[Senate Hearing 112-624]
[From the U.S. Government Publishing Office]
S. Hrg. 112-624
WATER AND POWER BILLS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WATER AND POWER
of the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
ON
S. 3265
S. 3464
S. 3483
H.R. 2842
SEPTEMBER 19, 2012
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
RON WYDEN, Oregon LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington MIKE LEE, Utah
BERNARD SANDERS, Vermont RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan DANIEL COATS, Indiana
MARK UDALL, Colorado ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware
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
JEANNE SHAHEEN, New Hampshire, Chairman
RON WYDEN, Oregon MIKE LEE, Utah, Ranking
TIM JOHNSON, South Dakota JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington DANIEL COATS, Indiana
BERNARD SANDERS, Vermont JOHN HOEVEN, North Dakota
DEBBIE STABENOW, Michigan DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia BOB CORKER, Tennessee
Jeff Bingaman and Lisa Murkowski are Ex Officio Members of the
Subcommittee
C O N T E N T S
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STATEMENTS
Page
Johnson, Hon. Tim, U.S. Senator From South Dakota................ 3
Katz, John, Deputy Associate General Counsel for Energy Projects,
Federal Energy Regulatory Commission........................... 14
Merkley, Hon. Jeff, U.S. Senator From Oregon..................... 1
Murkowski, Hon. Lisa, U.S. Senator From Alaska................... 16
Payne, Grayford F., Deputy Commissioner for Policy,
Administration and Budget, Bureau of Reclamation, Department of
the Interior................................................... 6
Shaheen, Hon. Jeanne, U.S. Senator From New Hampshire............ 1
Tipton, Hon. Scott R., U.S. Representative From Colorado......... 4
Wyden, Hon. Ron, U.S. Senator From Oregon........................ 18
APPENDIXES
Appendix I
Responses to additional questions................................ 25
Appendix II
Additional material submitted for the record..................... 29
WATER AND POWER BILLS
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WEDNESDAY, SEPTEMBER 19, 2012
U.S. Senate,
Subcommittee on Water and Power,
Committee on Energy and Natural Resources,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:32 a.m. in
room SD-366, Dirksen Senate Office Building, Hon. Jeanne
Shaheen presiding.
OPENING STATEMENT OF HON. JEANNE SHAHEEN, U.S. SENATOR FROM NEW
HAMPSHIRE
Senator Shaheen. Good morning. At this point I would like
to welcome everyone. Clearly there's not a lot going on in
Congress today. So all of you are here and we appreciate that.
Today's hearing involves 4 bills that are pending before
the subcommittee. The bills cover several different aspects of
our water and power jurisdiction including rural water and
hydropower.
The bills we're covering today are S. 3265, a bill amending
the Federal Power Act regarding the collection of land use
fees.
H.R. 2842, the Bureau of Reclamation's Small Conduit
Hydropower Development and Rural Jobs Act.
S. 3464, the Mni Wiconi Project Act amendments.
S. 3483, the Crooked River Collaborative Water Security
Act.
I look forward to hearing more about these bills. We have
several Senators who are going to be here testifying. Senator
Murkowski will be here to make a statement. She's running a
little late. We expect Senator Wyden also and possibly Senator
Johnson.
So while we're waiting for them before the testimony on the
bills occurs, we have Senator Jeff Merkley and Congressman
Tipton, who are here, who would like to testify on two of the
bills that are pending before us. So we appreciate your
willingness to go ahead while we're waiting for the others.
I'll ask Senator Merkley if you would go first.
STATEMENT OF HON. JEFF MERKLEY, U.S. SENATOR
FROM OREGON
Senator Merkley. Thank you very much, Chairman Shaheen. I'm
delighted to be here particularly because I'm presenting a bill
of critical importance to Central Oregon, the Crooked River
Collaborative Water Security Act. I introduced this bill with
my colleague, Senator Wyden, in early August.
This bill is a product of many years of negotiations
between a diverse set of stakeholders in the region who came
together despite many differences. There is a saying in the
West that, ``Whiskey, that's for drinking. Water, that's for
fighting.'' It's nice when occasionally stakeholders can come
together and wrestle with the very difficult issues about how
to share this precious resource.
The stakeholders have found common ground as presented in
this legislation. I'm thrilled that one key stakeholder, the
Prineville Mayor, Betty Ruppe, is here today, back here. She
has played a crucial role in developing this agreement. She
flew out here to DC specifically to attend this hearing to
convey how important this legislation is to the city of
Prineville and to the region.
This bill is important for the economic security and the
ecological health of the region. It's been endorsed by the city
of Prineville, Crook County, the Governor of Oregon, Irrigation
Districts, the Warm Springs tribe and environmental groups.
These groups have written letters of support to both the Chair
and Ranking Member. I have those letters here today to submit
for the record.
This bill addresses the use of water stored behind the
Bowman dam. This dam in the Deschutes Basin has created a
reservoir that has nearly doubled the necessary capacity for
its primary uses, irrigation and flood control.
Another key aspect of the Deschutes Basin is that it's
undergoing the process of reintroducing an endangered species
of fish, the Mid Columbia Steelhead, which used to exist in the
Crooked River, but went locally extinct. The reintroduction of
these native fish is still in the early stages. But the success
or failure of this reintroduction will provide a model for
other basins across the country.
In this context this legislation determines how to make use
of the water that exists in the reservoir. Quite simply, the
bill provides greater security to farmers by allocating
specific amounts of water to irrigation while also providing
for management of the reservoir to enhance fish and wildlife
habitat with increased flows. In addition this bill meets
future water needs for the city of Prineville and creates a
possibility for a new hydro electric turbine to be installed on
Bowman dam.
After decades of missed opportunities we now have the
chance to change the management of the Bowman dam and do so in
a way that benefits Oregon's economy and environment. I look
forward to working with the Chair, the Ranking Member,
certainly Senator Wyden and other members of the committee to
move this legislation forward.
Thank you, Madame Chair.
[The prepared statement of Senator Merkley follows:]
Prepared Statement of Hon. Jeff Merkley, U.S. Senator
From Oregon
Thank you Chairman Shaheen, Ranking Member Lee and members of the
subcommittee.
I am pleased to be here to present a bill of critical importance to
central Oregon, the Crooked River Collaborative Water Security Act. I
introduced this bill with my colleague, Senator Wyden, in early August.
This bill is the product of many years of negotiations between a
diverse set of stakeholders in the region who came together despite
many differences. They have found common ground as presented in this
legislation. I am thrilled that one key stakeholder, Prineville Mayor
Betty Roppe, is here today. Mayor Roppe has played a crucial role in
developing this agreement. She flew to Washington DC specifically to
attend this hearing to convey how important this legislation is to the
City of Prineville, and to the region.
This bill is important for the economic security and the ecological
health of the region. It has been endorsed by the City of Prineville,
Crook County, the Governor of Oregon, irrigation districts, the Warm
Springs Tribe, and environmental groups.
These groups have written letters of support to both the Chair and
Ranking Member. I would like to submit those to the record at this
time.
This bill addresses the use of water stored behind the Bowman Dam.
This dam, in the Deschutes Basin, has created a reservoir that has
nearly double the necessary capacity for its primary uses--irrigation
and flood control.
Another key aspect of the Deschutes Basin is that it is currently
undergoing a process of reintroducing an endangered species of fish,
the mid-Columbia steelhead, which used to exist in the Crooked River
but went locally extinct.
The reintroduction of these native fish is still in the very early
stages, but the success or failure of this reintroduction will provide
a model for other basins across the country.
In this context, this legislation determines how to make use of the
water that exists in the reservoir.
Quite simply, this legislation provides greater security to farmers
by allocating specific amounts of water towards irrigation, while also
providing for management of the reservoir to enhance fish and wildlife
habitat with increased flows.
In addition, this bill meets future water needs for the city of
Prineville and creates the possibility for a new hydroelectric turbine
to be installed on Bowman Dam.
After decades of missed opportunities, we now have the chance to
change the management of the Bowman dam and to do so in a way that
benefits Oregon's economy and environment.
I look forward to working with the Chair, Ranking Member, Senator
Wyden, and other members of the committee to move this legislation
forward.
Senator Shaheen. Thank you, Senator Merkley.
Senator Johnson has joined us. Senator, I was going ahead
to proceed with Senator Merkley and Congressman Tipton since
they were here or would you like to go now?
STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH DAKOTA
Senator Johnson. Briefly.
Senator Shaheen. Great.
Senator Johnson. Senator, Chairman Shaheen and thank you
for including the Mni Wiconi Amendments bill in today's
hearing.
The Mni Wiconi project serves 3 tribal rural water systems
and one non-tribal rural water system in South Dakota. Mni
Wiconi offers an economic lifeline and improved public health
to 3 Indian Reservations in my State that are home to some of
our Nation's most troubling levels of unemployment and poverty.
My legislation is intended not to expand the project's scope,
but to ensure that it is completed.
I appreciate that the Administration has some concerns. I
am hopeful that we can constructively work toward meeting the
remaining needs of this critically important project.
I would also ask that a letter from the Oglala Sioux tribe
be included in the record.
Senator Shaheen. Without objection, we will include the
letter.
Thank you very much, Senator Johnson.
Now, Congressman Tipton.
STATEMENT OF HON. SCOTT R. TIPTON, U.S. REPRESENTATIVE FROM
COLORADO
Mr. Tipton. Thank you, Chairwoman Shaheen for convening
today's hearing on my bill H.R. 2842, the Bureau of Reclamation
Small Conduit Hydropower Development Rural Jobs Act.
At a time when our country needs to focus on domestic
energy production and job creation, hydropower can play a
critical role in providing clean, renewable electricity while
expanding job opportunities in rural America. Hydropower is the
cheapest and cleanest source of electricity available through
modern technology. According to the Energy Information
Administration, it's the highest source of non-carbon emitting
energy in the world and accounts for approximately 70 percent
of the United States total renewable electricity generation
making it the leading renewable energy source of power.
My home State of Colorado has hydropower. But there's still
an enormous opportunity for new hydropower development at
existing facilities. Canals and pipelines in the State, if
developed, can generate as much power as the Glen Canyon Dam,
enough emission free power for a million homes.
Increased conduit hydropower serves a number of purposes.
It produces renewable, emissions free energy that can be
used to pump water or sell electricity into the grid.
It can generate revenue for irrigation districts to help
pay for aging infrastructure, the cost of facilities and
modernization.
It can create local jobs and generate revenue to the
Federal Government.
It's as simple as this poster demonstrates. As easy as
putting a portable generator into moving canal water.
What's stopping this low hanging fruit we might ask?
Actually, we are by allowing Federal regulatory framework
to stifle development and the entrepreneurial spirit. For this
reason I introduced my bipartisan legislation, the Bureau of
Reclamation Small Conduit Hydropower Development and Rural Jobs
Act. This legislation authorizes power development at the
agency's conduence to clear up multi Federal agency confusion
and duplicative processes and reduces the regulatory costs
associated with hydropower development.
This legislation seeks to remove duplicative environmental
analysis where doing so will considerably reduce costs for
hydropower developers while retaining the level of analysis
necessary to protect valuable natural resources. Under existing
regulations even though the Bureau of Reclamation Conduit
Hydropower units would already have been on disturbed ground
within existing manmade facilities such as those in these
posters, they've already gone through the Federal environmental
review process, is still going to require another national
environmental policy act or NEPA process, that would still have
to be done.
As an example, the House Natural Resources Committee heard
from an Arizona witness who wanted to be able to install 15
hydropower units on a Federal canal that had already gone
through the NEPA process. The cost of installing each turbine
would have cost $20,000. But going through the additional NEPA
review would have cost an additional $50,000 each according to
his testimony. That cost according to this chart is two and a
half times the installation cost making it cost prohibitive for
the irrigation district.
This simply makes no sense. But I understood that there are
some concerns with the wording of these provisions in my bill.
I want to assure you that I'm willing to work with you on
resolving those concerns.
The legislation has also substantially reduced
Administrative costs. Instead of the current process where the
Bureau of Reclamation must painstakingly analyze each and every
proposal for development, the bill gives to the first
development right to the entity or entities operating and
maintaining the Federal conduit. Most Reclamation irrigation
water supply projects have an arrangement where operations and
maintenance activities are transferred to the local beneficiary
as a way to be able to reduce paperwork and other costs.
The rationale for the legislation's right of first refusal
provision is that the non-Federal operator knows the details of
the facility and is locally invested in the project. This
provision would significantly decrease hydro conduit hydropower
planning costs.
The bill also protects water users by specifically
reaffirming hydropower development and as a secondary water
supply and develop delivery purposes in ensuring that there
will be no financial and operational impacts to existing water
and power users.
I'm proud to have the support of the Family Farm Alliance,
the National Water Resources Association, the American Public
Power Association, among others.
If enacted this legislation will jump start the conduit
hydropower development at the Bureau of Reclamation facilities
while supporting the creation of badly needed rural jobs. I
stand ready to work with the committee on making this bill a
public law reality.
Madame Chairwoman, with your permission I would like to be
able to submit letters of support for the record. I'd like to
thank you very much for this time.
Senator Shaheen. We would appreciate those letters for the
record and accept them without objection and appreciate, very
much, Congressman Tipton your testimony and your willingness to
work with the committee as we look at the wording of the
legislation.
Mr. Tipton. My pleasure, Madame Chairman.
Senator Shaheen. Thank you.
Since we are still waiting for Senators Wyden and Murkowski
we will go ahead with the testimony from the witnesses. We have
two witnesses today who are testifying on behalf of the
Administration.
Grayford Payne is the Deputy Commissioner for Policy,
Administration and Budget from the Bureau of Reclamation.
John Katz is an attorney with the Federal Energy Regulatory
Commission.
So, thank you very much to both of you for being here. Mr.
Payne, would you like to begin as soon as you get seated?
STATEMENT OF GRAYFORD F. PAYNE, DEPUTY COMMISSIONER FOR POLICY,
ADMINISTRATION AND BUDGET, BUREAU OF RECLAMATION, DEPARTMENT OF
THE INTERIOR
Mr. Payne. Thank you, Madame Chairman and members of the
subcommittee.
I'm Grayford Payne, Deputy Commissioner for Policy,
Administration and Budget at the Bureau of Reclamation. Thank
you for the opportunity to provide the Department's view on 3
bills before the subcommittee today, H.R. 2842, S. 3464 and S.
3483. My written statements have been submitted for the record.
H.R. 2842, the Reclamation Small Conduit Hydropower
Development and Rural Jobs Act of 2012, starting off with H.R.
2842, the Department supports the goals of this bill. It would
change to increase the generation of hydropower in existing
canals and conduits. H.R. 2842 would clarify to Reclamation is
responsible for permitting conduit hydropower development in
all Reclamation owned facilities through our lease power of
privileges or LOPP contracts.
Section two of H.R. 2842 would provide that the Natural
Environmental Policy Act or NEPA shall not apply to small
conduit hydropower development excluding citing of associated
transmission on Federal lands. Reclamation's existing LOPP
procedures allow for a categorical exclusion under the NEPA to
be applied to low impact hydropower projects without unduly
delaying project development.
The Department believes that environmental protection
should continue to apply in the context of new construction
undertaken on Federal lands and will continue to apply NEPA as
appropriate through the use of categorical exclusions or
environmental assessments.
Finally several of the definitions in H.R. 2842 as drafted
would affect the other authorities in the 1939 act. We
recommend improvements which are detailed in my written
statements.
S. 3464, the Mni Wiconi Project Act Amendments of 2012
would authorize funding for additional components on the Rural
Water Project that have been under construction for several
years and with appropriations requested in 2013, will be
essentially completed.
For reasons described in my written statement, the
Department cannot support S. 3464. In the Rural Water Program
Assessment report delivered to Congress this past July,
Reclamation explained that about $1.4 billion of Federal
obligations remain on Reclamation to complete the existing
authorities authorized rural water projects. That figure is
greater than Reclamation's total annual appropriations. The
sheer size of that obligation factors heavily into our position
on this bill which would authorize about $14 million of
additional obligations.
We recognize that the need continues to exist within the
reservation served by the Mni Wiconi Project. For that reason
Reclamation will continue to work with the sponsors, project
sponsors, and other agencies to assess how best to meet these
needs in the future.
S. 3483, the Crooked River Collaborative Water Security
Act.
S. 3483 is an innovative piece of legislation that would
accomplish several objectives for its sponsors. The bill
corrects the unwieldy boundary line for the Wild and Scenic
River designation on the portion of the Crooked River. It
enables the use of un-contracted water stored behind Bowman dam
for the city of Prineville as well as in stream flows to the
benefit of fish and wildlife downstream. It authorizes early
repayment of outstanding capital costs among other things.
The Department supports these objectives and we can support
S. 3483 if amendments are made consistent with points made in
my written statement.
In summary there are portions of the bill that depart
somewhat from practices currently applied under Reclamation
laws and policies particularly in the areas of operations and
contracting. We regard our recommendations as primarily
technical in nature and would be happy to work with the bill
sponsors and subcommittee to refine the legislation.
As a parting thought I want to relay that my day to day
duties here in Washington are primarily as a CFO and do
administrative capabilities working with the Department. That
said, for some specific questions about leasing or procedures,
leasing procedures or project construction or facility
operations I may need to respond back to the committee in
writing for the record. I'd be glad to do so.
Thanks again for the opportunity to be here today.
That concludes my statement.
[The prepared statements of Mr. Payne follow:]
Prepared Statements of Grayford F. Payne, Deputy Commissioner for
Policy, Administration and Budget, Bureau of Reclamation, Department of
the Interior
H.R. 2842
Madam Chair and members of the Subcommittee, I am Grayford Payne,
Deputy Commissioner for Policy, Administration and Budget at the Bureau
of Reclamation (Reclamation). I am pleased to provide the views of the
Department of the Interior (Department) on HR 2842, the Bureau of
Reclamation Small Conduit Hydropower Development and Rural Jobs Act of
2011. The Department supports the goals of HR 2842, which aims to
increase the generation of clean, renewable hydroelectric power in
existing canals and conduits. As noted in previous hearings, the
Department has an aggressive sustainable hydropower agenda, which we
continue to implement under existing authorities. My testimony today
will summarize the areas where the Administration supports the
objectives of HR 2842, as well as detail the areas in the bill where we
believe improvements could be made.
Before I share the Department's views on HR 2842, I want to
highlight some of the activities underway at the Department to develop
additional renewable hydropower capacity. Last year, Secretary Salazar
and the U.S. Department of Energy Secretary Steven Chu announced nearly
$17 million in funding over three years for research and development
projects to advance hydropower technology. The funding included ten
projects that will receive a total of $7.3 million to research,
develop, and test low-head, small hydropower technologies that can be
deployed at existing non-powered dams or constructed waterways. The
funding will further the Obama Administration's goal of meeting 80
percent of our electricity needs from clean energy sources by 2035.
In March 2011, the Department released the results of an internal
study, the Hydropower Resource Assessment at Existing Reclamation
Facilities, that estimated the Department could generate up to one
million megawatt hours of electricity annually and create jobs by
addressing hydropower capacity at 70 of its existing facilities. In
March of this year, Reclamation completed the second phase of its
investigation of hydropower development, Site Inventory and Hydropower
Energy Assessment of Reclamation Owned Conduits, as referenced in the
2010 Hydropower Memorandum of Understanding (MOU)\1\ between the
Department of the Interior, the Department of Energy, and the Army
Corps of Engineers. While the first phase, completed in 2011, focused
primarily on Reclamation dams, the second phase focused on constructed
Reclamation waterways such as canals and conduits. The two studies
revealed that an additional 1.5 million megawatt-hours of renewable
energy could be generated through hydropower at existing reclamation
sites.
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\1\ http://www.usbr.gov/power/SignedHydropowerMOU.pdf, 2010
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In summary, HR 2842 would do four things: 1) provide a blanket
authorization for the installation of small hydropower units on all
Reclamation-owned canals and conduits; 2) require that Reclamation
offer preference to water user organizations for the development of
canal/conduit hydropower under a Lease of Power Privilege (LOPP); 3)
exempt small canal/conduit hydropower projects below 1.5 MW from the
requirements of the National Environmental Policy Act (NEPA) and; 4)
designate Reclamation's Power Resources Office as the lead point of
contact for policy and procedure setting activities related to canal/
conduit hydropower under an LOPP.
Section 2 of HR 2842 would clarify that Reclamation is responsible
for authorizing conduit hydropower development on Reclamation-owned
facilities through LOPP contracts. As background, Reclamation is
authorized by existing law to issue LOPP contracts that utilize
Reclamation-owned facilities for private hydropower development under
Section 5 of the Townsites and Power Development Act of 1906, 43 U.S.C.
Sec. 522, and Section 9(c) of the Reclamation Project Act of 1939, 43
U.S.C. Sec. 485h(c). Statutes that are specific to individual
Reclamation projects may also apply. Similar to the LOPP process, the
Federal Energy Regulatory Commission (FERC) may also issue licenses for
hydropower development under the authority of the Federal Power Act, 16
U.S.C. Sec. 791 et seq. To resolve potential confusion over whether a
Reclamation LOPP contract or a FERC license should govern hydropower
development at Reclamation facilities, Reclamation and FERC entered
into agreements in 1981, 1992, and 2010 to address hydropower
development. In particular, a 1992 memorandum of understanding between
Reclamation and FERC (1992 MOU)\2\ established a process to resolve
questions of jurisdiction over hydropower development at Reclamation
facilities. Reclamation and FERC continue to work together to improve
that process and make the process more efficient.
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\2\ The 1992 MOU is available in the Federal Register at: 58 Fed.
Reg. 3269 (Jan. 8, 1993).
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Section 2 of HR 2842 would specifically authorize Reclamation to
develop or enter into LOPP contracts for the development of new
hydropower on conduits or canals on Reclamation-owned projects. This
language would streamline the issuance of LOPP contracts by simplifying
the Reclamation-FERC jurisdictional consultation that was established
in the 1992 MOU. This language also could provide Reclamation with an
opportunity to discuss programmatically resolving jurisdiction over
hydropower development on Reclamation conduits with FERC, thus creating
the potential to eliminate case-by-case jurisdictional consultations
for development on Reclamation conduits.
Section 2 of HR 2842 would also require that Reclamation offer
preference in the award of LOPPs to ``irrigation districts or water
users associations'' with which Reclamation has an existing contract
for operations and maintenance of that project or project feature.
