Senator.
    Before completing the topics in front of us, we want to 
welcome Congressman Baca. We appreciate--we know you had votes 
a little bit earlier and we're going to have some in just a 
little while, so we understand that. But we welcome you and 
appreciate the opportunity for you to testify.

STATEMENT OF HON. JOE BACA, U.S. REPRESENTATIVE FROM CALIFORNIA

    Mr. Baca. Thank you very much, Madam Chairwoman. I 
appreciate that very much. I want to thank you, and I also want 
to thank the ranking members, and also members of the 
Subcommittee here on Water and Power.
    As you know, I'm Representative Joe Baca from 43rd 
Congressional District. I want to thank my good colleague here 
that served with us some time in the past on our side of the 
House, and of course a great golfer too as well, not to mention 
that, too. Now he's carrying the banner for all of you.
    Senator McCain, thank you very much from our neighboring 
State, too, as well in Arizona.
    Thank you for your time. I'm pleased to present to you 
testimony on H.R. 4252, the Inland Empire Perchlorate Water 
Plume Assessment Act. H.R. 4252 directs the Secretary of the 
Interior to conduct, and I state, directs the Interior to 
conduct a study of water resources in the Rialto-Colton Basin 
in California.
    I would like to thank the chairman of the House Natural 
Resources Committee, Representative Nick Rahall, and of course 
Ranking Member Doc Hasting and my good friend of the House Ways 
and Means Committee subcommittee, Grace Napolitano, and Ranking 
Member Tom McClintock for their support on this legislation.
    I also want to take the time to thank all of my colleagues 
in the House of Representatives, and I state, for their 
bipartisan support on this bill. In addition, I commend the 
City Council of Rialto and the Perchlorate Task Force City 
Council Member Ed Scott, Rialto Mayor Pro Tem Joe Baca Junior, 
who happens to be my son, for their hard work and dedication in 
protecting families.
    Perchlorate is a rocket fuel additive. It is an unstable 
organic compound that is found to be harmful to humans, and I 
state, harmful to humans because it interferes with the thyroid 
functions. Those at the greatest risk are pregnant women and 
infants, and it affects all of us. Can you imagine many of the 
pregnant women and infants in the surrounding communities?
    I am very familiar with the water contamination. My family 
lives in the city of Rialto and I've lived there for almost 40 
years, so I've been impacted. My children, friends, and close 
neighbors know what it's like to live with water that is 
contaminated. When we first learned that our water was not safe 
to drink, we were scared and we were worried about the damage 
caused, not only to our health, bur our children and the 
surrounding communities. We were nervous because we drank the 
water, cooked with the water, bathed with it, and our children 
did as well.
    I drafted a bill to make sure that other families and 
neighboring cities would not have to suffer, because we are 
already suffering from enormous hardship in this area, and 13.4 
percent of the population lives below the poverty level and 
there's very high unemployment in the immediate area. We're 
ranked third highest in the Nation in the rate of foreclosure 
and the unemployment rate has double digits for too long.
    On top of these troubles, there is a plume of water that 
has a very high level of perchlorate. My bill requires, and I 
state, requires that the plume in the Rialto-Colton Basin is 
studied, is studied. The plumes are the underground pockets of 
water and can travel like little underground rivers. We know 
what it's like, just as the oil spill that we've had, and it's 
traveled. When it travels, it actually not only travels from 
our area, but it also can travel through the Santa Anna Basin 
into the Orange County area.
    We don't know where the contaminated water in this plume is 
traveling. We don't know where it's going. But we know we don't 
know how big it is or how fast the water is moving. We do need 
to know more about the plume to permanently fix the problem.
    The research established from the study in H.R. 4253 
ensures that the exact problem will be identified. As we all 
know, a study by the U.S. Geological Survey is not something 
done lightly. As the Nation's largest water, earth, and 
biological science and civilian mapping agency, the USGS 
provides scientific understanding, and I state, provides 
scientific understanding about the nature, resources, 
conditions, issues, and problems.
    The information gained by USGS studies will move us closer 
to eliminating the perchlorate issues that have caused 
heartaches, frustration, and fear. Fortunately, under the city 
council of Rialto's zero tolerance policy, the city does not 
blend any detectable level of perchlorate into the water 
system. They are making sure that water is safe by conducting 
wellhead treatment. But what about the cities that do not have 
the policy or the treatment facilities to clean this water?
    Commissioner Conder from the Department of Interior stated 
that the directives in this bill are within USGS jurisdiction. 
USGS has found that the groundwater constitutes about 79 
percent of the drinking water supplied in the entire Inland 
Empire, which has approximately over 4 to 5 million people in 
the area. As I stated, the flow of it also goes into the Santa 
Anna-Orange County area.
    A study by the USGS is long overdue. We have learned that 
perchlorate contamination began in 1940 through the action of 
the U.S. military, continued through the 1960s through the work 
of U.S. defense contractors, and may have been made worse by 
firework companies in the area.
    Water managers need to know the source, fate, and movement 
of perchlorate within the Rialto-Colton Basin and adjacent 
areas in order to effectively mitigate the contamination. We 
need USGS to make this a priority. That is why I drafted this 
bill. That's why I'm grateful that we're here today.
    In the administration, the written statement regarding the 
legislation indicates that the citizens relying on water from 
the Rialto-Colton Basin will have to compete with other 
administrative priorities for funding. The message to you is to 
send to USGS by supporting H.R. 4252 will be that families 
deserve clean drinking water, and I state, clean drinking 
water. They should not have to live in fear of the effects it 
may have on our children and women, too, as well. This message 
that you will send to USGS by supporting H.R. 4252 will be that 
families deserve clean drinking water.
    H.R. 4252 moves beyond finding of those at fault. We know 
the need to know and fully appreciate the extent of the damage. 
The hot spot of the contamination is in Rialto in my home city 
in California, and that area in 2009 was designated as a 
Superfund site. This Superfund designation we help take care of 
the hot spot, but what about the waters traveling underground 
in the plume? What about other cities that will be impacted if 
we don't do the study or the research?
    The contamination is spreading. I fear for communities that 
do not have the wellhead treatment facilities or the finances. 
Basically, in the State of California we're at a $1 billion 
deficit right now.
    What is learned from the study in H.R. 4252 will help other 
areas with the hardship of perchlorate contamination. I 
respectfully request your support of this legislation because 
it is a national consequence. There are many States that have 
perchlorate issues. This study would help them be aware of what 
could be happening underground. It received bipartisan support 
and our side of the House. I look forward to bipartisan 
support.
    I thank you for allowing me this time. Thank you.
    Senator Stabenow. Thank you very much, Congressman. We 
appreciate your testimony and your leadership on this issue. So 
thank you very much.
    If there aren't any questions, we will excuse this panel 
and thank you again for sharing your views with us. We 
appreciate the hard work that you've put into this. We will 
invite the second panel to come forward.
    Welcome. Before introducing each of our witnesses, and we 
appreciate your being here, I am going to turn to Senator 
Udall, who I know has introduced 2 of the bills that we have in 
front of us. We very much appreciate all of your leadership on 
these issues. I know, coming from Colorado, how important these 
issues are. So we will turn to you and appreciate any comments 
you would like to make.
    Senator Udall. Thank you, Madam Chairwoman. I want to come 
right back at you. I really appreciate the hard work of your 
committee staff and your willingness to include these 2 very 
important bills on the docket today.
    We have a saying in the West that whiskey's for drinking 
and water's for fighting over. To some extent, that's what 
these 2 bills do. They try and minimize the conflict.
    Senator Stabenow. Is this the whiskey?
    Senator Brownback. I would just add as a Kansan that 
Colorado is very good about fighting for water. They are 
excellent at it.
    Senator Udall. Senator Brownback and I have had these 
discussions on a number of occasions. But we're also committed 
to working together. We also have to be aware that at one point 
Colorado was a part of the greater territory of Kansas as well. 
I want to make sure that that's known for the record. But 
Senator Brownback does come to Colorado to experience the 
mountains. He spends his hard-earned dollars and helps our 
economy. We send him water in exchange.
    I want to just speak for a few minutes on these 2 important 
pieces of legislation and also introduce 2 Coloradans who will 
be testifying shortly as well. Let me start with S. 3404, which 
is the Leadville Mine Drainage Tunnel Remediation Act of 2009. 
On June 7, 1976, which is almost 34 years ago to the day, the 
Senate Committee on Interior and Insular Affairs held a hearing 
on a bill introduced by then Colorado Senator Floyd Haskill. 
The legislation at that time would have authorized the 
Secretary of Interior to, quote, ``rehabilitate and maintain 
the Leadville Mine Drainage Tunnel for public safety and water 
quality improvement,'' unquote.
    That is very similar to my bill today. Even by 1976, 
conditions in the tunnel I have referenced posed serious risks 
to the people of Leadville. Senator Haskill who I mentioned--I 
now have the great privilege to occupy the seat that he held 
back then--said at that hearing, quote: ``We have a serious 
problem here that I don't think can wait. We have a possibility 
that the city of Leadville's water supplies will be 
contaminated. We have the possibility of pollutants in the 
Arkansas River, which will be extremely serious and detrimental 
to agriculture, to say nothing of the health of people 
downstream.'' End of his quote.
    He went on to describe the immediate threat from a tunnel 
blowout to the residents of Leadville who live adjacent to the 
mouth of the tunnel.
    At that hearing 34 years ago, the Bureau of Reclamation 
testified that it did not have the authority, Madam Chair, to 
implement a permanent solution to the conditions in the tunnel 
threatening Leadville and the Arkansas River Valley. 
Unfortunately, Senator Haskill's legislation which would have 
given them that authority died in the House.
    Little has changed since then, and I see Mr. Olsen nodding 
in great agreement. Now, in 2007 and 2008 it appeared that we 
might be on the verge of realizing the dangers that Senator 
Haskill described, when the EPA said new collapses within the 
tunnel could lead to a catastrophic blowout. The Bureau and the 
EPA took emergency actions that eventually stabilized the 
situation, but in the process we heard the same claims from the 
Bureau, that it lacked the necessary authority to implement a 
permanent solution.
    For instance, in a letter from the Bureau responding to a 
November 8, 2007, EPA letter, the Bureau said that using its 
treatment plant as part of the remedy for Operable Unit 6, 
which is where the tunnel is located, they said, quote, ``It's 
beyond our authority.''
    So in short, Madam Chairwoman, in the process of trying to 
address the physical blockages within this tunnel we keep 
finding that there are legal blockages as well.
    So my legislation, similar to what Senator Haskill wanted 
to do in 1976, removes any doubt as to the Bureau's 
responsibility and authority for the maintenance of the tunnel. 
It also encourages the Bureau and the EPA to work cooperatively 
on any permanent solution for the cleanup of Operable Unit 6.
    Now, the administration is going to claim this bill is 
unnecessary. I disagree. I commend the Bureau and the EPA for 
working so well together the past couple of years on the tunnel 
and with my office and the people of Leadville. But that spirit 
of cooperation may not necessarily exist in the future. So we 
need to resolve the question of legal authority and 
responsibility for the tunnel once and for all.
    Now, if in the regrettable scenario--I'm being optimistic--
that I be here 34 years from now, if we're still discussing the 
safety conditions at the tunnel, let us at least be able to say 
that we removed the legal blockages in the hearing now.
    So to help us with that, I'm pleased to welcome Lake County 
Commissioner Ken Olsen to the hearing. Ken's literally been on 
the front lines of this fight and he knows better than anyone 
the importance to Leadville and southeastern Colorado of 
resolving this problem once and for all. He can correct me if 
I'm wrong, but I understand that your brother was probably the 
last person to walk more than 1,000 feet into the tunnel back 
in the 1950s before it became blocked?

 STATEMENT OF KENNETH L. OLSEN, LAKE COUNTY COLORADO BOARD OF 
                  COMMISSIONERS, LEADVILLE, CO

    Mr. Olsen. Actually, Senator, I just learned that from an 
email when I asked him about how to go about testifying at a 
subcommittee meeting. So I did not realize until about 2 weeks 
ago that he, my father, and my father's stepfather, who 
happened to be a blacksmith in 1943 driving the Leadville Mine 
Drainage Tunnel, went into the tunnel about 1,000 yards in 
about 1963. That was news to me.
    Senator Udall. For the record, 1,000 yards and one of the 
last groups to go into the tunnel. I too don't know everything 
my brothers do, so thank you for confirming that.
    Thanks for being here and we look forward to your insights.
    The other Coloradan I want to welcome, who's come all the 
way from Ouray, Colorado, that's Andy Mueller. He's President 
of the Colorado River District Board of Directors. The district 
and other Colorado River water users have done a remarkable job 
working with my office on the Ruedi Reservoir legislation. So I 
want to thank you for being here.
    Let me just, Madam Chair, if I could, speak briefly about 
that legislation. This bill, S. 3387, is necessary because 
we've had a very successful endangered species recovery program 
on the Upper Colorado River, with participation from the 
Federal Government, the States of Colorado, Wyoming, and Utah, 
water users, and Native American tribes. The program's been 
specifically designed to recover populations of four endangered 
fish and it's been one of the most successful endangered 
species recovery programs, not just in the West but in our 
Nation.
    Recovery of these species is an important Federal priority. 
However, to keep the program viable the water users must comply 
with the U.S. Fish and Wildlife Service opinion that requires 
10,825 acre-feet of releases from the Ruedi Reservoir dedicated 
to improving fish habitat in the Colorado River. Colorado River 
water users have identified permanent sources for this water. 
Half will come from the marketable yield pool of Ruedi 
Reservoir and half will come from a converted agricultural 
water right.
    This legislation, my legislation, will implement the first 
half from Ruedi Reservoir and has the support of a diverse set 
of water users in Colorado on both sides of the Continental 
Divide, which is saying something, Madam Chair. If you can 
bridge the Continental Divide, you're a long way to a solution.
    I understand the administration objects to providing the 
water from the reservoir as a nonreimburseable expense. 
Commissioner Connor, I know that we can work together to 
resolve your objections and I appreciate your recent efforts in 
that regard. I hope you will continue to commit to work with me 
to address the administration's concerns on both my bills in a 
timely manner. These are very, very important issues to 
Colorado, as you know.
    So again, I want to thank the ranking member and the 
chairwoman for their indulgence and for a long opening 
statement, but one that's important to my State. Thank you.
    [The prepared statement of Mr. Olsen follows:]

Prepared Statement of Kenneth L. Olsen, Chairman, Lake County Colorado 
            Board of Commissioner, Leadville, CO, on S. 3404

    My name is Ken Olsen. I am the chairman of the Lake County Colorado 
Board of Commissioners and a fifth generation Leadville, Lake County 
resident. I thank you for the opportunity to brief this sub-committee 
on the nature and need of this legislation.
    Leadville, Colorado is located in mountainous central Colorado at a 
10,200 feet elevation and is the highest incorporated city in the 
United States. The headwaters of the Arkansas River begin here. 
Leadville exists as one of the most productive mineral rich areas in 
the country and owes its formation to a long-term legacy of mining 
since the 1860's. Although we have been blessed with these natural 
resources, we also are cursed with the accompanying environmental 
effects of mining activities. Our area has been left to contend with 
two community pariahs, the Leadville Mine Drainage Tunnel and the 27 
year old California Gulch Superfund site. As explained further, the 
connection of one to the other is inseparable.
    The Leadville Mine Drainage Tunnel is an 11,299 foot tunnel that 
was driven starting in December 1943 as an emergency WWII war effort to 
de-water and access the Leadville Mining District for the extraction of 
zinc, lead and manganese. The tunnel was driven under the provision of 
PL 133 of the 78th Congress by the Bureau of Mines. The initial 6000 
feet of the tunnel was driven until the war ended in August 1945. The 
tunnel bore restarted in 1952 due to the Korean conflict and was 
continued to its current length. I wish to emphasize that the Leadville 
Mine Drainage Tunnel was driven by the United States Government for 
obtaining metals for the national defense of this country.
    In 1959 the General Services Administration approved the transfer 
of the tunnel from the Bureau of Mines to the Bureau of Reclamation. 
Reclamation initially wanted to obtain the water rights from the tunnel 
as part of the FryingpanArkansas Project. Subsequently, the Bureau gave 
up on this effort when the amount of water obtainable was insufficient 
for their needs and the water quality was a concern due to metal 
contamination. In the late 1960's due to large sinkholes appearing 
along the tunnel length the Bureau did perform some mitigation work 
including placing a pump to reduce rising water levels in the 
collapsing part of the tunnel and place a bulkhead (plug) about 200 
feet from the tunnel entrance to help alleviate a possible blowout of 
the tunnel. As the tunnel continued to deteriorate, congressional 
action was instituted by Senator Floyd Haskell in 1976 with 5.3394 in 
an attempt to address the problems created by the lack of maintenance. 
Of specific concern were the sinkholes adjacent to Colorado State 
Highway 91, rising water levels, increasing hydraulic head in the area 
drained by the tunnel, the threat to our local domestic water supply, 
metals contamination of the Arkansas River and all of its downstream 
users including the Front Range Municipalities of Aurora and Colorado 
Springs, that are outside the Arkansas Valley Drainage, and the risk to 
the trailer park residents at the mouth of the tunnel. The Bureau did 
not want this legislation and said they would study the problem. In 
1991 the Bureau put in a water treatment plant at the tunnel entrance 
in response to a Sierra Club lawsuit over water quality discharging 
from the tunnel of which the Bureau operates today.
    In 1983 the EPA designated 18 square miles in and around Leadville 
the California Gulch Superfund site. The site was split into twelve 
``operable units'' for management, however the treatment plant area at 
the tunnel entrance was not in the Superfund designation area. The bulk 
of the tunnel length is in operable unit 6 (OU6). In the long, arduous 
task of Superfund deletion OU6 was issued a Record of Decision (ROD) in 
2003, after a lengthy administrative process by the EPA. The selected 
remedy included the provision that surface water acid rock drainage 
(ARD) would be placed into the Marion Shaft in the spring runoff season 
of each year. The Marion connects directly with the LMDT via a short 
crosscut connection underground. The Bureau, EPA, Colorado Department 
of Health and the public all participated with input in the development 
of the ROD. The amount of ARD placed down the Marion each year varies 
from 3 to 5 million gallons, is usually 3 to 5 weeks out of the year 
and is highly contaminated primarily with zinc, cadmium and iron.
    The selected remedy for OU6 no doubt has made operation of the LMDT 
plant more difficult both in operational costs and treatment methods. 
What is also difficult to ascertain is how much of the contaminated 
surface water gets to the treatment plant via the collapsed tunnel. The 
treatment plant is highly effective in treating the water it does get 
from the bulkhead flow and the wells along the tunnel.
    In the summer of 2007 the Lake County Commissioners were apprised 
that the primary pump delivering water to the treatment plant was 
cavitating (sucking air) and that unusual turbidity was being 
experienced. We equated this information as a possibility that new 
collapses were occurring in the tunnel. Due to the known difficulty of 
this community with the LMDT we began inquiring locally about any other 
water level anomalies being observed locally. Our investigation led to 
us calling together various agencies and local private sector parties 
to compare notes in November 2007. We advised our congressional 
delegation of the potential risk involved with the continuous 
increasing hydrostatic head (elevating water levels) in the Leadville 
area. Subsequently we observed physical signs of high water levels in 
supersaturated mine dumps and across the ground surface where only 
occasional spring runoff is observed and was now being observed in the 
late fall. We obtained graphs of recent well data (hydrostatic heads in 
shafts and wells) and historic levels. We observed in data from the 
Leadville Sanitation District that they were processing wastewater at 
the highest level ever recorded. We believed that groundwater was 
infiltrating sewer mains never before exposed to higher ground water 
levels.
    In February 2008 the Board of Commissioners declared a state of 
emergency due to the risk of high ground water levels. The result was 
the drilling of a relief well into the LMDT and the transmission of 
that ``mine pool'' water to the LMDT Treatment Plant. The result of the 
relief well was to drop groundwater levels in the tunnel, relieve 
hydraulic head to reduce the possibility of a blowout at the tunnel, 
reduction of the risk to local water supply and Arkansas River 
contamination, and reduction of the risk to the trailer park residents 
near the treatment plant.
    In January 2009 the County was advised that the EPA was reopening 
the ROD on OU6 and was intent on capping the remaining historic mine 
waste rock dumps east of Leadville. The EPA indicated that they 
believed that the selected remedy for OU6 of placing acid rock drainage 
down the Marion Shaft was not reliable for the long-run as a remedy. 
The mine dumps are a valuable tourist draw to our community and we had 
already been through the public process for OU6 once before. The 
capping is to be done to reduce the volume of toxic water being 
produced every spring from the East side of Leadville. It is our 
observation and experience that the Bureau and EPA have not worked well 
with each other regarding the LMDT and OU6. Each agency is focused on 
their own functional area and tasks that they perceive as their 
mission. The legislation as set-forth in S3404 is needed for the 
following reasons: clear authority for the Bureau of Reclamation to 
maintain the LMDT for its entire length and treat all water; 
authorization for the EPA and Bureau to cooperate in the completion of 
the remedy for OU6 and to treat surface water from OU6 as a backup plan 
if the capping of the waste rock piles is only partially successful.
    Lake County's continuing struggle with the LMDT and Superfund 
combined environmental challenges need to be addressed for the long-
term. We need this legislation to accomplish the following:

   Require the BOR to have the responsibility and authority to 
        maintain the LMDT for its entire length
   Require the BOR to treat contaminated surface water, if 
        needed, at the LMDT Treatment Plant
   Require the EPA and BOR to jointly cooperate in ensuring 
        water quality in the Arkansas River

    We are a small county of 364 square miles, of which, 85% is owned 
by the Federal and State government. We have no producing mines at 
present. A large part of our economy is tourism and recreation based. 
The ability for our community to attract business and remain 
economically viable would be greatly enhanced by permanently addressing 
our environmental issues.
    We appreciate that both the Bureau of Reclamation and the EPA are 
attempting to carry out their environmental and public safety tasks. 
Our community does, however, deserve a reasonably cooperative 
relationship between the agencies and our public to give all a genuine 
sense of responsible public safety and environmental protection.

    Senator Stabenow. Thank you very much for again for your 
leadership on these issues and for joining us, being a part of 
this today.
    We want to welcome Commissioner Michael Connor. You have 
been with us before. We appreciate that, and we appreciate your 
being back with us to talk about all 4 of the bills that are in 
front of us. Then we will turn to Doug Peterson, who is 
President of the Minnesota Farmers Union, and we appreciate 
very much your being here to testify on 2 of the bills in front 
of us; and Mr. Andy Mueller, again President of the Colorado 
River District Board of Directors. Welcome. Ken Olsen, Lake 
County Commissioner of Leadville, Colorado.
    So we will first turn to Commissioner Connor. Welcome.

