[Senate Hearing 113-069]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-069
 
                        THE KLAMATH RIVER BASIN

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



                                HEARING

                               before the

                              COMMITTEE ON

                      ENERGY AND NATURAL RESOURCES

                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                                   TO

 RECEIVE TESTIMONY ON WATER RESOURCE ISSUES IN THE KLAMATH RIVER BASIN

                               __________

                             JUNE 20, 2013


                       Printed for the use of the

               Committee on Energy and Natural Resources



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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                      RON WYDEN, Oregon, Chairman

TIM JOHNSON, South Dakota            LISA MURKOWSKI, Alaska
MARY L. LANDRIEU, Louisiana          JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont             MIKE LEE, Utah
DEBBIE STABENOW, Michigan            DEAN HELLER, Nevada
MARK UDALL, Colorado                 JEFF FLAKE, Arizona
AL FRANKEN, Minnesota                TIM SCOTT, South Carolina
JOE MANCHIN, III, West Virginia      LAMAR ALEXANDER, Tennessee
BRIAN SCHATZ, Hawaii                 ROB PORTMAN, Ohio
MARTIN HEINRICH, New Mexico          JOHN HOEVEN, North Dakota
TAMMY BALDWIN, Wisconsin

                    Joshua Sheinkman, Staff Director
                      Sam E. Fowler, Chief Counsel
              Karen K. Billups, Republican Staff Director
           Patrick J. McCormick III, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Addington, Greg, Executive Director, Klamath Water Users 
  Association, Klamath Falls, OR.................................    66
Boxer, Hon. Barbara, U.S. Senator From California................     4
Brockbank, Dean S., PacifiCorp Energy, Vice President and General 
  Counsel, Portland, OR..........................................    57
Connor, Michael L., Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................     7
Fletcher, Troy, Executive Director, Yurok Tribe, Klamath, CA.....    40
Gentry, Donald C., Chairman or the Klamath Tribe or Oregon, 
  Chiloquin, OR..................................................    24
Hillman, Leaf G., Director of Natural Resources, Karuk Tribe, 
  Happy Camp, CA.................................................    31
Hutt, Hayley, Hoopa Valley Tribal Council Member, Hoopa, CA......    34
Hyde, Becky, Board Member, Upper Klamath Water Users Association, 
  Chiloquin, OR..................................................    64
Johnson, Tim, Assistant General Counsel For Power, Bonneville 
  Power Administration, Portland, OR.............................    81
Kobseff, Michael, Vice-Chair, Board of Supervisors, Siskiyou 
  County, CA.....................................................    47
Laird, Hon. John, Secretary For Natural Resources, California 
  Natural Resources Agency, Sacramento, CA.......................    21
Lovelace, Mark, Humboldt County Supervisors, Eureka, CA..........    53
Mallams, Tom, Commissioner Position One, Klamath County, Klamath 
  Falls, OR......................................................    45
McCarthy, Jim, Communication Director and Southern Oregon Program 
  Manager, Waterwatch of Oregon, Ashland,, OR....................    76
Merkley, Hon. Jeff, U.S. Senator From Oregon.....................     5
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     4
Nicholson, Roger, President, Resource Conservancy and Fort 
  Klamath Critical Habitat Landowners, Ft. Klamath, OR...........    62
Roos-Collins, Richard, Water and Power Law Group PC, Berkeley, CA    82
Whitman, Richard M., Policy Director, Oregon Governor John 
  Kitzhaber's, Natural Resources Office, Portland, OR............    17
Wyden, Hon. Ron, U.S. Senator From Oregon........................     1

                               APPENDIXES
                               Appendix I

Responses to additional questions................................   103

                              Appendix II

Additional material submitted for the record.....................   145


                        THE KLAMATH RIVER BASIN

                              ----------                              


                        THURSDAY, JUNE 20, 2013

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:40 a.m. in room 
SH-216, Hart Senate Office Building, Hon. Ron Wyden, chairman 
presiding.