Reclamation already provides preference to existing irrigation
districts and water user associations pursuant to Section 9(c) of the
Reclamation Projects Act of 1939. Reclamation would be happy to work
with the sponsor of the bill and the Committee to resolve any concerns
regarding preference.
Section 2 of HR 2842 would provide that NEPA ``shall not apply to
small conduit hydropower development, excluding siting of associated
transmission on Federal lands[.]'' The Department opposes a waiver of
NEPA. Furthermore, this language is in contrast to the existing
provision in Section 30 of the Federal Power Act (16 U.S.C. 823a) that
allows FERC to approve an application to develop hydropower within
conduits located on non-federal lands under certain conditions.
Accordingly, as provided in FERC's regulations at 18 CFR Sec.
380.4(a)(14), FERC is not required to prepare an environmental
assessment or environmental impact statement for certain conduit
hydropower projects that meet the statutory and regulatory criteria and
do not have the potential for significant environmental impacts.
The Department understands the intent of HR 2842 to be that
conduits and canals are existing, man-made structures where
environmental impacts associated with construction have already
occurred and/or been mitigated. However, the Department's view is that
low-impact hydropower, particularly in conduits and canals, can be
efficiently developed by utilizing existing environmental review
provisions that will not unduly delay project development and ensure
environmental health and safety. Environmental analysis for many LOPP
contracts has, for example, been addressed through categorical
exclusions or environmental assessments rather than environmental
impact statements. The Department believes that environmental
protections should continue to apply in the context of new construction
undertaken on federal lands, and will continue to apply NEPA through
the use of categorical exclusions or environmental assessments.
Reclamation's existing Lease of Power Privilege procedures allow
for an existing categorical exclusion under NEPA to be applied to low-
impact hydropower projects. Reclamation believes that low-impact
hydropower developed in conduits or canals may be appropriately
analyzed under those same procedures, which are documented in the
Departmental Manual at 516 DM 14.5(C)(3) and (D)(4). The Department
understands the value and importance of expedient environmental review
and believes development of hydropower within Reclamation's existing
conduits and canals can be efficiently analyzed utilizing these
existing review processes.
I would also like to address language in Section 2 of the House
passed bill specifying that ``the Power Resources Office (PRO) of the
Bureau of Reclamation shall be the lead office of small conduit
hydropower policy and procedure-setting activities conducted under this
subsection.'' The Department supports this language given that project-
specific expertise concerning Reclamation facilities resides first at
the field level where ownership responsibility for the specific
infrastructure resides. It is preferable for policies and procedures to
be set within the PRO with developers continuing to approach the
appropriate Reclamation regional or area office with proposals to
develop conduit hydropower. There is a robust channel of communication
between the PRO, other Denver Offices, and Reclamation regional and
field offices that allows for successful implementation of a Lease of
Power Privilege agreement.
Finally, HR 2842 would amend 9(c) of the Reclamation Project Act of
1939, which in addition to providing LOPP authority, authorizes the
Secretary to enter into contracts for municipal water supply and
miscellaneous purposes. Several of the definitions in HR 2842 as
drafted would affect the other authorities in the 1939 Act. In
particular, the proposed definition of ``transferred work'' is too
narrow to refer to all works affected by subsection 9(c) of the 1939
Act, since that subsection authorizes contracts involving works other
than conduits. Either the definition would need to be broadened to
include all affected works, or the term defined narrowed from
``transferred work'' to ``transferred conduit.'' Also, the existing
1939 Act has a definitions section. Any definitions that are of general
application should be included in the existing definitions section,
rather than in subsection 9(c). Definitions that apply solely to
conduit hydropower need to do so explicitly, to avoid misapplication or
confusion. Lastly, the 1939 Act definitions section already includes a
definition of ``Secretary''. The Department would be happy to work with
the Committee on these technical changes to the language of the
proposed definitions and their placement within the existing 1939 Act.
As referenced above, Reclamation has procedures in place through
the LOPP process for the sites where Reclamation has the authority to
develop hydropower. We are currently reviewing our LOPP policies and
processes to look for ways to expedite and improve the process,
especially for conduits and canals.
In conclusion, as stated at previous hydropower hearings before
this subcommittee, Reclamation will continue to review and assess
potential new hydropower projects that provide a high economic return
for the nation, are energy efficient, and can be accomplished in
accordance with protections for fish and wildlife, the environment, or
recreation. As the nation's second largest hydropower producer,
Reclamation strongly believes in the past, present and bright future of
this important electricity resource.
Thank you for the opportunity to discuss HR 2842. This concludes my
written statement, and I am pleased to answer questions at the
appropriate time.
S. 3464
Madam Chair and members of the Subcommittee, I am Grayford Payne,
Deputy Commissioner for Policy, Administration, and Budget at the
Bureau of Reclamation (Reclamation). I am pleased to provide the views
of the Department of the Interior (Department) on S. 3464, the Mni
Wiconi Project Act Amendments of 2012. If enacted, S. 3464 would expand
the scope and authorization ceiling of the Mni Wiconi Rural Water
Supply Project and have significant impacts on the budgets of both
Reclamation and the Bureau of Indian Affairs. For the reasons described
below, the Department cannot support S. 3464.
The Mni Wiconi Rural Water Supply Project is a municipal, rural and
industrial project that serves both tribal and non-tribal populations
of the Pine Ridge, Rosebud, and Lower Brule Indian Reservations and the
West River Lyman-Jones Rural Water System in seven counties of
southwestern South Dakota. Responsibilities of the Secretary under the
Mni Wiconi Rural Project Act (Public Law 100-516) include the operation
and maintenance of existing water systems, including the core treatment
plant and pipelines, and appurtenant facilities on the Pine Ridge,
Rosebud and Lower Brule Indian Reservations. With the funding requested
in the President's FY 2013 budget, the majority of the population of
the project will be served. The Lower Brule and West River Lyman-Jones
portions of the project will be completed. Generally those not
connected to the project (approximately 2.5% of the population on
Rosebud and Pine Ridge Reservation) are served by community water
systems or individual wells. Reclamation would be happy to facilitate
or coordinate action with other federal agencies to address the needs
identified by the bill's sponsor. Reclamation has a backlog of
authorized but not constructed projects. Therefore, we have concerns
about adding to the scope of an existing project that is nearly
complete.
Section 3(a) of S. 3464 would expand the service area of the Oglala
Sioux Rural Water Supply to include land that is part of the Pine Ridge
Indian Reservation in the State of Nebraska. The Mni Wiconi Project
Master Plan, a working document that identifies remaining construction
contracts to be completed, does not include construction contracts to
serve the population in Nebraska. It is our understanding that other
entities are involved with funding new housing facilities in this area,
which will include the costs for connecting these new facilities to the
Mni Wiconi water system. Given these considerations, adding this
portion of the Pine Ridge Indian Reservation to the authorized Project
service area does not add to the current authorized cost ceiling of the
project or schedule within the existing sunset date.
Sections 3, 4, and 5 of S. 3464 direct the Secretary of the
Interior to develop a plan for completion of the Oglala Sioux Rural
Water Supply System, the Rosebud Sioux Rural Water Supply System, and
the Lower Brule Sioux Rural Water System, respectively. Planning the
completion of the systems is dependent on future appropriations as well
as Reclamation's need for flexibility in decision-making relative to
all authorized rural water projects. Reclamation must constantly assess
and prioritize these kinds of projects to maximize the agency's ability
to meet its programmatic goals, to maximize water deliveries to rural
communities as efficiently as possible, and to reflect the diverse
needs and circumstances facing each individual project. The Department
would like to work with project sponsors of the bill to discuss plans
for completion, and clarifying the roles, responsibilities, and
authorities of Federal agencies involved in the project.
Section 6 of S. 3464 would require the Secretary to submit to
Congress recommendations for financing and implementing mitigation
plans for fish and wildlife losses, and Native American cultural
resources, resulting from the construction and operations of the Oahe,
Fort Randall, and Big Bend Dams and Reservoirs. The legislation does
not address how provisions of this section may have already been
addressed by other Acts of Congress intended to provide equitable
compensation to Indian tribes adversely impacted by Pick-Sloan projects
on the Missouri River; including the Tribal Parity Act (PL 105-132) and
the Cheyenne River Sioux Tribe Equitable Compensation Act (PL 106-511),
as amended.
Section 7 of S. 3464 would increase the authorized Mni Wiconi cost
ceiling by an additional $14,308,000, based on October 1, 2011, price
levels. Reclamation has worked closely with the project sponsors to
ensure completed features will be functional and provide intended
benefits within the currently authorized cost ceiling. The Department
believes the FY 2013 President's request of $23 million for
construction provides sufficient funding to meet the objectives of the
Project as authorized. Reclamation has not been provided the details
necessary to analyze the cost estimates that are contained in S.3464.
Section 7(b)(1) would authorize appropriations for operation and
maintenance to be used to reimburse costs for water service to members
of the Rosebud Sioux Tribe living in White River, South Dakota.
Reclamation is concerned that this shifts operation and maintenance
costs that have been a non-Federal responsibility of the West River
Lyman-Jones Rural Water System and the city of White River to the
United States, further compounding the budget challenges during these
fiscally difficult times. The Department is also concerned about the
precedent of Federal funding to cover payment of water bills for tribal
members residing in an incorporated city. The Department has testified
in other circumstances about the concerns it has with taking on
operation and maintenance obligations or subsidizing those costs.
Section 7(b)(5) would authorize appropriations for operation and
maintenance to be used for the improvement, repair, and replacement of
existing public or tribal water systems prior to their transfer into
the respective project system. Reclamation had previously determined
that the costs of upgrading existing community facilities should be
properly allocated to the construction component of the project. Since
these existing systems were originally constructed using funds and
authorities of other agencies, Reclamation believes any funding for
improvements needed to correct deficiencies in existing systems should
be discussed among the various responsible agencies before those
systems are accepted into the project.
Section 8 of S. 3464 would direct the Secretary to update and
submit to Congress feasibility studies addressing wastewater disposal
needs of the reservations, any deficiency assessments associated with
existing waste water systems, and construction, operation and
maintenance costs of new wastewater disposal facilities and systems
that may be recommended. Reclamation's general authorities and
expertise are associated with water supply and not wastewater treatment
and disposal. Reclamation believes that other agencies with existing
authorities and programs that address wastewater facilities and systems
may be better suited as the responsible agency for completing these
studies.
Section 9 of the bill amends PL 100-516 to insert a ``Mni Wiconi
Project Emergency Assistance Planning Act,'' which would require
federal agencies to develop and implement a five-year plan to meet the
needs of the Mni Wiconi Project Rural Water Systems in emergency
situations. While we agree that it is important to document potential
threats and emergency response measures in a written plan, it is not
feasible to forecast the ``emergency management needs of each rural
water system'' as described in the proposed Section 204(b)(1).
Furthermore, the collaborative effort by the Secretaries of the
Interior, Secretary of Defense, and Secretary of Homeland Security to
carry out the provisions of this section with consultation with the
Indian Tribes with an interest in the project would be extremely
difficult to achieve by the date specified of January 1, 2014.
The proposed Section 205 would establish an Emergency Assistance
Fund to carry out this title. Reclamation is responsible for extensive
water and power infrastructure that is exposed to the same natural
disasters and potential man-made threats that could affect the Mni
Wiconi Project Rural Water Systems. Funding needed for emergency
repairs are made available from annual appropriations and prioritized
as necessary to perform work to restore facilities to operational
status after damage occurs. This is a more efficient use of federal
funds than creating an emergency fund that is reserved for a specific
project, such as the Mni Wiconi Project.
This concludes my written statement. I would be pleased to answer
questions at the appropriate time.
S. 3483
Madam Chair and members of the Subcommittee, I am Grayford Payne,
Deputy Commissioner for Policy, Administration and Budget at the Bureau
of Reclamation (Reclamation). I am pleased to provide the views of the
Department of the Interior (Department) on S. 3483, the Crooked River
Collaborative Water Security Act. The provisions of S. 3483 address the
Crooked River Wild and Scenic River designation along with water supply
concerns relating to Reclamation's Crooked River Project.
The Department supports the goals of correcting the Wild and Scenic
River boundary near Bowman Dam and improving Reclamation project
operations, where possible, to further enhance water use and
availability. We also recognize refinements made since similar
companion legislation was heard in the House in June of last year. We
believe that some of the provisions of S. 3483 will advance the goal of
water security on the Crooked River, and we offer the following
recommendations for improvements to the bill. If the changes summarized
below are incorporated to the bill, the Department can support S. 3483.
S. 3483 includes seven sections which address: the Wild and Scenic
River designation near Bowman Dam; water supply for the City of
Prineville; first fill protection for water in Prineville Reservoir;
operating requirements ``for the benefit of downstream fish and
wildlife''; repayment contract provisions for the Ochoco Irrigation
District (District); requirements that Reclamation participate in
``dry-year management planning meetings''; and savings clause language
clarifying the bill's effect on existing law. This statement summarizes
the Department's interest in the most significant provisions of each
section.
An eight-mile segment of the Lower Crooked River near Prineville,
Oregon was designated as a National Wild and Scenic River in 1988 with
enactment of the Omnibus Oregon Wild and Scenic Rivers Act (Public Law
100-557). The Lower Crooked River meanders through canyons of deeply
eroded basalt and banks covered with riparian vegetation. A variety of
wildlife including river otters, beaver, great blue herons and mule
deer inhabit the corridor. A wide-range of recreation opportunities are
available along the Lower Crooked River including native trout fishing,
camping, hiking and boating.
When the Wild and Scenic River boundary was administratively
finalized for this section of the Crooked River, the centerline of
Bowman Dam was used as the upstream terminus of the designation.
However, the placement of the beginning of the designation within this
man-made feature is both counterintuitive and cumbersome to administer.
Section 2 of S. 3483 addresses this by moving that upper limit of the
designated river one-quarter mile downstream. The Department of the
Interior supports the proposed modification of the boundary as a
reasonable solution consistent with the original intent of the Wild and
Scenic designation. The Department is willing to work with the Sponsor
and the Committee to determine the exact placement of the new boundary.
Clearly the dam and related facilities were never intended to be
included within the wild and scenic river designation.
Section 2 of S. 3483 also contains language anticipating
applications for hydropower development at Bowman Dam through the
Federal Energy Regulatory Commission (FERC). The Department believes
that Reclamation has the authority to permit non-Federal power on the
Crooked River Project pursuant to the language of Section 2406 of
Public Law 102-486. Therefore, Section 2 (B) should be modified to add
``or Bureau of Reclamation'' after the words ``Federal Energy
Regulatory Commission.''
Section 3 of S. 3483 amends the Act of August 6, 1956 (70 Stat.
1058), by increasing the statutorily-required minimum release flows
from Bowman Dam to serve as mitigation for groundwater pumping by the
City of Prineville. The Department does not oppose the concept of
providing releases to mitigate for municipal use of groundwater. We
believe the bill's language of ``without further action by the
Secretary. . .'' and its references to a Reclamation Directive and
Standard to be contradictory and subject to interpretation as to the
need for NEPA compliance and a contract. The bill's language also
requires delivery of water prior to receiving payment from the City and
it is unclear as to whether or not the 5100 acre-feet is part of the
currently required 10 cfs releases. We recommend deleting the words
``Without further action by the Secretary of the Interior, beginning on
the date of enactment of the Crooked River Collaborative Water Security
Act'' and replacing it with, ``Upon passage of the Crooked River
Collaborative Water Supply Act, the Secretary of the Interior is
authorized to contract with the City of Prineville for up to 5,100
acre-feet of water in Prineville Reservoir and upon receipt of required
payments may release such water on an annual basis to serve as
mitigation. . .'' We recommend deleting the words `Water and Related
Contract and Repayment Principles and Requirements' as this does not
refer to a Reclamation document and deleting the words `Directives and
Standards PEC 05-01' as this is currently under revision. Substituting
``in accordance with Reclamation law and policy'' would be more
appropriate.
An additional concern with S. 3483 is the bill's statement that
``The Secretary is authorized to contract exclusively with the City for
additional amounts in the future at the request of the City.'' This
language would preferentially benefit the City of Prineville and
appears to close the door to any potential future irrigation or
municipal water contractors of the Crooked River Project (Project).
First Fill Storage and Release
Section 4 of S. 3483 also proposes an entirely new addition to the
1956 Act. The proposed addition would provide existing contractors and
others with a ``first fill'' priority basis, rather than the current
situation where both contracted and uncontracted storage space in
Prineville Reservoir fill simultaneously. While this provision is not
likely to have any immediate effect, it is possible under the proposed
first fill priority system that in very dry water years the last fill
entity could be shorted. This section also requires the release of all
the contracted water in the reservoir every year. We recommend deleting
the word `release' and substituting the words `make available' as it is
common for irrigators to use less water than they have contracted in
any given year.
Storage and Release of Remaining Stored Water Quantities
The Department supports the concept of providing some of the now
uncontracted space in the reservoir for fish and wildlife purposes.
However, the inserted Section 7(a) requirements to release all
remaining stored water quantities for the benefit of downstream fish
and wildlife will prevent Reclamation from issuing new contracts.
We note that the bill's language also inserts a Section 7(b) to the
1956 Act which would require that if a consultation under the
Endangered Species Act or an order of a court requires releases of
stored water from Prineville Reservoir for fish and wildlife, the
Secretary shall use uncontracted stored water. Reclamation would
interpret this provision to set a new precedent in legislatively
prescribing operation of the Crooked River Project. Reclamation
interprets this section as altering but not eliminating agency
discretion with respect to contract water supplies, therefore,
sufficient discretion would remain with respect to the operation of the
Project to warrant consultation under Section 7(a)(2) of the Endangered
Species Act. The limit of Reclamation's discretion is not entirely
clear, and could be subject to contrary interpretations. Also, the
additional quantity of water reserved for the City of Prineville is not
addressed in this section, and Reclamation interprets the bill such
that any future quantities of water made available to the City (beyond
the 5,100 acre feet) will not be subject to first fill protection and
may affect the use of water for the benefit of downstream fish and
wildlife.
S. 3483 also includes amendments to the 1956 Act to coordinate the
management of water for the benefit of fish and wildlife with the
Confederated Tribes of the Warm Springs Reservation of Oregon and the
State of Oregon. Reclamation notes the role of the U.S. Fish and
Wildlife Service and the National Marine Fisheries Service with respect
to the use of uncontracted water for the benefit of listed species is
not entirely clear, resulting in a potential for conflict if the
federal, state and tribal management priorities are not aligned.
Likewise, the limitation of the use of the reservoir for downstream
resources, could cause similar problems if a species were to be listed
in or above the Reservoir. As drafted however, Reclamation would
interpret the amended Section 7(c)(2) as not to alter Reclamation's
obligations under Section 7(a)(2) of the Endangered Species Act.
The ``Required Coordination'' language in the amended Section 7(d)
continues to lack clarity with respect to the scope and purpose of the
section. Specifically, striking the words ``and assist'' line 18 of
page 7 would reduce the potential for conflict by clarifying the
purpose of the section.
Section 5 of S. 3483 would provide for early repayment of project
construction costs by landowners within the District and the District's
participation in conserved water projects of the State of Oregon. The
Department fully supports these objectives and has no concerns
regarding corresponding language in the bill.
The Department does not see the need for language in Section 6 of
S. 3483 requiring that Reclamation participate in and prepare a report
from meetings by a ``Dry Year Management Planning'' group. Reclamation
already has standing authority to provide technical and planning
assistance to state, local and tribal government entities under Title
II of the Reclamation States Emergency Drought Relief Act (PL 102-250
as amended). This planning authority does not expire, and is not
subject to a standing drought declaration being in place in the area of
interest. The Drought Act authority is sufficiently broad to cover the
topic areas proscribed in Section 6 of S. 3483, without creating a new
Congressional reporting burden on the Department. However, if this
language remains, we suggest deleting at the end of Section 6(d),
``with the voluntary agreement of North Unit Irrigation District and
other Bureau of Reclamation contract holders referred to in that
paragraph, the Secretary may release that quantity of water for the
benefit of downstream fish and wildlife as described in section 7 of
that Act.'' This language limits Reclamation's authority and creates a
burdensome requirement that could more efficiently be addressed by
requiring entities to contact Reclamation prior to June 1 of any year
or the water will be released downstream.
The Department also supports the McKay Creek Exchange Project which
has been the subject of periodic discussions between the District and
Reclamation and which would provide enhanced instream flows in McKay
Creek in exchange for water from a portion of the District's current
contracted water supply from Prineville Reservoir. However, we have
concerns with those portions of Section 5 of S. 3483 that address
contract amendments relating to lands within the vicinity of McKay
Creek. As written, the proposed legislation does not clearly identify
the fundamental exchange element of the project. The language in
Section 5 is unclear as to whether the proposed water supply would come
from the District's current contract supply or from uncontracted water
in Prineville Reservoir, and the amount of water is not specified. As a
result, the Department believes the McKay Creek Exchange Project would
be implemented more effectively by proceeding with contracting
processes that Reclamation has typically used for such situations, and
which have been the subject of prior discussions with the District.
While the Department supports the goals of S. 3483, we believe that
the bill would benefit from changes as outlined here. This concludes my
written statement. I am pleased to answer questions at the appropriate
time.
Senator Shaheen. Thank you very much, Mr. Payne. We
appreciate that responses might need to be in writing.
Senator Murkowski has joined us, but we would like to go
ahead and hear your testimony, Mr. Katz. She'll make her
statement later.
Thank you.
STATEMENT OF JOHN KATZ, DEPUTY ASSOCIATE GENERAL COUNSEL FOR
ENERGY PROJECTS, FEDERAL ENERGY REGULATORY COMMISSION
Mr. Katz. Thank you, Chairman Shaheen, Senator Johnson,
Senator Murkowski. It's a pleasure to be before you today.
I'll go off topic for a minute just to thank Senator
Shaheen for her State's hospitality. My family had a wonderful
reunion at Lake Winnipesaukee this summer.
Senator Shaheen. We very much appreciate that. Come back
often.
Mr. Katz. Thank you.
I will be fairly brief. My name is John Katz. I'm Deputy
Associate General Counsel for Energy Projects at the Federal
Energy Regulatory Commission. I appear today as a Commission
staff witness. My statements are my own and don't necessarily
reflect the opinions of the Commission, the chairman or any
commissioner.
Section 10(e)(1) of the Federal Power Act provides that
persons, states, and municipalities to whom the Commission has
issued licenses are required to pay annual charges for a number
of things, as relevant here, for the use and enjoyment of lands
of the United States.