    STATEMENT OF MICHAEL L. CONNOR, COMMISSIONER, BUREAU OF 
            RECLAMATION, DEPARTMENT OF THE INTERIOR

    Mr. Connor. Thank you. Madam Chairwoman, Ranking Member 
Brownback, and Senator Udall: I'm pleased to be here today. I'm 
Mike Connor, the Commissioner of the Bureau of Reclamation. I 
will as expeditiously as possible summarize the Interior 
Department's views on the four bills before the subcommittee 
today.
    I should mention, with me today is Matt Larson with the 
U.S. Geological Survey, who is prepared to respond to questions 
on 2 of the bills, S. 2779 and H.R. 4252. Our written 
statements have been submitted for the record.
    The first bill is S. 2779, the Upper Mississippi River 
Basin Protection Act. The Department appreciates the intent of 
S. 2779 to address nutrients and sediments in the Upper 
Mississippi River Basin. We especially value the bill's 
emphasis on sound science.
    However, the Department has concerns about the financial 
resources that would be required for the USGS to carry out the 
full scope of activities described in this bill, given the 
overall availability of resources for administration programs. 
Also, the Department supports the goals of S. 2779, but we note 
that the activities called for in this bill are well within the 
scope of existing authorities.
    In summary, the proposed legislation describes a program 
consistent with current USGS activities to support protection 
of the Upper Mississippi River Basin and the Gulf of Mexico 
watershed nutrient task force recommendations. We note that 
some of these conservation activities are being addressed by 
other ongoing programs.
    The second bill I'll talk to is S. 3387, having to do with 
the Ruedi Reservoir and its marketable pool. You are absolutely 
right, Senator Udall, we will be happy to continue to work on 
this bill and work with Colorado's water users. S. 3387 would 
provide for the release of water from the marketable yield pool 
of water stored in Reclamation's Ruedi Reservoir for the 
benefit of endangered fish in the Colorado River.
    Reclamation recognizes the public interest embodied in the 
Upper Colorado River recovery program, the programmatic 
biological opinion, or PBO, that was issued to Reclamation on 
operations affecting the 15-mile reach of the Colorado River 
and the efforts of water users in Colorado to find a permanent 
water supply as negotiated under the PBO. Reclamation, the Fish 
and Wildlife Service, and our other Federal partners have a 
long positive history with the recovery program. My written 
statement describes the fact that since 1990 the large majority 
of water used in this program has in fact been provided on a 
nonreimburseable basis by the Bureau of Reclamation.
    With respect to S. 3387, the Department believes more 
negotiation is needed and that the bill as introduced is 
inconsistent with the cost share obligation that was a 
fundamental aspect of the 1999 PBO. In a September 1998 letter 
to the Fish and Wildlife Service, Colorado west slope and 
trans-mountain water interests agreed to each provide or secure 
funding to buy or build the 10,825 acre-feet of permanent water 
needed after the interim period ends in 2012. This commitment 
was subsequently incorporated into the PBO. Our goal is simply 
to maintain this nonFederal cost share in supplying the 
permanent water needed to comply with the Endangered Species 
Act.
    In addition, we have concerns that as currently written the 
bill would impact the Federal treasury due to potential lost 
revenues that would result from removing this water from the 
marketable yield of water from Ruedi Reservoir without a 
repayment contract. The Department is prepared to work closely 
with the proponents of S. 3387 to identify reasonable 
alternatives to the bill's present language. We think there is 
room to evaluate and develop an affordable cost share that 
could be borne by west slope interests.
    The third bill is S. 3404, the Leadville Mine Drainage 
Tunnel Act of 2010. The administration supports the general 
purposes of S. 3404, which are to ensure that the Leadville 
Mine Drainage Tunnel poses no threat to public safety or the 
environment and to facilitate the cleanup of a Superfund site 
in the vicinity. For reasons I'll summarize, however, the 
administration believes it is premature and perhaps unnecessary 
to move forward with this legislation.
    The administration last testified before this subcommittee 
on legislation pertaining to the tunnel on April 24, 2008. 
Since that time, Reclamation completed a risk assessment 
analyzing potential dangers posed by water blockages inside the 
tunnel and worked cooperatively with the U.S. Environmental 
Protection Agency and the Colorado Department of Public Health 
and Environment to install additional drainage capability, also 
called a relief well, into the tunnel.
    We have also held several public meetings with residents 
living near the tunnel--with residents living near the 
Leadville area, to convey Reclamation's finding that the LMDT 
is safe, and have continued an active dialog with the EPA as 
they set about revising their proposed remedy for Operable Unit 
6 of the California Gulch Superfund site, which lies just above 
the LMDT.
    We have also had very productive interactions with Senator 
Udall's office on this legislation and we appreciate those 
discussions.
    The Department has 3 principal concerns with the language 
in S. 3404. First, we do not believe that the requirement in 
section 2 of the bill is necessary, which calls on the 
Secretary of the Interior to take steps to repair and maintain 
the structural integrity of the LMDT. This mandate has not been 
found to be technically necessary from a public safety or 
environmental perspective, nor cost-effective, given the 
findings of Reclamation's risk assessment completed in the fall 
of 2008.
    Second, EPA and Colorado made a determination in June 2009 
that portions of the current remedy for Operable Unit 6 of the 
California Gulch Superfund site are not efficient nor 
sustainable and the agencies are proposing to change that 
remedy. In view of this ongoing process, the Department does 
not believe section 3 of the bill, which authorizes new duties 
to the Secretary of the Interior, is appropriate at this point 
in time.
    Finally, section 3 of the bill amends existing law of the 
1992 authorization pertinent to Reclamation. It amends that law 
in a manner that could be construed as conferring 
responsibility on the Secretary for facilities which have been 
listed under the Comprehensive Environmental Response 
Compensation and Liability Act, CERCLA, or as subject to the 
Resource Conservation Recovery Act, RCRA. Reclamation is not a 
potentially responsible party for contamination at the 
Leadville Superfund site and we believe that this language 
serves to create that impression and could be construed as 
creating liability where none currently exists. My written 
statement expands on these points.
    Returning to the risk assessment referenced previously, I 
would like to quickly provide some background. The assessment's 
purpose was to determine whether any threat was posed to public 
safety or the environment by the LMDT in the face of annual 
fluctuations in groundwater levels. Reclamation began its 
scientific risk assessment in 2007 and when initial findings 
were available they were independently peer reviewed. This 
review confirmed Reclamation's analysis that it is highly 
unlikely that a sudden release of water could occur from either 
a blockage in the LMDT or through the bulkheads installed in 
the tunnel.
    When the risk assessment was published in the early fall of 
2008, it was posted on the Internet and distributed to the 
media. Reclamation conducted 3 public meetings and sought 
public comment on the findings. We remain confident in the 
value of the risk assessment and in the validity of its 
findings.
    Notwithstanding that confidence, Reclamation has an 
emergency action plan for the LMDT and a water treatment 
facility that has been in place since 2001 and is regularly 
updated. The plan is more fully discussed in my written 
testimony.
    We understand the concern of Lake County Commissioners that 
Reclamation or the Department may 1 day walk away from the work 
at Leadville. I would like to affirm that Interior and this 
administration at its highest levels are committed to 
continuing to operate and maintain the treatment plant, pumps 
and pipelines and protect public safety at the LMDT.
    In addition to these actions, we support the process of the 
Colorado Department of Health and Environment and EPA to 
determine a water management portion of the remedy at OU-6 that 
is more effective than those actions that were proposed and 
incorporated into the ROD in 2003.
    Finally, the fourth bill, H.R. 4252. The last bill is the 
Inland Empire Perchlorate Groundwater Plume Assessment Act of 
2010. The Rialto-Colton Basin is located in western San 
Bernadino County in California, about 60 miles east of Los 
Angeles in the upper Santa Anna River watershed. Groundwater 
presently constitutes about 79 percent of the drinking water 
supply in the Inland Empire. Perchlorate, which is both from 
synthetic and natural sources, has been detected in the main 
water-producing aquifers within the Rialto-Colton and adjacent 
basin and has contaminated water in more than 20 production 
wells that supply the communities within the basin and 
surrounding area.
    The USGS has a long history of hydrologic work in the 
Rialto-Colton area and adjacent areas in the Inland Empire and 
it operates an extensive groundwater monitoring network, 
providing the public with real-time information on water levels 
and water quality. The USGS has developed predictive models on 
the Rialto-Colton Basin and adjacent groundwater basins to 
assist in the management of water resources in the area. These 
models are based on the current scientific understanding of the 
geology and hydrology in the area, including the aerial and 
vertical extent of the aquifers, hydraulic properties, recharge 
and discharge of groundwater, interaction between groundwater 
and surface water.
    H.R. 4252 directs the Secretary, acting through the USGS, 
to conduct a study of water resources in the State that 
addresses a number of concerns, including delineating the 
aquifers in the Rialto-Colton Basin, determining the 
avaiability of groundwater resources for human use and the 
salinity of groundwater resources, identifying the source or 
sources of a recent surge in perchlorate concentrations in 
groundwater and the susceptibility of the aquifers to 
contamination, and characterize the surface and bedrock 
geology, including the effect of the geology on groundwater 
yield and quality.
    The USGS has the scientific capacity to address the issues 
identified in H.R. 2316, a strong working relationship with 
many of the people currently working on groundwater quality 
issues in California's Inland Empire, and a reputation for 
providing unbiased information.
    We note that the problem of perchlorate affecting drinking 
water supplies is not unique to the communities in the Rialto-
Colton or the Inland Empire. Perchlorate is an issue throughout 
the Southwestern United States. Therefore, methods developed to 
understand the perchlorate contamination in the Rialto-Colton 
could be useful to water managers in other basins.
    We note, however, that the activities called for in H.R. 
4252 are already authorized by existing authorities. Any study 
conducted to fulfil the objectives of the bill would compete 
for funding with other administration priorities.
    That concludes my testimony. Both myself and Mr. Larson 
will be ready to answer questions at the appropriate time.
    [The prepared statements of Mr. Connor follow:]

   Prepared Statement of Michael L. Connor, Commissioner, Bureau of 
          Reclamation, Department of the Interior, on S. 3387

    Madam Chairwoman and Members of the Subcommittee, I am Michael 
Connor, Commissioner of the Bureau of Reclamation (Reclamation). I am 
pleased to be here today to present the views of the Department of the 
Interior (Department) on S. 3387, a bill to provide for release of 
water from the Marketable Yield pool of Ruedi Reservoir for the benefit 
of endangered fish habitat in the Colorado River, and for other 
purposes. The Department has concerns with the language of S. 3387 
which I will describe below.
    Reclamation recognizes the public interest in the Upper Colorado 
River Recovery Program and the Programmatic Biological Opinion (PBO) 
issued to Reclamation on operations affecting the 15-Mile Reach of the 
Colorado River, and supports the efforts of water users in Colorado to 
find permanent water supply requirements as negotiated under the PBO. 
Reclamation, the Fish and Wildlife Service (Service) and our other 
Federal partners have a long, positive history with the Recovery 
Program. Based on survival and propagation rates tracked by the 
Service, these recovery programs have promoted recovery of endangered 
fish species in the River.
    The Department's contribution of water for fish habitat in the 15-
Mile Reach Upper Colorado River has been substantial. From 1990 to 
1999, Reclamation provided at least 90% of the water every year under 
prior biological opinions for the four fish species, all on a non-
reimbursable basis. This averaged just under 35,000 acre-feet during 
the 1990s. Since adoption of the PBO in 1999, Reclamation's annual 
contribution of water has ranged from 20,825 acre-feet up to 50,825 
acre feet. Today, Reclamation's non-reimbursable contribution of water 
to this Program provides roughly 75% of the water available to the 
Service for the 15-Mile Reach, which comes from various Reclamation 
facilities including Ruedi Reservoir.
    Beginning in 2013, S. 3387 would authorize the annual release of 
5,412.5 acre feet of water from Ruedi Reservoir. The legislation 
further provides that this annual release can be executed without a 
contract between the Federal government and the non-Federal parties. 
The absence of a contract is problematic for operational and financial 
reasons.
    In a September 16, 1998, letter to the Service, Colorado West Slope 
and transmountain diverter water interests agreed to each ``. provide 
or secure funding to buy or build . . . '' 5412.5 acre-feet of 
permanent water after the interim period which ends in 2012, with the 
water users assuming responsibility for the 5412.5 acre-feet as of 
January 1, 2013. In light of this, the Department believes more 
discussion needs to take place between our agency, the State of 
Colorado, and west slope water users on S. 3387. The Department 
believes that the bill as written is inconsistent with this cost-share 
arrangement which was a fundamental aspect of the 1999 PBO.
    Associated with this issue, the Department is concerned that the 
bill will impact the Federal treasury due to potential lost revenues 
that would result by removing 5412.5 acre-feet of water from the 
Marketable Yield pool (51,500 acre feet) of water from Ruedi Reservoir 
without a repayment contract.
    In 1999, the Service issued a PBO to Reclamation on operations 
affecting the 15-Mile Reach of the Colorado River. In addition to the 
10,825 acre-feet of water Reclamation was to provide annually until 
2012, the PBO, in recognition of the September 1998 letter, called for 
east and west slope water users to have permanent agreements in place 
to provide 10,825 acre-feet of water per year by 2012. The ``10825 
Stakeholders'' as they became known began meeting in 2007 to review 
possible alternatives and have now selected a preferred alternative, 
which involves the west slope water users providing their commitment 
through the continued release of water from Ruedi Reservoir.
    Ruedi Reservoir was constructed to provide storage for replacement 
of out-of-priority diversions to the east slope, which is known as the 
replacement capacity, and to provide water for municipal and industrial 
development on the west slope. Ruedi Reservoir's largest pool of water 
is referred to as the Regulatory Capacity. The Regulatory Capacity 
(73,278 acre-feet) is divided into three smaller pools, one of which is 
the Marketable Yield pool. The Marketable Yield pool is 51,500 acre-
feet, of which 16,373 acre-feet remains available for contracting. The 
S. 3387 language would remove 5,412.5 acre-feet of the water available 
for future contracts and set it aside for the purposes of the bill 
without any repayment for construction, operation, or maintenance costs 
that are associated with this water, and incurred by the United States. 
Under the 1958 Water Supply Act (Public Law 85-500), and the 1962 
authorization for the Fryingpan-Arkansas Project (Public Law 87-590), 
these costs are reimbursable.
    In general, the Department views the principle of a reasonable non-
Federal cost-share contribution as an important one to maintain. Water 
development, despite its benefits, has had an impact on aquatic 
ecosystems. In this case, non-federal water development has contributed 
to certain species being listed under the ESA. The beneficiaries of 
that development need to contribute to the mitigation necessary to 
protect and recover species. We believe that was what was contemplated 
in the PBO.
    As S. 3387 is written, the non-federal cost sharing obligations of 
the west slope would be shifted to the United States. Not only is this 
inconsistent with the PBO as it applies to the west slope, it is also 
inconsistent with the approach taken by the east-slope water users who 
are meeting their cost-share obligation under the September 1998 letter 
and the PBO. Also, as alluded to earlier, the United States could lose 
revenues from the foregone 5,412.5 acre-feet of water that might 
otherwise be provided under a repayment contract. These revenues total 
about $6,800,000 in capital repayment if paid today in a one-time 
payment. Additionally, the revenues foregone from operation, 
maintenance, and replacement (OM&R) would annually total over $18,000, 
based on the OM&R figures from the previous five years.
    A final issue associated with the absence of a repayment contract 
concerns how releases of water will be made from Ruedi Reservoir. At a 
minimum, the language in the bill should articulate the need to 
coordinate releases with Reclamation and other interested parties, and 
that measures need to be taken to ensure that such releases of water 
are protected to ensure benefits to endangered species.
    In summary, I'd like to stress the importance of maintaining the 
1999 PBO for the benefit of aquatic resources and water users in 
Colorado. Accordingly the Department is prepared to work closely with 
non-Federal parties to identify reasonable alternatives to the bill's 
present language.
    This concludes my written remarks. I would be pleased to answer any 
questions from the Subcommittee.
                                s. 3404
    Madam Chairwoman and Members of the Subcommittee, I am Michael 
Connor, Commissioner of the Bureau of Reclamation (Reclamation). I am 
pleased to provide the views of the Department of the Interior 
(Department) on S. 3404, the Leadville Mine Drainage Tunnel Act of 
2010. The Administration supports the sponsors' intent with this bill 
to ensure that the Leadville Mine Drainage Tunnel (LMDT) poses no 
threat to public safety and the environment, and to facilitate the 
clean up of a Superfund site in the vicinity. For reasons described 
below, however, the Administration has both policy and technical 
concerns about this bill and does not believe that legislation is 
warranted at this time. We will continue to work with Federal, State, 
and non-Federal parties on water resource issues at the Leadville Mine 
Drainage Tunnel (LMDT).
    The Department last testified before this Subcommittee on 
legislation pertaining to the Leadville Mine Drainage Tunnel (LMDT) on 
April 24, 2008. Since that time, Reclamation completed a Risk 
Assessment analyzing potential dangers posed by water blockages inside 
the tunnel, and worked cooperatively with the U.S. Environmental 
Protection Agency (EPA) and Colorado Department of Public Health and 
Environment (CDPHE) to install additional drainage capability into the 
LMDT. We have also held several public meetings with residents living 
near the Leadville area to convey Reclamation's findings that the LMDT 
is safe, and have continued an active dialogue with the EPA as it 
revises the proposed remedy for Operable Unit 6 of the California Gulch 
National Priority List (Superfund) Site, which lies above the LMDT. We 
have also had very productive interactions with Senator Udall's office 
on this legislation, and we appreciate those discussions.
    The Department has three principal concerns with the language in S. 
3404. First, we do not believe that the requirement in Section 2 of the 
bill, which calls on the Secretary of the Interior to take ``such steps 
to repair and maintain the structural integrity of the LMDT as may be 
necessary,'' takes into consideration Reclamation's 2008 Risk 
Assessment. The Risk Assessment, completed in the Fall of 2008, is 
described in greater detail below. Second, a determination by the EPA 
and CDPHE was made in June of 2009 that portions of the current remedy 
for Operable Unit 6 of the California Gulch Superfund site are not 
efficient or sustainable, and the agencies are proposing to change that 
remedy this year. EPA and CDPHE jointly concluded that ``using the mine 
workings and the [LMDT] to convey water cannot be relied on for the 
long-term.'' In view of this ongoing process, the Department also does 
not believe that Section 3 of the bill, which contemplates new 
responsibilities for the Secretary of the Interior to treat additional 
flows of water diverted from the surface of Operable Unit 6 into the 
Leadville Mine Drainage Tunnel, is appropriate. Finally, Section 3 of 
the bill amends Section 708(a) of Public Law 102-575 in a manner that 
could be construed as conferring responsibility on the Secretary for 
facilities which have been listed under the Comprehensive Environmental 
Response, Compensation and Liability Act (CERCLA), or are subject to 
the Resource Conservation and Recovery Act (RCRA). Reclamation is not a 
Potentially Responsible Party for contamination at the Leadville 
Superfund site, and believes that this language serves to create that 
impression and could be construed as creating liability where none 
currently exists.
    The LMDT is located in Lake County, Colorado, and was originally 
constructed by the Bureau of Mines from 1943 to 1952. It was intended 
to remove water from portions of the Leadville Mining District to 
facilitate the extraction of lead and zinc ore for the WWII and Korean 
War efforts. Reclamation acquired the LMDT in 1959 with the intention 
of using the tunnel as a source of water for what was then the proposed 
Fryingpan-Arkansas project. Due to more senior existing claims on the 
water, no water rights for the discharge were ever obtained by 
Reclamation. The LMDT drainage discharges into the East Fork of the 
Arkansas River.
    In 1983, EPA listed the California Gulch Site on the National 
Priorities List of Superfund sites. The 18-square-mile area was divided 
into 12 areas called Operable Units (OU). The LMDT is located beneath a 
portion of a surface unit, OU6 that covers approximately 3.4 square 
miles in the northeastern quadrant of the Site. Groundwater in the 
California Gulch area is within a separate operable unit--designated 
OU12. Reclamation holds title to the LMDT on behalf of the United 
States, but does not own or operate any sources of contamination on the 
surface of OU6 (i.e., waste rock or tailings), or any portion of the 
surface itself.
    As part of the implementation of an OU6 remedy proposed in 2003, 
EPA has been collecting surface runoff from mine waste piles and 
discharging that surface runoff into the Marion Shaft, where it moves 
through the mine workings to the LMDT. This water is seasonal and 
totals approximately 3 to 5 million gallons a year. It has proven to be 
possible for the Reclamation plant to treat limited amounts of waters 
from OU6 for EPA pursuant to agreement and EPA's reimbursement. After 
reviewing technical data suggesting that the remedy proposed in 2003 
was neither effective nor sustainable, EPA in June 2009 announced that, 
in 2010, it planned to revise this proposed 2003 remedy, a process that 
is nearing completion today.
    The new data sheds additional light on the complex site 
hydrogeology, and suggests that the collection of water at the surface 
and the diversion of portions of the water into existing shafts, and to 
the LMDT, is not effective in the long term. Seasonally, groundwater 
levels fluctuate near the LMDT. Groundwater flows into the LMDT at 
numerous locations, and flows out of the LMDT at the portal and also 
into surrounding rock formations. In addition, EPA and CDPHE have 
determined that the new remedy should prevent the generation of 
contaminated surface waters in the first instance, thereby alleviating 
the additional 3 to 5 million gallons of contaminated surface water 
that is currently diverted through shafts into the LMDT.
    These characteristics also heavily influenced the findings of 
Reclamation's 2008 Risk Assessment. The assessment's purpose was to 
evaluate the stability and assess the risk associated with the LMDT. 
Reclamation began its scientific Risk Assessment in 2007, and when 
initial findings were available, they were independently peer reviewed. 
The Risk Assessment utilized a similar process to the one Reclamation 
uses to assess risk at its dams, a model that is an international 
standard for conducting risk assessments. The independent peer review 
confirmed Reclamation's analysis that it is highly unlikely that a 
sudden release of water could occur from either a blockage in the LMDT, 
or through the bulkheads installed in the tunnel. Moreover, the 
assessment concluded that even if an existing natural blockage in the 
upper part of the LMDT failed rapidly, a sudden release of water 
through the lower blockage and bulkheads is unlikely.
    When the Risk Assessment was published in the early Fall of 2008, 
it was posted on the Internet and distributed to the media. Reclamation 
conducted three public meetings and sought public comment on the 
findings. We remain confident in the value of the Risk Assessment and 
the validity of its findings.
    There are three sources of LMDT water currently entering the 
treatment plant. First, the natural rate of drainage from the tunnel 
portal is 500 gallons per minute (gpm), or 1.1 cubic feet per second 
(cfs). Second, there is a well in the LMDT about 1000 feet in from the 
portal that pumps about 500 gpm or 1.1 cfs directly to the treatment 
plant. And third, since June of 2008, Reclamation has been receiving 
another 700 gpm or 1.6 cfs, accommodating the additional drainage 
capability via another well installed by EPA about 4,700 feet in from 
the portal. This well was installed in response to public concern about 
rising water levels in the vicinity of the LMDT.
    Reclamation has a maximum treatment plant capability to process 
water at a rate of nearly 2,100 gpm from the LMDT or 4.8 cubic feet per 
second cfs. The NPDES permit for the facility states that the 30-day 
Average LMDT discharge cannot exceed 1,736 gpm or 3.89 cfs with a Daily 
Maximum ceiling of 2,313 gpm or 5.2 cfs.
    As these actions illustrate, Reclamation is currently managing 
safely all waters discharged to the LMDT. Nevertheless, Reclamation has 
an Emergency Action Plan for the LMDT and water treatment facility that 
has been in place since 2001 and is regularly updated. Water level 
indicators and other warning systems near the LMDT are tied into the 
water treatment plant's auto-dialer for employees, and an audible 
warning system was installed in 2002 to alert the Village at East Fork 
residents in the event of an emergency. The system plays an alert 
message in Spanish and English.
    We understand the concern of some in Colorado that Reclamation may 
one day ``walk away'' from the work at Leadville. I would like to 
affirm that Reclamation is committed to assuring that the treatment 
plant, pumps and pipelines are operated in a manner so as to protect 
public safety at the LMDT. In addition to these actions, we support the 
process of CDPHE and EPA to determine a water management portion of the 
remedy at OU6 that is more effective than actions the agency proposed 
in 2003. Recent studies conducted by EPA conclude that using the mine 
workings and the LMDT to convey water cannot be relied on for the long 
term, and that it is neither cost effective nor efficient to treat 
diluted acid rock drainage this way in perpetuity. Reclamation is 
awaiting the publication by EPA of a revised Record of Decision, and 
believes no legislation should be enacted until that process is 
complete. As such, the Administration does not believe that S. 3404 is 
warranted at this time.
    At a minimum, if any legislation were to proceed, it should be 
amended to address the issues raised herein.
    This concludes my written statement. I am pleased to answer any 
questions from the Subcommittee.

    Senator Stabenow. Thank you very much.
    Mr. Peterson, welcome.

STATEMENT OF DOUG PETERSON, PRESIDENT, MINNESOTA FARMERS UNION, 
                          ST. PAUL, MN

    Mr. Peterson. Thank you, Chairman Stabenow--excuse me--
Chairwoman Stabenow and Ranking Member Brownback, and also 
Senator Udall and the subcommittee. I want to thank you today 
for allowing me to testify in front of this committee on the 
water quality on data collection of the Upper Mississippi, 
specifically S. 2779.
    I'm Doug Peterson. I'm assessment of the Minnesota Farmers 
Union and my family and I--my wife is here also, Ellie--we 
operate a farm located south of Madison, Minnesota. We produce 
wheat, corn, soybeans, and alfalfa. I currently serve on the 
Board of Directors of the National Farmers Union and also serve 
as its national secretary.
    As the subcommittee considers S. 2779, the Upper 
Mississippi River Basin Protection Act, I would like to 
highlight some key perspectives and elements from a farmer's 
point of view. Farmers and ranchers have a variety of tools 
available to properly manage sediment and nutrient loss. 
Federal programs authorized under the farm bill and implemented 
by the U.S. Department of Agriculture also provide some 
necessary technical and financial assistance to maintain and 
improve natural resources on farmers' property. Depending upon 
the local resources and the needs and the agricultural 
production of the individual farmer, a range of activities can 
assist in avoiding, controlling, or trapping sediment and 
nutrient runoff.
    We in Minnesota have State-level programs that work in 
partnership with Federal programs to provide further 
improvement of natural resource conservation benefits. In 
Minnesota, the Land of 10,000 Lakes, the most recent listings 
of the pollution control agency has over 2500 polluted surface 
bodies of water listed as impaired in Minnesota that have been 
failed or identified under the Clean Water Act and water 
quality standards for their designated use.
    So far, about 40 percent of the water resources in 
Minnesota that have been assessed against water quality 
standards do not meet at least one standard, a rate comparable 
with a lot of other States. Only a small percentage, about 20 
percent, of Minnesota's river miles and lakes have been 
assessed so far.
    Because of the impaired water issues and other issues that 
we confront as the Minnesota Farmers Union, we have been active 
in recent years on water-related issues that pertain to the 
Upper Mississippi Basin, and the Minnesota Farmers Union along 
with 19 other farm organizations, including the Farm Bureau and 
commodity groups, we have come together to form the Minnesota 
Agricultural Water Resource Coalition. The purpose is to 
develop and implement a strategic educational, communication, 
and public relations program to inform agricultural producers 
in Minnesota about the water quality issues. Not only that; in 
addition, Minnesota agricultural groups have formed a working 
drainage group to work on the issues that concern Minnesota's 
nearly 17,000 miles of public drainage ditches that are 
critical to the Upper Mississippi River Basin area.
    The goals of this legislation, it fits well with the 
direction that the Farmers Union in Minnesota has been 
traveling. In 2006 the Minnesota legislature passed the Clean 
Water Legacy Act, which is the policy framework that describes 
how Minnesota will restore its impaired waters and protect high 
quality resources. That act also stresses the need for public 
participation in those plans, as it contains the reduction of 
pollution strategies.
    Strategies that consider local needs is also a key. Another 
component of the act is the need for State and local entities 
to cooperate and coordinate their water planning and monitoring 
efforts. The Minnesota Farmers Union is especially interested 
in monitoring and inventory efforts to establish parameters 
around natural background loading in waters, and legislation 
would helpfully and hopefully work to address what Minnesota 
Farmers Union has supported, that projects that defend and 
define the DNA markers of animal species fecal matter--in other 
words, fecal coliform in the water column--and natural 
sloughing, and establishment of pre-sediment levels.
    In closing, Madam Chair, I would just like to say that and 
emphasize that the property rights should be recognized as 
farmers and producers as a monitoring network is established 
and maintained. It is absolutely critical that any data 
collected should be sensitive to landowner privacy, and also as 
provided in this legislation.
    I want to thank you for this time. I will stand for 
questions. Thank you.
    [The prepared statement of Mr. Peterson follows:]

     Prepared Statement of Doug Peterson, Minnesota Farmers Union,
                              St. Paul, MN