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

    The Chairman. The committee will come to order.
    First, I want to thank all of our guests for being here 
today. I know that many of you traveled a long distance to 
come. We very much appreciate everybody being here.
    The committee is holding this round--table to discuss what 
is arguably the most challenging set of water resource issues 
in our country. Of course, those issues are what the Klamath 
Basin is all about and what the Basin has been wrestling with 
for some time.
    My own view is the Klamath needs a long-term solution, and 
one that addresses 4 key principles.
    First, there needs to be long-term certainty that our 
irrigators are going to get the water they need.
    Second, the Federal Government has the right to approve or 
deny any dam removal, although PacifiCorp has the right to make 
a business decision.
    Third, it's quite clear the Klamath tribes have to be a 
part of the solution.
    Finally, it has to ensure the recovery of our fish runs.
    My own view is much progress has been made over the past 10 
years trying to find common ground on how to reconcile the many 
important and competing interests in the Basin. This work is 
making a big difference for the on-project irrigators. But the 
fact is hundreds of farm households and citizens have been left 
behind.
    Working for a permanent solution is especially important 
now because the Basin is being pounded by drought once more. As 
we speak off-project irrigators are losing water supplies that 
they depend on. Everyone, and let me emphasize, everyone in the 
Basin has a right to expect better.
    Last month I was in Klamath Falls for a town hall meeting. 
My sense from that gathering is that all sides now recognizing 
how difficult this summer is want a real solution. From that 
town hall meeting I got a sense that people in the Basin want 
to put the disputes behind them. They want certainty for the 
future.
    When I chaired a hearing on drought earlier this spring the 
Commissioner of Reclamation told the Committee that it is his 
high expectation that water will not be shut off to the Klamath 
project this summer. That's because the on-project water users 
have negotiated with the Tribes and other interests in the 
Basin and have agreed with them on how to address water-short 
years.
    This important compromise, a compromise that hopefully will 
keep the on-project irrigators farming this year, is a step in 
the right direction. The reality is the drought and the 
exercise of water rights under State law has resulted in off-
project irrigators not receiving the water that they are 
accustomed to taking. Without a fresh solution that addresses 
the needs of everyone in the Basin, it's clear that's only 
going to happen more often.
    To the parties that have not reached a compromise and are 
experiencing that water cut-off, I want them to know that I am 
committed to sitting down with all of you and the other Basin 
interests to find a long-term solution that reflects both the 
anticipated water supply in years to come and economic issues 
that those family farmers are facing.
    In the West, we all understand that water is precious. The 
determination of water rights is exclusively within the purview 
of our States. The prior appropriation doctrine-what's in 
effect, first in time and first in right-sets the rules of the 
road.
    Our State, the State of Oregon, has just completed a 38-
year process to adjudicate water rights in the Basin. As a 
result, the Klamath Tribe has been recognized as having rights 
going back to, and I quote, ``time immemorial.'' These are in 
effect property rights under our State's law.
    In 2001 when the Basin had another very horrendous drought, 
these water rights had not been adjudicated. Now the Basin is 
bound by the system under State law that directs how to deal 
with water shortage and who gets what water. Unless a court 
intervenes, these are the rights that will be enforced this 
year and in the future. I think it's worth noting the Klamath 
County Circuit Court already declined to intervene just in the 
last few days.
    Now the Klamath Basin presents other serious challenges as 
well: degraded fisheries, high electricity costs, poor water 
quality, and adversely impacted towns and communities. Farming 
is obviously an energy-intensive undertaking. Our family 
farmers need affordable power to stay afloat.
    I have been working over the last few weeks with 
PacifiCorp, the Bonneville Power Administration, and the 
Interior Department to address this issue and can announce 
today that on-project users will soon see a real reduction in 
their power rates. Now, I discussed this with Congressman 
Walden last night and both he and I, and I know certainly 
Senator Merkley, all of us agree that we need rate relief for 
all our farmers. My own sense is this will require legislation. 
But there may be other ways to provide power rate relief for 
off-project users.
    I also at this time want to publicly express my 
appreciation to Bonneville, to PacifiCorp, the Department of 
the Interior, for making what I have just stated possible.
    That, in effect, is why the committee is holding this 
hearing. We are looking today for constructive approaches and 
fresh ideas to build on the good work that has been done in the 
past and to move ahead and to recognize the fiscal realities 
Congress and our Nation are facing.
    After considerable thought, I've concluded that the KBRA 
and essentially what has been agreed to at this point, is 
simply unaffordable in the current Federal budget environment. 
My message on this point is working together in good faith 
there's got to be a way to accomplish the agreement's 
objectives with a lower price tag.
    Finally, I want to pledge to Oregonians that California is 
going to pay its fair share of this program. Already ratepayers 
who Senator Merkley and I represent are paying for the Klamath 
solution. Oregonians are still waiting for California to pass 
its bond to pay its share of the cost.
    As chair of this committee, I believe all parties should 
have a chance to have input before the committee advances any 
legislation. I state that whether or not they have been for the 
previous agreements or have differing views. We've already 
received more than 4,000 comments through our website. We want 
to continue to hear from stakeholders and the public and work 
for that lasting solution.
    Let me close with just one last point. We can figure this 
out. I am very much aware that there are people-and I was 
reading various news articles last night-there are people 
hanging crepe on all this. They're saying this can't be done. 
This is too contentious and it's just not doable.
    I want you to know as we begin this discussion I've got a 
lot more faith in you and your--good will. I think there are 
people around this table and throughout the Basin that 
understand this has gone on long enough. People who understand 
how serious the situation is now and who want us to come 
together and find a solution.
    My own take with respect to these intractable resource 
challenges and Senator Murkowski and I have been able to tackle 
a few of them with some measure of success here in the last 
couple months, is that nobody in a challenging situation like 
this gets everything they want. Nobody gets everything they 
believe they deserve. But working together we can find a way so 
that everybody gets what they need as part of a lasting 
solution.
    So that's what today is going to be all about. I want 
everybody to understand that we're going to stay at this. We're 
going to stay at it until we find a solution this time.
    So I'm very lucky to have my colleague from Oregon here. 
Senator Murkowski will make her statement. Want to, again, 
express my appreciation to her.
    Late last night 14 bills came out of this committee and 
passed the Senate Floor, late last night. Bills that in many 
instances had been debated for years. It could not have been 
done without the good will and the partnership that has been 
possible in this committee.
    Senator Murkowski, I've said it before, I'm very 
appreciative. I'm appreciate of you coming here to discuss a 
matter so important to Senator Merkley and myself. We welcome 
your comments. Then we're going to hear from Senator Merkley.
    [The prepared statement of Senator Boxer follows:]