Section 24 of the act provides that when an entity files an
application either for a preliminary permit or for a license,
the lands that are covered by that application, this is only as
applies to Federal lands, become sort of exempt from disposal
under the public land laws because the United States is deemed
to have an interest in the power development potential of those
lands. In some instances entities reach agreements with
departments of the United States, such as the Department of
Reclamation and particularly the Forest Service, where they
will perhaps trade lands so that they can have lands available
for a hydro project or they may sell or the lands will
otherwise be transferred to those entities.
However, section 24 provides, in a mandatory fashion, such
that Reclamation and Agriculture don't have any choice, that if
such lands are transferred they are required to be continued to
be subject to the United States' power site reservation. In
some instances therefore, there are lands that have been
transferred entities who are operating hydro projects yet they
still pay annual charges for the use and enjoyment of those
lands.
Senator Shaheen. Mr. Katz, pardon me for interrupting you.
I just wanted to clarify for members of the audience that you
are testifying on S. 3265.
Mr. Katz. Oh, yes. I apologize. Indeed.
The proposed legislation would provide that if lands are
transferred or otherwise given to private entities by the
United States, annual charges for use of those lands would no
longer be charged by the Commission. It would amend section
10(e) to provide that.
Commission staff takes no position on the bill. It would
not, in any way, undercut the Commission's ability to protect
the public interest considerations that the Federal Power Act
requires it to protect. It would not affect the Commission's
budget in any way because the annual land use charges are paid
directly into the Treasury of the United States.
With that I'm happy to answer any questions you may have.
[The prepared statement of Mr. Katz follows:]
Prepared Statement of John Katz, Deputy Associate General Counsel for
Energy Projects, Federal Energy Regulatory Commission
S. 3265
Chairman Shaheen, Ranking Member Lee, and Members of the
Subcommittee:
My name is John Katz and I am Deputy Associate General Counsel for
Energy Projects at the Federal Energy Regulatory Commission. I appear
today as a Commission staff witness. The views I express are my own and
not necessarily those of the Commission or of the Chairman or any
individual Commissioner. I appreciate the opportunity to appear before
you to discuss S. 3265.
I. BACKGROUND
Section 10(e)(1) of the Federal Power Act (FPA) provides that
persons, states, and municipalities to which the Commission has issued
a license to operate non-federal hydropower facilities must pay to the
United States reasonable annual charges in an amount to be fixed by the
Commission for, among other things, ``recompensing [the United States]
for the use, occupancy, and enjoyment of its lands or other property.''
Section 17 of the FPA states that such charges will be paid into the
U.S. Treasury, with 12.5 percent being allocated to ``Miscellaneous
Receipts,'' 50 percent being paid into the Reclamation Fund, and the
remaining 37.5 percent being paid by the Secretary of the Treasury to
the state within which the lands at issue are located (there is an
exception for proceeds from Indian reservations, all of which are
credited to the Tribes).
FPA section 24 provides that any lands of the United States
included in any proposed hydropower project shall, from the date of
filing of a project application, be reserved from entry, location, or
other disposal until otherwise directed by the Commission or by
Congress. If the Commission determines that the power development
potential of reserved power sites will not be injured or destroyed by
location, entry, or selection under the public land laws, the Secretary
of the Interior will declare the lands open to location, entry, or
selection, under any conditions imposed by the Commission and ``subject
to and with a reservation of the right of the United States or its
permitees or licensees to enter upon, occupy, and use any part or all
of said lands necessary, in the judgment of the Commission, for the
purposes of [Part I of the FPA], which right shall be expressly
reserved in every patent issued for such lands.''
It has been the Commission's policy for many years that, where
federal lands subject to a power site reservation are transferred to a
licensee, the licensee still must pay annual charges for the use of the
lands, given that the United States retains the power interest in the
lands. The Commission has no record of the amount of acreage that falls
into this category, because the Commission assesses federal land use
charges based on the amount of federal acreage that each licensed
project occupies (typically, taken from information in a license
application or license order), and for this purpose there is no
practical distinction between lands that are wholly owned by the United
States and those that have been transferred to a private entity subject
to a power site reservation. Unless a licensee elects to identify any
acreage that has been transferred from federal ownership but is still
subject to a section 24 power site reservation, the Commission does not
have that information.
II. S. 3265
S. 3265 would revise section 10(e) of the FPA to provide that those
federal lands as to which the Commission assesses annual charges to
hydropower licensees will not include land that has been sold,
exchanged, or otherwise transferred from federal ownership,
notwithstanding the retention by the United States of a power site
reservation on those lands.
Commission staff has no position on the proposed legislation. S.
3265 would not affect either the Commission's ability to protect the
developmental and non-developmental values set forth in the FPA or the
Commission's funding. The Commission will assess annual charges for the
use, occupancy, and enjoyment of federal lands in any manner that
Congress directs.
III. CONCLUSION
This concludes my testimony. I will be happy to answer any
questions you may have.
Senator Shaheen. Thank you very much, Mr. Katz.
Senator Murkowski, did you want to make a statement?
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Madame Chairman, thank you first of all
for conducting this hearing including my bill on the agenda
this morning. I appreciate, you, Mr. Katz, being here and
speaking to S. 3265 which addresses FERC's collection of land
use fees for hydro projects.
Madame Chairman, I guess I look at this one and say I'm
just not sure why it's even necessary to legislate in this
area. But we are here this morning.
Under the Federal Power Act FERC is authorized to collect
these reasonable annual fees from project owners for use,
enjoyment and occupancy of Federal lands. In a sense the
Federal Government is a landlord for these types of projects
and can collect the fees and the rents from its tenants. I
understand that.
But I was very surprised to learn that when the land in
question is no longer owned by the Federal Government because
it's been sold or it's been transferred that the government can
continue to collect these fees. It's, you know, liking it to a
situation where you're renting an apartment or you're owning
the house. But you sell the house. Do you still have to pay for
a house that you no longer own?
I guess if there's an outstanding mortgage, yes. But if you
owned--if you rented an apartment and you're no longer in that
apartment, you've moved on. You've transferred. The fact that
you're still paying rent to the landlord to me just doesn't set
right. To me it's inherently unfair.
Yet, the FERC is authorized to continue to collect these
fees as long as the land retains something that is referred to
as a Power Site Classification. So what my legislation does,
Madame Chairman, is simply halt the collection of Federal land
use fees when the Federal Government no longer owns that land.
I've learned that even though it might sound simple on its
face, there's nothing simple about this.
We've had a difficult time even identifying how many
projects are at issue. In my questions to you, Mr. Katz, I'm
going to see if we can't drill down a little bit more on that.
I would note, though, for my colleagues that many of the
approximately 15 projects that we have identified so far many
of them are located in Alaska. But there are some in Oregon,
Washington and Colorado that are in the same situation. So it's
for this reason that I have brought this bill forward.
Madame Chairman, I don't know if you want to begin with
your questions. But I certainly have a few for Mr. Katz just in
terms of what we're really looking at here and how we might be
able to better identify the projects in question.
But thank you.
Senator Shaheen. Thank you very much, Senator Murkowski. I
know that you won't be asking about S. 3265 and Senator Johnson
will be asking about the Mni Wiconi project. So I will start
Mr. Payne, by asking you about the small conduit hydropower
development, H.R. 2842.
The committee has heard from a number of groups who have
raised questions about the waiver, the NEPA waiver, that's in
that legislation. So I wonder if you could begin by stating for
the record what your understanding is of what the language
would do with respect to waiving the NEPA process.
Mr. Payne. Yes. Currently the language that's in the
proposed legislation would basically waive the NEPA process for
the development of small conduit hydropower on Reclamation
owned facilities.
Senator Shaheen. Is the Bureau looking at ways to expedite
or improve the process for developing hydropower in these
situations? Clearly as I listen to Congressman Tipton testify
on his legislation he was suggesting that for projects that
would include hydropower in construction that had already been
completed and had already gone through the NEPA process that it
might be an unnecessary burden on those developers. That was my
interpretation of what he said.
Can you speak to that and to what the Bureau is looking at
and whether it's the Bureau's assessment that that's correct or
not?
Mr. Payne. Yes. Currently the Bureau has a directive in
standards on leases, lease and power privileges that we're in
the process of revising. The revised version will basically
become more friendly in the sense it will be more efficient,
more transparent and it will be basically allow more
communication so that this whole process of developing
hydropower at Reclamation facilities will be more streamlined.
We feel confident that this will satisfy.
Senator Shaheen. But it would still, based on that
response, it would still require a NEPA process?
Mr. Payne. Yes.
Senator Shaheen. Before going forward.
Mr. Payne. It would still require a NEPA process and what
we would use would be under the NEPA process, categorical
exclusions, which we've already used in 4 other instances in
recent years. As a result when you look at categorical
exclusion NEPA process, it has taken anywhere between 6 months
to 15 months to complete which we feel is fairly streamline.
Senator Shaheen. So how do you respond to the concern that
he raises that if a project has already gone through NEPA that
it shouldn't have to go through it again if just to add the
hydro, the conduit, into the canal or whatever the body is?
Mr. Payne. I'm not an expert on that. I'd like to get back
to you in written testimony.
But, I guess what I would say is what I've understood is,
you know, when the original one was done maybe years ago,
things can change. It's always good to honor the process and to
make sure that we get it done right so that we don't get down
the road and have to stop everything. I think it's more costly
to do it that way.
With, like I said, the categorical exclusion, which is more
of a checklist kind of NEPA process, it would streamline it.
That's why we feel this is kind of a win/win situation.
Senator Shaheen. OK. Thank you.
I want to go now to S. 3483, the Crooked River
Collaborative Water Security Act.
I was impressed as Senator Merkley was describing the
effort that had gone into the legislation about the number of
groups that have come together to come to some agreement on how
to move forward. I just wonder if the Bureau is confident that
the bill as written will bring about the intended results.
Mr. Payne. Yes. Actually the Bureau is very comfortable
with the bill. We like it a lot. We think that this current
legislation will bring about the results that are intended.
I think all the parties in Oregon support the bill. We
support it. We think it's a win/win for everybody.
We're very comfortable with it.
Senator Shaheen. Thank you.
Senator Wyden is here. I'm sure he will have a lot to say
about that legislation. So Senator, would you like to make a
statement before we go onto further questions?
STATEMENT OF RON WYDEN, U.S. SENATOR FROM OREGON
Senator Wyden. Thank you very much, Madame Chair. This is a
hectic morning, even by Senate standards.
I thank you and Senator Murkowski and Senator Johnson for
their courtesy. I particularly just wanted to commend Senator
Merkley and his staff for their leadership on the Crooked River
bill. I know Betty Ruppe is here today. She and so many in
Central Oregon spent hours and hours with Senator Merkley and
myself and our staff to put together this legislation on behalf
of the irrigation districts, the Warm Springs tribes, the
conservation groups, the city, Governor Kitzhaber, the State
and the county.
We have a long tradition in our State with trying to find
common ground on these kinds of issues. I think all of us,
particularly in the West, understand that water is the
prerequisite to a quality of life in our part of the country.
It's how we restore our salmon runs, the natural habitats. This
bill strikes a balance between competing demands for a scarce
resource.
I'm particularly pleased that the city of Prineville is
going to have water for economic development. Our irrigators
will have a new level of certainty on their future water
supply. It opens up the fish habitat. We particularly, Senator
Shaheen, want to thank you for scheduling the hearing on this
legislation so quickly.
This has been an important issue for Oregon. We're very
pleased to be able to move forward after all of the years of
work to reach agreement. We look forward to working the Bureau
of Reclamation.
Congressman Walden, he has a related piece of legislation
in the other body in order to be able to move this legislation
forward.
Mr. Payne, I'll have some questions for you. I think I'll
submit those for the record.
We appreciate the cooperation that you've shown and thank
you, Senator Shaheen, Madame Chair, for the courtesy this
morning. Thank you.
Senator Shaheen. Thank you very much, Senator Wyden.
Mr. Payne.
Mr. Payne. Thank you.
Senator Shaheen. I'll now go to Senator Murkowski for
questions.
Senator Murkowski. Thank you, Madame Chairman.
Mr. Katz, let me ask you about that power site
classification. My question relates to the purpose of these
PCSs. It's my understanding that they're meant to preserve the
power values of undeveloped areas or sites that could be
developed.
Is that a correct understanding?
Mr. Katz. Yes. I think that's accurate.
If you look at the legislative history of the section it
seems that back in the tens and the twenties, when that section
was being put together, that there was concern, particularly in
the Senate also in the House, about large companies, sort of,
obtaining huge swaths of power privileges so that the people of
the United States wouldn't have a chance to develop them. I
think that led to section 24.
Senator Murkowski. So once we have a hydropower facility in
place, once that project exists, just in terms of the practical
effect or the benefit of a Power Site Classification. Isn't the
power value protected by the PSC already being utilized then?
Mr. Katz. Yes, it should be.
Senator Murkowski. OK. OK.
I had mentioned in my comments about the difficulty in
identifying the projects out there. I know that you have worked
closely with my staff on the legislation. But FERC was not able
to provide us with a list of the hydropower projects that are
still subject to Federal land use fees.
Why is this so difficult? Why is it so hard to identify
this?
Mr. Katz. The reason it's difficult is because the
Commission charges or sets annual charges for the use of
Federal lands by hydropower licensees. But it doesn't have a
separate schedule of fees so that the fees relating to section
24 lands are different than fees that are not subject to
section 24.
Senator Murkowski. Would that be difficult to isolate that
or to account for them in a different way so that we would have
a better tracking on it?
Mr. Katz. In the future, as I think I spoke with your staff
recently, the Commission has fortunately due to new technology,
been able to ask licensees for data like from GPS and similar
processes. So in future, going forward, the Commission is
asking licensees to provide information as to which of those
lands might be subject to a power site reservation and which
aren't.
In the past the Commission didn't do that, as I said,
because it didn't affect the fee. So the Commission could, if
the Senate were to request or Congress were to request, could
go back to each licensee and see and ask them to provide that
information, but absent doing that which might be burdensome
for some licensees it might not.
There isn't a way to, sort of, go back to the past.
Senator Murkowski. Do I understand correctly, though, that
currently you have begun to ask for that information?
Mr. Katz. Yes, that's correct.
Senator Murkowski. Then I know that you have seen the list
of projects that my staff has assembled working with the trade
groups, including the National Hydropower Association, the
Alaska Power Association. We've essentially gone out and
surveyed these constituent and trade groups. We've shared this
list with the folks at FERC.
Does this list look complete to you? Do you that we pretty
much identified the population out there?
Mr. Katz. To the best of my knowledge, but again because
the Commission doesn't do that, there may be some licensees who
have, for example, very small amounts of lands that are subject
to such things, so it doesn't trouble them, and they haven't
brought that to your attention.
So I can't be sure that it's the universe. I think it's
probably the universe of people that make significant payments
and they're concerned about it.
Senator Murkowski. Is there anything else that you might
recommend we do, any other groups that we might look to in
trying to really firm up whether or not this is the universe?
Is there anything else that we should be looking at or any
other questions that we might be asking?
Mr. Katz. No. It sounds like you're speaking to the right
groups. I mean, certainly NHA is the industry trade
association.
Senator Murkowski. Right.
Mr. Katz. But again, I don't know what steps they've been
able to take to survey their membership.
Senator Murkowski. OK.
Mr. Katz. But you're asking the right folks.
Senator Murkowski. I appreciate that, Mr. Katz. I
appreciate you working with my staff on this to just better
understand what we're dealing with.
Again, I would like to think that this would be a simple
enough issue to resolve. It's certainly common sense that we're
trying to get to the point where common sense is going to rule.
I appreciate that.
I thank you, Madame Chair.
Senator Shaheen. Thank you.
Senator Johnson.
Senator Johnson. Thank you very much for being here today.
One of the primary goals of my legislation is to ensure
that the construction of the pipeline and necessary service
lines on the Pine Ridge Reservation and the Rosebud Reservation
can be completed. Without this, my understanding is that more
than 4,300 intended beneficiaries of the project on the two
reservations will not be served. Reclamation has stated that a
majority of the population will be served within their
authorized construction ceiling, but won't there still be an
unmet need within the existing scope of the project once the
construction ceiling is reached?
Mr. Payne. Yes, Senator, there probably will be some for
those outlying areas. We estimate that the actual number of
current residents that will not be serviced by the Mni Wiconi
project to be currently about 1,000 people given and I think
the 4 thousand is a projection down the road.
But either way we do agree that there is a need. But
currently what we understand with our research is that those
locations currently do have either residential wells or
community wells that they're currently being served by. NIH is
working with them to test water quality. Currently it is good
water quality.
You know, we have, in the past, and I think recently in
April or so we met with the various parties who have
constructed some of these locations whether it's Agriculture's
Rural Water Division or it's EPA or IHS or HUD and trying to
get them to get together to actually help with these projects.
But I think a lot of it has to do with their response is their
lack of funding or the other priorities. I don't really want to
speak for them. But I'm just what I'm understanding from our
region.
You know, I guess the best way would be we've proposed and
drafted an MOA that would be with the other, our other
agencies, that would basically, hopefully, outline roles and
responsibilities to see what we can do to get this. But we'd be
happy to work with the committee.
Senator Johnson. Reclamation previously stated that given
the magnitude of the work that will have to be completed on the
project and the backlog of work awaiting action on other
projects that the tribes should look for alternative funding
sources that could be used to construct any remaining features.
In Reclamation's view how does leaving the tribal sponsors
to fend for themselves in finishing this construction square
with the United States trust responsibilities to the tribes?
Mr. Payne. Again, this is back to where we have worked with
the tribes. The tribes have all done outreach to these other
Federal agencies and that is where we think that in order to
solve this problem may be an MOA with the other agencies to get
them all at the table to get a collective solution would
probably be the best.
Senator Johnson. Currently there are other Federal agencies
that operate existing community systems on their reservations,
which the original Mni Wiconi Act contemplates incorporating
into the project. Can you outline some of the challenges
Reclamation has faced in getting other agencies to participate
in plans to upgrade the existing community systems?
Do you think this bill would help spur the other agencies
to get involved at higher levels and make these issues a
priority?
Mr. Payne. In the actual Mni Wiconi project where we've
done the water treatment plan as well as the pipelines that go
throughout the communities, you know, we have known that there
are areas that were serviced by other Federal agencies. We do
recognize that some of these pipelines aren't up to standards
and that in order to connect to these pipelines we would really
need that the O&M that should have been performed on these to
be performed to get them up to standards because I think there
is possibly, if you were to connect them, very remote
possibilities contaminating the newly constructed lines that we
have as well as the fact that we would inherit a liability with
these.
I can't speak for the other Federal agencies. But I think
the tribes are also looking at ways to try to get them to the
table to help out. Once these systems are upgraded and they are
connected to our project and you know, we would be happy to
pick up the O&M for this.
Senator Johnson. Thank you very much, Mr. Payne. I look
forward to your cooperation.
Mr. Payne. Thank you.
Senator Shaheen. Senator Johnson, did you have any further
questions? Thank you.
I actually have one that is not clear to me that relates to
this project. I know that you indicated, Mr. Payne, that the
existing Mni Wiconi project is almost complete.
Can you elaborate on what that means? Is it going to be
complete in a year, in 6 months, in 5 years?
Mr. Payne. Sure. No, this project should be, if we get our
full appropriations for this project, should be completed in
2013. We have it as one of our priorities in our 2013 budget
submission.
So if we do get full funding we will be able to complete
this project in 2013. Then that would fulfill our Federal
obligation.
Senator Shaheen. OK. Thank you.
Mr. Katz, I want to follow up on some of Senator
Murkowski's questions relative to S. 3265.
How does this legislation correspond with FERC's pending
rulemaking on the collection of land use fees?
Mr. Katz. It's really a separate matter. I mean, in the
rulemaking the Commission noted what its current policy and
legal requirements were, but this is not an issue in that
rulemaking.
Senator Shaheen. OK.
It's my understanding that the Omnibus Budget
Reconciliation Act of 1986 requires FERC to recover its budget
through fees and annual charges on the industries that it
regulates. So how would this legislation impact the funding
that FERC has been dependent on to operate?
Mr. Katz. The legislation would not affect that at all
because section 17 of the Power Act provides that all the
charges that are recovered for use and enjoyment of U.S. lands
go straight to the Treasury. So those have never funded the
Commission's operations.
Senator Shaheen. OK. Thank you.
I want to go back with a final question, Mr. Payne, on the
S. 3483, the Crooked River Collaborative and would again note
what both Senators Merkley and Wyden had to say about the
collaborative effort that went into this project. I think it's
very impressive. I certainly commend the Mayor of Prineville,
who is here and all of those other individuals and groups who
made this happen.
But I just want to clarify that it is not the intent of
this effort to waive any applicable environmental laws.
Mr. Payne. That is correct.
Senator Shaheen. OK.
You're comfortable that the bill, as it's written, makes
that clear?
Mr. Payne. Yes, especially in the ESA portion. We would be
willing to work with the committee to clarify anything that
needs to be clarified. We don't have any problems with that.
Senator Shaheen. OK.
Thank you both very much for your testimony this morning. I
have no further questions and clearly neither does anyone else
since they're gone.
The testimony and written submissions from today's
witnesses will be part of the official hearing record. We will
keep that record open for 2 weeks to receive additional
statements.
Again, thank you. The hearing is adjourned.
[Whereupon, at 10:20 a.m. the hearing was adjourned.]
APPENDIXES
----------
Appendix I
Responses to Additional Questions
----------
Responses of Grayford F. Payne to Questions From Senator Murkowski
H.R. 2842
Question 1. What are the financial challenges in developing conduit
hydropower at federal canals and pipelines? In particular, what are the
capital costs, regulatory costs and other costs on a project covered by
this bill?
Answer. The capital cost and other investments required to develop
conduit hydropower on federal canals vary widely depending on the
facility size and location. In general, conduit hydropower is developed
with small units (under 10 megawatts), in locations where environmental
and regulatory considerations are minimal. Environmental compliance,
transmission agreements, operating arrangements and facility design are
among the principal non-capital cost considerations. Because conduit
hydropower units are typically small, the size of the investment is not
on the scale of typical federal powerplants, which are much larger and
have planning and development costs that can run into the tens of
millions of dollars.
Question 2. This bill waives the NEPA requirements for small
conduit hydropower of less than 1.5 mw because the canals and pipelines
necessary for conduit hydro have already been built. The proponents of
the bill argue that the NEPA waiver eliminates just the paperwork
requirements but not environmental statutes. Will environmental laws
like the Endangered Species Act and the Clean Water Act still apply?