    Chairwoman Stabenow, Ranking Member Brownback and members of the 
Subcommittee, thank you for the opportunity to testify today about the 
status of water quality and data collection efforts in the Upper 
Mississippi River Basin. My name is Doug Peterson and I am president of 
the Minnesota Farmers Union (MFU). My family and I own and operate our 
farm located south of Madison, Minnesota, where we produce wheat, corn, 
soybeans and alfalfa. In addition to my responsibilities at MFU, I also 
serve on the board of directors for the National Farmers Union (NFU).
    Farmers Union has been working since 1902 to protect and enhance 
the economic wellbeing and quality of life of family farmers, ranchers 
and rural communities through advocating grassroots-driven policy 
positions adopted by its membership. Our members understand the 
critical role of natural resource stewardship in maintaining our 
ability to provide food, feed and fuel, as well as a variety of 
ecosystems services such as clean water from our farms and ranches.
    As the subcommittee considers S.2779, the Upper Mississippi River 
Basin Protection Act, I will highlight some key elements from a 
producer's perspective. Farmers and ranchers have a variety of tools 
available to properly manage sediment and nutrient loss. Federal 
programs authorized under the Farm Bill and implemented by the U.S. 
Department of Agriculture (USDA) provide necessary technical and 
financial assistance to maintain and improve natural resources on 
farmers' property. Depending on the local resource needs and the 
agricultural production of the individual producer, a range of 
activities can assist in avoiding, controlling or trapping sediment and 
nutrient run-off. State-level programs work in partnership with federal 
programs to further improve natural resource conservation benefits.
    In Minnesota the land of 10,000 lakes, the most recent listings of 
the Minnesota Pollution Control Agency has over 2,500 surface bodies of 
water listed as impaired waters in Minnesota that have failed to meet 
water quality standards for their designated use. So far, about 40 
percent of the water resources in Minnesota that have been assessed 
against water quality standards do not meet at least one standard, a 
rate comparable with what other states are finding. Only a small 
percentage of Minnesota's river miles and lakes have been assessed so 
far.
    Because of the impaired waters issue and others, Minnesota Farmers 
Union has been very active in recent years on water related issues that 
pertain to the Upper Mississippi Basin. MFU came together with nineteen 
other Minnesota farm organizations including the Farm Bureau and 
commodity groups to form the Minnesota Agricultural Waters Resources 
Coalition to develop and implement a strategic educational, 
communications and public relations program to inform agricultural 
producers in Minnesota about water quality issues. In addition, 
Minnesota agriculture groups have formed a drainage work group to work 
on issues that concern Minnesota's nearly 17,000 miles of public 
drainage ditches that are critical to the Upper Mississippi River Basin 
area.
    The goal of this legislation fits well with the direction that 
Farmers Union and Minnesota have been moving. In 2006, the Minnesota 
Legislature passed the Clean Water Legacy Act, which is a policy 
framework that describes how Minnesota will restore its impaired waters 
and protect high quality water resources. The Act stresses the need for 
public participation to ensure that implementation plans contain 
pollution reduction strategies that consider local needs. Another key 
component of the Act is the need for state and local entities to 
cooperate and coordinate their water planning and monitoring efforts.
    MFU is especially interested in monitoring and inventory efforts to 
establish parameters around natural background loading in waters, and 
this legislation would hopefully work to address that. MFU has 
supported projects to define DNA markers of animal species fecal 
matter, and natural sloughing, and establishment of pre-settlement 
levels.
    Data collection and analysis plays a key role informing program 
implementation decisions. The Mississippi River Basin Healthy Watershed 
Initiative (MRBI) recently launched by the USDA-Natural Resources 
Conservation Service (NRCS) is a conservation-systems approach to 
managing and optimizing nutrient use and minimize runoff and soil 
erosion. The MRBI targets watersheds and subwatersheds based upon 
consistent evaluation of data from a variety of sources, including the 
USGS and state-level water quality data. The USGS data collection 
network proposed by this bill would provide information essential to 
future program planning as well as providing a quantifiable measure of 
the program's effects.
    In addition to conservation program implementation, the 
availability of sound data is also important in measuring outcomes to 
determine program effectiveness. Data collected by utilizing sound 
scientific methodologies and interpreted with rigorous statistical 
analysis can provide a wealth of information for lawmakers, government 
agencies and agricultural producers to help them make policy and 
resource management decisions.
    The legislation correctly recognizes the need to integrate data 
analysis with existing efforts across various agencies to create a 
baseline understanding of overlap, data gaps and redundancies. One of 
these already functional programs is the NRCS Conservation Effects 
Assessment Project (CEAP). CEAP assessments are carried out at the 
field-, watershed-and landscape-scale and include analysis of the 
cumulative effects and benefits of conservation practices on natural 
resources and the environment.
    USDA conservation program practices are being assessed under CEAP 
to quantify the environmental effects of conservation practices and 
programs and develop the science base for managing the agricultural 
landscape for environmental quality. Programs under consideration by 
CEAP include the Environmental Quality Incentives Program (EQIP), the 
Conservation Reserve Program (CRP), the Conservation Stewardship 
Program (CSP), the Wetland Reserve Program (WRP), the Wildlife Habitat 
Incentives Program (WHIP), the NRCS Conservation Technical Assistance 
Program and the Grassland Reserve Program (GRP).
    Given the vast landscape over which water quality information will 
be gathered, implementation of data collection as proposed under this 
bill will require an extensive network of monitoring stations, 
equipment and personnel. With more than 60 percent of the Upper 
Mississippi River Basin in cropland or pasture, private landowners are 
logical partners in the establishment of a nutrient and sediment 
monitoring network. I emphasize that private property rights should be 
recognized as a monitoring network is established and maintained, and 
it is absolutely critical that any data collected should be sensitive 
to landowner privacy as provided for in the legislation.
    Program effectiveness must be measured in an outcome-based approach 
where real changes and environmental benefits are tracked and rewarded. 
Efforts to improve data collection and analysis related to water 
quality moves us toward that goal by providing essential information 
that can be used to continually improve programs and practices for the 
best possible outcome. Farmers and ranchers have historically been our 
best soil and water conservationists when given the proper tools and 
programs, and continue to seek opportunities to protect and conserve 
the natural resources that are essential to agricultural production and 
rural communities.

    Senator Stabenow. Thank you very much.
    Mr. Mueller, welcome.

STATEMENT OF ANDREW A. MUELLER, PRESIDENT, BOARD OF DIRECTORS, 
 COLORADO RIVER WATER CONSERVATION DISTRICT, GLENWOOD SPRINGS, 
                               CO

    Mr. Mueller. Good afternoon, Madam Chair Stabenow, Ranking 
Member Brownback, and Senator Udall. My name is Andy Mueller. I 
am President of the Board of Directors of the Colorado River 
Water Conservation District, commonly referred to as the 
Colorado River District.
    I want to thank you for this opportunity to share the 
Colorado River District's position regarding the importance of 
S. 3387. I also want to thank Commissioner Connor for his 
willingness and the willingness of his Department to find and 
work with us--find a mutual solution for the issues presented 
by this bill.
    The Colorado River District is a political subdivision of 
the State of Colorado, responsible for the protection and 
development of the Colorado River Basin's water in Colorado. We 
have been partners with Interior agencies, States, water users, 
power and environmental interests in the cooperative and highly 
successful recovery program for the endangered fish on the 
Upper Colorado River since its inception in 1988.
    S. 3387 would dedicate a small portion of western 
Colorado's pool of water in the Federal Ruedi Reservoir to the 
recovery program. I want to share with you the importance of 
this legislation to the Colorado water users and the very real 
challenges we face.
    Let me begin by offering some perspective on the importance 
of the Colorado River and this legislation to the entire State 
of Colorado. The Colorado River provides water to nearly all of 
Colorado. Numerous diversions move water from the natural basin 
of the Colorado River to each of Colorado's major river basins. 
Among the largest of these diversions are 2 U.S. Bureau of 
Reclamation facilities, the Colorado Big Thompson and the 
Frying Pan-Arkansas projects. The latter includes the Ruedi 
Reservoir as a principal project feature and is the subject of 
this legislation.
    Additionally, hundreds of mostly small non-Federal projects 
provide vital water supplies to the metropolitan areas on both 
sides of Colorado's Continental Divide. All of these water 
users rely upon the continued success of the recovery program 
for compliance with the ESA.
    A key component of the recovery program is the 1999 U.S. 
Fish and Wildlife Service's programmatic biological opinion, or 
PBO, for the mainstream of the Colorado River in Colorado. The 
PBO provides Endangered Species Act compliance for 5 U.S. 
Bureau of Reclamation projects in Colorado. The PBO also 
fulfils ESA requirements for all existing nonFederal water 
projects and water uses on the main stem of the Colorado River 
in Colorado.
    This amounts to total Federal and nonFederal depletions of 
1 million acre-feet annually, serving over 4 million Colorado 
citizens and water users. The main stem basin of the Colorado 
River in Colorado is heavily used by agriculture, 
municipalities, and industry on both sides of the Continental 
Divide, which roughly divides the State. Tensions, alluded to 
earlier by Senator Udall, frequently erupting in litigation or 
worse, between the east and west slope water interests in 
Colorado, are legendary.
    I'm here today to present a true consensus position among 
those often-fractious parties. As part of the biological 
opinion, Colorado water users agreed to replace 10,825 acre-
feet per year of Ruedi releases currently being made under 
earlier biological opinions with permanent water sources. Water 
users agreed that the commitment should be split evenly between 
east and west slope water users, but all of the water must be 
provided for this commitment to be fulfilled.
    This bill is necessary for the implementation of this 
agreement. From the recovery program's inception in 1988, we 
have read the headlines and watched news features regarding the 
ESA's impact on water users in other regions.
    The recovery program distinguishes the Upper Colorado River 
from other fractious basins as it provides ESA compliance over 
Federal and nonFederal water users and has done so without a 
single legal challenge.
    Reclamation is concerned that water users are somehow 
reneging on our commitment, on our agreement to provide a 
permanent water supply to the endangered fish. We are not.
    Ruedi Reservoir is somewhat unique among Reclamation 
projects. Ruedi was built as compensation to western Colorado 
and the people therein for the loss of Colorado River water 
diverted to Arkansas--to the Arkansas River, through 
Reclamation's Frying Pan-Arkansas project.
    The majority of the water in Ruedi Reservoir is dedicated 
to the west slope water use. We see western Colorado's 
willingness to dedicate a portion of our uncontracted pool of 
Ruedi water to the endangered fish recovery as a commitment of 
our water. Accordingly, I'm here to ask you for your support of 
S. 3387 as the only practical implementation for continued 
compliance with the 1999 PBO.
    Thank you.
    [The prepared statement of Mr. Mueller follows:]

Prepared Statement of Andrew A. Mueller, President, Board of Directors, 
Colorado River Water Conservation District, Glenwood Springs, CO, on S. 
                                  3387

    I want to thank Chairman Stabenow and Senator Brownback for this 
opportunity to share the Colorado River Water Conservation District's 
position with the subcommittee regarding the importance of S.3387, 
which dedicates a portion of the Western Colorado Marketable Pool in 
Ruedi Reservoir to the Upper Colorado River Endangered Fish Recovery 
Program (``Recovery Program'').
    The Colorado River Water Conservation District (``River District'') 
is the principal policy body focused exclusively on the Colorado River 
within Colorado. We are a political subdivision of the State of 
Colorado responsible for the protection and development of the Colorado 
River basin's water resources to which the State of Colorado is 
entitled under the 1922 and 1948 Colorado River interstate water 
compacts. The River District includes all or part of 15 counties in 
west-central and northwest Colorado, including the entirety of the 
mainstem of the Colorado River basin in which both Ruedi Reservoir and 
the critical habitat for four fish species listed as endangered occur.
    The Colorado River provides water to almost the entire state of 
Colorado. Numerous transmountain diversions move water from the 
Colorado River's headwaters to each of Colorado's other major river 
basins. Among the largest of these diversions are two U.S. Bureau of 
Reclamation (``Reclamation'') projects: the Colorado-Big Thompson and 
Fryingpan-Arkansas projects. The latter includes Ruedi Reservoir as a 
principal project feature and is the subject of this legislation. 
Additionally, non-federal projects provide vital water supplies to 
Colorado's metropolitan areas, including the Denver metro area, 
Colorado Springs, and Pueblo.
    All these projects are 100% dependent on the continued success of 
the Recovery Program for continued service and water delivery. 
Technically, the Program serves as the ``reasonable and prudent 
alternative'' under provisions of the Endangered Species Act (``ESA''). 
The Recovery Program provides ESA compliance for approximately 1,800 
water projects depleting 2.8 million acre-feet per year in the 
Colorado, Wyoming, and Utah portions of the Upper Colorado River Basin. 
These include every Reclamation reservoir and project in the Upper 
Colorado River basin.
    A key component of the Recovery Program and ESA compliance is the 
1999 U.S. Fish and Wildlife Service's programmatic biological opinion 
(PBO\1\) for the ``15 Mile Reach'' of the Colorado River in Colorado. 
Only with the PBO in place can the following five U.S. Bureau of 
Reclamation projects continue operations in compliance with the ESA:
---------------------------------------------------------------------------
    \1\ ``Final Programmatic Biological Opinion for Bureau of 
Reclamation's Operation and Depletions, Other Depletions, and Funding 
and Implementation of Recovery Program Actions in the Upper Colorado 
river above the Confluence with the Gunnison River,'' December 20, 
1999.

   Fryingpan-Arkansas Project (including Ruedi Reservoir),
   Colorado-Big Thompson Project,
   Collbran Project,
   Grand Valley Project, and
   Silt Project.

    The PBO also fulfills ESA requirements for all existing non-federal 
water projects and water uses of the Colorado River from its confluence 
with the Gunnison River at Grand Junction, Colorado to its headwaters. 
This amounts to total depletions (federal and non-federal) of one 
million acre-feet annually. Additionally, the PBO allows for 120,000 
acre-feet/year of new water development.
    As part of the PBO, Colorado water users, including Reclamation, 
agreed to provide 10,825 acre-feet/year of water permanently. The PBO 
explicitly recognized Ruedi Reservoir as a potential source of this 
permanent water.
    S. 3387 permanently dedicates 5,412.5 acre-feet from the marketable 
pool of Ruedi Reservoir to fulfill half of the water users' commitment 
to provide 10,825 acre-feet of water annually to assist fish recovery. 
The marketable pool (51,500 acre-feet) in Ruedi Reservoir, as defined 
in the Fryingpan-Arkansas Project's Operating Principles, is dedicated 
to water uses on Colorado's west slope, consistent with Colorado water 
law.
    The PBO provides for an additional 10,825 acre-feet of releases 
from Ruedi Reservoir on an interim basis through 2012. The PBO also 
requires replacement of an additional 5,412.5 acre-feet by east slope 
water users from other sources. Accordingly, with passage of S.3387, 
Ruedi Reservoir will have a net increase of 5412.5 acre-feet of water 
in its West Slope marketing pool after 2012.
    The River District enjoys a long-standing and collaborative working 
relationship with Reclamation. We are therefore distressed that 
Reclamation opposes this legislation. From our discussions with 
Reclamation officials, we understand their principal concern is 
providing this water at no cost to water users. We respond in five 
parts.
    First, Reclamation seems to be ignoring the fact that other 
provisions of the PBO restore 5,412.5 acre-feet to the marketable pool 
at Ruedi. S.3387 is required to comply with the ESA, in particular with 
the PBO. Without the PBO, the restored water, plus the 5,412.5 
addressed in the legislation, would be released annually from Ruedi for 
fish recovery under previous biological opinions. With this 
legislation, there is a net increase in the contracting pool of 5,412.5 
acre feet of water. Without it, there is a substantial decrease in the 
contracting pool of water in Ruedi.
    Second, as mentioned above, Reclamation, specifically its five 
projects covered by the PBO, is the principal beneficiary of the PBO. 
Reclamation projects are the single largest water user in the mainstem 
basin of the upper Colorado River. As such, Reclamation is the primary 
beneficiary of the ESA protections of the Recovery Program and the PBO.
    Third, water dedicated to fish and wildlife (and recreation and 
other environmental purposes) in Reclamation reservoirs is 
traditionally non-reimbursable, i.e., provided at no cost to water 
users. We simply seek similar treatment for this water.
    Fourth, the authorizing legislation for the Fryingpan-Arkansas 
Project specifies, `` . . . the Secretary of the Interior is directed . 
. . to comply with the laws of the state of Colorado relating to the 
control, appropriation, use and distribution of the water therein.''\2\ 
``The primary purpose of Ruedi Reservoir . . .  (is) the protection of 
western Colorado water users by the provisions of Colorado Revised 
Statutes'' requiring ``any works or facilities shall be designed for 
exportation of water from the natural basin of the Colorado River . . . 
 shall be operated in such a manner that the present appropriations of 
water, and in addition thereto prospective uses of water . . . within 
the natural basin of the Colorado River . . . will not be impaired nor 
increased in cost at the expense of the water users with the natural 
basin.''\3\ Dedicating a portion of this water to fish recovery efforts 
and fulfillment of the PBO, provides protections to Western Colorado 
water users consistent with the authorizing legislation and principal 
purpose of Ruedi Reservoir.
---------------------------------------------------------------------------
    \2\ P.L. 87-590, 76 Stat. 389 at Section 5(e).
    \3\ Page 2, Paragraph 7 of House Document 130 in accordance with 
House Resolution 91, 87th Congress, March 15, 1961.
---------------------------------------------------------------------------
    Fifth, this legislation represents no actual cost to the federal 
Treasury either in lost or foregone revenues, at least for the 
foreseeable future. Contracts for water from the Marketable Pool of 
Ruedi Reservoir have been available for 28 years. To date, less than 
half of that pool is under contract. There simply is little foreseeable 
demand for the remaining water from this pool; therefore, western 
Colorado water users are willing to permanently dedicate a small 
portion of its water in Ruedi to endangered fish recovery in order to 
provide ESA protection for approximately one million acre-feet of 
existing depletions (both federal and non-federal) plus 120,000 acre-
feet of new depletions. Additionally, passage of this legislation 
yields a net increase to the marketable pool of 5412.5 acre-feet of 
water, more than offsetting any theoretical ``loss.''
    Finally, there is a practical and institutional impossibility for 
western Colorado water users to pay the contract price for Ruedi 
Reservoir water if this legislation fails. Reclamation's Colorado water 
projects are the larger west slope projects covered by the PBO. Other 
water uses are predominantly small agricultural and municipal uses. 
These water users simply do not have the financial capacity to pay the 
contract price for Ruedi water for release to endangered fish habitat. 
The contract-purchase price of a 5412.5 acre foot contract for Ruedi 
water is forecast to be roughly $8 million in 2013, when water 
deliveries from a permanent water source are required. Furthermore, 
neither the River District nor any other entity has the legal authority 
or institutional mechanism to impose a fee or levy a tax to provide the 
necessary revenues from water users for payment of a contract from 
Ruedi Reservoir.
    The consequence of failure to secure annual water releases from 
Ruedi Reservoir with this legislation is reopening of the PBO and new 
ESA consultations on the five Reclamation projects and hundreds of 
individual water users and water projects in the Colorado River basin 
in Colorado.
    Reclamation, as the largest water user in the basin, has the most 
at risk in the event of failure of the PBO. Non-compliance with the PBO 
and consequent reopening of the PBO creates serious regulatory and 
financial uncertainty for Reclamation and other water users, including 
possible imposition of expensive and open-ended selenium management 
program in the Colorado River basin, as was imposed in the Gunnison 
Basin under that basin's recent PBO for the same endangered fish.
    The Recovery Program for the Endangered Fishes of the Upper 
Colorado River is the most successful recovery program in the nation. 
Its continued success for the benefit of the four listed fish species 
and federal and non-federal water projects is dependent on passage of 
S.3387. Accordingly, the Colorado River District respectfully urges the 
Subcommittee's support of S.3387.
    Permanent assignment of 5,412.5 acre-feet of water in Ruedi 
Reservoir from the west slope's marketable yield pool to endangered 
fish recovery accomplishes several important federal goals:

   Ensuring continuing ESA compliance pursuant to the PBO for 
        all east and west slope Colorado River mainstem water users 
        upstream of the Gunnison River, including principally five U.S. 
        Bureau of Reclamation projects;
   Fulfilling Congressional intent and ensuring compliance with 
        Colorado law regarding the purposes of Ruedi Reservoir, namely 
        that the marketable yield pool continues to be available for 
        the benefit of west slope water users by providing ESA 
        compliance for uses of this water;
   Restoring 5412.5 acre-feet to the Ruedi Marketing Pool for 
        future use; and
   Maintaining consistency with long-standing Congressional 
        policy and Reclamation law that water dedicated to fish and 
        wildlife purposes from Reclamation projects is a non-
        reimbursable project cost.

    Senator Stabenow. Thank you very much.
    Mr. Olsen.
    Mr. Olsen. Thank you, Madam Chair, Senator Brownback, 
Senator Udall. I appreciate the opportunity this afternoon to 
testify in support of the Leadville Mine Drainage Tunnel Act of 
2010. My name is Ken Olsen. I'm the chair of the Board of Lake 
County Commissioners. Leadville is our county seat and I've 
spent all of my life in Leadville and have a reasonable 
familiarity with the Leadville Mine Drainage Tunnel, commonly 
referred to as the LMDT.
    First I want to point out that Leadville is situated at the 
headwaters of the Arkansas River. What happens in Leadville 
with water affects downstream farmers, municipal water 
supplies, and the trans-basin drinking water of Aurora and 
Colorado Springs--a lot of people.
    The drainage tunnel is 11,299 feet long. It ws driven as an 
emergency World War Two effort to de-wter and access the 
Leadville Mining District for the extraction of zinc, led, and 
manganese. It was driven 6,000 feet until 1945, when money ran 
out and the war ended, and started up again in 1952 during the 
Korean Conflict, when it was driven to its final length. this 
was all done by Federal appropriations through the War 
Production Board and the Bureau of Mines.
    In 1959 the tunnel was transferred to the Bureau of 
Reclamation, who wanted it for the water rights in connection 
with the Frying Pan-Arkansas Project of the Bureau. That did 
not work out well for the Bureau as the water was heavily 
metal-laden and water rights were in issue. In the late 1960s, 
sinkholes of significant size started appearing along the 
tunnel, which had not been maintained by the Bureau. The most 
significant were adjacent to Colorado Highway 91, which the 
tunnel goes under. The caving tunnel and concern over the water 
building up behind the blockages gave rise to the possibility 
of a tunnel blowout occurring.
    The first 1,000 feet of the tunnel was driven through 
glacial morraine material, dirt and rock, not a stable 
material. At the mouth of the tunnel reside over 200 residents, 
who are still there today. The tunnel entrance is within 300 
yards of the Arkansas River.
    As Senator Udall has pointed out, in 1976 Senator Floyd 
Haskill conducted a hearing on his S. 3394 with the Bureau to 
address the hazards to the public and environment posed by the 
collapsing tunnel. The Bureau opposed the legislation and said 
more study was needed.
    The Leadville Mine Drainage Tunnel Treatment Plant, which 
was the product of a Sierra Club lawsuit, was opened in 1991 to 
address water quality from the tunnel. In the fall of 2007, 
elevated water levels in the complex mine pool area which is 
east of Leadville intersected by the tunnel was again brought 
to the forefront of both public safety and environmental risk 
of a blowout of contaminated water. In February 2008, due to a 
series of events, a state of emergency was declared by the Lake 
County Commissioners. This led to the construction of a relief 
well by the Bureau and EPA, which is still in use today to pull 
down twater levels and reduce risk.
    Entering into the complexities of the situation is an 18 
square mile area of Leadville being designated a Superfund site 
in 1983, 27 years ago. Operable Unit 6, which is one of 12 
areas of the site and has the bulk of the tunnel length under 
it, had as an element of its 2003 record of decision that 3 to 
5 million gallons of highly toxic water was to be put down the 
Marian Shaft, which flows into the Leadville Mine Drainage 
Tunnel, every year.
    Now the EPA has decided to reopen its record of decision on 
Operable Unit 6 because they believe the long-term viability of 
the tunnel to transport the water to the treatment plant is 
questionable. They are proposing to reduce the acid rock 
drainage by capping historic mine piles.
    The Bureau has long contended that they only have the 
authority to treat the water coming out of the tunnel and are 
only responsible for the first 1,000 feet of the tunnel.
    In closing, we need S. 3404 to assign responsibility to the 
Bureau of Reclamation for the entire tunnel length and ensure 
that the mine pool created by the blocked tunnel is safely 
controlled and the Bureau of Reclamation works with the 
Environmental Protection Agency regarding Operable Unit 6 and 
treat, if necessary, any surface water from Operable Unit 6 
that still emanates after their reopened record of decision 
work on OU-6.
    Just as a brief example, I would love for these fine people 
up here to display the complexity of the geology of the 
Leadville Mine Drainage Tunnel. I'll take just a brief moment. 
This is a rather large visual. The complexity of the tunnel is 
such that it starts 9 feet out on this map, it goes for 11,000 
feet. This is the geology of the Leadville Mine Drainage 
Tunnel.
    It is complicated. The Leadville District is very 
difficult. It starts here. The treatment plant is here. The 
relief well was drilled here. The tunnel's blocked from the 
left-hand side of the map. The Leadville Mine Drainage Tunnel 
drains the east side of Leadville for strategic war metals.
    We need your help and appreciate the opportunity to address 
the committee today. Thank you.
    Senator Stabenow. Thank you very much for your testimony. 
Thank you to all of you.
    Senator Brownback had a question.
    Senator Brownback. Thanks, Madam Chairman.
    Mr. Mueller, I'd ask you just in particular, is there 
consequences on the quantity of water flowing in the Arkansas 
River by what you're proposing here?
    Mr. Mueller. Senator Brownback, there are no consequences 
to the Arkansas River. This pool of water that we're disputing 
with the Bureau of Reclamation, no one disputes that it's in 
Ruedi Reservoir for the sole benefit of the west slope of 
Colorado, for the water users on that side of the divide. So it 
is not coming out of any pool of water that would go eastward 
toward Kansas, no, sir.
    Senator Brownback. That would be significant to some people 
I know--me in particular. But I appreciate the discussion here, 
and I know these are serious issues that you're facing and 
wrestling with. I'm glad you've been working on them together 
for some time.
    Thanks, Madam Chairman.
    Senator Stabenow. Thank you very much.
    Thank you to all of you. We have actually managed to have 
the timing be just about perfect. They're just ready to call a 
vote. So I appreciate all of you being here. I would note that 
the subcommittee has also received written testimony regarding 
the hearing and the bills in front of us today. That testimony 
as well as any written submissions from today's witnesses will 
be made part of the official hearing record. We will also keep 
the record open for a period of 2 weeks to receive additional 
statements. For the information of Senators and the staff, 
questions for the record are due by the close of business day 
tomorrow.
    We thank you very much for joining us. The meeting is 
adjourned.
    [Whereupon, at 4:10 p.m., the hearing was adjourned.]