 Prepared Statement of Hon. Barbara Boxer, U.S. Senator From California
    Mr. Chairman, thank you for holding this hearing on water resource 
issues in the Klamath River Basin.
    Covering more than 10 million acres and stretching more than 250 
miles from southern Oregon to the Pacific Coast of northern California, 
the Klamath River Basin (Basin) is vitally important to the tribes, 
farmers, fisherman, and others who call it home. Known as the 
``Everglades of the West,'' the Basin's lakes, rivers and forests 
provide habitat for more than 400 species of wildlife and is critical 
for the recreation and tourism industries in the region.
    A severe drought in 2001 and the massive die-off of more than 
34,000 salmon the following year sounded the alarm that a bold plan was 
necessary to balance the needs of all those who depend on this critical 
resource.
    The stakeholders in the Klamath River Basin responded to this 
crisis by developing a plan through cooperation and consensus. In 2010, 
the Klamath Hydroelectric Settlement Agreement and the Klamath Basin 
Restoration Agreement was signed by more than 40 parties. I was proud 
to support the efforts of the coalition's agencies, tribes, farmers, 
fisherman, ecologists, and scientists, by cosponsoring implementing 
legislation in the last Congress, the Klamath Basin Economic 
Restoration Act (KBERA).
    No agreement of this complexity is ever perfect, but the KBERA was 
an important start to the legislative discussion because immediate 
relief for the region is paramount. The ultimate costs of inaction to 
the $750 million dollar a year fisheries and agricultural economy 
alone, and subsequent federal disaster relief, far outweigh the 
investment needed to support solutions that will bring reliability to 
the region's water supply.
    I firmly believe that the Klamath River Basin will serve as a model 
of what can be accomplished when communities historically divided by 
competing interests recognize the most important interest of all, our 
shared future.
    Mr. Chairman, I look forward to working with you and the Ranking 
Member on this and other issues that will come before your Committee 
this Congress. I'm dedicated to openly working with the parties to 
ensure success, and thank you for the opportunity to address this 
hearing.

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

    Senator Murkowski. Thank you chairman. I think it is 
important for all those that are gathered here to recognize 
that what you're seeing here with the very broad list of 
participants around the table. It is just yet one more measure 
of how the chairman of this committee has been handling things.
    We've got our fair share of contentious issues that we deal 
with on the Energy and Natural Resources Committee. Our process 
here, our way forward, has been one where we roll up our 
sleeves and we tackle the tough things. We try to find that 
sweet spot, as you describe it so many times.
    It's hard stuff. It's tough stuff. You have been involved 
with these issues for decades.
    Litigation that goes on for decades.
    Issues that are absolutely integral to all that goes on 
within your State in many ways and also down in California.
    So the fact that you are all here at the invitation of the 
chairman of the Energy Committee, I think, is really quite 
significant and important.
    Coming from a State like Alaska where more times than not 
we have more water than we need, sometimes it's been difficult 
for me to appreciate fully these water wars that go on. My 
first subcommittee that I ever chaired was Chairman of the 
Water and Power Subcommittee. That was a real eye opener for me 
in terms of understanding what really has gone on historically 
with discussions and arguments and fights and hopefully 
resolutions over our State's water rights.
    But I do think that, again, it's important to note that the 
chairman has really gone out of his way to make sure that this 
is an all inclusive approach. Truly gone out of his way to make 
sure that we have stakeholders here this morning that are 
representing every interest whether it's the farmers, the 
Indian tribes, commercial and sport fishermen, power producers, 
environmental groups, municipal water users, outdoor 
enthusiasts, advocates for Federal wildlife refuges. So gaining 
the full perspective on the 2 Klamath Basin agreements is going 
to be critically important.
    For me to better understand the goals there which I 
understand at this point include allocating water resources so 
farming, tribal, recreational, wildlife and fishing interests 
are protected.
    Restoring the fisheries in the Basin.
    Removing 4 dams while continuing to provide affordable 
power to agricultural communities.
    Improving habitat and water quality.
    Ensuring no further degradation of the Basin resources.
    As the chairman has indicated, all very complex, all very 
challenging, particularly at a time of limited Federal dollars. 
But I do hope that this morning's hearing will provide that 
better understanding on how we proceed into the future. I hope 
that you take the chairman's words to heart that we will stick 
with this. I think you've got the commitment of your 2 Oregon 
Senators to make this happen and know that I will be working 
with you from the committee perspective to do what I can to 
help facilitate.
    I do have Appropriations mark up at 10:30 so I'll be 
excusing myself at that point in time. But it won't be because 
of lack of interest. It's multiple scheduling. But Mr. 
Chairman, thank you for the opportunity to be part of, what I 
think, is a great collaborative process on how we move forward 
with some very complex issues.
    The Chairman. Thank you very much, Senator Murkowski.
    Suffice it to say what we're trying to do is sort of throw 
out the textbook with respect to a lot of these issues, the 
textbook that says you mostly have to fight. At the end of the 
day, everybody goes to Federal court and fights some more.
    It's only possible to have this approach that really brings 
people together when we have colleagues like you make it 
possible. I want everybody to know how appreciative I am.
    Senator Merkley has done an awful lot of good work on this 
issue. He's holding town hall meetings, meeting with all the 
parties, has spent a lot of time trying to bring people 
together. I so appreciate our partnership.
    Senator Merkley you just go forth as you would like.