What about state water laws?
Answer. Many of Reclamation's existing projects pre-date the NEPA
process, or are operating in conditions that have changed significantly
since construction. For these and other reasons explained in the
Department's written statement, we believe the NEPA waiver contained in
HR 2842 to be unwarranted. The development of small conduit hydropower
projects that meet the qualifications listed in a standard checklist
will be eligible for categorical exclusions (CE) under NEPA, resulting
in very little paperwork. That checklist is available as part of the
Reclamation Manual's Directive and Standard titled Lease of Power
Privilege (LOPP) Processes, Responsibilities, Timelines, and Charges
(FAC 04-08) (http://on.doi.gov/SrhRrW). The only way to determine
whether an individual project should be looked at more carefully under
NEPA is to allow these processes to take place. Federal and state laws
such as the Endangered Species Act and Clean Water Act will continue to
apply regardless of what level of NEPA analysis is performed for new
hydropower development or if the process is waived all together.
Question 3. Please elaborate on the potential use of a NEPA
categorical exclusion for conduit hydropower development.
Answer. Reclamation's existing Lease of Power Privilege procedures
allow for a categorical exclusion (CE) under NEPA to be applied to low-
impact hydropower projects. These procedures are also documented in the
Departmental Manual at 516 DM 14.5(C)(3) and (D)(4), for use when the
scope of a project is consistent with the terms of a CE, and there are
no extraordinary circumstances. Key considerations in determining if
the project is consistent with the terms of the CE are:
(i) the project would utilize an existing dam or conduit;
(ii) points of diversion and discharge of the LOPP powerplant
would be in close proximity to the existing infrastructure and
would not significantly affect the flow patterns of the water
source;
(iii) there would be no increase or change in timing of
diversions and discharges; and
(iv) the primary purpose of the infrastructure would remain,
e.g., most commonly irrigation.
Reclamation's final Directive and Standard, Lease of Power
Privilege (LOPP) Processes, Responsibilities, Timelines, and Charges,
which was released on September 28, 2012, provides more detailed
information on the potential use of a CE for conduit hydropower
development.
S. 3464
Question 1. Please describe all the Federal agencies that have
existing authorities and programs to address wastewater facilities and
systems within the region that may be better suited to play a role in
the project.
Answer. The other Federal agencies that have the authority to fund
various additional water and wastewater features in the region of the
Mni Wiconi project are: Indian Health Service (IHS) with the Department
of Health and Human Services (HHS), Bureau of Indian Affairs (BIA)
within the Department of the Interior, Housing and Urban Development
(HUD), Environmental Protection Agency (EPA), United States Department
of Agriculture Natural Resources Conservation Service (USDA NRCS), and
USDA Rural Development. IHS in particular has an active program to
assess and fund wastewater projects.
Reclamation and the Tribe's rural water staff have met with the
other agencies listed above on several occasions to discuss
authorities, programs, and capabilities to assist with completion of
remaining project components including wastewater facilities.
Reclamation's understanding is that while other Federal agencies are
supportive of addressing unmet needs, their budgets are limited and
projects are objectively prioritized and ranked. Establishing a project
specific interagency memorandum of agreement would help define needs,
roles, and responsibilities to develop a multi?agency approach to
improving these existing water systems. Reclamation introduced a draft
interagency agreement at a multi?agency government to government
consultation meeting on August 16, 2012. This agreement contemplates
periodic meetings to develop a coordinated approach to the upgrades of
the water systems.
Question 2. Please describe your current repayment obligations for
the Mni Wiconi project, as well as the remaining Federal Funding needed
to complete the project. Do you consider it the role of Reclamation to
pay for any additional operation and maintenance costs that the project
may incur under this bill?
Answer. The Mni Wiconi Act (P.L. 100-516), as amended and currently
in force, does not require repayment of project costs. Instead, it
required a 20% cost share for the non-tribal components, which has been
fully met. Reclamation estimates that the FY 2013 appropriation request
of $23 million will be sufficient to cover the remaining construction
obligation for project completion as currently authorized. With respect
to operation and maintenance costs, in general the Department opposes
requirements for federal funding of projects' operation and maintenance
costs. S. 3464 would increase Reclamation operation and maintenance
obligations by adding payments of water bills on trust lands within
White River and by funding initial improvements to existing community
water systems.
Question 3. Within your rural water program, if you were to
prioritize the projects, where would the Mni Wiconi project fall within
a prioritization system?
Answer. Reclamation's recently completed draft assessment report
titled ``Assessment of Reclamation's Rural Water Activities and Other
Federal Programs that Provide Support on Potable Water Supplies to
Rural Water Communities in the Western United States'' (www.usbr.gov/
ruralwater/docs/Rural-Water-Assessment-Report-and-Funding-Criteria.pdf)
details the prioritization criteria to be applied to authorized rural
water projects. Given Reclamation's application of funding criteria,
the Mni Wiconi project has ranked favorably, qualifying for an
appropriations request sufficient to complete the federal cost share
under the authorized ceiling, assuming that the President's FY 2013
request of $23 million is appropriated.
S. 3483
Question 1. Has the Administration proposed that hydro should be
developed at this facility? How long has the Administration studied the
possible development of hydro at this facility? In addition, what
process is being undertaken to ensure that all federal agencies are
working towards making this a possibility?
Answer. In 2010, Reclamation contracted with HDR to complete a
conceptual level feasibility study that ultimately determined that
development of hydropower by the Federal government at Arthur R. Bowman
Dam (Bowman Dam) on the Crooked River was technically feasible. Since
Bonneville Power Administration (BPA) is the federal power marketing
agency in the Pacific Northwest, Reclamation provided the study to BPA.
After reviewing the study and consulting with their rate payers, BPA
notified Reclamation that while technically feasible, they did not
believe federal development of hydropower at Bowman Dam was warranted
at this time. Bowman Dam was listed as a potential development site in
Reclamation's March 2011 Hydropower Resource Assessment at Existing
Facilities. The reconnaissance level analysis contained in that report
estimated that Bowman Dam could accommodate hydropower development of
approximately 3,293 kilowatts, with annual production of approximately
18,282 megawatt hours.
As stated in the Department's written testimony on S. 3483, we
believe that Reclamation has the authority to permit non-federal power
on the Crooked River Project pursuant to the language of Section 2406
of Public Law 102-486. Therefore, we have recommended that Section 2(B)
of the bill be modified to add ``or Bureau of Reclamation'' after the
words ``Federal Energy Regulatory Commission.'' Recently, two private
entities have expressed interest in developing hydropower at this site.
The U.S. Fish and Wildlife Service, the Bureau of Land Management, and
the Bureau of Reclamation have all been involved to varying degrees
with the private entities. However, neither the Federal Energy
Regulatory Commission nor the Bureau of Reclamation will process
applications before the Crooked River Wild and Scenic River boundary is
relocated downstream of Bowman Dam.
Question 2. Please describe what can be done administratively to
help improve the water situation within the area if this legislation is
not passed.
Answer. Since the early 1990s, Reclamation has operated Bowman Dam
to improve flow conditions in the Crooked River for downstream fish,
wildlife and recreation needs, while also meeting water user
contractual deliveries. With cooperation from the contract holders and
State of Oregon, we have used our flood control authority to shape
flood control releases to nearly a year round operation, such that we
have been able to augment downstream Crooked River flows to provide
fishery and recreation benefits. For example, while statutorily
authorized to only provide a 10 cubic feet per second (cfs) minimum
winter flow for fishery purposes, we have consistently provided a
winter-long minimum flow of 50 -75 cfs (35 cfs in the driest of years)
by reshaping flood control releases. In addition, during the irrigation
season, Reclamation routinely releases additional flow above that
needed strictly for irrigation (typically 15 to 30 cfs, but some years
higher) to ensure stream continuity and fishery benefits accrue
downstream of irrigation diversions.
Absent this legislation, we would expect to continue similar
operations, but recognize that current operations could change in the
future if more of the reservoir were contracted for irrigation or other
uses, thereby reducing our flexibility to shape flood control flows.
Reclamation could potentially work with the Oregon Department of Fish
and Wildlife, the Confederated Tribes of the Warm Springs, and other
entities to coordinate and shape releases of non-contract water to
benefit downstream fish and wildlife purposes. Administratively,
Reclamation also could potentially work with Ochoco Irrigation District
(OID) to adjust its district boundary to include and deliver project
water to McKay Creek water users; S. 3483 exempts OID from
environmental compliance for this inclusion. Reclamation also could
continue to issue contracts upon request for irrigation purposes.
However, the first fill provision for existing contractors and the City
of Prineville would not be possible without legislation.
______
Responses of John Katz to Questions From Senator Shaheen
(Submitted on Behalf of Senator Bingaman)
Question 1. You testified that enactment of S. 3265 would not
affect FERC's budget since the land use fees are paid into the Treasury
rather than retained by FERC. But what effect would the bill's
enactment have on Treasury collections? How much money do the annual
land use charges on power site reservations bring into the Treasury?
What effect would the bill's enactment have on payments to the
Reclamation Fund, the States in which the sites are located, and the
tribes on whose reservations the sites are located?
Answer. If enacted, S. 3265 would likely reduce Treasury
collections to some extent. In FY12, the Commission issued bills
totaling $8,277,850.69 for the use of federal lands. As I explained in
my written testimony, the Commission has never had a reason to track
separately federal land use charges that are attributable to lands that
have been opened to location, entry, or selection and transferred or
exchanged. Thus, I do not know what part of the annual land use charges
is based on power site reservations alone or what part of those charges
is attributable to lands that would be exempted under the proposed
legislation. Total FY12 federal land charges for the projects
identified by Senator Murkowski's staff as including lands that have
been transferred or exchanged by the United States were $240,216.35.
The portion of those charges attributable to transferred or exchanged
lands (as opposed to those still owned by the United States) would
represent a smaller figure.
Pursuant to section 17 of the Federal Power Act, 12 percent of
charges for the use of federal lands are paid into the Treasury, 50
percent of the charges are paid into the Reclamation Fund, and 37.5
percent of the charges are paid to the state(s) in which the lands are
located. These payments would be reduced, in appropriate percentages,
by any charges that were foregone as a result of S. 3265. I do not
believe that receipts by tribes on whose reservations power sites are
located would be affected by the draft legislation. Annual charges for
use of tribal reservations are established, pursuant to FPA section
10(e), subject to the approval of the affected tribe. The Commission's
practice is that the tribe and the licensee negotiate the annual
charge, with the Commission intervening only if the parties cannot
agree, something that has never to my knowledge occurred. Further, I am
not aware of any instance in which the United States has transferred
tribal reservation lands subject to a power site reservation to a
licensee.
Question 2. You appear to have said, in response to a question at
the hearing, that once a power site reservation under section 24 of the
Power Act has been developed, the purpose of the reservation has been
served, and collecting a land use charge on the power site reservation
serves no further purpose. But isn't the historic basis of the land use
charge the notion that the nation's water resources belong to the
nation as a whole and should not be given to private owners, ``forever
and for nothing,'' without reasonable compensation to the public? (See,
for example, Chemehuevi Tribe of Indians v. FPC, 489 F.2d 1207, 1219
n.54 (D.C. Cir. 1973).) Hasn't the principle of assessing a reasonable
charge for the use of the Nation's power resources been one of the
principal tenets of the part I of the Federal Power Act since its
enactment in 1920, and indeed, a fundamental principle of the Theodore
Roosevelt and William Howard Taft Administrations before the Act's
enactment? Wouldn't S. 3265 exempt the beneficiaries of federal power
site reservations from this principle?
Answer. The legislative history underlying section 24 makes clear
that Congress intended to preserve for the people of the United States
the ability to develop water power on federal lands, hence the
requirement that any transfer by the United States of lands on which
there is a power site reservation include a reservation of the right of
the United States or its peuditees to enter upon, occupy, and use of
any part of the lands deemed by the Commission to be necessary for
water power purposes. The principle of assessing a reasonable annual
charge for the use of federal lands has also been a long-term part of
the FPA and its predecessors. The FPA does not, however, address the
issue of collecting annual charges once entry is allowed to federal
lands, and I am not aware of any legislative history that deals with
the matter.
Question 3. You stated that the views you expressed were ``not
necessarily those of the Commission or of the Chairman or any
individual Commissioner.'' What are their views on exempting power site
users from the ``reasonable charge'' principle of the Federal Power
Act?
Answer. The Commission speaks through its orders and has not had
occasion to address this matter. I do not know the views of the
Commissioners regarding the proposed legislation.
Appendix II
Additional Material Submitted for the Record
----------
Statement of Mark Crisson, President & CEO, American Public Power
Association, on H.R. 2842
On behalf of the American Public Power Association, I am writing to
express our support for H.R. 2842, the Bureau of Reclamation Small
Conduit Hydropower Development and Rural Jobs Act of 2011. APPA is the
national service organization representing the interests of over 2,000
community-owned, non-for-profit electric utilities. These utilities
include state public power agencies, municipal electric utilities, and
special utility districts that provide electricity and other services
to over 46 million Americans.
APPA supports authorizing power development at the Bureau of
Reclamation's conduits. This new authorization in H.R. 2842 will help
clarify and streamline the multi-agency inefficiencies associated with
hydropower development on these federal projects by cutting duplicative
processes and reducing the regulatory burdens that many of our members
have encountered. Further, the legislation also protects existing
agreements that water users have on conduit generation projects and
provides additional safeguards to ensure such projects do not undermine
water deliveries. This bill is a needed fix to a burdensome process.
Also, APPA applauds the definition of a conduit in the bill that
includes all the various small hydropower opportunities like ditches,
pipelines, canals, and other similar manmade water conveyances that are
operated for the distribution of water for agricultural, municipal, or
industrial consumption and not primarily for the generation of
electricity. The energy potential for these smaller projects will help
alleviate power costs across the nation once in use.
Thank you for scheduling this worthwhile legislative hearing on
H.R. 2842. I hope you will feel free to contact me or the APPA
government relations staff with any questions.
______
Statement of Thomas O'Keefe, PhD, Pacific Northwest Stewardship
Director, American Whitewater, Seattle, WA, on S. 3483
We are writing today in support of the Crooked River Collaborative
Water Security Act (S. 3483), legislation that will improve flows in
the Crooked River, improve water supply reliability for farmers and the
local community, and allow for hydroelectric development on an existing
dam. We ask that you consider one minor amendment to the bill that
would further clarify and recognize the value and benefits of releases
from the reservoir for downstream recreation.
American Whitewater is a national non-profit 501(c)(3) river
conservation organization founded in 1954. We have over 5500 individual
members and 100 local-based affiliate clubs, representing whitewater
paddlers across the nation. American Whitewater's mission is to
conserve and restore America's whitewater resources and to enhance
opportunities to enjoy them safely. As a conservation-oriented paddling
organization, American Whitewater has an interest in the Crooked River
that supports whitewater recreation. A large percentage of our members
reside in Oregon and for those who do not, the state is a popular
travel destination for whitewater paddlers from across the country and
around the world.
The Crooked River is a Wild and Scenic River in Central Oregon with
a spectacular whitewater run downstream of Prineville Reservoir. The
Crooked attracts whitewater boaters from Oregon, Idaho, and Washington
when the river has sufficient flows to support recreation. Our
organization initiated a recreational flow study between the summer of
2006 and 2007 for two whitewater reaches on the Crooked River.\1\
Established methodology published by the National Park Service\2\ was
used to examine the instream flow-recreation relationship for the
river.
---------------------------------------------------------------------------
\1\ http://www.americanwhitewater.org/content/Document/view/
documentid/430/
\2\ Flows and Recreation: A Guide to Studies for River
Professionals, by Doug Whittaker, Bo Shelby, and John Gangemi, for the
Hydropower Reform Coalition and National Park Service--Hydropower
Recreation Assistance, 2005
---------------------------------------------------------------------------
Researchers found a range of acceptable flows, from a minimum of
1,400 cfs ranging up to 4,600 cfs. In addition to providing a
recreation opportunity, flows in this range also have an important
ecological function--these flushing and channel maintenance flows are
critical for maintaining and enhancing aquatic habitat.
American Whitewater fully supports the goals and objectives
outlined in this legislation but requests the committee consider
alternative language in Section 7(a) that adds recreation. Our
suggested language is as follows: ``. . .the Secretary shall store in
and release from Prineville Reservoir all remaining stored water
quantities for the benefit of fish, wildlife, and recreation downstream
of Bowman Dam.'' Given concerns that have been expressed regarding
impacts to reservoir recreation, we believe it is important to
recognize that river-based recreation downstream of Bowman dam sees a
benefit when water is released into the river. While these benefits are
recognized in Section 2 with the proposed revised language for 16
U.S.C. 1274(a)(72)(B)(i) that references the scenic, recreational, and
fishery values of the river, we believe a reference to recreation
should also be included in Section 7(a) of the legislation.
We fully support all the other provisions of the legislation,
including the amendment to the Wild and Scenic Rivers Act that will
allow for hydropower development at the existing dam, language that
will benefit the fish and wildlife resources of the Crooked River, and
the opportunity to provide water certainty for the City of Prineville
and local farmers.
The Crooked River Collaborative Water Security Act (S. 3483)
resolves longstanding conflicts about unallocated water in the Crooked
River watershed and strikes a balance between community water needs and
those of fish, wildlife, and river-based recreation.
______
September 18, 2012.
Hon. Jeff Bingaman,
Chairman.
Hon. Lisa Murkowski,
Ranking Member, U.S. Senate, Committee on Energy and Natural Resources,
304 Dirksen Senate Building, Washington, DC.
Dear Chairman Bingaman and Ranking Member Murkowski: On behalf of
our organizations' members, we are writing to express our opposition to
H.R. 2842, the Bureau of Reclamation Small Conduit Hydropower
Development and Rural Jobs Act of 2012. Specifically, we strongly
oppose the provision in Section 2 of H.R. 2842 that waives the National
Environmental Policy Act (NEPA) with respect to small conduit
hydropower projects at Bureau of Reclamation (BOR) facilities.
Our organizations support the responsible development of conduit
hydropower projects at Bureau facilities. We believe that there is
significant potential for new hydropower generation at these facilities
that can be tapped with minimal impact to the local environment. This
development can and should be encouraged.
H.R. 2842 does not represent a balanced approach to promoting new
conduit hydropower development. While the bill attempts to resolve some
jurisdictional and process issues associated with developing conduit
hydropower at BOR facilities, these issues were largely resolved
administratively when BOR updated the Reclamation Manual earlier this
year to improve the process for obtaining a Lease of Power Privilege at
its facilities. These revisions to the Reclamation Manual have made
many of H.R. 2842's provisions superfluous.
More troubling, H.R. 2842 creates a harmful blanket waiver of NEPA
for small conduit hydropower projects at Bureau facilities. Not only is
this bad policy, it is completely unnecessary. The Federal Energy
Regulatory Commission (FERC) has successfully employed a categorical
exclusion from NEPA for many years to permit small conduit projects in
order to facilitate their construction. Reclamation's revisions to the
Reclamation Manual follow this example, relying on an existing
categorical exclusion for small construction projects to expedite the
permitting and review of small conduit projects that will have minimal
environmental impact. Waiving NEPA will not result in the deployment of
one additional kilowatt of new generation at a BOR facility.
At its best, H.R. 2842 largely restates existing regulations. At
its worst, it unacceptably and without purpose waives basic
environmental review requirements. We hope that in the course of Senate
consideration of the bill, the NEPA waiver language can be removed.
Pending that, we oppose H.R. 2842 in its current form.
Sincerely,
Thomas Christopher,
Director, New England FLOW.
Kevin Colburn,
National Stewardship Director, American Whitewater.
Kevin Lewis,
Conservation Director, Idaho Rivers United.
John Seebach,
Senior Director, Federal River Management, American Rivers.
Chris Shutes,
FERC Projects Director, California Sportfishing Protection
Alliance.
______
Statement of Robert S. Lynch, Counsel and Assistant Secretary/
Treasurer, Irrigation & Electrical Districts Association of Arizona,
Phoenix, AZ
The Irrigation & Electrical Districts' Association of Arizona is an
Arizona non-profit association celebrating its 50th year of service to
the State of Arizona. Our 25 Members and Associate Members take power
and water from federal facilities on the Colorado River either directly
or, in case of Hoover power, through the Arizona Power Authority, and
in case of Colorado River water in central Arizona, the Central Arizona
Water Conservation District, one of our Associate Members.
A number of our members operate federal water facilities and others
built or acquired water facilities from the federal government. One of
our members has already gone through the painful process under Section
30 of the Federal Power Act in dealing with the Federal Energy
Regulatory Commission. Others would like to go through a sensible and
streamlined process with the Bureau of Reclamation to install small
hydropower units in existing water facilities whose water energy is
currently being wasted. With this interest in mind, we offer the
following comments on the April 4th Temporary Directive & Standard and
appreciate the opportunity to do so.
TIMELINES
The Temporary Directive & Standard (D&S) is structured along lines
of responsibility by various officials within the Bureau of
Reclamation. As such, it is very difficult to get a sense of when
things are supposed to happen and what timelines exist for seeing to it
that they do. A number of the tasks assigned to various people are not
identified as being associated with any particular timeline and the
timelines that are stated in the D&S. For that reason, we have
attempted to create a timeline that would show a potential applicant
the path it would have to take between expressing a ``formal request''
to Reclamation and actually having an operating electrical device. Our
timeline is attached. It contains a number of question marks that
indicate that the timeframe and positioning of that particular task was
not identified. In our view, it is this very sort of checklist that
potential applicants need up front in order to understand what they are
getting into, what the requirements are and when they occur. We think
Reclamation should consider developing such a timeline and going one
step further by identifying the as yet un-timelined tasks as either
fitting within a timeline already identified or one you assign in order
to properly gauge the sequence and timing of events.
OTHER COMMENTS
For ease of reference, we will now provide other comments to you in
the order in which they relate to the Temporary D&S.
Applicability
We do not understand the reference to Reclamation ``development
authority''. Does that mean that there is a specific authorized feature
of a project that Reclamation has not developed and is therefore off
limits to an applicant? Currently Reclamation only has jurisdiction
over its facilities that are part of a project authorization that
includes power development. One could read this paragraph as saying
that any proposed application where Reclamation has jurisdiction could
be denied on the basis of Reclamation deciding to do itself. We doubt
that was the intent but this divergent point of who does what needs
clarifying. No one wants to go through a process or begin to go through
a process only to find out that the agency has decided to do it itself.