                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

   Responses of Richard S. Walden to Questions From Senator Stabenow

    Question 1a. We have received testimony for the record from tribal 
interests in Arizona that the allocation available to the tribes is 
insufficient. Is it your belief that the allocations are fair?
    Answer. S-2891 makes available up to 69,170 kilowatts of capacity 
with 105,637 megawatt hours of energy in summer and 45,376 megawatt 
hours of energy in the winter pursuant to Schedule D. S-2891 provides 
an opportunity for fair and reasonable allocation of power to the 
tribes in Arizona for the following reasons:
    Representatives from the current Hoover contractors from Arizona, 
California and Nevada have been working on this legislation and, more 
specifically, on this concern for almost three years. The amount of 
hydropower currently allocated to Arizona from all federal sources in 
the summer months is 795,603 kilowatts. The portion that is currently 
allocated to tribes during the summer months is more than 17.7% of all 
federal hydropower allocated to the state of Arizona and it is 19.2% in 
the winter. Native Americans in Arizona living on tribal reservations 
represent 3.49%, according to the 2000 census, of the total Arizona 
population and the percentage is expected to be less than that when the 
2010 Census is completed. Despite this high allocation of hydropower to 
Native American tribes in Arizona, the existing contractor 
representatives from the three states believed that an additional 
allocation of Hoover power should be made available to the tribes in 
2017 and, therefore, agreed to make 69,170 kilowatts of capacity 
available through S-2891. If the Native American tribes in Arizona are 
able to take full advantage of the Hoover power available to them 
through S-2891, they will receive 23.9% of all hydropower allocated to 
the state of Arizona in the summer months and 26.2% in winter months. 
It should be noted that, despite our requests, the Native American 
tribes have been unable to provide to us their current load 
requirements. Therefore we are unable to ascertain what their future 
demand projections will likely be. We have made an honest effort to 
work with the Native Americans in Arizona to help them meet future 
power supply requirements with this national resource.
    Question 1b. What were the results of meetings you had with tribal 
entities in February and March? Have any discussions continued since 
March? If not, why not? And, if so, what have the results of those 
meetings been? Are you willing to engage in further discussions with 
the tribes in an ongoing forward basis?
    Answer. We met with tribal representatives in February and March in 
order to listen to and fully understand their need for an allocation of 
Hoover power. We discussed the proposals developed by the 
representatives of Arizona, California and Nevada and explained why the 
entities from the three states felt that the allocation of 69,170 
kilowatts to the schedule D pool was fair and reasonable based on all 
facts considered. The representatives from the tribes explored our 
reasoning and we discussed many details concerning scheduling and use 
of Hoover power. We explained that we representatives from Arizona 
supported a large allocation of power for tribes in Arizona despite 
some reticence from others. We believe that we have presented 
justification to the tribal representatives as to why the 69,170 
kilowatts of Hoover capacity available to tribes was fair and 
reasonable. Since these direct meetings in February and March, 
representatives from the tribes have attended monthly meetings of the 
Arizona Power Authority (the latest was June 15, 2010) where these 
matters were generally discussed; however, we have had no further 
direct meetings with tribal representatives since we felt we had fully 
explored and explained the reasoning behind the 69,170 kilowatt 
allocation available to tribes in Arizona nor have the tribes requested 
any further meetings. We are more than happy to continue discussions 
with the tribes and work with them in any way they would like to work 
with us to enable them to use this power efficiently and effectively to 
meet the needs of the tribes in Arizona. Hoover generation is a very 
valuable and dynamic resource and should be used to its maximum 
efficiency at all times. The tribal representatives recognize this, and 
we are willing, able and eager to achieve optimum efficiency of this 
resource with the tribes.
    Question 1c. Are there other allocations of power within the 
Colorado River system that also benefit Native American tribes?
    Answer. Yes. Exhibits 1 and 2 summarize the federal hydropower 
available in Arizona in both summer and winter months. As noted above, 
the tribes, which are approximately 3.5% of Arizona's population, 
currently receive 17.7% of the hydropower allocated to Arizona during 
the summer months. If the tribes are able to take full advantage of S-
2891 after it passes, the tribes will receive 23.9% of all hydropower 
allocated to Arizona during summer months.
    Question 1d. Do you support modifications to the bill to provide 
for the tribes' ability to contract directly with the Administration? 
Should that ability also be extended to the allocations made in 
Schedule C?
    Answer. We support modifications to the bill as adopted by the 
House of Representatives. These provide the tribes with the ability to 
contract for Hoover power directly with the Administration. However, we 
feel that extending an allocation of energy pursuant to Schedule C is 
not necessary or reasonable. Schedule C energy is limited by water flow 
on the Colorado River. Currently, and for the past seven years, no 
Schedule C energy has been available due to drought conditions in the 
southwest. Lake Mead reservoir supplying Hoover Dam is at record low 
elevations. The primary recipient of Schedule C energy under the 1987 
Hoover Power Marketing Plan is the Central Arizona Project (CAP). CAP 
uses Hoover power and energy to pump water for residents in Arizona. 
Approximately 15% of the water pumped by CAP flows to Native American 
tribes in Arizona at the present time. As Native American tribes' water 
requirements grow, this percent allocation will eventually increase to 
47%. The CAP uses this energy to supply their pumping responsibilities, 
a large portion of which is dedicated to Native Americans. If the 
Schedule C energy is reduced to CAP because we share it with Native 
Americans, they will have less energy available to meet their pumping 
responsibilities. Furthermore, if the Environmental Protection Agency 
limits the output of the Navajo Generating Station because of 
environmental concerns, CAP will be in dire need of all the energy it 
can obtain, especially any Schedule C energy if it is ever available 
again. Furthermore, the allocation of energy per unit of capacity 
(capacity factor) to the tribes through Schedule D will be higher than 
the corresponding allocation of energy that CAP receives through 
Schedule B. In brief, the tribal allocation (through Schedule D) is at 
an average energy level (capacity factor) for Hoover Dam, and Schedule 
B (the power that CAP receives) is at a much lower capacity factor. It 
would not be fair to increase the allocation of Hoover energy to the 
tribes above that of the average for the entire project at the expense 
of Schedule B users who receive less than average energy.
    Question 2. Would an allocation of power to customers in Arizona 
that did not go through the Arizona Power Authority be contrary to the 
procedures established under Arizona state law?
    Answer. The Boulder Canyon Project Act designates the Arizona Power 
Authority as the agency which purchases federal hydropower on behalf of 
the State of Arizona from the Boulder Canyon Project. An allocation of 
power to customers in Arizona that does not go through the Arizona 
Power Authority would be different than procedures previously 
established under Arizona state law, but it would not be contrary to 
state law. That is because under the first section of the Act's newly-
established Schedule D, the Western Area Power Administration may 
contract directly for long-term Schedule D contingent capacity and 
associated firm energy with new allottees located anywhere within the 
marketing area.
    Question 3. What attempts have been made to ensure a fair 
allocation process among the electrical cooperatives within Arizona?
    Answer. Section 30-125 of Arizona Revised Statutes states that when 
available power supplies are insufficient to meet pending power 
applications, preference shall be given to: (1) districts and (2) any 
incorporated city or town or any cooperative serving its own members 
only, to the extent of the difference between the existing contracts 
with purchase of power generated by the waters of the mainstream of the 
Colorado River from whomever purchased, and 17,500,000 kilowatt hours 
per annum. That complicated statute can be interpreted to mean that 
cooperatives could get approximately 7,000 to 10,000 kilowatts each of 
Schedule A hydro capacity. Richard S. Walden, as Chairman of the 
Arizona Power Authority Commission, has written a letter dated April 
20, 2010 to the General Managers of the Mohave Electric Cooperative, 
Sulphur Springs Valley Electric Cooperative and Navopache Electric 
Cooperative certifying that an application from these cooperatives will 
be treated fairly and equitably pursuant to all applicable laws, 
regulation and the Authority's guidelines. Mr. Walden has further 
reiterated that same pledge in testimony before the House of 
Representatives and the United States Senate Subcommittees on Water and 
Power.
    Question 4a. Please describe, from your perspective, the major 
differences between the administrative allocations proposed by the 
Administration and the allocations proposed in this bill. For example:
    Please comment on the proposal from the Administration to retain 30 
megawatts of contingent Hoover Dam capacity and distribute it to 
customers within the Administration's integrated system.
    Answer. In his June 9, 2010 testimony to the Subcommittee, Western 
Administrator Tim Meeks stated that his agency would like to withhold 
from allocation to customers 30 MW of Hoover Dam capacity for use in 
the regulation and integration of the other federal resources on the 
Colorado River. The Hoover contractors oppose this recommendation. 
Currently, the Administration retains the difference between nameplate 
capacity of Hoover Dam which is 2,074 megawatts and the capacity 
allocated to all contractors in the states of Arizona, California and 
Nevada which is 1,951 megawatts for this purpose pursuant to current 
law. The difference, which at full capacity is 123 megawatts, is 
available to the Administration to the extent that the elevation level 
at Lake Mead is sufficient to produce generation capacity above the 
1,951 megawatts contracted to customers. During the past 11 years, the 
southwest has suffered an extensive drought and the elevation at Lake 
Mead is currently below 1,092 feet (normal is 1,165 feet), and the 
production of capacity at Hoover Dam is approximately 70% of nameplate 
capacity. The Administration has done without this additional capacity 
for the last seven years; therefore, it does not make sense that they 
need the 30 megawatts for the same purpose after 2017. They use this 
capacity primarily for regulation and internal needs for which they 
have no contractual or compelling operating responsibility under the 
Hoover contracts.
    Question 4b. Please comment on the Administration's testimony 
regarding the quantity of power that should be available for 
remarketing.
    Answer. The Administration would prefer to have 30 MW of capacity 
available for regulation and other reasons some of which relate to 
other hydroprojects marketed by Western. They have no remarketing 
authority, need or responsibility for retaining 30 megawatts. The fact 
is that the diversity in use between Arizona, California and Nevada 
provides the Administration with sufficient capacity to meet their 
load-following and regulation responsibilities to its Hoover 
contractors. This has been the case for the past seven years during 
which the drought has reduced available capacity and there is no 
compelling reason for withholding any Hoover capacity from customers in 
Arizona, California and Nevada. There is a total installed capacity of 
2,074 megawatts at Hoover Dam and all of that power should be allocated 
to the three states to enable these states to meet their load 
responsibilities, especially for integrating other resources, load 
following and reserves. The Hoover Power Allocation Act of 2010 does 
not change the historical obligation of Western in this regard.
    Western has also suggested that the amount of firm energy sold to 
Hoover contractors be reduced from the current 4,527,001 MWH to 
4,116,000 MWH due to reduced energy production over the past several 
years at Hoover caused by the drought. Western delivers to its 
customers (contractors) the total energy output from Hoover regardless 
of the contractual provisions. The change suggested by Western has no 
effect on Western's obligations or its energy deliveries. We Hoover 
(contractors) customers get total energy produced (less losses and 
adjustments). However, the change suggested by Western may impact the 
amount of energy designated as Schedule C energy and this could create 
serious contractual problems among the contractors that we want to 
avoid. Please do not adopt this suggestion base energy change since it 
has no actual effect on energy production responsibilities, but could 
create serious contractual disputes.
    Question 4c. Please comment on the Administration's testimony that 
the current Implementation Agreement needs to be evaluated and 
potentially revised to accommodate current conditions.
    Answer. The current Implementation Agreement has been in effect for 
more than 15 years and addresses subjects such as billing, 
administration and crediting capital investments made by the customers. 
Should this agreement need to be revised, the Administration will have 
until 2017 to effectuate any required changes. That is not a compelling 
or relevant consideration in the passage of this bill.
    Question 4d. Please comment on the Administration's testimony that 
a 50-year contract term could potentially exclude classes of customers 
in decades to come.
    Answer. It is very difficult to imagine or understand what new 
classes of customers may be developed in the future that could not be 
served by existing contractors in Arizona, California and Nevada. 
However, it is important to understand that 50 years was the term for 
the original contracts between the states and the federal government 
when the Hoover generation went into service in the 1930's. In this day 
and age, energy considerations require long-term financing that finds 
its security in contracts like those associated with Hoover Dam. More 
specifically, in order to finance future generation, the entities that 
receive Hoover power like the Arizona Power Authority will need long-
term commitments in a 50 year time frame to ensure bondholders of its 
ability to repay debt. Future commitments to generation will be for 
similar terms for nuclear plants and coalfired generation with carbon 
sequestration facilities. Consequently, it will be necessary to have 
long-term contracts for Hoover to supplement these generating resources 
for meeting load and future financing requirements.
    In addition, the Arizona Power Authority and the Western Area Power 
Administration are currently discussing the financing for rebuilding 
the transmission facilities that bring Hoover power from Hoover Dam 
down to the Phoenix area. Many of these transmission facilities were 
built 50 or 60 years ago and need replacement. The federal government 
has neither allocated the financial resources nor indicated an 
intention to refinance this transmission system. Therefore, the local 
entities such as the Arizona Power Authority will be required to 
finance their share of these facilities. The Arizona Power Authority 
fully intends to work with Western to finance these transmission 
facilities on a long-term basis. A 50-year commitment from Western to 
purchase the Hoover power will help justify the investment in these 
transmission facilities. In short, we need the 50-year contract to 
responsibly plan for the future power supply needs of Arizona, and we 
at the Authority will undertake the responsibility to supply future 
classes of customers on a fair and equitable basis.
    Section 5 of the Boulder Canyon Project Act designates those 
classes of customers who are eligible to obtain Hoover power. A 50-year 
term is needed in order to assure a stable cash flow required to 
operate, maintain, and upgrade by hydropower generation and related 
transmission system.

   Responses of Richard S. Walden to Questions From Senator Brownback

    Question 1. The legislation before us would, upon the 2017 
expiration of the existing Hoover contracts, allocate the project's 
power for the next 50 years. The last time Congress reauthorized the 
Hoover project, we approved 30-year contracts--the same time period 
envisioned by Western in their Administrative proceeding.
    While supporters of the legislation argue that 50 years is needed 
in order to coincide with the 50-year Lower Colorado River Multi-
Species Conservation Program (LCR MSCP), Western notes that the 
contract terms do not coincide with the LCR MSCP terms. Please comment 
on the need for a 50-year vs. 30-year contract term. Will the adoption 
of a 50-year term potentially exclude evolving classes of customers in 
decades to come?
    Answer. The first contracts for Hoover Dam from the 1937 through 
1987 time frame were for 50 years. It was not until l987 that a 30-year 
term was employed as a compromise. To responsibly and effectively 
integrate a large hydro facility such as Hoover, a 50-year contract is 
required and even more necessary in the future as energy generation 
finance responsibilities become longer in time and larger in amounts.
    More specifically, to address the question of the MSCP, it is 
correct that the termination of the MSCP does not coincide with the 50-
year proposed contract term of this legislation. The MSCP has been in 
effect for almost seven years and will continue until 2054. The new 50-
year Hoover contracts would extend until September 30, 2067. Currently, 
costs associated with the MSCP are shared 50% by the federal government 
and 50% by the states of Arizona, California and Nevada. When the 
current MSCP agreements terminate in 44 years, I am confident that a 
new agreement will be implemented that is stricter, more costly and 
perhaps allocates a higher percentage of costs to the states than the 
current MSCP. At that time, voluntarily or otherwise, we will enter 
into a new environmental agreement that will extend the participants 
financial obligation for a longer period of time. Environmental 
problems do not go away with contracts nor do the agreements that 
address these problems. Our successors will be a part of these programs 
as long as people populate the state of Arizona.
    Question 2. In the Administrative proceeding to allocate future 
Hoover capacity, the Western Area Power Administration has proposed to 
retain 30 megawatts of contingent Hoover Dam capacity for use by 
Western for project integration purposes. Please comment on whether 
such retention is appropriate.
    Answer. This question has also been addressed above in response to 
Senator Stabenow's questions. In brief, in 1984, Western retained 123 
megawatts of capacity for internal integration purposes involving 
multiple projects not just Hoover. That amount of capacity was 
contingent on the capacity production at Hoover Dam. Due to the drought 
we are suffering in the southwest, the 123 megawatts has not been 
available for at least seven years, and probably will not be available 
through 2017. If Western can do without this capacity for 14 to 15 
years, they certainly don't need it in the post-2017 timeframe. Western 
has been able to take full advantage of the diversity in the use of 
Hoover between the states of Arizona, California and Nevada to meet 
these system responsibilities, and they will be able to do this in the 
post-2017 time frame. Furthermore, these responsibilities ultimately 
fall to the Hoover contractors of Western which can more effectively, 
efficiently and economically use the Hoover capacity to meet the load 
responsibilities of the people in the southwest because they have 
direct responsibility for these loads. We oppose the retention of any 
Hoover capacity by Western.
    Question 3. In your testimony, you note that Native American tribes 
and regionally-based electric cooperatives have raised some concerns 
with the legislation because they do not have direct access to Hoover 
power. Can you explain how the process works in Arizona and the steps 
you have already taken to address these concerns?
    Answer. The Arizona Power Authority has been designated by the 
state law to take and receive the power generated at Hoover Dam on 
behalf of the state and distribute the power fairly and efficiently 
within the restraints of state law. The states of Arizona, California 
and Nevada entered into discussions and negotiations approximately 
three years ago to develop this legislation. As a result of those 
deliberations, we have developed what is now known as S-2891. Schedule 
D of the proposed legislation was carefully thought through, 
negotiated, discussed and developed by the three-state working group in 
order to provide an opportunity for tribes and other entities, such as 
cooperatives which do not currently receive an allocation of Hoover to 
receive Hoover power. Exhibits 1 and 2* to these questions are tables 
summarizing all federal hydropower in Arizona as it is allocated to the 
various classes of customers. As can be seen, the tribes today receive 
approximately 17.7% of the hydropower allocated to Arizona during the 
summer months. Pursuant to S-2891, the tribes could receive almost 24% 
of the federal hydropower available during the summer months in 
Arizona. This is a major step we have taken to address the concerns of 
the Native American tribes. Likewise, the legislation has set aside 
11,510 kilowatts of capacity that is available to cooperatives and 
other entities not currently receiving Hoover power in Arizona. 
Furthermore, Mr. Richard Walden, Chairman of the Arizona Power 
Commission, has written a letter to three cooperatives that are 
primarily interested in obtaining an allocation of Hoover power in 
2017, assuring them that they will be treated fairly and equitably 
pursuant to all applicable laws, regulations and the Authority's 
guidelines applicable to the allocation process. We have met with 
representatives of the tribes and cooperatives to listen to and better 
understand their concerns and ideas regarding this legislation and the 
allocation process. Our intention is to do what is best for the 
citizens of Arizona which includes Native Americans and customers of 
cooperatives. We have and will continue to work 14 with all interested 
groups in order to make Hoover power available as fairly and reasonably 
as possible.
---------------------------------------------------------------------------
    * All exhibits have been retained in subcommittee files.
---------------------------------------------------------------------------
    Question 4a. The House companion bill adopted some amendments to 
the Hoover legislation that APA supported. In particular, you agreed to 
the following compromise changes:

   provide Western with 36 months, instead of 18 months, to 
        develop criteria and make allocations;
   allow tribes to contract directly with Western instead of 
        through a state agency; and
   remove a provision giving states first consultation rights 
        with WAPA regarding allocation criteria.

    Please explain why these changes were necessary. Should the Senate 
adopt these changes as well?
    Answer. Yes. The first change allows Western 36 months instead of 
18 months to develop criteria and make allocations of Hoover power was 
requested by Western. Western felt strongly that they needed at least 
this 36-month period to develop allocation criteria and negotiate 
contracts with their contractors in Arizona, California and Nevada, and 
we respect their judgment. It is a reasonable request and we, 
therefore, agreed to the 36-month time period for allocation. 
Provisions 2 and 3 above allow the tribes to contract directly with 
Western and remove provisions giving states first consultation rights 
regarding this allocation process. During discussions with the tribes 
regarding this legislation, they requested that Western have the 
ability to contract directly with them. Although we would rather have 
power directly allocated to the Power Authority through this 
legislation, we understand the position of the tribes and their desire 
to deal with the United States government and not the state. We respect 
the tribes' position and we concur with their request. We recommend 
that the United States Senate adopt these changes as did the United 
States House of Representatives. Furthermore, we do not object to the 
removal of the provision giving the states first consultation rights 
regarding allocation criteria. In short, we recommend that the Senate 
adopt the changes made by the House of Representatives.
    Question 5a. How does the Arizona Power Authority allocate its 
portion of Hoover power, and specifically, how does the Authority treat 
applications from eligible entities not currently receiving Hoover 
power?
    Answer. The ultimate criteria for allocating Arizona's share of 
Hoover power will be developed by the Commission of the Arizona Power 
Authority based upon all applicable laws and on the fundamental 
principles of reasonableness, fairness and equity. The Commission will 
follow the law set forth by the state of Arizona, a copy of which is 
included in the booklet submitted with these questions and identified 
as Exhibit 3. I direct your attention to page 21, Section 30-125--
Preference When Power Supplies Insufficient. The Power Authority will 
follow this Section for the power to be allocated under Schedule A and 
it will follow Title 45 for the power to be allocated under Section B. 
We will use our full authority and ability in an effort to satisfy all 
applicants, and if this requires supplementing the Hoover power with 
additional energy resources, we will also explore that option. We 
conducted a similar allocation process in 1987, and those results 
remain in effect today. All applications were given fair and reasonable 
consideration at that time. In the 1987 Hoover allocation process the 
Arizona Power Authority employed a two-year public process and 
developed a 1987 Hoover Power Marketing Plan for the State of Arizona. 
The Authority then offered to eligible entities within the State the 
Hoover power obtained under its Western federal power marketing 
contract. The Authority based the Marketing Plan upon requirements 
contained in the Western federal power marketing contract, applicable 
state law requirements, and additional general principles and 
guidelines developed through the public process.
    The Arizona Power Authority will employ a similar public marketing 
process in allocating Hoover power post-2017.
    Question 5b. How will the Authority treat applications from 
eligible entities not currently receiving Hoover power?
    Answer. The Authority will follow the requirements of its to-be-
developed 2017 Hoover Power Marketing Plan and give serious and fair 
consideration to all applicants for power, including those who are 
currently not receiving any Hoover power from the Authority.
    More specifically, the Arizona Power Authority has adopted 
regulation, 12 Arizona Administrative Code Chapter 14, which contain 
policies pertaining to the application for electric service and power 
purchase certificates that pertain to the allocation of Hoover power to 
qualified applicants in Arizona. These regulations, along with 
applicable sections of Title 30 and Title 45--Arizona Revised Statutes, 
are contained in the attached booklet identified as Exhibit 3.
    As set forth in Section R12-14-201, the Authority shall give public 
notice that it will receive applications for electric service from 
prospective purchasers. The public notice shall include date, time and 
place at which the Authority shall provide a preliminary information 
proposal regarding the allocation and marketing of available long-term 
power. In preparation for this conference, (which shall be held by the 
five Commissioners) the Power Authority will review existing 
allocations comments from all parties (existing and new) and propose a 
plan which will be discussed publicly with all interested parties. The 
Commissioners and staff of the Authority will answer questions and 
conduct all deliberations in public conferences where all interested 
parties will be duly notified, invited and given the opportunity to be 
heard. It is our plan to receive applications from all interested 
parties and develop a data request that will solicit capacity and 
energy information from all applicants so the Authority can develop a 
sound engineering and economic basis for allocating the Hoover power in 
2017. It is our intention to hire a qualified consulting engineer that 
will assist the Power Authority in soliciting, tabulating and checking 
the applicant-supplied information for accuracy, and make 
recommendations for an allocation methodology. It may also be necessary 
to hire a second consulting engineer to check the results, review the 
recommendations, make corrections, if necessary and add further 
recommendations with regard to allocation policies and procedures. It 
is our intention that all decisions will be made at public conferences 
by the Arizona Power Authority Commission after due deliberation and 
consideration of comments and suggestions by the general public. The 
Arizona Power Authority Commission will hold public, transparent, open 
and fair conferences and deliberation regarding the allocation of 
Hoover power.
                                 ______
                                 
        Responses of Doug Peterson to Questions Senator Stabenow

    Question 1. Please describe the practical implications of S. 2779 
for a typical farmer within the Upper Mississippi basin.
    Answer. I think the most practical part of this legislation will 
give farmers more opportunity to participate in monitoring and 
improving water quality, sediment and nutrient loss. I think a lot of 
time farmers get a ``bum-wrap'' on these issues. Good soil is essential 
to a farm, as is water quality, in addition, nutrients and inputs 
aren't free they are increasingly expensive, and farmers want to get 
the most out of them. This legislation will also help quantify farms 
inputs into the Mississippi basin, and demonstrate their contribution 
and also help set baselines for possible reductions.
    Question 2. Your testimony notes the importance of protecting 
individual property owners' rights--what is your understanding of how 
an individual's private property rights will be protected in the event 
the studies authorized by this bill go forward?
    Answer. It is my understanding and hopes that the legislation is 
clear that efforts for ``on-farm'' monitoring take into account access 
to farms and fields, that include the granting of permission before 
entering private property for monitoring purposes. Also an 
understanding of what to expect on a farm at the time of monitoring is 
key, what has been planted, sprayed, applicated recently, etc. It is 
also important that any producer information is treated with strict 
confidentiality.
    Question 3. Your testimony describes a ``drainage work group'' to 
address issues arising in connection with public drainage ditches that 
are critical to the Upper Mississippi River Basin--can you please 
provide a little more detail on the types of work that the group does? 
You also described a Minnesota water resources coalition that includes 
19 members, including the Farm Bureau, that is working on similar 
issues--can you please provide more details about how the work of that 
coalition relates to that work proposed to be completed by S. 2779?
    Answer. The Drainage Work Group was first established as a 
stakeholder group to advise the preparation the Public Drainage Ditch 
Buffer Study, which was published by the Board of Water and Soil 
Resources (BWSR) in February 2006. This Study Work Group discussed a 
range of topics regarding buffer strips and drainage and developed a 
number of consensus recommendations, which are presented in Section 6 
of the study report. In 2006, the Study Work Group agreed to continue 
to meet as the stakeholder Drainage Work Group (DWG), with continued 
facilitation provided by the BWSR. The stakeholder Drainage Work Group 
has been meeting since 2006 for the following purposes:

   Foster science-based mutual understandings regarding 
        drainage topics and issues;
   Develop consensus recommendations for drainage system 
        management and related water management, including 
        recommendations for updating Chapter 103E drainage law and 
        other provisions.