          STATEMENT OF HON. JEFF MERKLEY, U.S. SENATOR
                          FROM OREGON

    Senator Merkley. Thank you so much, Senator Wyden and Chair 
of this committee. Thank you to Ranking Member, Senator 
Murkowski. I'm going to thank you both for holding this hearing 
and inviting so many stakeholders from Oregon with multiple 
things at stake, important things at stake for their families, 
for their community in trying to figure out a path forward.
    I know that you've been engaged in this for far more than a 
decade. I appreciate your interest and that experience that 
you're bringing to bear.
    When I was first elected to the Senate one of my first 
trips was down to the Klamath Basin to talk to folks about the 
history of the Basin and of the challenges that existed there. 
It was in 2001 when I was a member of the Oregon House that I 
first became aware of the challenges in sharing water because 
that was a year of substantial drought, the worst drought to 
date at that point. It really became national news. It became 
national news because of the enormous frictions of how, in a 
drought year, how do you allocate water?
    Of course, at that point the water rights weren't 
adjudicated. That was before the Klamath Basin restoration 
conversation. It was on the trip that I took down there in 2009 
that I was reminded of the saying I'd heard all of the time I 
was growing up which was, ``Whiskey, that's for drinking and 
water that's for fighting.'' That captures the challenge of 
sharing this incredibly important resource.
    On that trip I was briefed on the fact that many 
stakeholders in the community were meeting together to try to 
find a win/win path forward. One person described it to me this 
way. He said, the only person winning are the lawyers. We don't 
want to spend the next 20 years just enriching lawyers. We want 
to solve the problem.
    I was very impressed that folks, who could barely talk to 
each other after the 2001 drought, had been sitting down for 
years to try to forge a path forward. I know that wasn't easy. 
But I do know that in the course of those meetings people came 
to respect each other, to understand each other and to realize 
there could be a path that was better for irrigators, better 
for the river, better for the fish, better for the tribes and 
that that was what they were going to try to capture.
    I'm a skeptical. I'm a skeptical that you could go from a 
theory of wanting to achieve such an agreement to actually 
sketching an outline. But the many community stakeholders who 
participated did sketch an outline. They did actually put it 
into print. They signed the agreement, the Klamath Basin 
Restoration Agreement and a second power agreement.
    Senator, the Secretary of Interior flew in to witness it. 
I'll tell you that those bonds that were formed in that process 
were incredibly important in 2010 during another extremely 
difficult drought where the relationships with each other and 
the relationships with Interior Department and with the 
Agricultural Department helped the community find a path 
forward that worked better than in 2001. Anyone nationally 
would not have known that the drought that year in 2010 was 
worse than 2001 because it never became national news as the 
community worked to solve the problems.
    So I think the stakeholders in the Basin, they're tired of 
fighting. They're tired of suing. They're tired of arguing. 
They want to end the water wars with a plan that works better 
on all parts.
    I certainly resolve to do what I could to assist. Said that 
if they could sign an agreement I would be a partner and try to 
help with Federal implementing legislation. That is process 
that is now here in this committee. I pledge to work with you 
and with the ranking member and with the committee as best as I 
can to help figure this out.
    You've laid out the key parameters that need to be 
addressed. We have here today folks who are part of the Klamath 
Basin Restoration Agreement. We have folks who were not part of 
the agreement who have come to share their perspectives. That's 
an important part of this process as well that they have the 
opportunity to put forward their concerns as we seek to build 
this path forward.
    So I simply want to close by saying that this year we have 
another worst ever drought. I hope that while everyone is here 
it's raining back home. I heard it was raining a little bit 
yesterday in the Basin. But it needs to rain a lot or this 
truly is a very, very difficult.
    In 2010 I was going through the Floor of the Senate with a 
chart which compared the lake levels in different years 
compared to the 2010 level which was a way of dramatizing how 
that was the worst ever. There's the complexities here are 
enormous between the endangered suckers in the lake, the 
endangered salmon in the stream, the demands on for irrigation 
and so forth. So not simple, for sure.
    The challenges now for us in Congress to put the same type 
of effort into this that all of our witnesses have put into the 
conversation. I look forward and hope that we can succeed in 
building a framework that can be adopted here by the U.S. 
Senate, carry momentum to the House and help build a better 
future for all Oregonians in the Basin.
    Thank you.
    The Chairman. Senator Merkley, thank you. You've put a lot 
of sweat equity into this cause in terms of working with 
people. I very much appreciate it.
    As Senator Merkley has indicated, now is the time, 
literally and figuratively. So let's have each of you take a 
few minutes and we'll just throw it open. Obviously you've 
heard from me and my colleagues the premium is on fresh 
thinking; that's going to help bring people together.
    Mike Connor, please. Welcome.