Definitions
We do not understand the meaning of the phrase ``conveyance of
water over or through a dam, its abutments, or foundation via existing
or proposed conveyance features.'' This is an addition to the
definition of conduit that has been used in pending federal legislation
and is very close to the definition used by the Federal Energy
Regulatory Commission (FERC). Are there existing conveyance features
that convey water over or through a dam, its abutments, or foundation?
We are not familiar with such facilities but knowing what is already
out there may make it easier for us to understand why this addition is
important and necessary.
We do not understand why gross revenue would be something that
includes renewable energy certificates (RECs). If one of your water
districts or water users associations or someone else is going to spend
money, go through this process and essentially do all the work and pay
Reclamation for its oversight, why would gross revenue be the parameter
for deciding the fee and most especially why would it also include the
REC. Reclamation has done absolutely nothing except allow a portion of
one of its facilities to be utilized at someone else's total expense to
generate electricity. The portion of the facility used will most likely
be very small in comparison to the overall project of which the site is
a part. In a shopping center lease, the triple net lease would be based
on gross revenue of whatever store is occupying that particular space
but not on its tax breaks. Moreover, for small projects, say 5
megawatts or below, the paperwork to keep track of these calculations
and collections would be more expensive than the revenue that would be
created. We think the basis for charging needs to be rethought. All of
the comments we have seen show that everyone wants the new facilities
owner or benefactor to pay a fair share of project obligations. To the
best of our knowledge, there has been no real public debate over how
one would calculate that. Nor has there been any debate over what
concepts should be used for the very smallest of facilities that should
not have to go through the entire process. In short, a one-size-fits-
all rate structure will only inhibit the development of additional
hydropower in Reclamation facilities in our view. We think this process
needs work.
Formal Request
This term first appears in subparagraph 5.A(3) on page 4. There is
no discussion within the document about what constitutes a formal
request, what paperwork is required for such a request and whether or
not there is any information requirement that precedes it. Yet it is
the precipitating event of the process, initiating everything that
follows. We presume without knowing that receiving a formal request
will initiate the process within Reclamation to decide whether or not
Reclamation will turn the requester aside and develop the site in
question. Certainly Reclamation would make that decision early and not
let an applicant spend a lot of time and money before shutting them
out. That Reclamation decision should have a timeline of its own in
order to ensure an applicant that it will not get played.
Requests for Extension of Time
This first appears in subparagraph 5.A(9) and appears to only apply
to timeframes outlined in the Lease of Power Privilege (LOPP).
Reclamation does intend to consider extension requests for an entity
holding a Preliminary Lease. See Section 8. That reference should be
included here.
Public Safety
In paragraph 5.C, the responsibility of the Chief of the Dam Safety
Office is outlined but that individual's role in the timeline is
nowhere to be found. The subject matter is brought up in a number of
places but not with regard to the role this individual plays in
executing the timeline.
Notifications
The appropriate Regional Power Manager or Area Office Manager is
responsible for ensuring the publication of solicitations for
applicants for a LOPP, apparently after being notified of the receipt
of a ``formal request'' and a ``formal determination of jurisdiction
(5.A(3)). The 3 following responsibilities are all intended to precede
that event. The list appears to have been created backwards rather than
forwards. Just as importantly, this duty includes notifying ``any other
appropriate stakeholders''. If someone claims to be an appropriate
stakeholder and was not notified, is that grounds for stopping work on
the timeline? Is there a remedy for being excluded? What standard is
supposed to be applied in the various regions to decide who is an
``appropriate'' stakeholder? It is our experience that these
discretionary vague terms only lead to conflict. Reclamation should
consider clarifying this mechanism.
LOPP Lead
In subparagraph (2), federal power customer organizations are added
to a requirement that Reclamation meet with a federal water user that
has an operation, maintenance and replacement transfer contract with
the relevant project but is not a participant in the proposed LOPP.
Reclamation law only allows irrigation districts and water users
associations to play that role and so the reference to a federal power
customer organization is inappropriate where it is placed. It should be
inserted on the next line after the word ``project''. It is certainly
worthwhile to bring federal power customer organizations into these
dialogues early and we think this is a good provision. However, the
qualification of the federal power organization should be not based on
a task it cannot by law undertake. We are also concerned because we are
not sure whether the 30-day requirement follows after the issuance of
the Preliminary Lease or comes before. Whichever is intended should be
clarified but we rather suspect that your water and power customers
would prefer it being before and not after you've already selected a
Preliminary Lessee. The same paragraph also requires a documentation of
``agreed upon terms, roles and responsibilities resulting from this
meeting''. What happens if agreement does not ensue? Are the terms,
roles and responsibilities those outlined in an already issued
Preliminary Lease? Is the documentation in question to become part of
the Preliminary Lease? Part of the LOPP?
The same assumption about agreeing is also found in Section 6
noting the need for agreement on jurisdiction between the Senior
Advisor, Hydropower and the respective Regional Director. Here again,
what if they don't agree? What happens? What if FERC doesn't agree?
Selection of Lessee
In paragraph C., there are criteria that Reclamation intends to
apply that ``will give more favorable consideration to proposals'' that
meet two criteria. The two criteria talk about developing and
conserving and utilizing water and natural resources. We fail to see
what that has to do with putting a turbine in a conduit. Reclamation
will also favor an application that demonstrates that the offeror is
qualified to develop the facility and to maintain it but does not say
how one demonstrates those qualifications. Is an irrigation district
that wants to put a turbine in a conduit but has never done so before
less qualified than a private company that would do that same thing
merely because the company has done it elsewhere? Does the preference
stated in the following paragraph override the considerations in
paragraph C.?
In the following subparagraphs in paragraph D., the language in
subparagraph (1) is not the same as in paragraph C. Subparagraph (2)
does not address the issue of what happens when there are two equally
qualified preference entities, such as two irrigation districts that
take water from the same conduit. Is an irrigation district that takes
water less qualified automatically than the other irrigation district
that's maintaining the conduit? Subparagraph (3) likewise delves into
the use of preference concept but does not deal with the competing
preference entity problem. Nor does it tell us what ``utilize in the
public interest or water resources project'' is supposed to mean. If
you are putting a turbine in a conduit, the water is already flowing
down the conduit. You are not using the water. You are using the energy
in the water and the water is continuing on down the conduit. What
public interest differentiation could be made in such a situation?
In paragraph 7.E., subparagraph (1) mentions ``scoring criteria''
but does not tell us what they will be, who will develop them, and
whether or not they will be tailored to the specific solicitation or be
a set of standards developed separately. In the following
subparagraphs, proposal requirements must include expected generation
under average, wet and dry hydrologic conditions. Are these to be
predefined in the solicitation? Will they be the same for all
applications or project by project standards? If these brackets have to
be determined by the applicant, what standards will they use? The
proposal also has to define the ability of the generation to provide
ancillary services. Shouldn't there be a cutoff level of say 15
megawatts at or below which one would not expect a facility to be able
to generate ancillary services? Likewise, it is really necessary to do
a present worth analysis of a small turbine installation in a conduit?
Timeframes for Development
These two paragraphs (8.A.&B.) delineate timeframes for
installation of a facility on a dam on the one hand and in a conduit on
the other. They are not cross-referenced to the duties of the Regional
Director nor is the prior reference cross-referenced to these or
inclusive of both. Also, since the Regional Director will determine
whether there is just cause for any delay, should we assume that some
more detail on what that constitutes, akin to a force majeure clause in
a contract, will be articulated in the Preliminary Lease and the LOPP?
If not, how will this process of deciding on delays be standardized
throughout the agency?
PMA Right of First Refusal
In paragraph 9.D. and again in subparagraph H(3), there is a
discussion of right of first refusal. One provision relates to PMAs and
the other to ``the federal government'', whatever that means. Is this a
clerical error? If not, are you saying that the local air force base
could swoop in and take the turbine power away from the irrigation
district? Is there a real need to a right of first refusal for small
conduit installations? What would the PMA do with a 12 kV turbine?
LOPP Charges
In Section 10 and then in Section 11, this subject is treated. We
do not understand why charges would be determined differently on
transferred works rather than those that have not been transferred. A
turbine is a turbine. A project is a project. If there is capital
repayment, there is capital repayment. If there is O&M, there is O&M.
Determining what a fair contribution to these costs ought to be depends
on a number of factors, including whether the project is paid out or
not and whether the particular installation has any impact on project
O&M. LOPP charges ought to be fair and ought to be simple. One-size-
fits-all charging will not promote the widest range of hydropower
development on existing Reclamation facilities. We agree that an
installation that is devoted to project use and thus relieves
Reclamation from supplying that power from the project itself should be
treated differently than others. But we also believe that small
installations should have a simplified method of contributing to costs
in terms of charges that are rational and don't require a lot of
paperwork. A 50 megawatt power plant at a dam and a 1 megawatt turbine
in a conduit are two totally different things. They should be
recognized as such in the charging scheme that Reclamation ultimately
settles on.
In summary, we have offered these comments because we very strongly
believe in this program and very strongly believe that the wasted
hydropower in our existing water deliveries should be harnessed. We
believe it is imperative that the ultimate Directive & Standard for
this process define a series of business models that will make the
process attractive to your existing water and power beneficiaries as
well as to third parties who may wish to participate. A good start
would be the development of a checklist for 15 megawatt and below
conduit applications, similar to the CE checklist in Reclamation's NEPA
Manual, that would allow a proposal to bypass most of this process and
most of the cost associated with it.
We appreciate the opportunity to comment on the Temporary Directive
& Standards and we look forward to working with Reclamation in further
refinement of this program.
______
Statement of Robert S. Lynch, Robert S. Lynch & Associates, on Behalf
of the Irrigation & Electrical Districts' Association of Arizona, on
H.R. 2842
The Irrigation & Electrical Districts' Association of Arizona
(IEDA) is a voluntary association organized in 1962 to represent the
interests of irrigation, electrical and other special districts, rural
communities and other public entities in the acquisition and use of
federal hydropower and water from Reclamation projects. As our 50th
anniversary approaches on December 14th, we are pleased to file this
Statement supporting H.R. 2842, the Bureau of Reclamation Small Conduit
Hydropower Development and Rural Jobs Act of 2012. We supported and
testified in favor of the bill in the House of Representatives and are
pleased to offer you our views on this excellent bill for your
consideration.
Over the last century and more, Arizona has a long history of
developing irrigated agriculture, both in central Arizona and along the
Colorado River. We have developed systems of canals and laterals which
now serve both irrigated agriculture and municipal and industrial water
users. Much of these canal systems are Reclamation project systems
built over the years as successive projects were authorized by
Congress. The water that flows in these systems contains energy.
Indeed, the water would not flow if it did not. That energy is largely
unused as the water courses through these systems until it reaches its
ultimate destination and stops moving. The energy is dissipated at that
point. Lost.
Recent improvements and innovations in the development of small
hydropower generating turbines has made the idea of installing multiple
small turbines in these systems a potentially attractive source of
electric energy. This technical advance comes at a time when our
electricity providers are scrambling to find alternatives to fossil
fuel generation, developing conservation and demand side management
programs and otherwise trying to make existing electric resources go
farther.
Our members would very much like to be part of that effort and
participate in a new widespread small hydropower installation program
that could be implemented throughout the West.
One key to making this happen is to reduce bureaucratic red tape
and costs to make small hydropower installation economically attractive
in the same fashion it has become technically attractive. Since the
Bureau of Reclamation holds title to so many of these facilities in the
West, we and others in the Western Reclamation states have been working
with the Bureau of Reclamation to try to reduce costs and paperwork
toward that end. Some of the hurdles we identified along the way needed
to be addressed by Congress. Hence, H.R. 2842.
H.R. 2842 provides a simplified path for the development of small
hydropower facilities in Reclamation managed federal conduit. It
recognizes the primacy of water delivery as a Reclamation mission. It
recognizes the position that Reclamation law has always historically
given to irrigation districts and water users' associations. It answers
questions that Reclamation officials have been debating and it gives
those of us in the Reclamation West a clear incentive to begin working
aggressively toward using flowing water in these conduits for electric
generation instead of letting that energy go to waste.
At the same time, we have been working with Reclamation to develop
environmental and permitting guidelines that would complement the
direction Congress, we hope, will give the agency on this subject.
However, Reclamation's reaction to this legislation has not been as
helpful as we would have hoped for. Indeed, the Interim Directives and
Standards that Reclamation produced this spring appears to us to
complicate rather than simplify the process. We are attaching the
comments that we made on the Interim Directives and Standards to give
you an idea of the problems we have identified in them. These include a
two-page timeline we tried to piece together because the Interim
Directives and Standards address who does what rather than giving us a
path and a timeline.
In sum, we strongly support H.R. 2842. We hope the Committee will
mark and report it, if possible, in this session. There is an enormous
amount of energy being wasted every day as water flows through these
conduits to its ultimate destination. We now have the technology to
capture a great deal of that energy in small increments which
collectively can provide an enormous resource for the West. This clean,
renewable hydropower is waiting for us to use it. We need your help.
H.R. 2842 is a big step forward toward that end.
Thank you for the opportunity to provide this Statement to the
Subcommittee. We would be happy to answer any questions or provide any
additional information that the Committee might desire as it
deliberates over this important and very much needed legislation.
______
Statement of the Oglala Sioux Tribe, Rosebud Sioux Tribe, Lower Brule
Sioux Tribe And West River/Lyman-Jones, on S. 3464
INTRODUCTION
Thank you for the opportunity to submit testimony on this most
important legislation, S.3464, the Mni Wiconi Project Act Amendments of
2012. This testimony has been developed conjunctively and is offered on
behalf of the Oglala Sioux Tribe, West River/Lyman-Jones, Inc., the
Rosebud Sioux Tribe and the Lower Brule Sioux Tribe, the four
beneficiaries and sponsors of the Mni Wiconi Rural Water Supply System
in southwestern South Dakota (Figure 1)*. S. 3464. re-authorization of
the Mni Wiconi Project, will:
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* Figure has been retained in subcommittee files.
increase the authorized project ceiling for construction by
$14.308 million (October 2011 dollars) for completing drinking
water distribution projects on the Pine Ridge and Rosebud
Indian Reservations,
extend the completion of construction through 2015
ensure the service area of the Oglala Sioux Rural Water
Supply System (OSRWSS) includes a small area of reservation
trust land in Nebraska
provide for interagency agreements between the Bureau of
Reclamation and
--EPA,
--Department of Agriculture
--Department of Health and Human Services and
--Department of Housing and Urban Development
--Bureau of Indian Affairs
to assist with completing the tribal water systems including the
upgrade of existing facilities in Reservation communities and, in the
case of the Department of Agriculture and Bureau of Indian Affairs,
assist in distribution of livestock water to Reservation rangelands
consistent with the original intent of the project.
S. 3464 will also require federal agencies to work with the tribes
to establish an emergency plan for the water systems, address specific
cultural resources concerns, and update the waste water disposal system
needs.
Individually and collectively, the Project Sponsors support S. 3464
and seek the support of the Subcommittee.
PROJECT HISTORY
The Mni Wiconi Project Act of 1988 (Public Law 100-516) authorizes
and directs the Secretary of the Interior to construct the Mni Wiconi
Rural Water Supply Project to provide a safe and adequate municipal,
rural, and industrial water supply to both Indian and non-Indian
residents of South Dakota. The Act recognizes the poverty on the
reservations and severely poor water quantity and quality on the
reservations and in the West River/Lyman-Jones service area.
The Mni Wiconi Project has reached an historic milestone following
the long struggle beginning in 1988 of the Oglala Sioux Tribe and West
River/Lyman-Jones to complete this invaluable drinking water project.
Similarly, the Rosebud Sioux Tribe began work on their rural water
system in 1984 and became part of the Mni Wiconi Project with the
passage of P.L. 103-434 in 1994. S. 3464 provides the means to fulfill
the vision of safe and adequate water supply for Rosebud Sioux.
The Project is a testament to the ability of the tribal sponsors
and non-Indian neighbors to collaborate to improve the health and
welfare of our respective constituencies. When the Project was
initiated, relationships between us were strained at best and governed
by events many generations before us but still fresh in the minds of
our peoples. As the Project reaches its conclusion, we have built a
mutual respect and relationship that evolved from the necessity of
working together toward a common good. None of this would have been
possible without the continuous efforts of the Committee and the South
Dakota delegation, and especially the sponsor of S. 3464, the Honorable
Tim Johnson.
It is important that the Committee understand the background upon
which we embarked to build the largest rural water project in the
world. In the beginning we were joined by our partners in the project,
West River/Lyman-Jones, for the purpose of bringing good quality water
from the Missouri River to the Badlands of Western South Dakota. The
Missouri River as a water source is important to the Lakota people
because the River is contained within the Great Sioux Reservation
established by the Treaty of 1868. Our forefathers saw to it that the
entire Missouri River was included in the lands reserved to us. The
water users in the West River/Lyman-Jones service area live within the
boundaries of the Great Sioux Reservation, which includes all of South
Dakota west of the east high bank of the Missouri River.
As formulated in the late 1980s, the Project was of great concern
to the members of the Oglala Sioux Tribe. They felt the history of
water projects on Indian reservations at that time would be played out
on the Pine Ridge Indian Reservation: that non-Indian interests would
receive water and project benefits quickly and Indians would be left
with delay and necessary project features unfinished. They looked at
the projects authorized on the San Juan River in June 1962, and
observed that non-Indians received project benefits immediately, but
the Indians still struggle to get their projects completed decades
later, even though they were authorized half a century before. They
observed opposition to Indian projects from the Office of Management
and Budget. Based on these concerns, the majority of members of the
Oglala Sioux Tribe were opposed to the Project in its early years.
The initial concerns were overcome by a better understanding of the
provisions of the Mni Wiconi Project Act, PL 100-516 (102, Stat 2567,
October 24, 1988), a reformulation of the project in the Final
Engineering Report of May 1993 and amendment of the Act to include the
Rosebud Sioux Tribe and Lower Brule Sioux Tribe. Significantly and of
high importance to the Tribe, the United States acknowledged a trust
responsibility in the Mni Wiconi Project Act to ensure that adequate
and safe water supplies are available to meet the economic,
environmental, water supply, and public health needs of the Pine Ridge
Indian Reservation.
Also, important to the comfort level of the Oglala Sioux Tribe was
the Act's provision that title to the Oglala Sioux Rural Water Supply
System (OSRWSS) would be held in trust by the United States for the
Tribe. This includes the principal components of the Mni Wiconi Project
such as the intake on the Missouri River, the regional water treatment
plant on the Missouri River and the main transmission pipelines from
the Missouri River to West River/Lyman-Jones, the Rosebud Sioux Tribe
and the Lower Brule Sioux Tribe.
Pursuant to the Act, the Oglala Sioux Tribe entered into a PL 93-
638 (Indian Self-Determination and Education Act) cooperative agreement
with the Bureau of Reclamation to plan, design, construct, operate,
maintain and replace OSRWSS.
The Mni Wiconi Act Amendments of 1994 (Public Law 103-434, Title 8)
added construction of the Rosebud Sioux and the Lower Brule Sioux Rural
Water Systems to serve the respective reservations, thereby increasing
the number of Project ``Sponsors'' to four. The amendments also raised
the authorized appropriation ceiling for the Project from $87.5 to
$263.2 million (1993 dollars), subject to cost indexing, and provided
that the systems would generally be constructed in accordance with the
Project's Final Engineering Report, dated May 1993 for the purpose of
providing domestic, commercial, municipal, rural, industrial, and
livestock water.
The overall Project includes a 14.5 million gallon per day regional
water treatment plant, 4,500 miles of pipeline, 60 booster pump
stations, and 35 water storage reservoirs. The Project will ultimately
serve more than 52,000 people, including more than 40,000 on the three
Indian reservations. It is a monumental endeavor which is providing
myriad benefits to those most in need. It is a project that must be
reauthorized.
IMPACT ON QUALITY OF LIFE AND HEALTH
It is respectfully submitted that the Project is unique and that no
other project in the Nation has greater human needs. The Project
beneficiaries, particularly the three Indian Reservations, have the
lowest income levels in the Nation. Poverty in the Indian service areas
is consistently deeper than elsewhere. At the beginning of the third
millennium one could not find a region in our Nation in which social
and economic conditions were more deplorable.
Before the Mni Wiconi Project, health risks to the Indian people
from drinking unsafe water were severe. Health effects of water borne
diseases were consistently more prevalent than elsewhere in the Nation,
due in part to (1) lack of adequate water in the home and (2) poor
water quality where water was available. Higher incidences of impetigo,
gastroenteritis, shigellosis, scabies and hepatitis-A were well
documented on the Indian reservations of the Mni Wiconi Project area.
Poverty is the harbinger of the severe health care crisis facing
the Indian people in the Northern Great Plains. The extra costs of
health-care during the lifetime of each 24,000 members of the Indian
population in the Mni Wiconi Project are estimated at $1.12 to $2.25
billion (in 2010 dollars). This is not total costs of health care; it
is the present value of the extra cost of life time health care
relative to the rest of the population off the reservations. Regional
data suggests clear relationships between income levels and higher
mortality rates for heart disease, cancer and diabetes with
correspondingly higher federal health-care costs.
The Mni Wiconi Project is a part of the solution. It brings much
needed employment, which, in turn, engages part of our unemployed and
underemployed and brings about measurable improvement in the health of
the Lakota Nation, thereby reducing federal health-care costs and, most
of all, the tragedy in the families affected. Mni Wiconi builds the
dignity of many, not only through improvement of drinking water, but
also through increased employment and earnings during planning,
construction, operation and maintenance and from commercial enterprises
supplied with Project water.
The Project has accomplished much improvement of water quality .
Using a combination of water from the Missouri River and from the
Ogallala Aquifer. Homes previously reliant on water laced with unsafe
levels of arsenic, uranium and nitrite/nitrates have been placed on a
safe and reliable drinking water system, and we expect corresponding
reductions in mortality.
PROJECT FUNDING STATUS
As shown in the table below, the Project will be 95% complete at
the end of FY 2012. Construction funds remaining after FY 2012 will
total $23.137 million within the current authorization (in October 2010
dollars). The funds will not be adequate to complete the Project as
originally planned.
Cost indexing over the last five years has averaged 4.72% for
pipelines and last year was 7.83%. Pipelines are the principal
components yet to be completed.