    Following are the entities represented on the Drainage Work Group.


                                         Drainage Work Group Membership
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                 Drainage Authorities                                    AMC--Association of Minnesota Counties
                                                             MAWD--Minnesota Association of Watershed Districts
                     Farm Groups                                                     MFB--Minnesota Farm Bureau
                                                                                   MFU--Minnesota Farmers Union
                                                                                                               Lobbyist for several other Ag groups
                    Environmental                             MCEA--Minnesota Center for Environmental Advocacy
                        Groups                                                                               FWLA--Fish and Wildlife Legislative Alliance
                                                                         MCF--Minnesota Conservation Federation
                  Other Associations                            MASWCD--Minnesota Association of Soil and Water
                                                                                         Conservation Districts
                                                                             MVA--Minnesota Viewers Association
                                                                 MACO--Minnesota Association of County Officers
                                                             MADI--Minnesota Association of Drainage Inspectors
                                                                    RRWMB--Red River Watershed Management Board
                                                                        MAT--Minnesota Association of Townships
                                                        MAWRC--Minnesota Agricultural Water Resources Coalition
                                                               ADMC--Agricultural Drainage Management Coalition
                    State Agencies                                                         BWSR, DNR, MDA, MPCA
                     Legislature                                                                               Legislators and/or House and Senate committee staff
----------------------------------------------------------------------------------------------------------------


                 2006-2007 Recommendations and Outcomes
Drainage Work Group Activities and Accomplishments to Date

    The Drainage Work Group (DWG), which is facilitated by the Board of 
Water and Soil Resources, has provided a forum for discussing drainage 
management issues, sharing applicable current science and developing 
consensus recommendations for enhanced drainage management.
    In 2006, the DWG developed consensus recommendations to:

   clarify and enhance Chapter 103E drainage law regarding 
        buffer strips and side inlet controls along public drainage 
        ditches (Section 103E.021);
   clarify protection of conservation practices along drainage 
        ditches;
   clarify ditch inspection frequency;
   develop drainage records preservation and modernization 
        guidelines and promote state cost-share for drainage records 
        modernization;
   support an update of the Minnesota Public Drainage Manual; 
        and
   support establishment of an interagency drainage management 
        team to provide coordination and assistance to promote 
        multipurpose drainage management.

    These consensus recommendations were substantially adopted by the 
Legislature in 2007.
    In 2007, 2008 and 2009, the DWG developed consensus recommendations 
to further update Chapter 103E drainage law, including:

   clarify the scope and process of Section 103E.227 to better 
        enable wetland restorations and other impoundments on drainage 
        systems, and associated funding partnerships between drainage 
        systems and conservation programs;
   clarify the language and process of Section 103E.805 to 
        better enable partial abandonment of drainage systems for 
        wetland restorations and other impoundments;
   require all Chapter 103E drainage authorities to appoint a 
        drainage inspector and clarify applicability to watershed 
        districts as well as counties;
   update various dollar limits and thresholds in drainage law, 
        primarily for inflation;
   support additional state cost-share for drainage records 
        modernization; and
   provide authority in statute to BWSR for drainage 
        stakeholder coordination.

    Bills carrying these consensus recommendations were introduced but 
stalled during the 2009 legislative session. These bills are being 
further discussed by the 2010 Legislature, minus any appropriations.
Other Topics of Discussion to Date
   Review of drainage law and experience regarding transfer of 
        drainage system authority, particularly where urban areas have 
        expanded over agricultural drainage systems.
   Water quality use classifications and public drainage 
        systems.
   Drainage ditch assessments on state Consolidated 
        Conservation lands.
   Sources of sediment in the Minnesota River Basin.
   Current conservation drainage practices--research and 
        experience.
   Methods and process for redetermination of benefits of 
        drainage systems, including adjusting drainage assessments for 
        land use change.
   Lateral effects of drainage on conservation lands and 
        conservation lands on farmland
   103E.015 Considerations before drainage work is done.
   Other current drainage related research, information, 
        legislation, programs and topics.

    The Minnesota Agricultural Water Resources Coalition (MAWRC) came 
together to develop and implement a strategic educational, 
communications and public relations program to inform agricultural 
producers in Minnesota about water quality issues. Given the vast 
landscape over which water quality information will be gathered, 
implementation of data collection as proposed under this bill will 
require an extensive network of monitoring stations, equipment and 
personnel and with more than 60 percent of the Upper Mississippi River 
Basin in cropland or pasture, private landowners are logical partners 
in the establishment of a nutrient and sediment monitoring network. The 
MAWRC is a good network to help provide farmers with info about 
monitoring network.
      Response of Doug Peterson to Question From Senator Brownback

    Question 1. In your testimony, you describe many of the ongoing 
programs that address sediment and nutrient loading within the river 
system. What additional information, and at what costs, do you 
anticipate this bill will provide, that is currently not being 
undertaken by the myriad of federal and states agencies studying the 
river system?
    Answer. It is the hope of MFU that the legislation would provide 
added voluntary monitoring from farmland where it is currently not. MFU 
is not sure on the additional cost. However, the network this bill 
would establish would provide valuable information that could be used 
to better target ongoing programs and maximize use of federal and state 
resources.
                                 ______
                                 
    Responses of Kenneth L. Olsen to Questions From Senator Stabenow

    Question 1. Was the Lake County Commission satisfied that the 
relief well drilled in 2008 addressed the immediate public safety 
concerns that the County had at the time and today? Is the relief well 
still operational and available for use if any emergency situation 
develops?
    Answer. The Lake County Commissioners are satisfied that the relief 
well was drilled in 2008 to reduce the water level and consequently the 
hydrostatic head on the tunnel. Although the well drilled is called a 
``relief well'' the fact is that it is still being used currently to 
keep the water levels down and convey contaminated water to the 
Leadville Mine Drainage Treatment Plant. We view this well as a 
permanent asset which will need to be utilized in perpetuity to 
maintain safe water levels as the tunnel deteriorates more over time 
and less water flows to the tunnel entrance. We believe the Bureau of 
Reclamation should set a mine pool target level. Additional wells may 
be needed in the future as additional caving occurs.
    Question 2. Has the County been working with the Environmental 
Protection Agency regarding the revised Record of Decision for Operable 
Unit 6 at the Superfund site--and does the County support the changes 
proposed by EPA?
    Answer. Lake County has been working with the Environmental 
Protection Agency regarding an amended Record of Decision on Operable 
Unit 6 (OU6) of the California Gulch Superfund Site since January 2009 
when the commissioners were advised by Carol Campbell of Region 8 that 
such amendment was being pursued. This process is ongoing and includes 
several public scoping sessions and on-the-ground pilot projects 
regarding capping of waste rock piles. The Lake County Commissioners 
are generally supportive of the alternatives as proposed by the 
Environmental Protection Agency for OU6. Mitigation of the visual 
effects of these historic waste piles is of paramount concern of the 
business and cultural heritage community and the commissioners must 
reach a balance with all parties involved. We believe the Environmental 
Protection Agency needs to study clean water diversions as well as 
capping.
    Question 3. Was the County involved with the risk assessment 
process that the Bureau of Reclamation completed in 2008 to assess the 
risks associated with a failure of the tunnel? Was the County satisfied 
with the results of the assessment?
    Answer. The county's involvement in the risk assessment process was 
to the extent of participation in public meetings of the presentation 
of the draft and final versions of the risk assessment. Communication 
with the Bureau of Reclamation, Environmental Protection Agency and 
Colorado Department of Health and Environment via telephone conference 
was weekly for several months after the county emergency declaration of 
February 13, 2008. The Risk Assessment document is technical in nature 
and provides some degree of public safety assurance with regard to the 
potential for a tunnel ``blowout.'' Several items in the report are of 
special note. On page 46 in the conclusion of the report ``The 
likelihood of the upper blockage near the Pendery Fault remaining 
stable decreases as the level of the mine pool, and subsequent head 
differential, increases. If the upper blockage were to fail, the 
likelihood of uncontrolled seepage would increase and some property 
damage could occur but loss of life would not be expected.'' This 
statement reaffirms the commissioners' view that the mine pool level 
must be controlled not only to reduce risk to property and life but 
also to reduce the environmental consequences of uncontrolled seepage 
of metal contaminated water into the Arkansas River drainage. 
Additionally, several suggestions are made by the Consultant Review 
Board in their Executive Summary which include computation of maximum 
mine pool level, refinement of early warning system and refinement to 
analysis of seismic conditions. The commissioners have not been advised 
by the Bureau of Reclamation of progress to date on these suggestions. 
The Bureau has been working well and communicating with our local 
emergency response personnel. It should be pointed out that it appears 
the Risk Assessment focused on life safety issues related to the Tunnel 
and a potential blowout. It did not focus on environmental risk or 
mention risk to our local water supply. We live with the risk of 
chemicals stored and used at the treatment plant in the form of 
sulfuric acid and sodium hydroxide. The risk could be reduced and 
potential operating costs may be reduced by converting the plant to a 
lime/ferric chloride operation.

   Responses of Kenneth L. Olsen to Questions From Senator Brownback

    Question 1. Please describe the participation of the Federal 
agencies in addressing your concerns regarding the tunnel since the 
release of the Risk Assessment conducted by the Bureau of Reclamation.
    Answer. Since the release of the Risk Assessment our contact with 
the Bureau of Reclamation regarding concerns at the Tunnel has been 
several meetings regarding updating of the emergency evacuation plan 
with Bureau personnel and a conference call in December 2009 with 
Bureau Deputy Commissioners Finkler and Wirkus regarding then S1417 by 
Senator Udall. We have, as stated above in answer to Senator Stabenow's 
question 2, had a reasonable level of communication with the 
Environmental Protection Agency regarding OU6.
    Question 2. Please explain what amount of authorized funding you 
believe will be necessary to both treat the surface water delivered 
through the LMDT and expand the treatment plant? Does it exceed what is 
currently authorized by this legislation?
    Answer. I am not privy to what it is costing currently to operate 
the treatment plant. It is my belief the treatment plant does not need 
to be expanded and the current costs of operation will most likely 
remain the same as now except for inflation and necessary replacement 
component parts as the plant ages. Operation costs would be best 
derived from the Bureau of Reclamation. The costs of operation and 
maintenance of the treatment plant and tunnel is a federal 
responsibility as the Federal government drove the tunnel.
                                 ______
                                 
   Responses of Andrew A. Mueller to Questions from Senator Stabenow

    Question 1. In a September 16, 1998, letter to the Fish and 
Wildlife Service, the Colorado River District agreed to provide water 
or secure funding to buy water necessary to meet specific Endangered 
Species Act requirements--do you believe that this legislation is 
consistent with that commitment?
    Answer. We believe S.3387 is consistent with both the spirit and 
letter of the 1998 letter to the Fish and Wildlife Service. The purpose 
of S.3387 is partial fulfillment of the commitments made in the 1998 
letter. Passage of S.3387 will provide half of the 10,825 acre-foot 
commitment made in the letter. Division of responsibility for the 
10,825 acre-foot commitment is described in detail in the letter. West 
Slope water users are ``providing . . . 5,412.5 acre-feet of permanent 
water for the fish'' with S.3387 and its permanent dedication of water 
from the West Slope's Marketable Pool of water in Ruedi Reservoir.
    Question 2. Is the River District willing to discuss potential 
compromises with the Administration as are outlined in Commissioner 
Connor's testimony?
    Answer. The Colorado River District very much appreciates the 
Commissioner's and the Administration's willingness to discuss 
potential compromise. The River District is willing to do so and looks 
forward to developing workable alternatives to S.3387 as introduced. 
The River District and its water user partners have a meeting scheduled 
with the Commissioner to explore mutually acceptable mechanisms for 
fulfilling the requirements of the 1999 Biological Opinion.
    Question 3a. S. 3387 proposes to allocate certain water from Ruedi 
Reservoir for fish and wildlife purposes and specifies that the 
capital, operation, maintenance, and replacement costs that arise from 
the release of such water shall not be reimbursable--are there any 
special circumstances that apply to this situation that would not apply 
to others?
    Answer. We believe S.3387 is consistent with Reclamation's 
authorities and historical practices. Reclamation's Manual states that 
Reclamation has discretion over determinations of reimbursable and non-
reimbursable costs related to ESA consultation costs. The Manual states 
that the cost of compliance is done on a caseby-case basis. Reclamation 
has room to negotiate or determine that these costs are non-
reimbursable.
    Water is commonly dedicated to fish and wildlife (and other public 
benefits) as nonreimbursable in Reclamation projects (see examples 
below).
    Regarding the specific question of special circumstances, Ruedi 
Reservoir is somewhat unique among Reclamation projects. Ruedi was 
built as compensation to Western Colorado, pursuant to the Fryingpan-
Arkansas Project's authorizing statute and Colorado's Conservancy 
District statute, for the loss of Colorado River water diverted to the 
Arkansas River basin through the Fryingpan-Arkansas Project. The 
majority of the water in Ruedi Reservoir is dedicated to use in Western 
Colorado. We see Western Colorado's willingness to dedicate a portion 
of its uncontracted pool of water in Ruedi to endangered fish recovery 
as a commitment of our water.

    Question 3b. Please provide examples of water dedicated for fish 
and wildlife purposes on a non-reimbursable basis that you believe is 
consistent with the proposal in S. 3387.
    Question 3c. Please provide examples of releases of water from a 
federal reservoir without a contracting mechanism in place for the 
releases of water as proposed by S. 3387.

    Answer. Water dedicated to flood control, recreation, fish and 
wildlife and other public purposes is commonly identified as non-
reimbursable in Reclamation Projects. One example of this is the Weber 
Basin Project in Utah, which includes $18.9 million in nonreimbursable 
costs allocated to flood control, recreation, fish and wildlife 
enhancement, highway transportation, and the safety of dams. Congress 
included a permanent ``conservation pool'' of 18,000 acre-feet in Ruedi 
Reservoir as nonreimbursable in its authorizing legislation in 1961. 
(P.L. 87-590, 76 Stat. 389).
    Water is routinely released from Reclamation projects pursuant to 
requirements of Biological Opinions without contract. Water is released 
from other Colorado River reservoirs, specifically Flaming Gorge, 
Navajo and Glen Canyon Dams, for fish and wildlife purposes without 
benefit of a contract. Additionally, a Biological Opinion for the 
Gunnison River basin will soon be finalized requiring stored water 
releases from Reclamation's Aspinall Unit consistent with both a 
biological opinion and settlement of the National Park Service's Black 
Canyon of the Gunnison's recently decreed water rights. There will be 
no contract required for releases required by either of these 
substantial water demands.
    Additionally as further example, we offer the releases of water 
from Reclamation projects in the northwest to aid native salmon 
recovery. The Bureau releases storage water from several projects in 
the Upper Snake River Basin (including Minidoka, Palisades and Boise 
Projects) for downstream threatened and endangered salmon species, 
pursuant to a 30-year agreement with the State of Idaho and water 
users. There is no reimbursable expense; in fact, the Bureau rents 
available contracted water (``willing seller'') and also pays an 
administrative fee to the local water district for the release of 
uncontracted water. These releases are authorized pursuant to state 
statute; the costs are covered by Congressional appropriations, not 
reimbursable project costs.
    While we offer these as examples of water released by Reclamation 
without contact for fish and wildlife purposes, we are happy to explore 
with Reclamation removal of the provision in S.3387 requiring releases 
without a contract if an acceptable contractee can be identified and 
enforceable contract developed.
    Question 4. The legislation will not take effect until an 
unspecified date when an additional 5,412 acre-feet of water is 
allocated to meet the remaining obligations in the biological opinion--
where is that additional allocation expected to come from and what 
happens if that obligation is never met?
    Answer. Water users' obligation under the 1999 Biological Opinion 
is for delivery of 10,825 acre-feet of water annually. Water users 
split that commitment equally between Eastern Colorado and Western 
Colorado water users of the Colorado River. Eastern Colorado water 
users plan to provide half of the obligation by no longer irrigating 
historically irrigated lands located in western Colorado. The water 
historically used for irrigation will be dedicated to fish recovery.
    The specific effective date language for S.3387 is included to 
legislatively establish the full 10,825 acre-foot commitment by water 
users. Failure to provide the full amount will fail to comply with the 
1999 Programmatic Biological Opinion (PBO) and would re-open the PBO, 
which covers all water uses of the mainstem of the Colorado River in 
Colorado. The great efficiencies in administering the ESA per the PBO 
for the Fish & Wildlife Service, other federal agencies, and large and 
small water users would be lost.
    If the full obligation is not met by fiscal year 2013, over one 
million acre-feet of historical water consumption would be subject to 
individual ESA consultations. Failure of the PBO could result in 
immediate re-initiation of ESA consultation on the five major 
Reclamation projects covered by the PBO and approximately 300 
nonfederal projects that have received ESA compliance under the PBO.
    Question 5. Please describe the potential uses in Colorado that 
will generate contracting income for Reclamation from the ``restored'' 
water you describe will be available from Ruedi Reservoir? If there is 
little foreseeable demand for the remaining water within the Marketable 
Pool, do you foresee a different market for the restored water?
    Answer. The Colorado River District has conducted several marketing 
studies for this and other stored water in Western Colorado. Because of 
Ruedi Reservoir's location below the significant senior water right on 
the Colorado River, we do not forecast full contracting of the entire 
Marketable Pool of water in Ruedi.
    Under the provisions of the PBO, by 2013, 10,825 acre-feet of water 
will no longer be released annually from the Marketable Pool in Ruedi 
Reservoir. This is the 10,825 that is currently being released through 
2012 from Ruedi on an interim basis pursuant to the PBO. S.3387 
provides for annual release of 5,412.5 acre-feet annually for fish 
recovery beginning in 2013. With the passage of S.3387, the net 
increase to the Marketable Pool will be 5,412.5 acre-feet.
    We pointed out the net increase in the Marketable Pool in my 
written testimony in partial response to concerns raised by Reclamation 
that S.3387 represents lost or foregone income to the US Treasury. 
However, we do not believe that the full pool will, in fact, be 
contracted in the foreseeable future and therefore our proposed 
permanent dedication of a portion of the marketable pool will not have 
an actual impact on either the US Treasury or on water users' ability 
to contract for water from Ruedi Reservoir.
    Most important in our response to this and other questions about 
this legislation is that only with passage of S.3387 and provision of 
the full 10,825 acre-feet is the PBO fulfilled and any of the benefits 
to water users and Reclamation possible.

   Responses of Andrew A. Mueller to Questions from Senator Brownback

    Question 1. Please describe your understanding of how the Upper 
Colorado River Recovery Program and the Programmatic Biological Opinion 
(PBO) addresses the role that project beneficiaries should play as it 
relates to the mitigation necessary to protect and recover species. Was 
it your understanding that the unused water, that you intend to use for 
mitigation, would require a cost-share agreement?
    Answer. Water users acknowledge our commitment to provide 10,825 
acre-feet annually for endangered fish recovery under the PBO. S.3387 
represents a permanent commitment of half of the 10,825 obligation from 
Western Colorado's pool of water in Ruedi Reservoir.

          The primary purpose of Ruedi Reservoir . . . (is) the 
        protection of western Colorado water users by the provisions of 
        Colorado Revised Statutes'' requiring ``any works or facilities 
        shall be designed for exportation of water from the natural 
        basin of the Colorado River . . . shall be operated in such a 
        manner that the present appropriations of water, and in 
        addition thereto prospective uses of water . . . within the 
        natural basin of the Colorado River . . .  will not be impaired 
        nor increased in cost at the expense of the water users with 
        the natural basin.'' \1\
---------------------------------------------------------------------------
    \1\ Page 2, Paragraph 7 of House Document 130 in accordance with 
House Resolution 91, 87th Congress, March 15, 1961.

    Dedicating a portion of this water to fish recovery efforts and 
fulfillment of the PBO, provides protections to Western Colorado water 
users consistent with the authorizing legislation and principal purpose 
of Ruedi Reservoir. Accordingly, we see Western Colorado's willingness 
to dedicate a portion of its uncontracted pool of water in Ruedi 
Reservoir as providing our water to endangered fish recovery.
    Question 2. How, if at all, will the release of this water stored 
in the Ruedi Reservoir impact water usage for agriculture, drinking, or 
recreational purposes?
    Answer. Because the West Slope Pool, or Marketable Pool, of water 
in Ruedi Reservoir is far from fully contracted, there should be no 
impact on traditional consumptive uses such as agriculture, municipal 
or industrial water use. The 5,412 acre-feet to be committed to fish 
recovery from Ruedi will likely be delivered to the critical habitat 
for the endangered fish with a recreational water contract. 
Accordingly, these releases can, and likely will, have a positive 
impact on recreation and the environment in the Roaring Fork and 
Colorado Rivers.
    There are local concerns regarding potential impacts of water 
releases from Ruedi Reservoir to the angling community immediately 
downstream of Ruedi dam on the Fryingpan River. However, with less 
water released after 2012 than presently released (5,412 acre-feet 
versus 10,825) and a recent commitment from the Fish & Wildlife Service 
to be more sensitive to local conditions on the Fryingpan's angling 
community when scheduling fall releases from Ruedi Reservoir, any 
negative impact should be attenuated.
                                 ______
                                 
     Responses of Phyllis Currie to Questions From Senator Stabenow

    Question 1. Your testimony indicates that the power from Hoover dam 
contributes toward meeting the renewable energy requirements of the 
State of California--if you did not have this power available, how 
difficult would it be to meet those requirements?
    Answer. Retention of its share of Hoover power is a critical 
component of Pasadena's plan to meet the 40% by 2020 renewable energy 
goals set by its Board. This is among the highest renewable goals of 
any city and utility in the country. Being able to count on 95% of its 
current Schedule A and B allocations of Hoover power will help Pasadena 
mitigate the rate impact of the higher cost renewable resources we will 
acquire.
    Question 2. Do you support modifications to the bill that are 
consistent with the changes made on the House side?
    Answer. Yes. All the existing Hoover contractors support the 
changes to the bill made by the House.
    Question 3. How would you propose to address any unresolved 
``intra-California'' issues if there are any? For example, the 
Committee has received a request from the Imperial Irrigation District 
to specify which interests in California should be eligible to receive 
new allotments of Hoover power--what is your position regarding that 
proposal as opposed to an alternative process that may be utilized.
    Answer. Pasadena and the other existing Hoover contractors are very 
aware of and sensitive to the desires of entities like the Imperial 
Irrigation District (IID) to get a share of Hoover power. We propose to 
address requests by California interests that do not currently receive 
Hoover power by encouraging them to participate in the Western Area 
Power Administration's (Western) process for allocating Schedule D 
power. In the case of IID, which is a SCPPA member, SCPPA has stated 
that it will support IID's application for some of that power during 
the administrative process.
    The legislation provides 103 MW for distribution to new entrants, 
which include entities like IID. In order to ensure that Western's 
Schedule D administrative process is open, fair and transparent, the 
legislation does not specify the criteria that will be developed by 
Western or the entities that will receive the allocations.
    Question 4a. Please describe, from your perspective, the 
differences between the administrative allocations proposed by the 
Administration and the allocations proposed in this bill. For example:
    Please comment on the proposal from the Administration to retain 30 
megawatts of contingent Hoover Dam capacity and distribute it to 
customers within the Administration's integrated system.