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

    Mr. Connor. Thank you, Mr. Chairman, Ranking Member 
Murkowski, Senator Merkley. I'm Mike Connor, Commissioner of 
the Bureau of Reclamation here representing the Department of 
the Interior interest today. I appreciate the opportunity to 
discuss the water resource issues in the Klamath River Basin.
    The Klamath has a long history of conflict driven by scarce 
water resources that have over allocated among competing uses. 
This year's drought continues that unfortunate trend. There's 
new turmoil caused by the ongoing priority enforcement of water 
rights resulting in the shut off of junior water users. At the 
same time project irrigators will not receive a full supply of 
water. The tribal fishery in Upper Klamath Lake continues to be 
closed to all but a ceremonial catch of 2 to 3 fish.
    Wildlife refuges that support some of the most important 
habitat on the Pacific Flyway will struggle for water. Fish 
species in both Upper Klamath Lake and the Klamath River 
continue to be at risk of extinction. Even more disturbing is 
that the analyses we've done that indicate that without a long 
term solution all of these problems will likely worsen and may 
occur more frequently in the coming years due to the impacts of 
climate change.
    Many of the parties most affected, those that live and work 
in the Klamath Basin, have decided enough is enough. Have 
charted a different future for themselves. The Klamath 
Hydroelectric Settlement Agreement, or KHSA, and the Klamath 
Basin Restoration Agreement, or KBRA, were signed in February 
2010 and require action from Congress to be fully implemented.
    If enacted these agreements would address the ongoing 
impacts on the rest of the Basin's resources while 
strengthening the communities that rely on these resources.
    The Klamath agreements hold great promise to transform what 
was once a landscape of turmoil and conflict to one built on 
cooperation and trust. Our perspective is that a long term 
solution that is driven at the local level by those who are 
most directly affected is the best opportunity to avoid the 
year to year crises that plague this Basin. Under this approach 
there is a mutual commitment to a shared resource, the economy 
is strengthened and those who are most directly affected have a 
say in how the resource is managed.
    We should not lose this opportunity and we understand the 
need for flexibility here, Senator Wyden.
    My written statement describes the KHSA and KBRA in detail.
    One point I'd like to make here though is that the promise 
of the Klamath agreements are more than just lofty words. They 
can be translated into real, specific benefits and conditions 
like the current water year.
    For example with the KHSA and KBRA in place this year's 
project allocation would be 353 thousand acre feet instead of 
the projected 219 thousand acre feet.
    Wildlife refuges would be allocated approximately 51 
thousand acre feet compared to the zero available this year.
    Thirty thousand acre feet of depletions above Upper Klamath 
Lake would be dedicated toward fishery purposes with the system 
managed in real time.
    Tribal members would be at work on implementing habitat 
restoration actions.
    Water users both on and off project who are currently 
paying between 9 and 15 cents per kilowatt-hour power for 
agricultural production relation would be paying about half 
that amount allowing for more investment in the agricultural 
economy.
    There would also be more tools to address fishery needs and 
of course, the Secretary would be able to proceed with 
determining whether damming is in the public interest and will 
advance fishery restoration.
    Without the framework of the Klamath agreements we are 
expanding a system that simply cannot meet all the competing 
demands year in and year out. Under this scenario the current 
cycle of crises management, disaster relief and unfulfilled 
tribal rights will continue. A more permanent solution that 
provides greater predictability for the availability of water 
and improved fishery resources is an investment that will be 
more cost effective in the long run.
    We acknowledge that despite our best efforts there are 
parties that have not signed the Klamath agreements. I speak to 
their concerns in my written statement and am glad to discuss 
them further today. Given the constraints of time I'll simply 
conclude by thanking the committee, Mr. Chairman, your 
leadership for convening this round table and we're looking 
forward to working on the agreements that we need to put in 
place for the long term.
    [The prepared statement of Mr. Connor follows:]