The extension of the Project from 2008 to 2013 did not provide for
budgeting of Reclamation oversight, administration or other
``overhead'' costs, which will have diverted $26.696 million from
construction. These costs have been and will continue to be incurred at
the expense of construction elements. The slow pace of budgeting and
appropriations has extended the project by six additional years. The
overhead costs in those years have depleted construction funds by
$26.696 million. S. 3464 asks that $14.3 million be restored.
CONSTRUCTION CEILING INCREASE
Reauthorization of the funding ceiling by $14.3 million and a time
extension through 2015, the fourth construction sunset date extension,
are needed on the Pine Ridge and Rosebud Indian Reservations to
complete the drinking water systems. The West River/Lyman-Jones and
Lower Brule Rural Water Systems are complete. Under-budgeting and the
slow pace of appropriations underlie the need to reauthorize and extend
the Project.
The $23 million remaining in authorized construction funds was
included in the President's FY2013 Budget Request. The budgeting will
be adequate to complete the allocation of currently authorized funding
but will be inadequate to fully complete the drinking water system to
people in need. These are people that were contemplated in the Final
Engineering Report and included in the project design.
The Project authorization date was extended by PL 110-161 (2008)
through 2013 without accompanying budgeting for administration and
other overhead costs after FY 2007. The extension was necessary because
funds had not been appropriated at a rate sufficient to complete
funding of Project construction within the authorized construction
ceiling. Funds that would have gone to construction were necessarily
used to cover annual overhead costs, and Reclamation encouraged the use
of construction funds allocated for livestock to cover overhead.
Overhead costs for the OSRWSS ($17.990 million) and the Rosebud Sioux
Rural Water System (RSRWS) ($8.706 million), a total of $26.696
million, severely impacted the funding available for construction.
Because the budgeting of non-contract costs was not included in
previous funding authorities after FY 2007, the necessary expenditures
for Reclamation oversight and Project administration have reduced the
funds to complete construction projects. OSRWSS would have ended the
Project with a surplus in its construction budget of $5,101,000 after
finishing its construction projects if it had not been required to
expend unbudgeted funds on non-contract costs after FY 2007. The
surplus could have been applied to community systems upgrades or the
livestock program.
The Concept Paper for completing the Project (prepared in several
versions in 2011 and included for the record as Exhibit A) documented a
need for an increase in the authorized construction ceiling of $29.369
million. Since the Concept Paper was completed the Director of OWRWSS ,
Mr. Frank Means, took every possible step to achieve cost savings and
to limit activities strictly to our first priority of completing the
drinking water systems to serve the present and future growing
populations on the Reservations. The Rosebud Sioux Tribe did likewise.
Lower Brule dropped $1.74 million in reservoir expansions that would
improve their system completed 5 years ago. The cost reductions limit
the necessary reauthorization to $14.3 million as presented in Table 1
and as shown in Figure 2* on the Pine Ridge Indian Reservation.
---------------------------------------------------------------------------
* Figure has been retained in subcommittee files.
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In an effort to be reasonable yet steadfast to complete the
Project, our request for reauthorization of the Project is focused only
on completing the drinking water systems. We propose to use other
avenues to accomplish community system upgrades and livestock watering
projects:
1. Funds to upgrade existing community systems on the
Reservations, a pre-requisite, according to Reclamation, for
transferring them to the Project as contemplated by the Act and
the Final Engineering Report (FER) are not requested. The re-
authorization requires Reclamation to submit a plan to Congress
for upgrades and transfer within two years of the
reauthorization and to implement the transfer according to the
plan. While we disagree, Reclamation requires transfer before
making operation, maintenance and replacement funding
available.
2. The high level of investment now required by Reclamation
for upgrading the community systems was not contemplated by
Reclamation in the 2002 reauthorization (PL 107-367), December
19, 2002. This high level of cost prevents the transfer of
existing community systems to the Project and enables their
continued deterioration due to absence of funding for
operation, maintenance and replacement.
3. The livestock components of the Project on the Pine Ridge
and Rosebud Indian Reservations will be developed outside the
new authorization through existing programs of the Bureau of
Indian Affairs and the Department of Agriculture, and new
funding authorization is not requested,
4. While $26.969 million in unbudgeted overhead costs from
2007 through 2015 will be spent, an amount that has and will be
expended at the expense of construction elements, we are only
requesting $14.308 million to complete the drinking water
systems on the Pine Ridge and Rosebud Indian Reservations.
The completion of the Project on the Pine Ridge Indian Reservation
with the $8.633 million requested in the construction ceiling
reauthorization will serve 2,350 people or 11% of the design
population. The completion of the Project on the Rosebud Indian
Reservation will serve 2,000 people or11% of the design population. The
$14.3 million is necessary to ensure that these intended beneficiaries
will be served. S. 3464 will increase the authorized appropriations
ceiling by this amount. We support the bill on this ground. We also
support it for its several other provisions that address the other
needs for finishing the Project as intended which are not covered by
the $14.3 million increase.
COMMUNITY SYSTEM UPGRADES
The Mni Wiconi Act clearly states that the OSRWSS, RSRWS, and Lower
Brule Rural Water System (LBRWS) shall include the purchase,
improvement and repair of existing water systems, including systems
owned by individual tribal members and other residents on the
reservations. Sections 3(a)(4), 3A(a)(4), and 3B(a)(4). Further,
Sections 3(a)(8), 3A(8), and 3B(a)(8) state that the aforementioned
authorized rural water systems shall also include other facilities
deemed necessary to meet the water supply, economic, public health and
environmental needs of the reservations, including facilities for the
tribes, reservation villages, towns and municipalities. Finally,
Sections 3(b)(3), 3A(b)(3) and 3B(b)(3) reference the purchase,
improvement and repair of existing systems. Congress intended for
existing water systems to become a part of the Mni Wiconi Project. In
fact, the objectives of the Mni Wiconi Project cannot be met unless the
community systems are connected. Without inclusion of such systems, the
Project as intended by Congress and the Tribe would not be complete.
Reclamation has determined the costs for community system upgrades.
Overall, the costs for community system upgrades total $26.657 million.
Of this, $13.164 million is for OSRWSS. The total for the RSRWS is
$11.693 million and for the LBSRWS is $1.8 million.
Upgrades of the cost magnitude now proposed by Reclamation for
these existing systems were not previously contemplated in the FER or
by Reclamation in PL 107-367, the 2002 reauthorization of the Mni
Wiconi Project Act. Reclamation's current proposal would have the
systems in near perfect condition prior to their transfer into the
Project rather than accepting these currently working systems and
improving them as needed over a period of time--when the lifetime of a
feature has come to an end. S. 3464 contains language to direct the
transfer of existing community systems to OSRWSS, RSRWS or LBSRWSS as
other federal agencies' funds and project operation, maintenance and
replacement funds are applied to the upgrade of those systems.
It does not make sense to hold up completing the Project, which
must include these existing systems, by requiring the existing systems
to be in nearly new condition prior to transfer. Instead, systems
should be transferred into the Project and a schedule for conducting
priority upgrade work should be established using operation,
maintenance and replacement (OMR) Project funding.
OSRWSS is working to seek funding from other federal agencies such
as HUD, Rural Development, IHS and EPA to assist in upgrading the
existing community systems. Two central issues have arisen: (1) the S.
3464 language on the community system upgrades is needed to direct the
agencies to assist; and (2) Reclamation cannot evade its
responsibility. Reclamation is still the responsible federal agency,
and it must adhere to its trust responsibility and share a portion of
the costs of community systems upgrades, a central component for
ensuring adequate and safe water to the people on the reservation,
through the operation, maintenance and replacement program. This said,
we support the continuation of operation, maintenance and replacement
funding by other agencies that have historically contributed, including
HUD and BIA, to assist in limiting funding required from Reclamation.
S. 3464 would direct the necessary other agency assistance for the
community systems upgrades and direct that the systems be transferred
and the operation, maintenance and replacement monies appropriated to
Reclamation under the Act be used to improve, repair and replace those
systems. These provisions of S.3464 are fundamentally important to the
completion of the overall Project and for ensuring the Project can
function and serve its beneficiaries as intended.
LIVESTOCK NOT INCLUDED IN FUNDING REQUEST
Water for livestock on the Pine Ridge Indian Reservation was
contemplated in the Final Engineering Report and in the original
Project authorization and subsequent reauthorization.
OSRWSS has reduced its livestock distribution system from $24.024
million to $11.380 million, and OSRWSS has removed its reduced
livestock plan from the funding needed in the amendment of the Mni
Wiconi Project Act. The Oglala Sioux Tribe plans are to work with the
Natural Resources Conservation Service and the Bureau of Indian Affairs
to construct the livestock distribution systems over a period of 15
years. However, enactment of S. 3464 is needed to direct these agencies
to undertake the work and fund this important and intended component of
the Project. As stated previously, the Bureau of Reclamation urged that
funding intended for livestock construction be used to finance the
overhead costs after 2007, and the livestock program was sacrificed for
necessary non-construction activities that had not been budgeted.
EXTENSION OF OSRWSS BOUNDARY INTO NEBRASKA
S. 3464 is needed to ensure that the portion of the Pine Ridge
Indian Reservation that extends into Nebraska is included in OSRWSS
under the Mni Wiconi Project Act, and, specifically, to ensure the
Tribe's nursing home can be served with Mni Wiconi Project water.
There are no associated construction costs as the Indian Health
Service is expected to construct the pipeline extension to the Nebraska
tract from existing authority. There would be minor operation and
maintenance costs for the line estimated at less than $5,000 per year.
SERVICE TO ROSEBUD SIOUX ON TRUST LAND IN WHITE RIVER
S. 3464 is needed to ensure that tribal members and tribal
facilities located on trust lands in the town of White River receive
the same benefits as other tribal members in the Primary Service Area
of the RSRWS. Indians in White River were included in the design
population of RSRWS but because they are customers of the town rather
than WR/LJ they are not addressed by the comprehensive agreement
between RSRWS, WR/LJ and Reclamation for water service in Mellette
County.
S. 3464 authorizes the reimbursement to the town of White River for
operation and maintenance costs for the provision of water to service
connections of the Rosebud Sioux Tribe and tribal members located on
trust land within the town. This is similar to the current agreement
with Tripp County Water Users District in Tripp and Gregory Counties
and does not involve any construction. There are very few trust lands
within the town and the cost is estimated at less than $6,000 per year.
ADEQUATE FUNDING FOR OPERATION, MAINTENANCE AND REPLACEMENT
In addition to expressing our support for S. 3464, we take this
opportunity to raise a very important concern of the tribal sponsors:
the need for adequate operation, maintenance and replacement (OMR)
funding. The Mni Wiconi Act clearly sets forth the trust responsibility
of the United States to ensure adequate and safe water supplies are
available to meet the economic, environmental, water supply and public
health needs of the reservations, and established the framework for
Reclamation to fund the construction and OMR of the Project. Section
2(a)(5), Section 10(a) and (b). The Act authorizes, among other things,
the construction, operation and maintenance of municipal, rural and
industrial water systems which include the existing water systems.
Section 3(a), 3A(a) and 3B(a). Reclamation needs to work with the
OSRWSS, RSRWS and LBRWS to ensure the remaining features of the
Project, including the work related to existing community systems, are
completed as planned and the intended beneficiaries are served.
The Act's trust responsibility provision also applies equally to
construction and OMR. Anything less than sufficient funding for OMR
threatens the significant investment of the United States in
construction.
Reclamation needs to work with the OSRWSS to adequately fund OMR of
the core and distribution systems. The OSRWSS core facilities serve all
Project Sponsors, including the Lower Brule Sioux Tribe, Rosebud Sioux
Tribe and West River/Lyman-Jones, as well as the Pine Ridge Indian
Reservation. Reclamation advises us that OMR is its first priority. The
statutory trust responsibility requires OMR to remain at the forefront
of Reclamation's funding obligations. Funding should be adequate to
ensure a safe drinking water supply for all Project Sponsors. As we
move forward, the Mni Wiconi Project must remain a Reclamation
priority. Our OMR funding needs should not be affected by other
authorized projects' construction funding needs or by Indian water
rights settlements in the years ahead.
Threatening an unnecessary increase in the costs of OMR for the Mni
Wiconi project are the Surplus Water Policies of the Corps of Engineers
that would require payment for stored water in Lake Oahe. The Corps of
Engineers proposes a cost of $15-$20 per acre foot of water derived
from Pick Sloan storage. The Oglala Sioux Tribe believes that the Corps
of Engineers policy on surplus water is flawed and that the charges
proposed would simply require Congress to appropriate more OMR funds
for the Mni Wiconi Project for payment of Corps of Engineers charges.
MNI WICONI PROJECT EMERGENCY PLAN
S. 3464 includes a new Title for the Mni Wiconi Act which would
direct the Departments of Interior, Homeland Security and Defense (Army
Corps of Engineers) to work with the Project Sponsors to develop a
comprehensive emergency plan for the Project in case of major
breakdowns of the systems.
Project Sponsors, Reclamation and the Federal Emergency Management
Agency have met and will continue to meet and update state-of-the-art
emergency response plans. S. 3464 would assist efforts to address any
major catastrophe that might adversely impact the Project's rural water
systems.
Of considerable concern to the Oglala Sioux Tribe is the crossing
by the Keystone XL Pipeline of the Missouri River in Montana and the
Western Dakota tributaries of the Missouri River, including the
Cannonball, Grand River, Moreau, and Cheyenne River crossings that
enter Lake Oahe and pose a risk to the Mni Wiconi Project intake below
Oahe Dam. A major spill from this pipeline would be carried by those
streams to our water source. We oppose the pipeline, but if we are
unsuccessful in our opposition and the pipeline is built, it provides a
prime example of the need for a specific Mni Wiconi Project emergency
plan.
MITIGATION OF FISH & WILDLIFE LOSSES
Section 6(b) of the Mni Wiconi Act was included in the original
version of the Act. The Section requires the Secretary, in cooperation
with the State, all Indian tribes residing on reservation within the
State and other federal agencies, to develop and submit recommendations
to Congress for implementing and financing mitigation plans for fish,
wildlife and terrestrial losses incurred as a result of the
construction and operation of the Oahe Dam and Reservoir and the Big
Bend Dam and Reservoir. Section 6 of S.3464 would include important
revisions to Section 6(b). First, it would add a date by which the
recommendations would be submitted to Congress. Further, it would
ensure that the recommendations for the mitigation plans include losses
of Native American cultural resources, human remains, ceremonial plants
and herbs, gathering rights, access to sacred sites, other usufructuary
rights and impacts to groundwater on the Missouri River tributaries. It
would also include the Fort Randall Dam and Reservoir. Significantly,
S. 3464 would require the Secretary to set forth a process by which the
he will carry out meaningful consultation with the tribes on the
development of the recommendations, something of utmost importance to
the tribes. S.3464 also specifically directs relevant agencies, the
Army Corps of Engineers, the National Park Service, and the Fish and
Wildlife Service to provide the Secretary with assistance in completing
the recommendations, which would ensure their cooperation and
engagement on these issues.
WASTE WATER DISPOSAL SYSTEMS
In 1994, the Mni Wiconi Act was amended to include a provision
authorizing and directing the Secretary, in consultation with the
tribes, to conduct feasibility studies on the need to develop waste
water disposal facilities and systems and rehabilitate existing systems
on the reservations. S. 3464 revisits the waste water disposal systems
provisions, Section 12(c), to ensure that their intent is carried out.
Importantly, S. 3464 would have the tribes, in consultation with the
named relevant federal agencies, update and complete the feasibility
studies and sets forth what specifically the studies must address. The
amendment is necessary to move waste water disposal systems piece of
the Act forward.
CONCLUSION
The Mni Wiconi Project is like no other in terms of human needs.
Mni Wiconi means ``the water of life.'' It is unique in that the Act
which authorized it acknowledges the United States trust responsibility
to ensure adequate and safe water supplies for the Pine Ridge, Rosebud,
and Lower Brule Reservations. S.3464 will enable the United States to
carry out this trust responsibility by completing the Project as
contemplated. Without S.3464, thousands of intended project
beneficiaries, some who have been waiting for clean water since 1988,
will not be served.
We thank the Committee for its consideration of this important
legislation and respectfully request that S. 3463 move forward to
enactment as soon as possible.
supplemental statement of the oglala sioux tribe, rosebud sioux tribe,
lower brule sioux tribe and west river/lyman-jones, on s. 3464
Thank you for the opportunity to submit supplemental testimony on
S.3464, the Mni Wiconi Project Act Amendments of 2012 following the
hearing on September 19, 2012. This supplemental testimony has been
developed conjunctively and is offered on behalf of the Oglala Sioux
Tribe, West River/Lyman-Jones, Inc., the Rosebud Sioux Tribe and the
Lower Brule Sioux Tribe, the four beneficiaries and sponsors of the Mni
Wiconi Rural Water Supply System in southwestern South Dakota (Figure
1).
Having reviewed the testimony of Mr. Grayford Payne, Deputy
Commissioner for Policy, Administration and Budget, on behalf of the
Bureau of Reclamation, the Oglala and Rosebud Sioux Tribes, in
particular, will seek mutually agreeable resolution of conflicts
between our positions and those of the Bureau of Reclamation on the
amount of funding required to complete the remaining components of the
Project, the number of persons that will benefit by the completion of
the Project and other subject areas where the testimony of the Sponsors
and the Bureau of Reclamation may be different.
Because the Tribes, through the efforts of the Oglala Sioux Tribe,
had kept the Bureau of Reclamation fully informed of funding needs to
complete the drinking water portion of the Project and had provided
documentation of detailed costs frequently (including quantities and
unit prices of incomplete Project segments), we were surprised that the
Bureau of Reclamation claimed (1) it did not have necessary details to
evaluate the proposed increase in the authorized Project ceiling for
construction by $14.308 million (October 2011 dollars) and (2) that the
Project could be ``completed'' with the FY 2013 funding request in the
President's budget.
Clearly, a fundamental difference for the Oglala and Rosebud Sioux
Tribes is our definition of Project ``completion'' for which the
$14.308 million will be used. To us, this means the completion of the
construction of the drinking water portion of the Project without
completing the livestock portion or community upgrades. The Bureau of
Reclamation definition of Project ``completion'' apparently means
simply the expenditure of the currently authorized funding ceiling. The
currently authorized funding ceiling, however, will not be adequate to
complete the construction of the drinking water portion of the Project.
Further, the livestock portion and community upgrades are essential
components of the overall Project, which also must be addressed. S.
3464 sets out methods for ensuring these features are addressed and
finished so that the Project can function as intended.
The intent of the Oglala and Rosebud Sioux Tribes is to work with
the Bureau of Reclamation during the congressional recess to reach
agreement on the full scope of S. 3464 and to inform the Committee upon
its return of the areas where we have reached complete agreement and
areas where we have not, if any. Our working relationship with the
Bureau of Reclamation has been extremely good over the last 20 years of
development, and we are confident that differences are minimal and can
be resolved.
We will work with the Bureau of Reclamation and fully advise the
Committee of the resolutions we have successfully reached so that
legislation necessary for the Project can move forward.
______
Statement of Steve Moyer, Vice President for Government Affairs,
Arlington, VA, on H.R. 2842
On behalf of Trout Unlimited and its nearly 150,000 members
nationwide, we write in support of S. 3483 and in support of an amended
H.R. 2842 as described below. Please include this letter in the record
for the above-referenced hearing.
Trout Unlimited is a national not-for-profit membership
organization dedicated to conserving, protecting and restoring our
nation's coldwater fisheries and their habitats.
S. 3483--CROOKED RIVER COLLABORATIVE WATER SECURITY ACT
Trout Unlimited supports S. 3483--a bill designed to improve water
management at Bowman Dam and provide more dependable flows for fish and
wildlife habitat in the Crooked River basin. This bill encourages
pragmatic, creative solutions and partnerships to restore Crooked River
fisheries, including steelhead. The bill improves water supply
certainty for the City of Prineville and local irrigators, and sets the
stage for hydropower development at Bowman Dam, while at the same time
creating new opportunities for improved flows for fish and wildlife in
the Crooked River downstream.
Among other benefits for fisheries habitat, the bill:
Gives clear authority and direction to store and release
water for downstream fish and wildlife purposes.
Gives state and tribal officials more authority and
flexibility to manage releases and target them for the benefit
of downstream fish and wildlife resources.
Supports year-round flows in the Crooked River by
authorizing release of mitigation water for the City of
Prineville, regardless of whether it is needed by the City for
mitigation purposes, thereby ensuring an additional 5,100 acre
feet of flows annually through the Crooked River.
Provides a path forward to reduce or eliminate water
diversions from McKay Creek, a tributary of the Crooked that
provides critical habitat for steelhead below the dam. By
reducing or eliminating surface diversions from this key
tributary, this bill helps to ensure that McKay Creek will be
ready once again to support steelhead and native trout.
Creates new opportunities for voluntary measures to improve
fish flows and habitat by providing opportunities for instream
leasing, water conservation and other voluntary water sharing
agreements.
Supports opportunity for future development of hydropower at
Bowman Dam.
Establishes a clear path forward for development of
collaborative solutions to improve river conditions in dry
years.
The western states have a long history of water shortage and over-
allocations. In a situation that is nearly unheard of in the West,
Prineville Reservoir behind Bowman Dam holds nearly 80,000 acre-feet of
unallocated water. This situation presents a unique opportunity to
provide for downstream fisheries while continuing to meet existing
irrigation demand and support economic development opportunities for
the City of Prineville. Since the completion of Bowman Dam in the
1960s, there have been multiple attempts to reach agreement on expanded
water management.
S. 3483 represents the carefully balanced solution to this decades
old effort. S. 3843 breaks a nearly 40-year old log-jam related to
water management at Prineville Reservoir and creates an opportunity to
improve conditions in the Crooked River in a manner that supports local
irrigators, communities and business development. We thank Senators
Merkley and Wyden for their leadership on this issue and strongly urge
the committee's support for this bill in its current form.
H.R. 2842--BUREAU OF RECLAMATION SMALL CONDUIT HYDROPOWER DEVELOPMENT
AND RURAL JOBS ACT OF 2012
H.R. 2842 aims to clarify jurisdictional issues and improve the
regulatory process for developing hydroelectric projects at Bureau of
Reclamation (BOR) facilities.
Trout Unlimited supports hydropower projects that are properly
managed and operated to minimize impacts to coldwater fisheries and
their habitats. We believe that significant potential exists for
responsible development of hydropower at existing BOR facilities that
can be tapped with minimal impact to the local environment
Although we generally support the objectives of this bill, we have
concerns with some of its provisions--specifically we oppose bill
language in Section 2 amending the Reclamation Project Act of 1939 to
exclude small conduit hydropower development from review under the
National Environmental Protection Act (NEPA).