    Answer. In his June 9, 2010 testimony to the Subcommittee, 
Western's Administrator Tim Meeks stated that his agency would like to 
withhold from allocation to customers 30 MW of Hoover Dam capacity for 
use in the regulation and integration of the other federal resources on 
the Colorado River. Today, no Hoover power is reserved for those 
functions; all of it is allocated to the customers who have paid (and 
continue to pay) Hoover's costs of construction and operation. 
Therefore, the Hoover contractors oppose this recommendation.
    Question 4b. Please comment on the Administration's testimony 
regarding the quantity of power that should be available for 
remarketing.
    Answer. S. 2891 and H.R.4349 direct that 4,527,001 megawatt hours 
of energy be allocated annually from Hoover Dam. In contrast, 
Administrator Meeks' testimony recommends that only 4,116,000 megawatt 
hours be allocated.
    The obligation of the Secretary of Energy to delivery contingent 
capacity and firm energy pursuant to the terms of the legislation is 
subject to the availability of water to produce such capacity and 
energy. Hoover contractors believe that the full amount of available 
contingent capacity and energy ought to be delivered to customers 
annually. Therefore, the Hoover contractors oppose the Administration's 
proposal to withhold from allocation 411,001 megawatt hours of firm 
energy.
    Question 4c. Please comment on the Administration's testimony that 
the current Implementation Agreement needs to be evaluated and 
potentially revised to accommodate current conditions.
    Answer. The Hoover contractors understand that the current 
Implementation Agreement addressed a number of issues that arose after 
the 1987 contracts were signed, some of which were one-time events that 
have since been resolved. Hoover contractors are willing to work with 
Western and other parties, through the administrative process to 
allocate Schedule D power, to evaluate how the current Implementation 
Agreement needs to be revised and to develop changes to the Agreement.
    Question 4d. Please comment on the Administration's testimony that 
a 50 year contract term could potentially exclude classes of customers 
in decades to come.
    Answer. S. 2891 and H.R. 4349 direct the Secretary of Energy to 
enter into 50 year contracts with existing Hoover contractors and with 
new allottees that receive an allocation of power from the Schedule D 
resource pool. This contract term matches the 50 year funding 
commitment that water and power contractors in Arizona, California and 
Nevada have made to fund the non-federal share of the Multi-Species 
Conservation Plan. It also provides resource certainty for Hoover 
contractors.
    The 103 MW Schedule D resource pool authorized in the legislation 
ensures that the benefits of Hoover power will be distributed more 
widely in the three states and will provide resource certainty for new 
allottees, as well.
                                 ______
                                 
    Responses of Phyllis Currie to Questions From Senator Brownback

    Question 1. The legislation before us would, upon the 2017 
expiration of the existing Hoover contracts, allocate the project's 
power for the next 50 years. The last time Congress reauthorized the 
Hoover project, we approved 30 year contracts--the same time period 
envisioned by Western in their Administrative proceeding.
    While supporters of the legislation argue that 50 years is needed 
in order to coincide with the 50 year Lower Colorado River Multi-
Species Conservation Program (LCR MSCP), Western notes that the 
contracts terms do not coincide with the LCR MSCP terms. Please comment 
on the need for a 50 year vs. 30 year contract term. Will the adoption 
of a 50 year term potentially exclude evolving classes of customers in 
decades to come?
    Answer. The 50 year funding commitment that water and power users 
in Arizona, California and Nevada made to the Multi-Species 
Conservation Program (MSCP) will protect 26 endangered, threatened and 
sensitive species on the Lower Colorado River. Hoover contractors 
agreed to participate in this historic public-private partnership in 
anticipation of continuing to receive the benefits of Hoover power upon 
compliance with MSCP program requirements.
    Given that the new Hoover contracts will begin in 2017, the 
benefits from the power contracts will not coincide precisely with the 
50 year term of the MSCP. However, a fundamental principle underlying 
MSCP is that the substantial financial commitment made by the Lower 
Colorado River water and power users was based on the expectation that 
they would receive benefits from the operation of Hoover Dam for a 
commensurate period of time.
    While it is true that the contract extension period for other 
projects whose power is marketed by Western is 30 years, no other group 
of project customers has made the long-term financial commitment to 
environmental mitigation that the Hoover contractors have made.
    The Hoover contractors have addressed Western's concern about 
excluding evolving classes of customers by agreeing to reduce each of 
their existing allocations of Hoover power by five percent to create 
the Schedule D pool of 103 MW for new entrants.
    Question 2. In the Administrative proceeding to allocate future 
Hoover capacity, the Western Area Power Administration has proposed to 
retain 30 megawatts of contingent Hoover Dam capacity for use by 
Western for project integration purposes. Please comment on whether 
such retention is appropriate.
    Answer. In his June 9, 2010 testimony to the Subcommittee, Western 
Administrator Tim Meeks stated that his agency would like to withhold 
from allocation to customers 30 MW of Hoover Dam capacity for use in 
the regulation and integration of the other federal resources on the 
Colorado River. Today, no Hoover power is reserved for those functions; 
all of it is allocated to the customers who have paid (and continue to 
pay) Hoover's costs of construction and operation. Therefore, the 
Hoover contractors oppose this recommendation.
    Question 3. The Imperial Irrigation District has requested an 
amendment to direct Western to give preference to full-service public 
power providers when allocating California's share of the new 
``Schedule D'' allotment of Hoover Dam power. What is your position on 
this proposed amendment?
    Answer. Pasadena and the other existing Hoover contractors are very 
aware of and sensitive to the desires of entities like the Imperial 
Irrigation District (IID) to get a share of Hoover power. We propose to 
address requests by California interests that do not currently receive 
Hoover power by encouraging them to participate in the Western Area 
Power Administration's process for allocating Schedule D power. In the 
case of IID, which is a SCPPA member, SCPPA has stated that it will 
support IID's application for some of that power during the 
administrative process.
    The legislation provides 103 MW for distribution to new entrants, 
which include entities like IID. In order to ensure that Western's 
Schedule D administrative process is open, fair and transparent, the 
legislation does not specify the criteria that will be developed by 
Western or the entities that will receive the allocations.
    Question 4. You testify that S. 2891 will help offset the higher 
cost of renewable resources Pasadena needs to acquire to meet the 40% 
by 2020 target it has adopted. Please elaborate. Am I correct in 
assuming that the Hoover hydropower provided under these contracts will 
not count as a renewable resource to meet your state goal?
    Answer. You are correct that Pasadena, in accordance with 
California's Renewable Portfolio Standard guidelines, does not count 
Hoover hydropower as a renewable resource. However, Pasadena and its 
customers benefit from the fact that Hoover hydropower is low cost, 
zero-carbon energy. Pasadena, in consultation with its consumer-owners, 
has adopted goals of 40% renewable energy by 2020 and 40% carbon 
reduction below 2008 levels by 2020. Without Hoover energy, Pasadena 
would have to procure an equivalent amount of renewable resources at a 
much higher cost, resulting in greater costs to customers.
                                 ______
                                 
     Responses of George M. Caan to Questions From Senator Stabenow

    Question 1. Can you please describe the efforts that have been made 
to negotiate the terms of this legislation among the various 
stakeholders?
    Answer. Discussions regarding this proposed legislation have been 
underway for almost two years. In the course of this process, current 
Hoover contractors have engaged in discussions with each other, with 
their customers (including a wide range of municipalities), with 
entities who have not previously received Hoover power (including 
Indian tribes and electrical and irrigation cooperatives), with 
industry associations, and with state and federal government entities. 
The goal of all of these discussions has been to develop principles 
that will provide a reasonable framework for post-2017 Hoover power 
allocations, and to develop and support legislative language to 
implement this framework.
    Question 2. How will entities like Indian tribes and electrical 
cooperatives be able to obtain allocations of power--and please comment 
on the sufficiency of the 5 percent that has been reserved for the new 
contractors?
    Answer. S. 2891 and H.R. 4349 create a 103 megawatt resource pool 
(Schedule D) for new allottees. Indian tribes and electric cooperatives 
are expressly included in the class of entities eligible to apply for 
power from this pool. With this legislation, tribes will be eligible to 
apply for Hoover power allocations for the first time.
    Hoover contractors believe the size of this resource pool is fair 
and sufficient. In fact, it is larger than any of the resource pools 
created in the past for other federal projects.
    Question 3. Please describe the changes agreed to in connection 
with the proceedings on the House side for the corresponding House 
legislation--and do you recommend that similar changes be adopted here 
in the Senate?
    Answer. The Hoover contractors recommend that the Senate adopt the 
amendments adopted on the House side. These include:

   Two amendments addressing tribal sovereignty concerns:

    --An amendment allowing tribes to contract for Hoover power 
            allocations directly with the Western Area Power 
            Administration (Western), rather than indirectly through 
            the states.
    --An amendment deleting a provision in H.R. 4349 as introduced, 
            which required Western to consult with the states first in 
            developing its criteria for allocating the Schedule D pool. 
            With this amendment, tribes will be on an equal footing 
            with the states and all other interested entities that 
            choose to participate in development of Western's criteria 
            in its administrative process.
    --An amendment increasing the time allowed for Western's allocation 
            of Schedule D power, from 18 to 36 months, as Western 
            requested.

    Question 4a. Please describe, from your perspective, the 
differences between the administrative allocations proposed by the 
Administration and the allocations proposed in this bill. For example:
    Please comment on the proposal from the Administration to retain 30 
megawatts of contingent Hoover Dam capacity and distribute it to 
customers within the Administration's integrated system.
    Answer. In his June 9, 2010 testimony to the Subcommittee, 
Western's Administrator Tim Meeks stated that his agency would like to 
withhold from allocation to customers 30 MW of Hoover Dam capacity for 
use in the regulation and integration of the other federal resources on 
the Colorado River. Today, no Hoover power is reserved for those 
functions; all of it is allocated to the customers who have paid (and 
continue to pay) Hoover's costs of construction and operation. 
Therefore, the Hoover contractors oppose this recommendation.
    Question 4b. Please comment on the Administration's testimony 
regarding the quantity of power that should be available for 
remarketing.
    Answer. S. 2891 and H.R. 4349 direct that 4,527,001 megawatt hours 
of energy be allocated annually from Hoover Dam. In contrast, 
Administrator Meeks' testimony recommends that only 4,116,000 megawatt 
hours be allocated.
    The obligation of the Secretary of Energy to deliver contingent 
capacity and firm energy pursuant to the terms of the legislation is 
subject to the availability of water to produce such capacity and 
energy. Hoover contractors believe that the full amount of available 
contingent capacity and energy ought to be delivered to customers 
annually. Therefore, the Hoover contractors oppose the Administration's 
proposal to withhold from allocation 411,001 megawatt hours of firm 
energy.
    Question 4c. Please comment on the Administration's testimony that 
the current Implementation Agreement needs to be evaluated and 
potentially revised to accommodate current conditions.
    Answer. The Hoover contractors understand that the current 
Implementation Agreement addressed a number of issues that arose after 
the 1987 contracts were signed, some of which were one-time events that 
have since been resolved. Hoover contractors are willing to work with 
Western and other parties, through the administrative process, to 
allocate Schedule D power, to evaluate how the current Implementation 
Agreement needs to be revised, and to develop changes to the Agreement.
    Question 4d. Please comment on the Administration's testimony that 
a 50 year contract term could potentially exclude classes of customers 
in decades to come.
    Answer. S. 2891 and H.R. 4349 direct the Secretary of Energy to 
enter into 50 year contracts with existing Hoover contractors and with 
new allottees that receive an allocation of power from the Schedule D 
resource pool. This contract term matches the 50 year funding 
commitment that water and power contractors in Arizona, California and 
Nevada have made to fund the non-federal share of the Multi-Species 
Conservation Plan. It also provides resource certainty for Hoover 
contractors.
    The 103 MW Schedule D resource pool authorized in the legislation 
ensures that the benefits of Hoover power will be distributed more 
widely in the three states and will provide resource certainty for new 
allottees, as well.

      Responses of George Caan to Questions From Senator Brownback

    Question 1. The legislation before us would, upon the 2017 
expiration of the existing Hoover contracts, allocate the project's 
power for the next 50 years. The last time Congress reauthorized the 
Hoover project, we approved 30 year contracts--the same time period 
envisioned by Western in their Administrative proceeding.
    While supporters of the legislation argue that 50 years is needed 
in order to coincide with the 50 year Lower Colorado River Multi-
Species Conservation Program (LCR MSCP), Western notes that the 
contracts terms do not coincide with the LCR MSCP terms. Please comment 
on the need for a 50 year vs. 30 year contract term. Will the adoption 
of a 50 year term potentially exclude evolving classes of customers in 
decades to come?
    Answer. (Same response as above)
    Question 2. In the Administrative proceeding to allocate future 
Hoover capacity, the Western Area Power Administration has proposed to 
retain 30 megawatts of contingent Hoover Dam capacity for use by 
Western for project integration purposes. Please comment on whether 
such retention is appropriate.
    Answer. (Same response as above)
    Question 3. Please elaborate on the amendments adopted by the House 
to address tribal sovereignty concerns.
    Answer. (Same response as above)
    Question 4. Western has initiated a Federal Register proceeding to 
address the Hoover allocation issues administratively. Why do you 
prefer Congressional action?
    Answer. Hoover is unique among federal projects because, from the 
initial authorization in the Boulder Canyon Project Act of 1928, its 
power has been allocated by Act of Congress. The agreement of the 
states of Arizona, California and Nevada was needed in order to win the 
support of Congress.
    This same question arose when Western commenced its marketing 
process in 1979, for the Hoover power contracts expiring in 1987. At 
that time, litigation was filed over the proper interpretation and 
application of the Boulder Canyon Project Act, which resulted in 
uncertainty and unnecessary expenditure of resources. That litigation 
was resolved by the Hoover Power Plant Act of 1984.
    We believe that Congress should allocate post-2017 Hoover power 
statutorily as it did in 1928 and in 1984. As in both of those prior 
instances, the agreement of the three states is essential to ensure 
Congressional support. Congressional action is the only way to ensure 
that the Administration, Hoover contractors and new allottees are not 
subjected to expensive, time-consuming and unproductive litigation.
    Finally, Congressional action is needed to ensure that Western has 
the statutory authority to create the Schedule D resource pool which 
will allow Indian tribes and other new entrants to participate in the 
allocation process for Hoover power. Commenters in Western's 
administrative proceeding stated that Western does not have authority 
to grant Hoover power allocations to new allottees, in the absence of 
the express statutory authorization granted in S.2891.
                                 ______
                                 
  Responses of Michael L. Connor to Questions From Senator Stabenow, 
                               on S. 3387

    Question 1. Regarding S. 3387, the Ruedi Reservoir bill, I am 
pleased that the Administration is willing to work with the river 
district to develop reasonable alternatives to the bill's present 
language--what is the anticipated time frame for being able to provide 
alternative language to the district?
    Answer. Reclamation and the district have had discussions that we 
expect will result in a path forward soon.
    Question 2. Does Reclamation agree that dedicating a portion of the 
water from Ruedi Reservoir for fish and wildlife purposes in a non-
reimbursable manner is consistent with the authorizing legislation for 
the Reservoir?
    Answer. Water identified in the authorizing legislation for fish 
and wildlife purposes is for mitigation for the construction and 
operation of the Fryingpan--Arkansas (Fry-Ark) project. The water at 
issue in S. 3387 is to be provided pursuant to an agreement specific to 
a 1999 Programmatic Biological Opinion for mitigation of non-project 
activities by other entities outside the scope of the Fry-Ark project. 
As non-project activities, these require reimbursement to the United 
States for the costs of storing and delivering the water.
    Question 3. What are Reclamation's concerns about the need to have 
a contract relating to the release of water from the Reservoir as 
opposed to allowing the Fish and Wildlife Service to request releases 
of water through some other process as contemplated by the bill?
    Answer. As stated in our testimony on S. 3387, the absence of a 
contractual arrangement governing the release of water from Ruedi 
Reservoir could pose operational and financial problems. Operationally, 
the absence of a contract deprives Reclamation of a legal basis for 
establishing expectations of water users along the 15-mile reach of the 
River and introduces a new variable or obligation into operational 
considerations. Financially, as discussed in our testimony, a contract 
enables reimbursement to the United States for proportionate costs 
incurred at Ruedi. At a minimum, the language in the bill should 
articulate the need to coordinate releases with Reclamation and other 
interested parties and that measures need to be taken to ensure that 
such releases of water are protected from diversion by others to ensure 
benefits to endangered species.
    Question 4. If the issues raised by Reclamation are not addressed, 
are you concerned about the potential precedent this bill may set for 
other projects?
    Answer. Yes.

   Responses of Michael L. Connor to Questions From Senator Brownback

    Question 1. Could you please elaborate on why the absence of a 
contract is problematic for operational and financial reasons, as it 
relates to Ruedi Reservoir?
    Answer. As stated in our testimony on S. 3387, the absence of a 
contractual arrangement governing the release of water from Ruedi 
Reservoir could pose operational and financial problems. Operationally, 
the absence of a contract deprives Reclamation of a legal basis for 
establishing expectations of water users along the 15 mile reach of the 
River and introduces a new variable into operational considerations. 
Financially, as discussed in our testimony, a contract enables 
reimbursement to the United States for proportionate costs incurred at 
Ruedi. At a minimum, the language in the bill should articulate the 
need to coordinate releases with Reclamation and other interested 
parties and that measures need to be taken to ensure that such releases 
of water are protected from diversion by others to ensure benefits to 
endangered species.
    Question 2. Please describe how the BOR has addressed cost share 
issues in the past, as it pertains to unused reservoir capacity at 
federal water facilities for environmental purposes.
    Answer. The water users' proposal to use uncontracted Ruedi 
Reservoir water in this manner is unique to the facts of this 
situation. The water users committed to provide a permanent 10,825 acre 
feet of water (west and east slope water users) in a programmatic 
biological opinion as their contribution to actions that, when 
combined, provide ESA compliance for both non-federal and federal 
depletions. We are not aware of similar factual situations.

 Responses of Michael L. Connor to Questions From Senator Mark Udall, 
                               on S. 3404

    Question 1. I want to emphasize for the record that the goal of my 
legislation--the Leadville Mine Drainage Tunnel Act of 2010 (S. 3404)--
is not to force the Bureau of Reclamation to act when it believes the 
tunnel is safe. The point is to ensure that when we know it is not 
safe, there are clear lines of responsibility and authority for acting. 
That was not the case in 2008 when the Bureau and the U.S. 
Environmental Protection Agency (EPA) disputed their respective 
responsibilities to respond to a dangerous buildup of contaminated 
water behind a physical blockage in the tunnel. And none of the legal 
blockages have changed since then. Therefore, in my opinion, the Bureau 
misses the point when they testify that the legislation does not take 
into consideration the 2008 risk assessment. The legislation is not 
designed to address current safety conditions, but rather current and 
future responsibility for action.
    Even though the Bureau committed in its testimony to not ``walk 
away'' from the tunnel, and there has been good cooperation recently 
with EPA and the State of Colorado on this issue, that has not been the 
history at the tunnel. I want to ensure the people of Leadville and 
southeastern Colorado that we do not have a repeat of 2008 at any point 
in the future.
    Commissioner Connor, with that in mind, can you describe your 
understanding of the Bureau's responsibilities regarding the tunnel? Do 
you have any objection to codifying those responsibilities in law so 
that it is clearly articulated for any future contingencies?
    Answer. Reclamation believes that its current responsibilities for 
the tunnel are spelled out in Public Law 102-575, which requires that 
Reclamation, `` . . . treat the quantity and quality of effluent 
historically discharged from the Leadville Mine Drainage Tunnel.'' 
Reclamation is responsible for ensuring that all of its facilities are 
safe, and do not present a threat to public health, safety, or the 
environment. It is for that reason that, when EPA and others expressed 
concern about the safety of the Tunnel, Reclamation conducted a risk 
assessment to confirm that the Tunnel did not present a significant 
safety hazard. Based on that assessment, Reclamation believes the 
tunnel is safe and the chance of a catastrophic discharge as a result 
of the failure of a blockage inside the tunnel is highly unlikely. As 
provided in PL 102-575, Reclamation is responsible for the operation 
and maintenance of the treatment plant, and is also committed to 
ensuring that waters discharged from the treatment plant do not violate 
Federal and state law. Reclamation generally does not object to 
statutory language that would clarify those responsibilities, 
particularly as it relates to Reclamation's authority to treat waters 
(above historical flows) delivered to the treatment plant from the de-
watering well in the tunnel or limited surface waters discharged in 
case of emergency from operable unit 6 of the California Gulch 
Superfund Site pursuant to the ROD Amendment issued by EPA on September 
28, 2010. However, Reclamation has both policy and technical concerns 
about this bill and does not believe that legislation is warranted at 
this time.
    Question 2. Commissioner Connor, in your testimony, you stated that 
S. 3404 could be construed as ``conferring responsibility on the 
Secretary for facilities which have been listed under the Comprehensive 
Environmental Response, Compensation and Liability Act (CERCLA), or are 
subject to the Resource Conservation and Recovery Act (RCRA).'' Could 
you specify which parts of and in what ways S. 3404 could be construed 
as such? In addition, since my legislation is not designed to confer 
any such responsibility to the Secretary, can you suggest changes to 
the legislation that would remove this particular concern?
    Answer. Section 708 of Pub. L. 102-575 currently provides that 
``[t]he Secretary shall have no authority under this section at 
facilities which have been listed or proposed for listing on the 
National Priorities List, or are subject to or covered by the Resource 
Conservation and Recovery Act.'' We note that S. 3404 would amend 
Section 708 to provide expressly for such authority, including any 
authority to improve and expand the Treatment Plant and to consult with 
EPA on elements of the Operable Unit 6 ROD that may require alterations 
to, or affect the operation and maintenance of, the Tunnel or treatment 
plant.

   Responses of Michael L. Connor to Questions From Senator Stabenow

    Question 1a. Regarding S. 3404, relating to the Leadville Mine 
Tunnel, was the Department of Interior able to coordinate its testimony 
with the Environmental Protection Agency?
    Answer. Yes.
    Question 1b. When will EPA have the revised Record of Decision for 
the site completed?
    Answer. EPA issued a Record of Decision amendment for OU6 on 
September 28, 2010, which eliminates the use of the LMDT except in the 
event of an emergency. The ROD amendment can be found at: http://
www.epa.gov/region8/superfund/co/calgulch/index.html.
    Question 2. Is Reclamation committed to working in a timely manner 
with the State of Colorado and the Lake County Commission on specific 
amendments to the bill that will address the Administration's concerns 
about the bill including issues relating to the potential 
characterization of Reclamation as a potentially responsible party, and 
ensuring an appropriate allocation of costs associated with treatment 
of water and maintenance of the facilities?
    Answer. Yes.
    Question 3. Does Reclamation need additional authority to treat 
water at the Leadville Mine Tunnel treatment facility or maintain the 
tunnel or treatment facility beyond what is currently provided in P.L. 
102-575 or otherwise?
    Answer. Reclamation is presently treating the annual outflow volume 
of the Leadville Mine Drainage Tunnel (LMDT), approximately 510 million 
gallons. In addition to this amount, Reclamation is treating surface 
water diversions by EPA from surface sources into the LMDT via the 
Marion Shaft (up to 5 million gallons per year to date, as well as 
diversions from relief well in two locations along the tunnel 
alignment. One of those locations is the relief well that EPA installed 
in 2008 to relieve the threat posed by blockages in the lower portion 
of the tunnel ( 377 million gallons per annum), of which Reclamation 
has since taken ownership. Reclamation's authority to treat these 
additional waters is not explicitly enumerated in Public Law 102-575; 
however, Reclamation has been relying on general health and safety 
considerations to treat these diversions.

   Responses of Michael L. Connor to Questions From Senator Brownback

    Question 1. Please describe the work that the BOR has conducted, as 
it relates to the safety of the Leadville tunnel. Do you believe it is 
the obligation of the Bureau of Reclamation (BOR) to be the lead 
Federal agency? If additional work is needed, do you believe the BOR 
should be the lead agency, as it relates to any public safety and 
environmental issues that may arise? If not, who should be the lead 
Federal agency, as it relates to the operations of the tunnel, and any 
costs associated with additional mitigation, if necessary.
    Answer. In response to public concerns expressed in 2008 about the 
safety of the Tunnel, Reclamation initiated a scientific Risk 
Assessment to analyze the condition of the LMDT. That assessment, begun 
in 2008, was intended to respond to concerns about the stability of the 
LMDT and its potential for a catastrophic release of water. When 
initial findings were available, they were independently peer reviewed. 
The independent peer review confirmed Reclamation's analysis that it is 
highly unlikely that a sudden release of water could occur from either 
a blockage in the LMDT, or through the bulkheads installed in the 
tunnel. Moreover, the assessment concluded that even if an existing 
natural blockage in the upper part of the LMDT failed rapidly, a sudden 
release of water through the lower blockage and bulkheads is unlikely. 
When the Risk Assessment was published in the early Fall of 2008, it 
was posted on the Internet and distributed to the media. Reclamation 
conducted three public meetings and sought public comment on the 
findings. We remain confident in the value of the Risk Assessment and 
the validity of its findings. Lastly, Reclamation is conducting a 
facility assessment of its operation and maintenance. The purpose of 
the review is to identify possible treatment process enhancements, 
overall efficiency improvements, and any possible modification 
opportunities that would lower long term operation and maintenance 
costs. This will be accomplished within the appropriated budget. As the 
owner of the LMDT, Reclamation is the lead Federal agency for all 
matters concerning its operation and maintenance. The California Gulch 
Superfund Site, part of which overlies the tunnel, is being cleaned up 
under CERCLA with EPA as the lead agency and Colorado Department of 
Public Health and the Environment (CDPHE) as the support agency. EPA is 
the lead Federal agency, in consultation with CDPHE, for responding to 
environmental contamination associated with the Superfund Site.
    Question 2. Please describe the role that the BOR has played at 
other superfund sites, in addressing water related issues. Is this a 
core mission of the BOR?
    Answer. Activities related to Superfund Sites are not a core 
mission of the Bureau of Reclamation. However, Reclamation has certain 
technical expertise that can be useful in developing remedies at 
Superfund sites. In some case-by-case instances, Reclamation has made 
this expertise available on a reimbursable basis.
    Additionally, the Department of the Interior and its component 
bureaus possess delegated authority under the Comprehensive 
Environmental Response, Compensation and Liability Act (CERCLA) to 
conduct cleanups of Federal lands. Reclamation has exercised this 
authority at times to conduct CERCLA cleanups on lands subject to 
Reclamation's jurisdiction, custody or control. Because it manages 
relatively little contaminated land on behalf of the United States, 
Reclamation has not conducted many CERCLA cleanups. Nevertheless, 
Reclamation takes all of its environmental stewardship responsibilities 
seriously and believes that environmental response on Reclamation-
managed lands is part of its overall agency mission. Reclamation notes 
that, with respect to Operable Unit 6 of the California Gulch Superfund 
Site, Reclamation does not manage any of the surface of the Site--the 
source of the acid mine drainage and other surface water discharged 
into or migrating to the Tunnel. EPA, together with CDPHE, is 
responsible for addressing water contamination at Operable Unit 6.

                               ON S. 2779

    Question 3. Within your testimony on the Upper Mississippi you 
describe many programs that are in place that address the science and 
management of nutrients and sediments in the river system. Do you 
believe that this bill will provide any additional insight, or 
direction, that you are currently not pursuing? If so, what areas 
should be further addressed?
    Answer. The activities called for in the bill would expand the 
current USGS monitoring efforts in the region, which would support 
United States Department of Agriculture programs, including the 
recently announced Mississippi River Basin Healthy Watersheds 
Initiative, by providing a more comprehensive picture of the 
effectiveness of conservation and management practices. The bill also 
directs the USGS to obtain improved geospatial coverages of information 
on point and nonpoint sources of nutrients to streams, along with 
information on best management practices. Both monitoring data and 
geospatial coverages are used to calibrate scientifically sound and 
rigorous water-quality models, which would help land and water managers 
address nutrient and sediment issues in the Mississippi River Basin and 
hypoxia issues in the Gulf of Mexico.

    Responses of Michael Connor to Questions From Senator Stabenow, 
                               on S. 2779

    Question 8. Regarding S. 2779, relating to the Upper Mississippi 
River, does the Administration have any technical concerns regarding 
the bill beyond the issue raised in the testimony regarding the 
potential lack of sufficient funding to complete the work authorized by 
the bill?
    Answer. The USGS has a few technical concerns with the current bill 
language; we would be happy to work with the Committee to resolve our 
concerns.
    Question 9. Does S. 2779 provide any additional authority to 
U.S.G.S to complete the required work beyond what is already in place?
    Answer. No, the activities described within S. 2779 are within the 
scope of current USGS authorities.