   Prepared Statement of Michael L. Connor, Commissioner, Bureau of 
                Reclamation, Department of the Interior
    Chairman Wyden, Ranking Member Murkowski and members of the 
Committee, I am Mike Connor, Commissioner of the Bureau of Reclamation 
(Reclamation). I am pleased to represent the Department of the Interior 
(Department) today to discuss water resource issues in the Klamath 
River Basin.
    The Klamath River Basin has a long history of conflict driven by 
scarce water resources that have been over-allocated among competing 
uses. While we are not far removed from the events of 2001, when water 
to Reclamation's Klamath Project (Project) was not delivered in the 
spring, or 2002, when 30,000 adult salmon perished in the lower Klamath 
River, or 2006, when the commercial ocean fishery closed along the 
Oregon and California Coasts due to poor Klamath Basin stocks; we only 
need to look at the conditions in 2013 to understand the importance of 
a long-term, comprehensive, and durable solution for the Klamath Basin. 
Consistent with eight out of the last twelve years, project irrigators 
will again not receive a full supply of water, and the power rates they 
are paying continue to escalate and are among the highest charged to 
irrigation projects in the West. Both of these issues directly and 
adversely affect the Klamath Project water users and the $600 million a 
year their agricultural products and jobs contribute to the local 
economy.\1\
---------------------------------------------------------------------------
    \1\ Revised Cost Estimates for the Klamath Basin Restoration 
Agreement. June 17, 2011. http://216.119.96.156 /Klamath/2011/06/
RevisedCostEstimates.pdf
---------------------------------------------------------------------------
    With the Upper Klamath Basin experiencing a drier than normal water 
year, last week the Department and the Klamath Tribes exercised their 
adjudicated water rights for rivers flowing into the Upper Klamath 
Lake, which I will go into further detail later in my testimony. In 
addition, the tribal fishery in Upper Klamath Lake continues to be 
closed to all but a ceremonial catch of two to three fish per year and 
the abundance of these endangered fish populations have continued to 
decline for the last 20 years. Wildlife refuges that support some of 
the most important habitat on the Pacific Flyway struggle for water and 
suffer bird die offs, water quality continues to be degraded, and 
species in both Upper Klamath Lake and the Klamath River continue to be 
at risk of extinction. Private irrigators in the upper basin will 
struggle to maintain crops and livestock in this drought year. And, 
finally, a relatively large run of Chinook salmon is expected to return 
home to the Klamath River this fall. While this should be a reason to 
celebrate, this year's drought conditions have raised concerns about 
how to avoid another salmon die-off in the Lower Klamath River. Our 
analysis shows all of these problems will likely worsen and may occur 
more frequently in the coming years due to impacts of climate change 
unless a long term solution is found.\2\
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    \2\ As stated in section 4.1.1.2 of the Secretarial Determination 
Overview Report, our analysis shows all of these problems will likely 
worsen and may occur more frequently in the coming years due to impacts 
of climate change. For example, models show that, while there is some 
uncertainty, over a period of 50 years (2012 to 2061), water 
temperatures in the Klamath Basin would increase 1 to 3 degrees C (2 to 
5 degrees F) and earlier snow melt would decrease summer flows. 
Removing the Klamath River dams would restore salmon access to critical 
cool-water habitat for spawning and rearing in the upper basin, thereby 
helping to buffer against effects of climate change. Removing the dams 
would also immediately improve late summer and fall water temperatures 
for salmon below this reach, thereby buffering against future impacts 
of climate change.
---------------------------------------------------------------------------
    Moreover, these very same scenarios have played out in three of the 
four years since over 40 parties have signed the Klamath Agreements; 
the Klamath Hydroelectric Settlement Agreement (KHSA), and the Klamath 
Basin Restoration Agreement (KBRA) in February 2010. The Klamath 
Agreements were crafted to address these ongoing impacts and risks to 
the Basin's resources while strengthening communities that rely on 
these resources by charting a path of collaboration and cooperation. 
The Klamath Agreements hold great promise to transform what was once a 
landscape of turmoil and conflict to one that is built on cooperation 
and trust with the recognition that we cannot take care of ourselves if 
we fail to also take care of our neighbors.
    While visiting the Basin several times over the past few years, I 
have been personally struck that tribal members, fishermen, and 
irrigators--who only a few short years ago could not even stand in the 
same room together--are no longer arguing with each other but are now 
advocating for each other and for the protection of each other's 
interests. The Klamath Agreements stand as a common vision for these 
diverse parties, and the commitment to cooperation and collaboration 
contained in these agreements is nothing short of historic.
    Our perspective is that a long-term, durable solution that is 
driven at the local level by those who are most directly affected is 
the best and perhaps only opportunity to avoid the year to year crises 
that are endemic to this basin. Under this approach, there is a mutual 
commitment to a shared resource, the economy is strengthened and jobs 
are created, and those who are most directly affected have a say in how 
the resource is managed. It is for these reasons that the framework 
embodied in both Klamath Agreements holds such promise for addressing 
the needs of the Klamath Basin in a manner that fits the above 
criteria.
    To be sure, implementing these agreements and accomplishing the 
parties' collective goals will take substantial resources. From a 
Federal perspective, we have significant concerns about overall costs 
in light of the current fiscal climate. Whatever the final costs might 
be, there should be an appropriate cost share that follows the 
`beneficiary pays' principle and is in line with other restoration 