Trout Unlimited generally supports regulatory efficiency; however,
we do not support elimination of regulatory oversight or reduction of
environmental standards for projects simply in the name of expediency.
A waiver of the NEPA review process is a harmful and unnecessary
sacrifice. Alternatives exist to promote expediency without sacrificing
environmental safeguards. For instance, the NEPA process allows for
development of categorical exclusions to help move certain categories
of activities through the review process more quickly. The Federal
Energy Regulatory Commission (FERC) has successfully employed a
categorical exclusion from NEPA for many years to permit small conduit
projects in order to facilitate their construction. Reclamation's
revisions to the Reclamation Manual follow this example, relying on an
existing categorical exclusion for small construction projects to
expedite the permitting and review of small conduit projects that will
have minimal environmental impact. Such approach could be taken here.
Furthermore, the BOR has recognized the need to provide clarity for
small conduit hydro development and has updated their manual
accordingly. We encourage the committee to examine whether those
updates satisfy the needs of hydro developers prior to advancing
legislation.
Finally, H.R. 2642 precludes NEPA review for projects producing
1.5MW or less. However, even small-scale developments can have
significant adverse effects. Development of a categorical exclusion
with strong impact based sideboards would more appropriately
distinguish minimal impact projects from those with more significant
environmental effects--allowing for minimal impact projects to proceed
quickly while ensuring that harmful or damaging projects are subject to
more thorough review under NEPA.
We thank the Subcommittee for the opportunity to comment on these
bills.
______
Statement of Kimberley Priestley, Senior Policy Analyst, Waterwatch,
Portland, OR, on S. 3483
Founded in 1985, WaterWatch of Oregon is a non-profit river
conservation group dedicated to the protection and restoration of
natural flows in Oregon's rivers. We work to ensure that enough water
is protected in Oregon's rivers to sustain fish, wildlife, recreation
and other public uses of Oregon's rivers, lakes and streams. We also
work for balanced water laws and policies. WaterWatch has members
across Oregon who care deeply about our rivers, their inhabitants and
the effects of water laws and policies on these resources.
On behalf of WaterWatch of Oregon's members and supporters we write
in support of S. 3483, the Crooked River Collaborative Water Security
Act, as introduced.
S. 3483, CROOKED RIVER COLLABORATIVE WATER SECURITY ACT
In the Crooked River Basin there exists a rare opportunity to pass
a bill that could benefit all economic sectors in the region---farmers,
cities and fisheries. In a situation that is nearly unheard of in the
water parched West, Prineville Reservoir behind Bowman Dam holds over
80,000 acre feet of water that has not been allocated to any particular
use. This fact presents an extraordinary opportunity to release the
unallocated stored water to restore flows to the river and its
economically important fisheries, without taking water away from
existing irrigation districts or impeding growth opportunities for the
City of Prineville.
S. 3483 takes advantage of this rare opportunity and delivers a
bill that:
Dedicates nearly 80,000 acre feet of water stored in
Prineville Reservoir to downstream fisheries. The water must be
released in a way to maximize the biological benefits to
downstream fish, including newly reintroduced steelhead. This
bill will result in significant flow increases to the
historically water-parched Crooked River.
Provides the City of Prineville with 5,100 acre-feet of
water to serve as instream mitigation to offset the impacts of
new groundwater pumping (under state law, new groundwater wells
in this basin must provide instream mitigation).
Provides farmers who currently hold irrigation contracts for
water from the reservoir with guarantees to their longstanding
use.
Allows hydropower development to now proceed on Bowman Dam.
Charts a path forward for flow restoration projects on McKay
Creek (a creek that is key to steelhead introduction efforts).
Requires dry year management planning.
S.3483, as introduced, represents a carefully crafted agreement
between conservation groups, irrigation districts, the State of Oregon,
the City of Prineville and the Confederated Tribes of the Warm Springs
Reservation. We thank Senators Merkley and Wyden for introducing this
bill that represents a balance amongst varied basin interests that,
until now, was unattainable.
S. 3483 marks the end of over 30 years of fighting over the
unallocated water behind Bowman Dam. The vision provided by this
groundbreaking legislation could not only help save the Crooked River,
its prized redband trout, and its newly reintroduced steelhead--it
could also make a major contribution to the region's economy.
We urge the subcommittee to pass S. 3483 as introduced.
Thank you for this opportunity to comment.
______
Statement of Brett Swift, Northwest Regional Director, American Rivers,
Portland, OR, on S. 3483
American Rivers is the nation's leading voice for healthy rivers
and the communities that depend on them. We believe that rivers are
vital to the health, safety and quality of life of all Americans. Since
our founding in 1973, we have worked to protect and restore rivers and
seek balanced solutions that benefit all stakeholders. On behalf of
American Rivers' thousands of members and supporters I write in support
of S. 3483, the Crooked River Collaborative Water Security Act in its
current form.
S. 3483, CROOKED RIVER COLLABORATIVE WATER SECURITY ACT
The Crooked River is one of Oregon's treasures. It has an
outstanding fishery, spectacular scenery and various recreational
activities that depend upon a healthy river with adequate flows. S.
3483 takes advantage of a rare opportunity found in the West--water in
Prineville Reservoir that is not currently allocated to any particular
use--to improve flows in the Crooked River for the benefit of fish and
wildlife below Bowman Dam. In addition, S. 3483 provides greater
certainty to water users in the basin including local farmers and the
City of Prineville.
S. 3483 provides the following benefits:
Allocates water stored in Prineville Reservoir to downstream
fisheries, which will benefit ESA listed steelhead that
recently have been reintroduced to their historic habitat.
Allows for flow restoration projects on McKay Creek, a
critical tributary supporting steelhead reintroduction efforts.
Removes barriers to voluntary water leasing and conservation
projects in the basin.
Provides the City of Prineville with water to support the
community's municipal water needs.
Provides local farmers with a reliable supply of water from
Prineville Reservoir.
Opens the door to new hydropower development on Bowman Dam.
S. 3483 resolves a longstanding conflict over unallocated water in
the Crooked River Basin and strikes a balance for water users and the
environment while improving conditions for the fish and wildlife that
rely on the Wild Scenic Crooked River. Importantly, it sets the basin
on a path toward working collaboratively to address water needs and
meet a range of interests in the long-term.
In conclusion, thank you for holding a hearing on this bill
concerning Oregon's outstanding Crooked River. We urge the subcommittee
to pass S. 3483 as introduced. Thank you for considering our views.
______
Statement of Betty Roppe, Mayor, City of Prineville, OR, on S. 3483
I am writing on behalf of the City of Prineville in support of S.
3483, the Crooked River Collaborative Security Act, introduced by
Oregon Senators Ron Wyden and Jeff Merkley.
For over 30 years, local, state and federal agencies, and many
stakeholders, have sought agreement on the best management of the U.S.
Bureau of Reclamations' Bowman Dam and Prineville Reservoir. Each of
those efforts has failed to produce consensus, until now.
Senators Wyden and Merkley, and their staff, are to be commended
for writing legislation that amends several outdated laws and policies
to equally promote social health, economic prosperity and environmental
enhancement. We are pleased the legislation ensures our City would have
access to a long-term water supply, so we can responsibly plan for the
future and our local businesses can create jobs and make essential
capital investments. Of course, we are also pleased with the other
benefits that the legislation would create for Central Oregon.
Upon enactment, the Crooked River Collaborative Water Security Act
would provide immediate benefits to our region. In addition to the new
water supply for the City, many local farm and ranch families would
secure long-term certainty to continue to produce crops and livestock.
On the Crooked River, fish and wildlife species, including reintroduced
steelhead, would benefit from a new release schedule of uncontracted
water stored annually in the reservoir. And a ``water rights switch''
on McKay Creek would benefit local families and result in higher
instream flows for steelhead and other species. Finally, the Portland
General Electric Company could seek approval to build a small
hydropower facility at the base of the dam, capable of serving 4,500
homes.
The City of Prineville appreciates the Subcommittee's expedited
hearing on the bill, and we encourage you to immediately work to secure
its passage. Please call me personally if we can provide you with any
additional information on our community's needs or why this
legislation's enactment is so crucial to the City of Prineville.
______
Statement of Ken Fahlgren, Crook County Commissioner,
Prineville, OR, on S. 3483
I am writing on behalf of Crook County in support of S. 3483, the
Crooked River Collaborative Water Security Act, introduced by Oregon
Senators Ron Wyden and Jeff Merkley.
We are pleased the legislation would provide Crook County, the City
of Prineville, and many of our local farmers and ranchers with the
water supply certainty they need to meet current and future needs. This
certainty will enable our agricultural sector and other businesses,
including new technology companies, create jobs, make significant
investments, and responsibly plan for the future.
We understand the bill would provide numerous benefits to our
community and the environment. For example, farmers and ranchers with a
U.S. Bureau of Reclamation contract would be able to accelerate their
payments to the U.S. for their share construction costs for Bowman Dam,
and could also temporarily lease water instream for fisheries purposes.
Further, providing farm families on McKay Creek with a supply of water
from Bowman Dam would result in greater water supply reliability, and
also increase instream flows for steelhead and other species on this
creek. The management of uncontracted water supplies for fish and
wildlife would also benefit steelhead, redband trout and other species
in the Crooked River. Finally, moving the wild and scenic boundary
would enable the construction of a small hydropower facility at the
base of the dam, creating carbon-free electricity and new property tax
revenues. The Portland General Electric Company is well respected in
our community, and I understand the company will seek the approval to
build that facility.
Crook County appreciates your scheduling this hearing. Please call
me personally if I can provide you with additional information
regarding our support for the Crooked River Collaborative Water
Security Act.
______
Statement of Mike Britton, Secretary/General Manager, North Unit
Irrigation District, Madras, OR, on S. 3483
I am writing on behalf of the North Unit Irrigation District in
support of S. 3483, the Crooked River Collaborative Water Security Act,
introduced by Oregon Senators Ron Wyden and Jeff Merkley. We appreciate
your scheduling this hearing on the bill.
We commend Senator Wyden and Senator Merkley, and their staff, for
writing this legislation and doing so in a manner that fully protects
agricultural water supplies, including the North Unit Irrigation
District. This certainty will enable our district as well as the other
districts, farm and ranch families that rely upon the water supplies of
Bowman Dam, to have the same assurances of an annual irrigation supply
as we all have now. For our district, this is the most important aspect
of the bill as North Unit and its patrons rely on the Crooked River to
supply irrigation water to nearly 9,000 acres of productive
agricultural lands in Jefferson County. The 10,000 acre-feet of water
set-aside for our district in the bill is an absolute need and must be
available to the district every single year, whether we call upon those
supplies or not. Further the bill should ``do no harm'' to existing
water right holders so that irrigators who are using these water
supplies today have the same access to the legal use of this water in
the future, after enactment of the bill. This is consistent with the
position of Oregon Governor John Kitzhaber, noted in his August 1, 2012
letter to Senator Wyden and Senator Merkley.
Our district appreciates your scheduling this hearing. Please call
me personally if I can provide you with additional information
regarding our support for the Crooked River Collaborative Water
Security Act.
______
Statement of Steve Forrester, City Manager,
City of Prineville, OR, on S. 3483
I am writing on behalf of the City of Prineville in support of S.
3483, the ``Crooked River Collaborative Water Security Act,''
introduced by Oregon Senators Ron Wyden and Jeff Merkley. We would
appreciate your including this letter in the September 19, 2012
Subcommittee on Water and Power hearing record.
The City of Prineville, as well as Crook County, Ochoco Irrigation
District and many others are pleased to support S. 3483, the ``Crooked
River Collaborative Water Security Act.'' Senator Wyden and Senator
Merkley deserve credit for their hard work, extraordinary patience, and
understanding of our Community in the development of this legislation.
We are appreciative of their work in writing this legislation and look
forward to the benefits that enactment would provide for our entire
community.
Prineville, located in Central Oregon's Deschutes Basin, is one of
Oregon's most historic cities. It is the largest city in Crook County
with a population of 10,000. Today, our City is facing an unusual
combination of challenges and opportunities. This legislation would
take a tremendous step forward in addressing them.
Over the past several years, our unemployment rate has ranged
between 14 and 20 percent, one of the highest rates in the United
States. Business failures, job losses, and home foreclosures have been
a constant problem for us, and they've significantly stressed our
City's social services.
Not long ago, vibrant timber operations, a highly successful
national tire business, and small productive family farms and ranches
served as our economic foundation. But changes to our Nation's timber
harvest policy drove once-thriving mills and family-owned businesses
into closure. The tire operation moved away. And then, our national
economy collapsed. These events struck our region particularly hard. We
lost one family business after another, and along with them, hundreds
of family-wage jobs. Successful family farms and ranches kept our
community from spiraling even further downward.
In the midst of the downturn, Apple and Facebook selected
Prineville as a location for their new data centers. Facebook has
completed construction on a new, state-of-the-art, LEED certified,
300,000 square-foot data center near our airport. Facebook is now
beginning to develop a second facility. Apple is also constructing a
new facility in our community. Both companies have created family wage
jobs, made significant financial investments in our community, and have
sparked an economic resurgence we have not seen in a long time.
Prineville is a progressive city regarding natural resources. Mayor
Betty Roppe serves on the board of directors of the Deschutes River
Conservancy, a consensus-based, non-profit organization dedicated to
river restoration. The City is collaborating with irrigation districts,
conservation groups, and others to develop a multi-species Habitat
Conservation Plan, which will ultimately set in motion conservation
measures designed to improve habitat for species including bull trout
and reintroduced hatchery steelhead listed as ``threatened'' under the
Endangered Species Act. Finally, the City is re-creating a 280-acre
lower Crooked River wetland at a cost of $8.5 million, which will
improve riparian habitat and further cleanse our wastewater discharges.
The Portland General Electric Company and Confederated Tribes of Warm
Springs are helping to finance this innovative project.
At this point, we have taken as many steps as we possibly can to
recover our economy and enhance our environment. But we can only fully
resolve our problems if Congress enacts new law to remove several
barriers to our recovery, including a lack of water supply certainty.
To resolve this problem, Congress must amend the underlying
authorization of the Crooked River Project to ensure our community has
certainty for economic and environmental uses. Doing so will promote a
more dynamic business climate that will allow us to strengthen our
commitment to basic social services, improve environmental conditions,
and bring about real, permanent improvements for Prineville, Crook
County, and Central Oregon.
THE CROOKED RIVER PROJECT
The U.S. Bureau of Reclamation's Crooked River Project was
authorized on August 6, 1956 (70 Stat. 1058) for irrigation and flood
control purposes. A key feature of the Crooked River Project is Arthur
R. Bowman Dam, constructed in 1960 and 1961, which has an active
storage of approximately 148,633 acre-feet of water annually.
Sixteen irrigation districts and families have long held contracts
to 68,273 acre-feet to irrigate 25,000 acres of small, family farms and
ranches in Crook County. Valuable crops, including grain, garlic, hay,
mint, and seed are grown on these lands, along with livestock. Because
irrigation needs are also satisfied with natural flow rights, the use
of stored water for irrigation is often less than the total stored
water contract amounts. Since the late 1960s, Reclamation has
contracted five times with North Unit Irrigation District to supply
water to that district's farmers and ranchers. These contract amounts
have averaged roughly 13,600 acre-feet. Reclamation also provides
releases for fish and wildlife purposes, including releases of an
authorized minimum 10 cubic feet per second (cfs) annually, and often a
voluntary release up to 75 cfs in the winter months. For more than
thirty years, there has been an ongoing community discussion about this
project, and the potential to use the uncontracted water stored in
Bowman Dam for various purposes. Every effort to address this situation
has failed to produce consensus, until now. This legislation is
supported by a broad array of interests, including Oregon's Governor
John Kitzhaber, agricultural, conservation and irrigation interests,
the Confederated Tribes of Warm Springs, Crook County, City of
Prineville and Portland General Electric Company. The broad support for
the legislation is based on the unprecedented social, economic, and
environmental benefits it would create for Central Oregon.
REMOVING FEDERAL BARRIERS TO PROMOTE ECONOMIC AND ENVIRONMENTAL
BENEFITS
I want to compliment Senator Wyden and Senator Merkley, and their
staff, for writing this legislation. The legislation includes changes
to specific provisions of the underlying authorization for the Crooked
River Project, and adds several new provisions. All of these provisions
are collectively necessary to remove the barriers that stand in the way
of meaningful economic recovery and environmental enhancements. The
legislation would provide significant benefits, including a new water
supply for the City of Prineville, longterm water supply certainty for
irrigation districts and farming families, dedicated water releases for
reintroduced steelhead and for other fish and wildlife on McKay Creek
and the Crooked River, and the potential to develop carbon-free
hydropower at an existing dam. The legislation also enables local
farmers to accelerate the repayment of their obligations to the Bureau
of Reclamation and would establish a process for a dry-year management
plan, developed collaboratively and relying upon voluntary measures.
This legislation presents a remarkable opportunity to enhance not
only social and economic values in Oregon, but to significantly enhance
instream values for fish and wildlife as well. We understand some may
not fully appreciate the specific language in the bill to accomplish
these tremendous benefits, but I have come to learn that there is a
price for consensus. In this case, it is not federal funding or the
construction of new federal facilities, but instead it is legislative
recognition of the extraordinarily unique situation of Bowman Dam and
its potential value for all of Central Oregon. The real precedent of
this bill is a remarkable series of collaborative benefits, socially,
economically and environmentally, at no federal expense.
WATER FOR THE CITY OF PRINEVILLE
The City of Prineville needs a long-term, reliable water supply to
meet its current and future needs. All of the City's supplies are met
with groundwater. In addition to the needs of two new companies, Apple
and Facebook, the City needs new supplies for our current residents.
There are 500 homes inside our City limits without City water service,
not because the City does not want to serve them, but because we lack a
reliable supply. These homes, many with low-income families, draw their
potable water from private, unregulated on-site wells connected to a
shallow aquifer. Many of these homes also maintain on-site septic
systems, and given the small sizes of the lots, the situation presents
an unacceptable long-term risk.
Prineville has evaluated every practical option to meet its needs.
For example, we've taken conservation as far as we can. Almost all of
the homes and businesses in the City are fully metered; we adhere to a
strict odd/even summer residential landscape-watering schedule; and we
are replacing nearly one-mile of our main water line each year. Our
water rates are also higher than nearly every other major city in
Central Oregon.
While the City is capable of drawing more water from its existing
wells, it is restricted from doing so by the State. Because Oregon has
deemed groundwater in the Deschutes Basin to be hydrologically
connected to surface water, and because all surface water in the basin
is fully appropriated, the State requires any new groundwater use to be
``mitigated.'' Such mitigation typically involves buying irrigation
rights and leaving those supplies instream. Under State law, this
transfer of an existing out-of-stream surface water right to a new
instream use (resulting in a ``mitigation credit'') offsets any impacts
arising from the new groundwater pumping. In the Crooked River
subbasin, however, mitigation credits are scarce due to a lack of
willing sellers and other constraints. Lacking these credits, the City
cannot pump any additional groundwater.
This legislation meets the City's needs by authorizing the Bureau
of Reclamation to release 5,100 acre-feet of water annually as a
mitigation credit under state law. This step will enable the City to
pump the additional groundwater necessary to meet all of its needs into
the foreseeable future. The bill also directs the Secretary to work
with the State of Oregon to ensure these supplies are protected
instream.
PROTECTING EXISTING WATER USE
Agriculture, one of our region's economic mainstays, also needs
certainty. To provide it, the bill clarifies that Bowman Dam will
continue to be managed so the water supplies of the existing contract
holders, and one district that occasionally purchases water from
Reclamation (North Unit Irrigation District), will be available each
year as these supplies have been since the project's construction. This
is absolutely essential for our community's social and economic
standing. It will ensure family farms and ranches continue to receive
their water supplies without interruption. This will sustain
agricultural productivity, enabling farmers and ranchers to continue to
invest in seed, fertilizer, and fuel, and to rely upon local businesses
for custom farming, insurance, and other needs.
S. 3483 requires Reclamation to store and release a sufficient
amount of water, whether from infill or carryover, to meet the sixteen
existing irrigation contracts, the City's needs, and the needs of North
Unit Irrigation District that may arise from time to time. It is
important to note this provision is limited to the districts and
families who presently hold contracts with Reclamation, including North
Unit Irrigation District. No new contracts will be approved and no new
supplies will be made available, with the exception of the McKay Creek
Water Rights Switch, discussed below.
S. 3483 provides clear assurances to the families who live and work
in our community that their water supplies will be protected, and that
their way of life will be improved. Right now, that is critical for our
community's well being.
PROTECTING RECREATION
Recently, some members of our community have raised questions
regarding the potential drawdown of Prineville reservoir to provide
higher downstream releases of water for fish and wildlife. In
particular, questions have been raised as to whether this may affect
recreation at the reservoir. We understand these concerns are related
to the potential ``stranding'' of several boat ramps in consecutive dry
years, and the possible long-term impacts to fish and wildlife habitat
in the reservoir.
For the past 52 years, Prineville Reservoir has been a recreational
treasure. With 43 miles of shoreline, and nearly 100 homes, it is a
camping, fishing, and water destination for families from all over
Oregon. It is also an economic asset for our community. A 2005 census
report showed that over 90 percent of the 615,000 visits to Prineville
Reservoir were from out of our area. Purchases of food, fuel, and
supplies are a key source of revenue for local businesses.
Governor Kitzhaber's August 1, 2012 letter to Senators Merkley and
Wyden (see attached) acknowledges this concern. Importantly, the
Governor's letter commits the State to work with our community, and
others, to address impacts on recreation and fish and wildlife in the
reservoir if they occur. We're committed too. We are also very
comfortable with our partners, the Confederated Tribes of Warm Springs
and the Portland General Electric Company, and their respective roles
established by the legislation, and in conjunction with it. While some
may be uncomfortable with the State and tribal management of the
uncontracted water supplies, we are supportive of this provision
because it builds upon an existing relationship between Oregon
Department of Fish and Wildlife, and the Confederated Tribe of Warm
Springs and would include Ochoco Irrigation District, United States
Bureau of Reclamation.. We understand annual management decisions of
the uncontracted water supplies will be based upon the best available
information and science, and adaptively managed. The City of Prineville
and Crook County will work with our community, and all our partners,
including our community, our Congressional delegation, and others to
improve Prineville Reservoir so that it continues to be a safe, fun,
and enjoyable destination.