                              ON H.R. 4252

    Question 10. Regarding H.R. 4252, the bill to assess groundwater 
pollution conditions in California, is the primary concern of the 
Administration that there may not be sufficient funding to complete the 
work authorized by the bill or are there any specific technical 
concerns regarding the bill?
    Answer. The USGS has no technical concerns regarding H.R. 4252; 
however, the work authorized by this bill would need to be considered 
in light of other USGS research priorities.
    Question 11. Your testimony indicates that the U.S. Geological 
Survey is currently working on studies relating to the groundwater 
quality in California's Inland Empire area--does H.R. 4252 add to any 
of the existing authorities or provide any new authorizations?
    Answer. USGS's The Rialto Colton Basin study proposed in HR 4252 
can be conducted with existing authorities; H.R. 4252 does not add to 
these authorities nor does it provide new authorities.


                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

    [Due to the large amount of materials submitted, additional 
documents and statements have been retained in subcommittee files.]

 Statement of the U.S. Geological Survey, Department of the Interior, 
                               on S. 2779

    Madam Chairwoman and Members of the Subcommittee, the Department of 
the Interior appreciates the opportunity to provide its views on S. 
2779, the ``Upper Mississippi River Basin Protection Act.''
    The Department considers sediment and nutrient loss in the Upper 
Mississippi River Basin to be a real threat to the health of the 
ecosystem and appreciates the efforts of the sponsors of S. 2779 to 
address this important issue. We especially value the emphasis within 
the bill on the need for reliance on sound science to inform wise 
management of nutrients and sediments in the Upper Mississippi River 
Basin. However, we have concerns about the financial resources that 
would be required for the U.S. Geological Survey (USGS) to carry out 
the full scope of activities described in this bill. Carrying out these 
activities would mean diverting resources away from other priority 
programs. The Department of the Interior supports the goals of S. 2779, 
although we note that the activities called for in this bill are well 
within the scope of existing Department of the Interior authorities and 
activities already underway by the Department that are aimed at 
addressing the same problems addressed in this bill.
    The bill directs the Secretary of the Interior, acting through the 
USGS, to provide a scientific basis for the management of sediment and 
nutrient loss in the Upper Mississippi River Basin. This would be 
accomplished through

   establishing a sediment and nutrient monitoring network that 
        builds on existing monitoring activities;
   conducting research and modeling that relate sediment and 
        nutrient gains and losses to landscape, land-use, and land-
        management characteristics;
   providing technical assistance regarding use of consistent 
        and reliable methods for data collection; and
   instituting a program to disseminate new information to 
        managers, scientists and the public.

    The role identified for the Department in this bill is consistent 
with the USGS's leadership role in monitoring, interpretation, 
research, and assessment of the health and status of the water and 
biological resources of the Nation. Since its beginning, the USGS has 
been the primary federal agency responsible for assessing the quantity 
and quality of the nation's surface water and groundwater. The USGS has 
been active in a number of programs and investigations that involve the 
Upper Mississippi River Basin specifically.
    The USGS participates in the Mississippi River Gulf of Mexico 
Watershed Nutrient Task Force. The role of the Task Force is to provide 
executive level direction and support for coordinating the actions of 
participating organizations working on nutrient management within the 
Mississippi River/Gulf of Mexico Watershed. It is chaired by the 
Environmental Protection Agency and has representation from four 
additional Federal agencies, ten State governments, and Tribal 
governments in the basin. A key goal of the Task Force is to implement 
the Gulf Hypoxia Action Plan 2008, which provides an overview of how 
federal agencies, states, and tribes are working together to take 
action to reduce the size of the hypoxic zone in the Gulf of Mexico 
while protecting and restoring the human and natural resources of the 
Mississippi River Basin. The Action Plan in 2008 identified USGS to 
lead or co-lead two activities. The USGS has the lead role to ``.reduce 
the scientific uncertainties regarding the source, fate, and transport 
of nitrogen and phosphorus in the surface waters of the Mississippi/
Atchafalaya River Basin and to improve the accuracy of management tools 
and efficacy of management strategies for nutrient reduction.'' As a 
co-lead with the U.S. Environmental Protection Agency and the National 
Oceanic and Atmospheric Administration, the USGS is tasked ``to 
coordinate, consolidate, and improve access to data collected by State 
and Federal agencies on Gulf Hypoxia and Mississippi/Atchafalaya River 
Basin program activities and results.''
    To accomplish these tasks, the USGS has used its water-quality 
models and a broad suite of USGS and other Federal and non-Federal 
monitoring data from 31 basin States to identify the most important 
sources of nutrients and the sub-watersheds delivering the majority of 
those nutrients from the Mississippi River Basin to the Gulf of Mexico. 
Partners and stakeholders such as the U.S. Department of Agriculture 
and the U.S. Environmental Protection Agency in coordination with State 
and local agencies are using USGS information to target their resources 
in priority watersheds to manage nutrient runoff to rivers and streams.
    Specifically, the models estimate the amounts of nutrients 
delivered from key nutrient sources and landscapes in the Mississippi 
River watershed. Delivery of nutrients from more than 800 watersheds to 
local rivers, streams, and lakes, and to more distant receiving waters 
such the northern Gulf of Mexico are estimated. Key nutrient sources 
assessed in the model include chemical fertilizers, animal manure, 
human wastewater, urban stormwater, and atmospheric deposition. A 
nationally scaled model for the Mississippi/Atchafalaya River Basin was 
published in 2008, and a regional model for the Upper Mississippi River 
watershed is planned for release this year.
    The USGS has offices in each of the five Upper Mississippi River 
Basin states. These offices have a long history of conducting water-
quantity and water-quality monitoring and assessment activities within 
the basin. Existing USGS programs include the Hydrologic Networks and 
Analysis Program, the National Water-Quality Assessment Program, the 
National Stream Quality Accounting Network, the National Streamflow 
Information Program, the Toxic Substances Hydrology Program, the Water 
Resources Research Act Program, and the Cooperative Water Program, as 
well as cooperative efforts such as the Long-Term Resource Monitoring 
Program funded by the U.S. Army Corps of Engineers. These programs 
currently provide information on nutrients and sediment in rivers, 
streams, and groundwater within the basin.
    For more than 20 years, the USGS Upper Midwest Environmental 
Sciences Center (UMESC) in La Crosse, Wisconsin, has provided research 
support in the Upper Mississippi River Basin to Department of the 
Interior agencies and the U.S. Army Corps of Engineers to address 
complex issues of navigation, contaminants, and other natural-resource 
concerns. More recently, this Center has developed an active 
partnership with the Department of Agriculture, Natural Resources 
Conservation Service, on sediment and nutrient concerns of the 
agencies. For over 15 years, UMESC has provided scientific and 
management leadership for the Long-term Resource Monitoring Program 
component of the U.S. Army Corps of Engineers' Upper Mississippi 
Restoration-Environmental Management Program. This monitoring program 
of water quality, fisheries, vegetation, land use, and other critical 
indicators of river health is the largest mainstem river assessment 
program in the Nation.
    The USGS conducts monitoring activities in cooperation with many 
States and local governments in the Upper Mississippi River Basin. The 
USGS is also active in hydrologic and water-quality studies in the 
Lower Mississippi River Basin. The continuity of research is important 
from the standpoint of developing a complete assessment of the entire 
Mississippi River basin. To this end, the USGS has begun a partnership 
with the Long-term Estuary Assessment Group, centered at Tulane 
University. The USGS also supports EPA and states in their 
implementation of the National Aquatic Resource Surveys, particularly 
those focused on rivers and streams. These surveys are producing 
assessments of the condition of rivers and streams throughout the 
Mississippi River basin and across the nation. By focusing on periodic 
assessments of the resource at large, these surveys provide an 
important complement to the continuous sampling at selected locations 
proposed in the USGS sediment and nutrient monitoring network.
    S. 2779 acknowledges the need to use all existing monitoring and 
science programs of the USGS and those of other entities while 
identifying information needs in the Upper Mississippi River Basin. 
Existing monitoring and assessment programs and models are tools for 
defining how water-quality conditions are affected by human activities 
and natural climatic variations and how management actions may best 
improve water-quality conditions at a wide range of scales from small 
watersheds to the Mississippi River Basin. In 1995, the USGS had more 
than 200 locations for long-term sampling in the Basin; now, the 
network consists of about 74 locations, many of which are only sampled 
one year out of every four making it challenging to verify model 
outputs. Within the last 10 years, there also has been a reduction in 
the number of locations that are sampled by States. DOI is in the 
process of developing a plan to determine how many sampling stations 
are needed to provide needed data.; the report is expected to be 
published in 2011.
    The bill would also authorize integration of activities conducted 
in cooperation with other Federal partners and would emphasize and 
expand the existing USGS coordination and assistance to State 
monitoring programs. For example, the U.S. Fish and Wildlife Service's 
(Service) Partners for Fish and Wildlife Program restores wetland 
habitat in watersheds across the country, including the Upper 
Mississippi River Basin. The Service applies its expertise to the 
management of sediment and nutrients in the basin through participation 
in demonstration projects, technical assistance, and working groups. We 
recognize the need to ensure that future monitoring activities 
complement and do not duplicate State or other Federal monitoring 
activities.
    Section 106 of the bill provides for the National Academy of 
Sciences (NAS) to conduct a comprehensive assessment of water resources 
of the Upper Mississippi River Basin. As drafted, funding for such a 
study would come from USGS resources and could have the effect of 
reducing funding available for other USGS monitoring and assessment 
work in the basin. If the NAS study remains in the bill, additional 
direction as to the goals and uses of the study should be provided.
    In summary, the proposed legislation describes a program consistent 
with current USGS activities to support protection of the Upper 
Mississippi River Basin and the Gulf of Mexico Watershed Nutrient Task 
Force and the recommendations of the 2008 Action Plan. We note that 
some of these conservation activities are being addressed by other 
ongoing programs. Funding for the activities in S. 2779 is not included 
in the fiscal year 2011 President's Budget proposal and would remain 
subject to available resources.
    Thank you, Madam Chairwoman, for providing the Department with the 
opportunity to present this statement.
                                 ______
                                 
 Statement of the U.S. Geological Survey, Department of the Interior, 
                               on HR 4252

    Madam Chairwoman and members of the Subcommittee, I appreciate the 
opportunity to provide the Department of the Interior's views regarding 
U.S. Geological Survey (USGS) scientific capability relevant to the 
Inland Empire Perchlorate Ground Water Plume Assessment Act of 2009 
(H.R. 4252).
USGS Science in Support of Groundwater Management and Contaminants
    The USGS serves the Nation by providing reliable scientific 
information to describe and understand the Earth; minimize loss of life 
and property from natural disasters; manage water, biological, energy, 
and mineral resources; and enhance and protect our quality of life. The 
specific mission of the USGS California Water Science Center is to 
collect, interpret, and provide unbiased and timely scientific 
information of the highest quality for the responsible planning, use, 
and management of California's water resources in cooperation with 
local, State, and other Federal agencies. Scientific issues related to 
the occurrence and movement of groundwater and contaminants, such as 
perchlorate, fall within the scope of the USGS mission.
Perchlorate issues in Rialto Colton and the ``Inland Empire''
    The Rialto-Colton Basin is located in western San Bernardino County 
in California, about 60 miles east of Los Angeles in the upper Santa 
Ana River watershed (the Inland Empire). The Rialto-Colton Basin is 
bounded on the northeast by the Bunker Hill and Lytle Creek Basins and 
on the southwest by the Chino and North Riverside Basins. Groundwater 
presently constitutes about 79 percent of the drinking-water supply in 
the Inland Empire. Perchlorate has been detected in the main water-
producing aquifers within the Rialto-Colton and adjacent basins and has 
contaminated water in more than 20 production wells that supply the 
communities within the Rialto-Colton Basin and surrounding area.
    Perchlorate (ClO4-) has both synthetic and natural 
sources. Synthetic perchlorate is a residual of the manufacture and use 
of rocket propellants, fireworks, flares and other pyrotechnic devices. 
Minor concentrations of natural perchlorate has been measured in mined 
Chilean nitrate fertilizers. Perchlorate is extremely soluble and is 
carried in groundwater without retardation or absorption. The two major 
sources of synthetic perchlorate in the area are San Bernardino 
County's Mid-Valley Sanitary Landfill and a 160-acre site near the 
landfill. These two sites were used for storage and destruction of 
perchlorate-containing compounds such as explosives, propellants, and 
pyrotechnic devices. Chilean nitrate fertilizer was commonly used in 
the Basin in the early part of the 20th century. In addition, imported 
water from the Colorado River contains measurable perchlorate and also 
may be a source of perchlorate in the Inland Empire. Recent data 
collected by the USGS indicates that low levels of perchlorate have 
accumulated naturally in unsaturated zones in arid and semiarid areas 
of the southwestern United States, such as the Mojave Desert, likely as 
a result of atmospheric deposition.
    Perchlorate contamination is of concern to water managers because 
of the importance of groundwater in this region. Water managers need to 
know the source, fate, and transport of perchlorate within the Rialto-
Colton Basin and adjacent basins in order to effectively mitigate the 
contamination. Major uncertainties facing water managers include: 1) 
the source(s) of perchlorate in specific wells; 2) the hydrologic and 
geologic controls on the migration of perchlorate within the Rialto-
Colton Basin; 3) the effectiveness of the Rialto-Colton Fault as a 
barrier to perchlorate migration from the Rialto Colton basin to the 
adjacent Chino and North Riverside basins; and 4) the potential 
vertical movement of perchlorate through long-screened wells.
What is the USGS doing in the area?
    The USGS has a long history of hydrologic work in the Rialto-Colton 
area and adjacent areas in the Inland Empire going back as far as the 
early 1900s. This work has been updated periodically and collectively 
forms the basis of our scientific understanding of the regional 
hydrogeologic setting, the movement of water within aquifers pumped for 
public supply, and water-quality issues in the area. The USGS operates 
an extensive groundwater-monitoring network providing the public with 
real-time information on water levels and water quality. The USGS has 
developed predictive models in the Rialto-Colton Basin (Woolfenden and 
Kadhim, 1997; Woolfenden and Koczot, 2001) and the adjacent Lytle Creek 
and Bunker Hill groundwater basins (Danskin and Freckleton, 1989; 
Danskin and others, 2006) to assist in the management of the water 
resources in the area. These models are based on the current scientific 
understanding of the geology and hydrology in the area, including the 
areal and vertical extent of aquifers, hydraulic properties, recharge 
and discharge of groundwater, and the interaction between groundwater 
and surface water. Most of the USGS research done in the Inland Empire 
has been in cooperation with local water management agencies such as 
the San Bernardino Valley Municipal Water District under the auspices 
of the USGS Cooperative Water Program. In the past five years, about 70 
percent of the cost of these studies has been borne by local agencies.
    In recent years, the USGS has been working with local water 
agencies to help them understand the sources, distribution, and 
migration of perchlorate in the Inland Empire. A recent study completed 
as part of the USGS Groundwater Ambient Monitoring and Assessment 
(GAMA) Program (Belitz and others, 2003) sampled 99 drinking water 
wells throughout the Inland Empire and identified perchlorate in about 
67 percent of the wells at the reporting level of 0.5 micrograms per 
liter (ug/L); about 10 percent had perchlorate concentrations in excess 
of the California maximum contaminant level of 6 ug/L, but no well had 
concentrations in excess of the EPA health reference level (Kent and 
Belitz, 2009). Woolfenden (2008) used a particle-tracking model to 
determine the susceptibility of an aquifer to perchlorate contamination 
in the Rialto-Colton Basin. Izbicki (2008) collected wellbore flow and 
depth-dependent water-quality data from a public supply well near 
Highland, CA located in the northern part of the Inland Empire. Water-
quality and isotopic data indicated that the source of perchlorate was 
Chilean nitrate fertilizer.
    The USGS is participating in a 2-year study funded by the 
Department of Defense Environmental Security Technology Certification 
Program (ESTCP) to apply state-of-the-art chemical and multiple-isotope 
techniques to identify the source of perchlorate within the Inland 
Empire. A total of 25 wells will be sampled and analyzed for 
perchlorate, perchorate isotopes, and other tracers in the Rialto-
Colton Basin and Chino Basin adjacent to the Rialto-Colton Fault. Data 
collected in this study are intended to help identify the areal and 
vertical extent of perchlorate contamination near the margin plumes in 
areas having high background perchlorate concentrations from fertilizer 
or other sources. An important component of this new work is to 
investigate the impact of well-bore flow on the vertical distribution 
of perchlorate within aquifers.
Rialto Colton Basin, California Water-Resources Study
    The key issues of concern identified in H.R. 4252 are:

          A. The delineation, either horizontally or vertically, of the 
        aquifers in the Rialto-Colton Basin within the State, including 
        the quantity of water in the aquifers;
          B. the availability of groundwater resources for human use;
          C. the salinity of groundwater resources;
          D. the identification of a recent surge in perchlorate 
        concentrations in groundwater, whether significant sources are 
        being flushed through the vadose zone, or if perchlorate is 
        being remobilized;
          E. the identification of impacts and extents of all source 
        areas that contribute to the regional plume to be fully 
        characterized;
          F. the potential of the groundwater resources to recharge;
          G. the interaction between groundwater and surface water;
          H. the susceptibility of the aquifers to contamination, 
        including identifying the extent of commingling of plume 
        emanating within surrounding areas in San Bernardino County, 
        California; and
          I. characterization of surface and bedrock geology, including 
        the effect of the geology on groundwater yield and quality.

    The USGS has the capability to complete a 2-year study to address 
the issues of concern presented in H.R. 4252 for the Rialto-Colton 
Basin. The tasks required are within the scope of the USGS mission and 
expertise and could be accomplished under existing authorities.
    H.R. 4252 focuses on perchlorate issues in the Rialto-Colton Basin; 
however, perchlorate is a concern throughout the Inland Empire. If 
requested, the USGS could consider options for studying this issue 
throughout the region.
Conclusion
    The USGS has the scientific capacity to address issues of concern 
identified in H.R. 4252, a strong working relationship with many of the 
people currently working on groundwater quality issues in California's 
Inland Empire, and a reputation for providing unbiased information.
    The problem of groundwater quality affecting drinking water 
supplies is not unique to communities in Rialto-Colton or the Inland 
Empire. Perchlorate is an issue throughout the southwestern U.S. 
Therefore, methods developed to understand the perchlorate 
contamination in the Rialto-Colton could be useful to water managers in 
other basins.
    We note, however, that the activities called for in H.R. 4252 are 
already authorized by existing authorities. Any study conducted to 
fulfill the objectives of the bill would need to compete for funding 
with other Administration priorities.
    Thank you, Madam Chairwoman, for the opportunity to present the 
views of the Department on H.R. 4252. I will be happy to answer any 
questions you or the other Members may have.
                                 ______
                                 
                                Salt River Project,
                          Commercial and Customer Services,
                                          Phoenix, AZ, May 5, 2010.
Mr. Tyler Carlson,
Huber Chief Executive Officer, Mohave Electric Cooperative, Bullhead 
        City, AZ.
Mr. David Plumb,
Chief Executive Officer, Navopache Electric Cooperative, 1878 W. White 
        Mountain Blvd., Lakeside, AZ.
Mr. Creden Huber,
Chief Executive Officer, Sulphur Springs, Valley Electric Cooperative, 
        340 North Haskell, Wilcox, AZ.
    Dear Messrs. Carlson, Huber and Plumb: Salt River Project (``SRP'') 
fully supports the fair and equitable distribution of power from Hoover 
Dam to eligible entities within the State of Arizona. We believe that 
includes Native American tribes and electric cooperatives. The Hoover 
Power Allocation Act of 2009 (``Act'') establishes a pool of Hoover 
power (``Hoover D'') for allocation to eligible entities that do not 
currently have allocations of Hoover power.
    We recognize you have concerns with the State allocation process 
that you have expressed during the federal deliberations of the Act. 
However, recognizing the importance of Hoover as a resource for the 
State of Arizona, our hope is that we can jointly support the passage 
of the Act and commit to work together to address your concerns at the 
State level once an allocation for Arizona is secured.
    When the Act is passed, the State of Arizona through the Arizona 
Power Authority, will receive a renewed allocation of Hoover power, 
including Hoover D. Hoover D is intended only for eligible entities 
without current allocations of Hoover power and the state process, 
under existing Arizona statutes, defines electric cooperatives as 
eligible entities. SRP will be actively engaged in the State allocation 
process and we commit to support the allocation of a portion of Hoover 
D to each of your cooperatives. It is our expectation that cooperatives 
will receive allocations in this process. Should your cooperatives 
receive a combined total allocation of less than 3 MW, SRP hereby 
commits to sell an amount of power, providing operational and cost 
characteristics that mirror Hoover D capacity and energy, necessary to 
bring you to 3 MW total. Our calculations are that a 3 MW allocation 
will provide you an allocation proportionally equivalent to SRP's 
Hoover allocation relative to our respective loads. This commitment by 
SRP is extended solely to Mohave Electric Cooperative, Navopache 
Electric Cooperative and Sulphur Springs Valley Electric Cooperative 
and it will be your responsibility to determine an equitable 
distribution of the 3 MW.
    By copy of this letter to your legal counsel, this letter also 
serves as notice that SRP is withdrawing its membership from the 
Arizona Municipal Power Users Association.
    We look forward to working with you to secure a new long term 
allocation of Hoover power for the State of Arizona, to address your 
concerns and to ensure broad, equitable distribution of Hoover power 
within the State, including to you and your members.
            Sincerely,
                                           Mark B. Bonsall,
                                         Associate General Manager.
                                 ______
                                 
     Statement of Navopache Electric Cooperative, Mohave Electric 
 Cooperative, and Sulphur Springs Valley Electric Cooperative, on H.R. 
                                  2891

    On March 18, 2010, our organizations testified before the House of 
Representatives Water and Power Subcommittee on the merits of H.R. 
4349/S. 2891and we informed those Members of Congress that this 
legislation was critically flawed from a state, national, and Federal 
perspective. It is still our contention that these bills fall woefully 
short of providing Arizona's rural electric Cooperatives, cities, towns 
and Native American tribes protection from the discriminatory practices 
of the Arizona Power Authority.
    Despite efforts to ``improve'' the legislation in the House of 
Representatives we do not believe there are sufficient safeguards to 
ensure that Arizona's Hoover allocation will be distributed in an equal 
and equitable manner that is consistent with Federal preference laws.
    Under the proposed legislation there is a superficial allocation to 
a reservation of Hoover power and energy in a Federal Pool of 5% which 
is less than the historic Federal Pool reservations in re-marketing of 
Federal resources of the last 20 years amounting to between 6% and 8%. 
This small reserve pool is expected to be marketed appropriately under 
federal law. However, testimony before the House of Representatives 
Water and Power Subcommittee has proven that despite this well intended 
effort, the 5% pool is inadequate to meet the reasonable needs of new 
entities seeking access to Hoover.
    Moreover, under Federal law there is a right of equal and equitable 
access granted to cities, towns, municipalities, Indian tribes and 
rural electric cooperatives to power generated from a Federal 
hydroelectric facility. Yet within the State of Arizona, power from 
Hoover has been marketed contrary to the most recent Federal preference 
rules and regulations and this inequity is not addressed or corrected 
in the bills S. 2891 or H.R. 4349.
    The Arizona Power Authority has made claims that it ``has met with 
(Indian tribes and Rural Electric Cooperatives) to listen to their 
concern, better understand their needs and assure them that the 
Authority will work with them to use a fair, . . . public process to 
allocate power from the proposed new Schedule D pool  . . . '' However, 
the only meeting that took place was not productive and the Authority 
made no commitments nor did they provide us with any assurances. As 
appreciative as we are of the opportunity to seek power from the 
Schedule D pool, we would respectfully prefer to have the Arizona Power 
Authority adhere to Federal preference laws--which, we believe, would 
provide the Cooperatives, Tribes, and cities and municipalities with 
access and an equal opportunity to obtain Hoover power.
    We also would like to clarify a misconception that has been allowed 
to flourish regarding the Authority's ``costs'' for Hoover power. The 
Hoover facility and its uprates and the costs associated with the 
facility are all paid by the allottees through the cost of the power 
remarketed, and in Arizona the cost of Hoover to the Arizona Power 
Authority is recovered through its rates to its customers. Beginning in 
2017, as it is today, the Arizona Power Authority will recover any 
Hoover related costs through the rates that it charges its customers 
for the Hoover power and energy resold to them.
    S. 2891/H.R. 4349 reallocation of Hoover as proposed to the Arizona 
Power Authority, as an agent of the State, does not require it to 
follow the Federal Reclamation Project Act of 1939 in remarketing and 
perpetuates discrimination against cooperatives and municipalities by 
relegating them to an inferior and lesser eligible class of customer. 
It should be noted that Federal policy on the marketing of resources 
from Federal projects was set by law upon passage of that Act. It is 
national federal policy to encourage distribution of federal resources 
for the widespread use first of public bodies, cities, towns, 
municipalities, cooperatives and tribes and then to others.
    Since inception, contrary to the widespread use principles and 
philosophy of Federal Law, the Arizona statutes controlling sale of 
Hoover power by the Arizona Power Authority (A.R.S. Sec. 30-125) have 
favored a single class of customer--special irrigation and electric and 
other districts--to the disadvantage of cities, towns, tribes, 
municipalities and electric cooperatives. The Federal Preference law 
does not have such discrimination, and we would prefer bill language 
clarifying that the Authority must comply with Federal rules and 
regulations governing the distribution of power from Hoover.
    S. 2891 which enacts new federal national policy concerning the 
marketing of the Hoover resource should not permit such continued 
discrimination by the Arizona Power Authority (APA) and S. 2891 should 
be revised to require the APA, as a condition of receipt of its Hoover 
allocation, to follow the Federal preference law giving equal and 
equitable access to cities, towns, rural electric cooperatives, 
municipalities and tribes.
    Beginning with the original allocations of Hoover and its 
remarketing in the three states, Nevada through its Colorado River 
Commission, a preference customer under Federal Law, we understand 
markets to rural electric distribution cooperatives, Valley and 
Lincoln, consistent with the provisions of the 1939 Act.
    Within the Hoover marketing area, California has made an effort to 
distribute Hoover for the widest use consistent with law. The 
California municipal entities which currently receive and will receive 
2017 allocations are all considered to be Federal preference customers, 
except for Southern California Edison. Recognizing the wide customer 
base of Southern California Edison and the fact that Edison was an 
original investor and purchaser of Hoover in the original marketing, it 
continues to receive under this legislation an allocation of Hoover 
even though it is not qualified as a Federal Preference customer. We do 
not oppose the way in which California and Nevada propose to manage 
their Hoover allocation for wide spread use consistent with Federal 
law.
    It should be noted, unlike the Nevada Colorado River Commission and 
the cities of California which are eligible under the 1939 Act, the 
Arizona Power Authority is not qualified under Federal law as an entity 
entitled to preference in marketing federal hydroelectric resources 
under the 1939 Reclamation Project Act. It is ineligible to receive 
federal power allocations from the Federal Parker Davis Project. It was 
declared ineligible to receive allocations of federal power from the 
Federal Colorado River Storage Project (CRSP) because of its 
discriminatory law.
    Contrary to the policy of encouraging wide spread use, the APA Act 
A.R.S. Sec. 30-125 gives preference only to special districts and 
relegates electric cooperatives, cities, and towns to a second class of 
customer while the 1939 Federal Law puts all three classes and Indian 
tribes on an equal and equitable footing. Since applicants for use of 
Hoover exceed the resource allocated to Arizona, the APA does not make 
the resource available for widespread use and after 2017 will continue 
to discriminate against what after 2017 will be over two million people 
in Arizona, within the marketing area, unless S. 2891 is amended.
    We, as Cooperatives, believe that Arizona Indian tribes and also 
many Arizona communities such as Marana, St. Johns, Eagar, 
Springerville, Duncan Valley Electric, Graham County Electric, 
Navopache Electric, Williams, Gilbert, Wickenburg, and Reserve, New 
Mexico, and Mohave Electric, Trico Electric and Sulphur Springs Valley 
Electric Cooperatives and their currently over 250,000 meters and what 
by 2017 will be more than 2 million customers are prejudiced under the 
proposed legislation by the current Arizona Power Authority statutory 
provisions unless S. 2891 is amended.
    The relevant necessary S. 2891 provision is in Section 619 (a) 
Renewal of Contracts section and what we would propose is that the 
language of S. 2891 should be amended to read as follows:

    `` . . . Provided, however, that in the case of Arizona and Nevada, 
such renewal contracts shall be offered to the Arizona Power Authority 
to be remarketed and resold only in compliance by the Arizona Power 
Authority with the provisions of the Federal Reclamation Project Act of 
1939, 53 Stat. 1187, 1194, 43 U.S.C. 485h(c) with respect to preference 
in marketing of Federal Power and upon assurance of meaningful 
allocations of Hoover A to the Arizona rural distribution cooperatives 
within the State of Arizona, and the Colorado River Commission of 
Nevada . . . ''
    The economic circumstances of 1946 used to justify the A.R.S. 
Sec. 30-125 discriminatory provisions of the Arizona Power Authority 
Hoover law favoring agricultural special irrigation and electrical 
districts, and denying for 70 years widespread use of the resource, no 
longer will exist in 2017. As they continue to be urbanized and as 
acreage devoted to irrigated agriculture decreases, those districts no 
longer require a super-preference in the allocation of Hoover contrary 
to Federal law as opposed to a continuing opportunity for equal 
consideration.
    The needs of inhabitants of Arizona cooperatives, cities and towns 
and Indian tribes have expanded since 1946 and an equal and equitable 
opportunity for them to receive an allocation of Hoover power and 
energy will be vitally important to their electric operations as we all 
pursue development of renewables, use of hydroelectricity in the 
integration of wind, integration of solar, and flexibility in operating 
electric systems to reduce green house gasses and lessen coal 
dependence.
    Perpetuation of the APA refusal to comply with the 1939 Federal 
Preference laws, in the receipt and resale of a vital Federal resource, 
is unconscionable. Hoover is a resource which belongs not to the 
special favorites of the APA but to the people of the United States to 
be marketed in accord with Federal law. S. 2891, which disposes of this 
Federal Resource should be amended to require compliance by the APA 
with Federal Preference laws as a condition of receipt by it of a 
renewed 50-year allocation of Hoover. After 70 years, equity, fairness 
and equal opportunity under Federal laws should be the benchmark for a 
renewed 50-year allocation to the APA of Hoover.
    Hoover power is a vital resource for customers in the States of 
Arizona, California and Nevada. Over 29 million people rely on this 
power. In the 1984 remarketing of Hoover, Arizona cities and towns and 
cooperative were denied equal and equitable access.
    Under the 1984 legislation, these current contracts are scheduled 
to expire in 2017.
    The 1984 Hoover Power Act distributed power under three schedules:

    Schedule A--Provided allocations to the original contractors of 
Hoover power as authorized by the 1928 Act. Metropolitan Water District 
of Southern California, Cities of Los Angeles, Glendale, Pasadena, and 
Burbank (preference customers); the Southern California Edison Co.; the 
State of Arizona through its Power Authority; Nevada through the 
Colorado River Commission of Nevada (a preference customer); and the 
City of Boulder City, Nevada (a preference customer).
    Schedule B--Provided an allocation to contractors that advanced 
funds for modification of Hoover power turbines as authorized by the 
1984 Act: these were the States of California (Cities of Glendale, 
Pasadena, Burbank, Anaheim, Azusa, Banning, Colton, Riverside, Vernon 
who are all preference customers under federal law); and the Colorado 
River Commission of Nevada (a preference customer); and the Arizona 
Power Authority of the State of Arizona.
    Schedule C--Governs allocations of excess Hoover energy, if any, to 
the states of Arizona, California and Nevada as negotiated by the 
states and federal government.
The Hoover Power Allocation Act of 2009-S. 2891/H.R. 4349
    Under the proposed legislation, Congress would distribute Hoover 
Power pursuant to Schedules A, B, and C. However, each of the current 
Hoover contractors would contribute 5% of their allocated power to a 
pool that would be distributed under a new Schedule D. Schedule D power 
would be allocated to federally recognized Native American Tribes and 
the other eligible entities that do not currently purchase Hoover 
power. Such a miniscule amount is grossly unfair and inadequate.
    Two thirds of the Schedule D pool would be distributed through the 
Western Area Power Administration and the remaining one third would be 
allocated in equal shares to the Arizona Power Authority (for new 
Arizona contractors subject to the discriminatory Arizona law); and the 
Colorado River Commission of Nevada (for new contractors); and through 
Western (for new contractors in California).
    These new contracts would continue for 50 years until September 30, 
2067.
Widespread Use of Federal Resources
    The driving intent and objective of Federal law in marketing power 
resources as expressed in the 1939 Reclamation Act is to encourage 
widespread use in marketing of the Federal Resource to as broad a 
public audience as possible. Examples of encouraging the widespread use 
of federal electricity in Arizona would be to include, with the 
existing districts, the cooperatives and municipalities that do not now 
have Hoover allocations with equal and equitable access.
Examples of Cooperative Use--All Customers, Not Just Water
    Arizona electric distribution cooperatives, consistent with the 
intent of the original Rural Electrification Act serve a wide and broad 
based membership as not for profit entities.
    Navopache Electric Cooperative in Northeastern Arizona and Western 
New Mexico serves: 2 accounts for the Village of Reserve in the state 
of New Mexico, needs of the State of New Mexico, 4 New Mexico Fish and 
Game needs and 2 State of New Mexico accounts. Also it delivers 
electricity to and serves 3,973 accounts on the White Mountain Apache 
Reservation reaching approximately 12,000 Native American people. It 
delivers to 14 Arizona Department of Transportation accounts, 29 United 
States Forest Service accounts, 2 Arizona prison accounts, 59 Arizona 
school districts, and 8 Arizona Fish and Game accounts.
    Mohave Electric serves 36 Federal installations and 5 Department of 
Interior accounts, 39 Fort Mohave Tribe accounts, 6 Havasu National 
Wildlife accounts, 600 Hualapai Tribe accounts or about 1200 Native 
American persons, 87 Bullhead City, Arizona municipal accounts, and 7 
community college accounts. There are also 11 mining accounts and 33 
farm accounts.
    Sulphur Springs Valley in Southeastern Arizona along the Mexico 
border delivers electric service to many installations of the United 
States Army, the United States Customs and Border Service, the United 
States Forest Service, The Arizona Game and Fish Department, the 
Arizona Department of Transportation, the Arizona Nature Conservancy, 
the University of Arizona, multiple schools, municipal buildings, the 
Arizona Department of Veteran Services and the Arizona Department of 
Public Safety.
Misconceptions and Recent Developments
    You may hear some rendition of history that the cooperatives did 
have an allocation of Hoover power in the early 1960's. That particular 
portion of history provides the example of why this amendment is 
needed. Prior to 1963, the State of Arizona--through the APA--did 
market a blended product of Hoover power, Parker-Davis Project power, 
and purchased steam power as Colorado River Power. The APA had excess 
surplus of this blended power and some of the cooperatives in Arizona 
did purchase this power along with entities such as investor-owned 
utilities. Those of us that purchased this excess power from the APA 
did not have allocations. It is important to note that the Parker-Davis 
Project power was required by law to be marketed in accordance with 
federal preference rules. In 1963, the federal government decided that 
Arizona's ``super preference'' laws were not consistent with the 
Federal Preference laws and took the Parker-Davis Project power away 
from the State and marketed it directly to preference entities in 
accordance with preference power provisions. It was then that the 
cooperatives received Parker-Davis power in 1963. Since 1963, the 
cooperatives have not received an allocation of Hoover power, and the 
power they received prior to 1963 was actually a blend of Parker-Davis 
Project power, Hoover power, and purchased steam power and, again, not 
an allocation.
    We are here seeking an amendment to a federal legislative action 
that we did not initiate, we are simply responding to it. We have 
sought since May of 2008 to come together to mutually create the 
Arizona State position on allocations within the state, to no avail. We 
sought a parallel path of a State allocation solution and federal 
legislation development, but were also denied. We sought these 
positions so all in Arizona could support the legislation when it was 
developed and introduced. But some entities felt compelled to thwart 
and prevent the Arizona cooperatives input. We could not, and did not, 
support a federal legislative solution that did not solve the Arizona 
State allocation issues first, and are forced to seek federal 
legislative relief because the legislation has been introduced.
    It is only within the last few weeks, and with the knowledge that 
we are here to testify that the Arizona Power Authority has asked to 
meet with us. And, yet, the Authority has not proposed any solutions or 
alternatives to seek a mutual resolution of the problem, and in fact, 
have not even presented us with a proposal to address the existing 
inequity. We view these initial overtures as self-serving.
    In closing, we want you to know that some, but not all the Arizona 
interests have been willing to meet to address the inequities and 
unfairness in the proposed legislation. We express our gratitude to the 
officials of Salt River Project for their willingness and commitment to 
the Rural Electric Cooperatives, and we look forward to working with 
them on issues concerning Arizona's allocation of Hoover power. We too 
are committed to finding a solution that will be valuable to the State 
of Arizona and all of its qualifying participants.
                                 ______
                                 
            The Uncompahgre Valley Water Users Association,
                                        Montrose, CO, June 3, 2010.
Hon. Debbie Stabenow,
Chairman, Subcommittee on Water and Power, Senate Energy and Natural 
        Resources Committee, 304 Dirksen Senate Building, Washington, 
        DC.
Hon. Sam Brownback,
Ranking Member, Subcommittee on Water and Power, Senate Energy and 
        Natural Resources Committee, 304 Dirksen Senate Building, 
        Washington, DC.
SUBJECT: Support for S. 3387 re: Ruedi Reservoir Water Releases to 
Benefit Endangered Fish Habitat in the Colorado River

    Dear Chairman Stabenow and Ranking Member Brownback: I am writing 
to support S. 3387, a bill that provides for release of water from 
Ruedi Reservoir for the benefit of endangered fish habitat in the 
Colorado River and amends P.L. 106-392, the authorizing legislation for 
the Upper Colorado and San Juan river basin recovery programs.
    Ruedi Reservoir was constructed for the benefit of west slope water 
users. Use of this water for endangered fish habitat to provide ESA 
compliance on more than 500,000 acre-feet per year of depletions by the 
west slope water users is consistent with the intended uses of Ruedi 
Reservoir. Making the component non-reimbursable is consistent with 
congressional policy that water uses in Reclamation projects for 
environmental purposes (fish and wildlife, endangered species, 
recreation, etc.) are non-reimbursable.
    S. 3387 is a consensus bill developed by east and west slope water 
users in Colorado. The bill, along with corresponding efforts by east 
slope water users to provide 5,412.5 acre-feet of water from other 
sources, fulfills fundamental requirements of the 15-Mile Reach 
Programmatic Biological Opinion (PBO) (USFWS, 1999). The PBO provides 
ESA compliance for five major Reclamation projects and numerous non-
federal projects in the Upper Colorado River Basin. The PBO is an 
essential component of the Upper Colorado River Endangered Fish 
Recovery Program which is recovering endangered fish while providing 
ESA compliance for 1,800 water projects in the Upper Colorado River 
basin.
    S. 3387 provides an essential element supporting continued recovery 
of endangered fish and ESA compliance for Reclamation and non-federal 
water projects in the Upper Basin. Therefore, I urge the Subcommittee's 
favorable consideration of this bill.
            Sincerely,
                                          Marcus W. Catlin,
                                                           Manager.
                                 ______
                                 
             Grand Valley Water Users' Association,
                                      Grand Valley Project,
                                                      June 4, 2010.
Hon. Debbie Stabenow,
Chairman, Subcommittee on Water and Power, Senate Energy and Natural 
        Resources Committee, 304 Dirksen Senate Building Washington, 
        DC.
Hon. Sam Brownback,
Ranking Member, Subcommittee on Water and Power, Senate Energy and 
        Natural Resources Committee, 304 Dirksen Senate Building 
        Washington, DC.
    Dear Chairman Stabenow and Ranking Member Brownback: I am writing 
to support S. 3387, a bill that provides for release of water from 
Ruedi Reservoir for the benefit of endangered fish habitat in the 
Colorado River and amends P.L. 106-392, the authorizing legislation for 
the Upper Colorado and San Juan river basin recovery programs.
    Ruedi Reservoir was constructed for the benefit of west slope water 
users. Use of this water for endangered fish habitat to provide ESA 
compliance on more than 500,000 acre-feet per year of depletions by the 
west slope water users is consistent with the intended uses of Ruedi 
Reservoir. Making the component non-reimbursable is consistent with 
congressional policy that water uses in Reclamation projects for 
environmental purposes (fish and wildlife, endangered species, 
recreation, etc.) are non-reimbursable.
    S. 3387 is a consensus bill developed by east and west slope water 
users in Colorado. The bill, along with corresponding efforts by east 
slope water users to provide 5,412.5 acre-feet of water from other 
sources, fulfills fundamental requirements of the 15-Mile Reach 
Programmatic Biological Opinion (PBO) (USFWS, 1999). The PBO provides 
ESA compliance for five major Reclamation projects and numerous non-
federal projects in the Upper Colorado River Basin.
    The PBO is an essential component of the Upper Colorado River 
Endangered Fish Recovery Program which is recovering endangered fish 
while providing ESA compliance for 1,800 water projects in the Upper 
Colorado River basin.
    S. 3387 provides an essential element supporting continued recovery 
of endangered fish and ESA compliance for Reclamation and non-federal 
water projects in the Upper Basin. Therefore, I urge the Subcommittee's 
favorable consideration of this bill.
                                        Richard L. Proctor,
                                                           Manager.
                                 ______
                                 
                                              Denver Water,
                                          Denver, CO, June 3, 2010.
Hon. Debbie Stabenow,
Chairman, Subcommittee on Water and Power, Senate Energy and Natural 
        Resources Committee, 304 Dirksen Senate Building Washington, 
        DC.
Hon. Sam Brownback,
Ranking Member, Subcommittee on Water and Power, Senate Energy and 
        Natural Resources Committee, 304 Dirksen Senate Building 
        Washington, DC.
SUBJECT: Support for S. 3387 re: Ruedi Reservoir Water Releases to 
Benefit Endangered Fish Habitat in the Colorado River

    Dear Chairman Stabenow and Ranking Member Brownback: I am writing 
to support S. 3387, a bill that provides for release of water from 
Ruedi Reservoir for the benefit of endangered fish habitat in the 
Colorado River and amends P.L. 106-392, the authorizing legislation for 
the Upper Colorado and San Juan river basin recovery programs.
    Ruedi Reservoir was constructed for the benefit of west slope water 
users. Use of this water for endangered fish habitat to provide ESA 
compliance on more than 500,000 acre-feet per year of depletions by the 
west slope water users is consistent with the intended uses of Ruedi 
Reservoir. Making the component non-reimbursable is consistent with 
congressional policy that water uses in Reclamation projects for 
environmental purposes (fish and wildlife, endangered species, 
recreation, etc.) are non-reimbursable.
    S. 3387 is a consensus bill developed by east and west slope water 
users in Colorado. The bill, along with corresponding efforts by east 
slope water users to provide 5,412.5 acre-feet of water from other 
sources, fulfills fundamental requirements of the 15-Mile Reach 
Programmatic Biological Opinion (PBO) (USFWS, 1999). The PBO provides 
ESA compliance for five major Reclamation projects and numerous non-
federal projects in the Upper Colorado River Basin. The PBO is an 
essential component of the Upper Colorado River Endangered Fish 
Recovery Program which is recovering endangered fish while providing 
ESA compliance for 1,800 water projects in the Upper Colorado River 
basin.
    S. 3387 provides an essential element supporting continued recovery 
of endangered fish and ESA compliance for Reclamation and non-federal 
water projects in the Upper Basin. Therefore, I urge the Subcommittee's 
favorable consideration of this bill.
            Sincerely,
                                         James S. Lochhead,
                                                       CEO/Manager.
                                 ______
                                 
              The Southwestern Water Conservation District,
                                        Durango, CO, June 16, 2010.
Hon. Debbie Stabenow,
Chairman, Subcommittee on Water and Power, Senate Energy and Natural 
        Resources Committee, 304 Dirksen Senate Building Washington, 
        DC.
Hon. Sam Brownback,
Ranking Member, Subcommittee on Water and Power, Senate Energy and 
        Natural Resources Committee, 304 Dirksen Senate Building 
        Washington, DC.
SUBJECT: Support for S. 3387 re: Ruedi Reservoir Water Releases to 
Benefit Endangered Fish Habitat in the Colorado River

    Dear Chairman Stabenow and Ranking Member Brownback: We are writing 
to support S. 3387, a bill that provides for release of water from 
Ruedi Reservoir for the benefit of endangered fish habitat in the 
Colorado River and amends P.L. 106-392, the authorizing legislation for 
the Upper Colorado and San Juan river basin recovery programs. 
Southwestern Water Conservation District is charged with protecting and 
developing the water in Southwestern Colorado and actively participates 
in the San Juan River Basin Recovery Implementation Program. The 
success of two programs is linked in terms of achievement of recovery 
goals for two endangered fish species.
    S. 3387 is a consensus bill developed by water users in Colorado. 
The bill provides an essential component for recovering endangered fish 
under the Upper Colorado River Endangered Fish Recovery Program. As 
such, it benefits both recovery programs, complies with the Endangered 
Species Act, and fulfills the congressional intent expressed in P.L. 
106-392, as amended.
    We very much appreciate the Subcommittee's past support of the 
recovery programs and needed amendments to P.L. 106-392. We urge the 
Subcommittee's favorable consideration of S. 3387.
                                               John Porter,
                                                         President.
                                 ______
                                 
                                   Colorado Water Congress,
                                          Denver, CO, June 3, 2010.
Hon. Debbie Stabenow,
Chairman, Subcommittee on Water and Power, Senate Energy and Natural 
        Resources Committee, 304 Dirksen Senate Building Washington, 
        DC.
Hon. Sam Brownback,
Ranking Member, Subcommittee on Water and Power, Senate Energy and 
        Natural Resources Committee, 304 Dirksen Senate Building 
        Washington, DC.
SUBJECT: Support for S. 3387 re: Ruedi Reservoir Water Releases to 
Benefit Endangered Fish Habitat in the Colorado River

    Dear Chairman Stabenow and Ranking Member Brownback: I am writing 
to support S. 3387, a bill that provides for release of water from 
Ruedi Reservoir for the benefit of endangered fish habitat in the 
Colorado River and amends P.L. 106-392, the authorizing legislation for 
the Upper Colorado and San Juan river basin recovery programs.
    Ruedi Reservoir was constructed for the benefit of west slope water 
users. Use of this water for endangered fish habitat to provide ESA 
compliance on more than 500,000 acre-feet per year of depletions by the 
west slope water users is consistent with the intended uses of Ruedi 
Reservoir. Making the component non-reimbursable is consistent with 
congressional policy that water uses in Reclamation projects for 
environmental purposes (fish and wildlife, endangered species, 
recreation, etc.) are non-reimbursable.
    S. 3387 is a consensus bill developed by east and west slope water 
users in Colorado. The bill, along with corresponding efforts by east 
slope water users to provide 5,412.5 acre-feet of water from other 
sources, fulfills fundamental requirements of the 15-Mile Reach 
Programmatic Biological Opinion (PBO) (USFWS, 1999). The PBO provides 
ESA compliance for five major Reclamation projects and numerous non-
federal projects in the Upper Colorado River Basin.
    The PBO is an essential component of the Upper Colorado River 
Endangered Fish Recovery Program which is recovering endangered fish 
while providing ESA compliance for 1,800 water projects in the Upper 
Colorado River basin.
    S. 3387 provides an essential element supporting continued recovery 
of endangered fish and ESA compliance for Reclamation andn on-federal 
water projects in the Upper Basin. Therefore, I urge the Subcommittee's 
favorable consideration of this bill.
            Sincerely,
                                            Douglas Kemper,
                                                Executive Director.
                                 ______
                                 
                           Wyoming State Engineer's Office,
                                        Cheyenne, WY, June 8, 2010.
Hon. Debbie Stabenow,
Chairman,
Hon. Sam Brownback,
Ranking Member, Subcommittee on Water and Power, Senate Energy and 
        Natural Resources Committee, 304 Dirksen Senate Building 
        Washington, DC.
SUBJECT: Support for S. 3387 to amend P.L. 106-392, authorizing Ruedi 
Reservoir Releases to Benefit Endangered Fish Habitat in the Colorado 
River

    Dear Chairman Stabenow and Ranking Member Brownback: We are writing 
to support S. 3387, a bill providing for water releases from Ruedi 
Reservoir for the benefit of endangered fish habitat in the Colorado 
River. This measure, when enacted, will amend P.L. 106-392, the 
authorizing legislation for the Upper Colorado and San Juan River Basin 
recovery programs. These programs are long-term conservation 
partnerships among the States of Colorado, New Mexico, Utah and 
Wyoming, Indian tribes, federal agencies, and water, power and 
environmental interests working to recover four species of endangered 
fish native to the Colorado River Basin while allowing water 
development to continue in compliance with the federal Endangered 
Species Act (ESA). The Department of the Interior recognized these 
programs with the Department's Cooperative Conservation Award in April 
2008 as national model efforts successfully working to recover 
endangered species while addressing water needs to support growing 
western communities in a manner fulfilling the Federal government's 
trust responsibilities to Native Americans and respects state water law 
and interstate river compacts.
    A component of U.S. Bureau of Reclamation (Reclamation) Fryingpan-
Arkansas Project, Ruedi Reservoir was constructed on the Fryingpan 
River in western Colorado for the benefit of Colorado's west slope 
water users. The primary purposes of Ruedi are to provide storage for 
28,000 acre feet of replacement water that allows out-of-priority 
diversions by the Fry-Ark project to Colorado's east slope, and a 
marketable yield pool for Colorado's west slope uses. A little more 
than one-third of Ruedi Reservoir's marketable yield pool is currently 
under contract with apparent limited prospects for future contracting. 
Use of this water to enhance and benefit endangered fish habitat so as 
to ensure continuing compliance with the ESA for more than 500,000 
acre-feet per year of depletions by Colorado west slope water users is 
consistent with the intended purposes of Ruedi Reservoir. Making the 
component non-reimbursable is consistent with past and current 
Congressional policy directives and enactments which specify that 
Reclamation project water uses for environmental purposes (fish and 
wildlife, endangered species, recreation, flood control, etc.) are non-
reimbursable.
    S. 3387 would accomplish the same result for a 5,412.5 acre-foot 
block of water to be permanently allocated to endangered fish recovery 
from Ruedi Reservoir. There is no traditional, master contract with a 
west slope project ``sponsor'' to whom this block of water has been 
allocated or to whom the project costs associated with this water have 
been assigned. A little more than one-third of the available marketable 
yield pool or contract pool is currently under contract. There are 
limited prospects for foreseeable future contracting. Permanent 
assignment of 5,412.5 acre-feet of water for endangered fish recovery 
is appropriate.
    S. 3387 is a consensus bill developed by east and west slope water 
users in Colorado. It is supported by the non-federal participants to 
the two endangered fish recovery programs, including the State of 
Wyoming. This bill, along with corresponding efforts by Colorado east 
slope water users to provide 5,412.5 acre-feet of water from other 
sources, fulfills fundamental requirements of the 15-Mile Reach 
Programmatic Biological Opinion (PBO) issued by the U.S. Fish and 
Wildlife Service in 1999.
    The PBO is an essential component of the Upper Colorado River 
Endangered Fish Recovery Program which is recovering endangered fish 
while providing ESA compliance for 1,800 water projects in the Upper 
Colorado River basin. This legislation, along with water provided by 
Colorado's east slope water users, would satisfy the obligations of the 
15-Mile Reach PBO, which provides ESA compliance for five major 
Reclamation projects and numerous non-federal projects in the Upper 
Colorado River Basin.
    Enactment of S. 3387 will provide an essential element supporting 
continued recovery of the endangered fish species and ESA compliance 
for Reclamation-constructed, as well as nonfederal, water projects in 
the Upper Colorado River Basin. The past support and assistance of 
Congress has greatly facilitated the success of these multi-state, 
multi-agency programs. We urge the Subcommittee's favorable 
consideration of this bill.
            Respectfully submitted,
                                        Patrick T. Tyrrell,
                                            Wyoming State Engineer.
                                           John W. Shields,
                                       Interstate Streams Engineer.

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