programs that have been enacted in the recent past. We also acknowledge 
there are a handful of parties that have not signed the Klamath 
Agreements despite the non-partisan development of this framework over 
several federal and state administrations. We needr to continue our 
efforts to find common ground with these groups. But we also believe 
that the time is ripe for action and that we have a unique opportunity 
to heal and restore the basin in a lasting manner. We should not lose 
this opportunity.
KHSA
    The KHSA is a unique combination of environmental and business 
interests striking an agreement that combines both business sense and 
protection of natural resources. It is an agreement to study the 
potential removal of four privately owned hydroelectric facilities on 
the Klamath River and to determine, based on a host of scientific and 
engineering studies, whether removal of these facilities is in the 
public interest, including consideration of the interests of local and 
tribal communities, and whether it will advance restoration of the 
fisheries. The KHSA calls for removal to occur in 2020, should there be 
a determination that removal is in the public interest. Congressional 
authorization is necessary for the Secretary to make this 
determination. Should there be a decision to remove these facilities; 
the costs shall be borne by a combination of PacifiCorp's electricity 
customers in Oregon and California, through a minimal surcharge, and a 
water bond from the State of California. Consequently, there are no 
federal costs associated with any potential dam removal under the KHSA.
    The KHSA also includes certain protections for PacifiCorp in the 
facilities removal process should there be a determination to remove 
these dams. The current cost estimate is below the protection levels 
provided to PacifiCorp, though it remains uncertain at this point who 
would bear any costs in excess of those protections, should such a 
situation arise. The KHSA also provides a commitment for PacifiCorp to 
transmit and deliver federally generated power to the Klamath Project, 
which could provide savings to water users on power costs, making for 
efficient project operations, which in turn makes more water available 
for conservation purposes. On this point, discussions are underway 
between PacifiCorp, the Department, Bonneville Power Administration, 
and the Klamath Water Users on developing a plan that can be approved 
by the Public Utility Commission in Oregon to provide federal 
preference power to the Klamath Project water users. In 2006, that 
Commission terminated the Klamath Water Users' preferential power 
contract as discriminatory; then gradually increased the water users' 
power rates over a period of seven years to equilibrium with market 
rates for agricultural use in the region. We could have similar 
discussions with Western Area Power Administration for the California 
part of the Project. Although we do not have the authority to provide 
such federally generated, below-market-rate power to off project 
irrigators, and doing so would be an expansion of Reclamation's typical 
project arrangements, there are provisions in the Klamath Agreements, 
if approved by Congress that would approve such an arrangement.
KBRA
    The KBRA is a restoration agreement that includes water allocation 
and fish habitat restoration actions, predicated on, and working in 
conjunction with dam removal, to restore the Klamath Basin. The KBRA 
includes agreements among tribal and non-tribal entities resolving 
water rights disputes and provides the means for Reclamation's Klamath 
Project to conserve water supplies and develop sources of power that 
will place the Project on par with other similarly sized irrigation 
projects in the West. The KBRA provides real water to wildlife refuges, 
and if funded will put tribal members to work on habitat restoration 
actions needed in the Basin. Through the establishment of a Federal 
Advisory Committee Act charter, the KBRA will return many decisions 
regarding the Basin resources back to local control. While most of the 
items in the KBRA, especially those involving tribal and fisheries 
programs, are presently authorized under existing law, key items 
associated with making Reclamation's Klamath Project more efficient and 
flexible would require additional Congressional authorization.
    To illustrate how the Klamath Agreements would change the impacts 
of the current water year, if fully authorized, the Project allocation 
would be 353,000 acre-feet instead of the current projected 319,125 
acre-feet, wildlife refuges would be allocated 51,000 acre-feet 
compared to no available water this year, and 30,000 acre-feet of 
depletions above Upper Klamath Lake would be dedicated towards fishery 
purposes, with the system managed on a real-time basis able to react to 
changes in hydrology. Tribal members would be at work implementing 
habitat restoration actions. There would also be more tools to address 
fishery needs in the fall. Without the framework of the Klamath 
Agreements, we are managing a system that simply cannot meet all the 
competing demands year in and year out. Without the Klamath Agreements, 
the current cycle of crisis management, disaster relief, animosity 
between communities, and unfulfilled tribal rights will continue. A 
more permanent solution that provides greater predictability as to the 
availability of water and improved fishery resources is an investment 
that will be more cost-effective in the long run.
KHSA/KBRA Science Process
    Between the signing of the Klamath agreements in early 2010 and 
today, many federal studies have been undertaken and completed that 
analyze the potential effects of Klamath River dam removal and 
implementation of KBRA on local communities, tribes, and the 
environment. A Final Environmental Impact Statement analyzed the 
proposed action to remove the four lower PacifiCorp dams on the Klamath 
River in 2020 and to implement the KBRA, as well as three alternatives 
where some or all of the dams would remain in place.
    The process undertaken to develop new information for a Secretarial 
Determination was rigorous, open and transparent, provided multiple 
opportunities for stakeholder and public participation, included 
independent subject-matter experts to provide a breadth of 
perspectives, and relied on multiple levels of independent peer review 
to ensure objectivity and accuracy of findings, as described in more 
detail below.