THE MCKAY CREEK WATER RIGHTS SWITCH
S. 3483 will also accelerate the McKay Creek fisheries restoration
project. Local farm and ranch families, currently outside of OID's
boundary, have expressed interest in exchanging their existing McKay
Creek water rights for stored water supplies from Bowman Dam. Up to
twenty-three families may ultimately participate in this exchange,
which could result in less overall water use per acre, but provide a
more reliable supply for these families. State and private funds would
finance the entire cost of the project.
To accomplish this exchange, S. 3483 authorizes two important
steps. First, the bill expands OID' s boundary from its present size,
which includes approximately 20,000 irrigated acres, to add
approximately 685 additional acres that are currently irrigated with
water from McKay Creek. Second, the bill enables OID to supply stored
water to these additional 685 acres, but only after the landowners
permanently transfer their existing natural stream flow water rights,
with some of the water rights dating to the 1800s, to instream use.
Thus, S. 3483 authorizes OID to supply up to 2,740 acre-feet to enhance
instream flows in McKay Creek. This project is an important steelhead
restoration initiative supported by the Confederated Tribes of the Warm
Springs Reservation, the Crooked River Watershed Council, Deschutes
River Conservancy, Portland General Electric Company, the Deschutes
Land Trust, and many others.
WILD AND SCENIC MOVE
S. 3483 also proposes to move an existing wild and scenic river
boundary on the Crooked River. This will allow the construction of a
small hydropower facility at the base of Bowman Dam, above the new
boundary. In 1988, Congress designated the Lower Crooked River (or
Chimney Rock Segment) as a Recreational River Area in the Omnibus
Oregon Wild and Scenic Rivers Act. Following passage of this law, the
Bureau of Land Management (BLM) established the upstream ``interim''
boundary of this 8-mile long segment on the crest of Bowman Darn, in
the center of State Highway 27. Although BLM has stated this location
was never intended to be the final starting point of the designation,
it has been unable or unwilling to administratively move the boundary.
The current boundary is an absolute restriction on the development of
carbon-free, renewable hydropower generation at Bowman Darn.
S. 3483 will require the Secretary to relocate the upstream
boundary of the wild and scenic designation to a point one-quarter mile
downstream from the toe of the dam. This minor shift would enable a
small, minimally intrusive facility to be constructed, including a
small powerhouse and related facilities.
I understand the project would operate with existing water
releases, without any changes to release schedules, amounts, or
reservoir recreation levels. In addition to power generation, the
project may also improve water quality below the dam by reducing total
dissolved gas (TDG) concentrations. Fish can be affected by elevated
TDG concentrations, which has occurred recently, for example, in the
Columbia River. Relocating the boundary and the construction of a
hydropower facility will not impair Redband trout spawning areas, and
river access for fishing will not be impacted except as necessary for
public safety.
Finally, the eventual license holder will be required by the
Federal Energy Regulatory Commission to evaluate impacts to the
designated ``Outstandingly Remarkable Values'' in the quarter-mile
reach between the dam and the new boundary. If impacts are identified,
full mitigation will be required. Besides the potential fisheries
benefits, this project will create enough carbon-free, renewable
electricity to power 4,500 homes.
OCHOCO IRRIGATION DISTRICT CONTRACT CHANGES
Ochoco Irrigation District's present water supply contract with
Reclamation does not allow OID to participate in ``Conserved Water
Projects'' under Oregon law. Under the terms of its contract, water
allocated to OID can only be used for irrigation purposes.
Since these contracts were signed, the State of Oregon has enacted
laws to encourage water users to conserve water. The Oregon Conserved
Water statute (ORS 537.455 et seq.) is one such program. This statute
requires at least 25 percent of any water saved by a conservation
project to be left instream and protected with an instream water right.
Because OID's contract with Reclamation does not allow water to be
dedicated to instream uses, OID cannot participate in this program. S.
3483 would remove this barrier to water conservation by amending OID's
underlying contract so it can conserve water consistent with Oregon law
and return a portion of the savings to instream uses, forever.
S. 3483 makes a second amendment to OID's contact. This change will
enable District landowners to voluntarily repay their respective share
of construction costs associated with Bowman Dam and the Crooked River
Project earlier than their present repayment schedule allows. These
farmers and ranchers are prohibited from paying off their obligations
to the United States before the contract repayment date of 2023. This
change is important because it will enable District landowners to
purchase additional lands inside OID while still using water from
Bowman Dam. Larger holdings can promote greater efficiencies, economies
of scale, and a more dynamic business climate.
Collectively, these amendments to OID's contract would allow for
greater flexibility and creativity in land use decisions and water
management, benefitting the economy and environment. They would
facilitate conservation efforts, instream leasing, and more dynamic
business practices. Congress has previously approved similar provisions
for Oregon irrigation districts (see P. L. 110-229, Section 509(d); and
P.L. 109-138).
CONCLUSION
S. 3483 will, if enacted, accelerate real, meaningful social,
economic, and environmental benefits for the people of Prineville,
Crook County, and all of Central Oregon. I encourage the Subcommittee
to act quickly on this legislation.
attachment.--letter of governor kitzhaber
State of Oregon,
Salem, OR, August 1, 2012.
Hon. Jeff Merkley,
U.S. Senate, 313 Hart Senate Office Building, Washington, DC.
Hon. Ron Wyden,
U.S. Senate, 221 Dirksen Building, Washington, DC.
Re: Draft legislation regarding Oregon's Crooked River basin
Dear Senators: My administration is very appreciative of your work
to advance legislation to improve the environment and economy of
central Oregon. The Crooked River basin encompasses one of Oregon's
truly special places. It presents many challenges and opportunities,
especially with respect to the issue of water associated with
Prineville Reservoir and the Bowman Darn. I want to personally commend
all of the stakeholders--including the Confederated Tribes of the Warm
Springs of Oregon, the Ochoco and North Unit Irrigation Districts,
Crook County, the City of Prineville, Portland General Electric, and
several conservation groups--for their years of effort, collaboration,
and leadership in reaching common ground around this historic
legislation.
My understanding is that the legislation would result in numerous
benefits. For the City of Prineville, the legislation provides releases
of Prineville Reservoir water, allowing the City to acquire new
groundwater rights needed for economic development and the associated
instream mitigation credits required by Oregon law. The legislation
also slightly modifies an existing Wild and Scenic River boundary to
enable development of hydroelectric energy at the existing Bowman Dam.
In addition, the legislation would provide needed certainty for Ochoco
Irrigation District and the other 15 U.S. Bureau of Reclamation
contract holders to ensure in-igation water will continue to be put to
productive agricultural use. Finally, I understand that all remaining
un-contracted reservoir water, which in some years could amount to
upwards of 80,000 acre feet, will be dedicated to the primary benefit
of downstream fish and wildlife, with the Confederated Tribes of Warm
Springs and the State of Oregon entering a new chapter of partnership
to help guide the Bureau of Reclamation's release of this water. This
water provides unprecedented opportunities for steelhead and other
species of concern in the Crooked River as well as the larger Deschutes
River system. The legislation envisions exactly the sort of mutual win
that Oregonians expect for the economy, the environment, and
communities.
I want to underscore one issue with you that is separate from the
specific legislative language itself but, should it be enacted into
law, related to implementation of the legislation's direction of water
releases for downstream fish and wildlife. This issue centers on Oregon
state water law and water rights. One of my longstanding principles
throughout the development of the legislation has been that conditions
for fish and wildlife in the Crooked River can and should be improved,
but not at the expense of existing legal use of water from the Crooked
River. I understand that this legislation's approach to addressing the
stakeholder's collective interests in Crooked River water will likely
require a new water management regime for Prineville Reservoir, along
with increased care around water use accounting and collaboration
around dry-year planning. With that in mind, I want to ensure the above
principle is not undercut.
It is my expectation that, following the enactment of the proposed
legislation, the U.S. Department of Interior through the Bureau of
Reclamation will apply for or authorize an application to the State to
protect releases of stored, un-contracted Prineville Reservoir water
with a state-issued flow augmentation water right or some other form of
instream water right. In advancing such an application, my expectation
is the Bureau will support an approach that ensures existing holders of
Crooked River primary surface flow water rights below Bowman Dam who do
not also hold storage right--supplemental or otherwise--have legal
access to water consistent with current levels of legal water use.
These users include the North Unit Irrigation District and a number of
smaller family irrigators. For water right holders who currently have
access to stored water, whether through contracts or otherwise, my
expectation is that they would utilize water identified in the ``first
fill'' provisions of the legislation to satisfy their existing levels
of legal water use.
Based on this, T ask for your assistance in ensuring that any
Bureau of Reclamation application for flow augmentation or instream
water rights is conditioned on this outcome, and I foresee any such
state-based flow augmentation or instream water right carrying forward
the requested condition to protect existing levels of legal water use
as described above, while still advancing a level of meaningful
instream flow protection for fish and wildlife benefit.
I understand the North Unit irrigation District is currently
working on potential changes to its system of water management and
water source. Providing the above protection is not intended to
undennine or artificially enhance that effort with a right to water
that at some point may not be needed. To be clear, the ``do no harm''
concept as conceived above would only apply to existing legal levels of
use tied to existing water rights, and not to full paper water rights
or future uses under future water rights. In addition, during dry years
when water scarcity is an elevated concern, this concept is not
intended to undermine the value of uncontracted water releases for
downstream fish benefit or restrict efforts by irrigators and others to
collaborate over voluntary dry-year management solutions that benefit
fish. It would simply and importantly mean that existing irrigators
have available to them the same access to the legal use of water as
before the legislation takes effect. I support and am committed to
working with the relevant parties to enter into a Memorandum of
Understanding to memorialize this approach.
In addition, the legislation's direction for managing uncontracted
Prineville Reservoir water for the benefit of downstream fish and
wildlife may affect seasonal reservoir levels and associated reservoir
recreation. I expect that as a practical matter, the State, Tribes, and
Bureau will collaborate with other relevant interests to assess and
consider ways to address potential recreation, cultural resource, and
safety impacts while still serving and achieving primary downstream
fisheries benefits. If impacts to state investments in boat access and
associated infrastructure will foreseeably occur on a repetitive basis,
I expect the State, Bureau, our congressional delegation and others
will work together on investments to mitigate these effects.
Again, I commend you, your staff, and all the parties for their
leadership and continued collaboration, and I look forward to working
with you to advance the legislation in the final days of this Congress.
Sincerely,
John A. Kitzhaber, M.D.,
Governor.
______
Statement of Stanley ``Buck'' Smith, Chairman, Tribal Council, the
Confederated Tribes of the Warm Springs Reservation of Oregon
On behalf of the Tribal Council of the Confederated Tribes of the
Warm Springs Reservation of Oregon, I am writing to express our strong
support for S. 3483, Crooked River Collaborative Water Security Act--
introduced by Senators Merkley and Wyden.
In short, this legislation is the result of countless hours of
deliberation of a diverse group of local stakeholders. It helps resolve
a decades-long question of how to balance water interests between
municipal and irrigation users, while also ensuring the recovery of
salmon, trout and steelhead in the Crooked River.
Specifically, the Confederated Tribes believe that the ``first
fill'' provision for irrigators is firmly balanced by the dedication of
un-allocated water for downstream fish and wildlife. For both
provisions to work and for the policy to be defensible in the future,
we also believe the ESA provisions are appropriately and narrowly
crafted. This will allow the collaborative management process to
achieve ecological results with all stakeholders at the table.
Thank you for scheduling a hearing on this landmark legislation.
______
Status Report on Mni Wiconi Project Sponsors' Negotiations With Bureau
of Reclamation, on S. 3464
This status report has been developed conjunctively and is offered
on behalf of the Oglala Sioux Tribe, West River/Lyman-Jones, Inc., the
Rosebud Sioux Tribe and the Lower Brule Sioux Tribe, the four
beneficiaries and sponsors of the Mni Wiconi Rural Water Supply System
in southwestern South Dakota (See Supplemental Testimony Dated
September 2012).
The Oglala and Rosebud Sioux Tribes sought good-faith resolution of
conflicts between our positions and those of the Bureau of Reclamation
on funding required to complete the remaining components of the Project
and on community system rehabilitation where the testimony of the
Sponsors and the Bureau of Reclamation was different. Documentation of
the subjects presented in those discussions is provided in Attachments
A, B, C: our position paper presented to the Bureau of Reclamation by
letter dated October 29, 2012, the response of Commissioner Connor
dated November 14, 2012, and our response to the Commissioner's letter
dated November 21, 2012.
In exchange for Reclamation support for the funding ($14.308
million in October 2011 dollars) needed to complete the drinking water
parts of the Oglala Sioux Rural Water Supply System (OSRWSS) and
Rosebud Rural Water Supply System (RRWS) and for support to transfer
40-plus Indian communities into the Project and to fund the operation,
maintenance and replacement of those systems thereafter, as always
intended, we offered to eliminate the following from S. 3464:
Section 6 Mitigation of Fish and Wildlife Losses associated
with Pick Sloan dams,
Section 7 (b)(1) related to reimbursement of the City of
White River for the Rosebud Sioux Tribe or members,
Section 8 Wastewater Disposal Systems,
Section 9 and Title II, Mni Wiconi Project Emergency
Assistance Planning Act.
We were unsuccessful in changing Reclamation's opposition despite
the facts that Reclamation has:
1. spent, in part, and proposes to spend, in part, over 20%
(Attachment C, p. 2, paragraph 4) of the $14.308 million needed
to complete the drinking water systems on the Pine Ridge and
Rosebud Indian Reservations on its office building and
exorbitant oversight, both of which are outside the scope of
the project,
2. failed to account for overhead costs between 2007 and 2013
in its Final Cost Containment Report that will consume $14.86
million funds that otherwise could have been used by OSRWSS to
complete its project and fund part of the community system
upgrades from construction and $8.71 million that could have
been used for the same purposes by RRWS,
3. placed the greatest hardship of inadequate budgeting by
the Administration and appropriations from Congress on OSRWSS
due to its geographical location at the end of the project and
Reclamation policy that would not permit OSRWSS to build
concurrently with rural water systems closer to the Missouri
River and has placed a similar hardship on RRWS,
4. created artificially high costs ($25 million) of community
system rehabilitation on 40-plus Indian communities to transfer
to OSRWSS, RRWS and LBRWS, as a pre-requisite for their
transfer and eligibility for operation, maintenance and
replacement (OMR) funds, and
5. required unworkable provisions that (a) other federal
agencies fund the $25 million in rehabilitation costs or (b)
the Indian Sponsors use Reclamation construction funds to
rehabilitate community systems knowing that other federal
agencies are resisting participation and the funds are not
available from the authorized construction ceiling for Mni
Wiconi.
We remain willing to work with the Bureau of Reclamation but must
advise the Committee that S. 3464 is essential to complete our drinking
water systems and transfer existing communities to the Indian rural
water systems despite the inflexibility of the Bureau of Reclamation to
alter its opposition.
______
November 21, 2012.
Michael Connor,
Commissioner, Bureau of Reclamation, U.S. Department of the Interior,
1849 C Street, NW, Room 7657, Washington, DC.
Re: Mni Wiconi Project
Dear Commissioner Connor: Our meeting in San Diego on November 1,
2012, with Deputy Commissioner Murillo was a pleasure. He received us
graciously and listened attentively to our position on S 3464, the
final amendment, if successful, of the Mni Wiconi Project Act. At the
end of the meeting, he was very clear that the Department does not
support S 3464, and he promised a letter from the Bureau of Reclamation
in response to the position paper that we presented. While we were
disappointed in the outcome, it was a very cordial meeting thanks to
Deputy Murillo.
Your response letter dated November 14, 2012, has been received and
reviewed. The position of Reclamation was expected but highly
disappointing. On behalf of the Oglala Sioux Rural Water Supply System
(OSRWSS) and the Rosebud Rural Water System (RRWS) and with the support
of the other sponsors, we would like to address the opposition of the
Department to S. 3464.
As our position paper presented, we are willing to remove the
following provisions and associated costs from S. 3464:
Section 6 Mitigation of Fish and Wildlife Losses associated
with Pick Sloan dams,
Section 7 (b)(1) related to reimbursement of the City of
White River for the Rosebud Sioux Tribe or members,
Section 8 Wastewater Disposal Systems,
Section 9 and Title II, Mni Wiconi Project Emergency
Assistance Planning Act.
The hope was that Reclamation would be willing to compromise if the
Oglala and Rosebud Sioux Tribes were willing to compromise and
significantly reduce the costs of S. 3464. We cannot understand why
Reclamation cannot compromise on this extremely important project, even
though the level of funding required to complete the project is limited
to 3% of the total cost.
As the basis for the decision that the Department cannot support S.
3464, you expressed concern about adding to the scope of an existing
project that is nearly complete.
Nearly complete is not sufficient. Pursuant to Section 2(a)(5) of
the Mni Wiconi Project Act the United States has a trust responsibility
to ensure that adequate and safe water supplies are available to meet
the economic, environmental, water supply and public health needs of
the reservations. For the benefit of the members of the Oglala Sioux
Tribe and the Rosebud Sioux Tribe, the drinking water project must be
completed, and the current funding authority is inadequate. An
additional $9.29 million is required to complete OSRWSS and an
additional $5.68 million is required to complete RRWS, a total $14:96
million in October 2012 dollars. This is not an addition to the scope
of the project. It is the restoration of funding diverted for other
purposes that is now needed to complete the scope of the project
related to drinking water while foregoing additional funds to complete
the scope of the project for livestock.
Before you became Commissioner, the Bureau of Reclamation used $1.5
million of our funding authority to build an office building in Pierre
that was not contemplated in the Final Engineering Report (FER) of
1994. This was a unilateral scope change in the project by Reclamation
that diminished our ability to complete the drinking water project.
Reclamation proposes an additional $1.5 million in costs to oversee the
project in FY 2013 and FY 2014 even though the current funding
authority extends only through FY 2013. The $3 million in the new
office building and the oversight over the next 2 years accounts for
approximately 20% of our need for additional funding to complete the
project.
The additional construction funds proposed in S. 3464, are not an
expansion of the scope of the project. All facilities proposed in the
additional construction funding are for purposes contemplated in the
FER, unlike Reclamation's new office building in Pierre, which was an
expansion of the existing project and not included in the FER. Our
opposition to the expenditure on the office building only arises
because Reclamation has opted not to support the additional
construction funding needed to complete OSRWSS and RRWS. We are
required to show the inconsistency of action and support from
Reclamation.
As presented throughout this, the overhead costs of administering
the project after FY 2007 and community system upgrades were unbudgeted
in Bureau of Reclamation's Final Cost Containment Report prepared in
1999 that contemplated project completion in 2007. The extension of the
project beyond 2007 due to inadequate budgeting by Reclamation and
inadequate appropriations by Congress strung out the project through at
least 2013 without amendment and through 2014 with amendment and has
required all sponsors to divert funds needed for drinking water
construction to cover unbudgeted overhead.
The burden of extending the time to complete the project has fallen
most sharply on OSRWSS and RRWS. West River/Lyman-Jones and the Lower
Brule rural water systems were able to complete their projects earlier
due to the construction sequence required by Reclamation between the
Missouri River and the Pine Ridge Indian Reservation. Earlier
completion reduced the years of unbudgeted overhead costs by those
sponsors, and the last projects to complete construction (OSRWSS and
RRWS) necessarily have experienced greater diversion of funds to
overhead at the expense of project completion.
On the Pine Ridge Indian Reservation, particularly, the entreaties
of OSRWSS to allow construction of pipelines concurrently with other
sponsors, even though those pipelines would be dry until the OSRWSS
core system could be constructed from the Missouri River to the
Reservation, were met with Reclamation disapproval. When the OSRWSS
core system reached the northeast corner of the Pine Ridge Indian
Reservation in 2009, only 40% of the distribution system, all dependent
on groundwater, had been constructed. The Lower Brule Rural Water
System was complete, the West River/Lyman-Jones Rural Water System was
nearly complete, and the Rosebud Rural Water System was 70% complete:
Whether Reclamation policy on construction sequence was appropriate or
not, the effect on OSRWSS was that the burden of completing the project
was the greatest as was the deduction of overhead costs from the funds
available for construction. This was the fear our tribal members
expressed in 1992 when they rejected the Mni Wiconi Project by
referendum on the basis that the United States could not be trusted to
finish the project on the Pine Ridge Indian Reservation after the non-
Indian service areas had been completed.
S. 3464 addresses the inequity of completing the project last for
both the OSRWSS and RRWS systems.
Transfer of existing community systems to the Indian rural water
systems for operation, maintenance and replacement funding eligibility
was a cornerstone of the original project. Recently, and without
previous identification as a need in the Reclamation's Final Cost
Containment Report prepared in 1999, Reclamation has identified $25
million in upgrades as a pre-requisite for transfer to the respective
Indian rural water systems: OSRWSS, RRWS and LBRWS. This has the effect
of withholding project OMR funds from over 40 community systems.
Your letter makes transfer virtually impossible by conditioning
support of S. 3464 on funding from other federal agencies to
``rehabilitate'' those systems to ``reasonable standards.''
Alternatively, your letter would approve the use of Reclamation
construction funds within the project ceiling but opposes an increase
in the construction funding ceiling. Either option is unworkable.
We are committed to working with you to obtain funds from other
agencies for community system rehabilitation but not as a pre-requisite
to transfer and project OMR funding. It is unthinkable that Congress
would invest $460 million in the Mni Wiconi Project and allow 40 plus
Indian community systems to fall into disrepair because Reclamation is
unwilling to transfer systems in good, workable condition into the
project and to fund future OMR unless (1) other federal agencies bring
existing community systems to a ``Cadillac'' condition by expending $25
million or (2) Reclamation construction funds in the amount of $25
million are used, which are outside the construction ceiling and which
Reclamation opposes as an addition to the ``scope'' of funding for the
project.
The $25 million in ``rehabilitation'' of community systems is not
within the realm of reasonable expectation of funding from other
federal agencies. Reclamation posture seems to be a clever innovation
to frustrate transfer and the eligibility of the community systems for
Reclamation OMR budgeting and funding. Each of the 40 plus community
systems is currently a functional system and is in such a state of
repair to successfully distribute water received from the new
Reclamation rural water systems. We feel the systems should be
transferred in their current state of repair, which would make them
eligible for OMR funding.
Thank you, and please do not hesitate to contact me if you have any
questions or would like additional information.
Sincerely,
Frank Means,
OSRWSS Director.