   A team of more than 50 federal experts, scientists and 
        engineers, from eight separate federal agencies and offices, 
        prepared or oversaw the preparation of 50 new technical 5 
        reports covering areas such as engineering, hydrology, fish 
        biology, economics, cultural resources, recreation, and real 
        estate. Agency guidelines governed the peer review process for 
        these published reports.
   Completely separate from the development of these new 
        technical reports, four independent expert panels were convened 
        to provide additional perspectives regarding the likely impacts 
        of dam removal and KBRA implementation on four groups of fish 
        species. The four reports from the expert panels benefited from 
        broad public and stakeholder input as well as independent peer 
        reviews.
   The major findings from these 50 reports, the findings from 
        the four independent expert panel reports, and many other 
        existing reports were summarized in a single Klamath Overview 
        Report. This Overview Report was treated as a ``Highly 
        Influential Scientific Assessment'' and received a second round 
        of peer review from an independent panel of six nationally-
        recognized experts. The peer reviewers were also provided 
        public comments on the Overview Report to consider during their 
        peer-review deliberations. As part of the peer review process, 
        an independent ``referee'' ensured that the federal scientists 
        adequately addressed each of the peer review comments and 
        recommendations in the Final Overview Report.

    All of these studies and materials are available to the public and 
can be found at http://klamathrestoration.gov/.
Public Involvement
    Over 80 meetings and workshops were held throughout the Basin over 
a period of two years that allowed for public and stakeholder 
participation in the science process. The public and stakeholders 
provided input on hypotheses to be tested, study designs, available 
sources of information, data analysis, and conclusions to be drawn from 
the analyses. The public involvement improved the quality of reports. A 
summary of the findings from the science process is attached as an 
Appendix.
Parties that have not signed the Klamath Agreements
    We acknowledge that despite our best efforts, there are a small 
number of parties who participated in the negotiations but have chosen 
not to sign the Klamath Agreements. We respect that each party has its 
own unique concerns and must make its own decisions as to what it 
believes is in its best interest. Some of those who oppose the Klamath 
Agreements want to maintain the status quo or have general concerns 
about dam removal; others believe their resources are being 
inappropriately harmed or their rights are being terminated; or, in the 
case of homeowners around the reservoirs, that they are bearing an 
unfair share of the adverse consequences of the Klamath Agreements.
    As to those who want to maintain the status quo or have general 
concerns about dam removal, I wish to be clear that as Commissioner of 
the Bureau of Reclamation, which owns 476 dams and annually generates 
40 billion kilowatt-hours of electricity, I understand the importance 
of dams to both the economy and the communities of the American West. I 
also believe that given the ongoing challenges and increasing demands 
for limited water resources, we should continue to evaluate 
opportunities to develop additional storage and power generation 
opportunities where it makes sense. But we should also not be afraid to 
evaluate potential dam removal when the specific circumstances warrant. 
The KHSA reflects the unique circumstances of the Klamath Basin, where 
the owner of these private dams, in making a business decision that is 
in the best interests of its electricity customers and the company, has 
agreed to evaluate whether their removal would advance fisheries and be 
in the overall public interest as part of a Basin-wide restoration 
effort that addresses many of the systemic problems that continually 
plague the Klamath Basin. Dam removal in this instance has been given a 
hard look because, with the passage of time, it is clear that the 
ongoing costs of these facilities most certainly outweighs the 
benefits-- something now confirmed based on the analyses completed.
    While no final determination has been made on the removal of these 
PacifiCorp dams, there are several specific facts that bear 
emphasizing: these dams are privately owned and their owner has agreed, 
as part of a business decision, to evaluate their potential removal, 
which could still occur as an independent business decision even 
without any Congressional action on the Klamath settlements. In 
addition, these dams provide no water storage for purposes of 
irrigation, drinking water, or flow augmentation for fish. Nor are they 
designed or currently operated for downstream flood control. Moreover, 
these dams generate a limited amount of electricity, approximately 82 
megawatts, which PacifiCorp has already made up with other power 
sources.
    Just as importantly, if these dams are retained, PacifiCorp would 
have to obtain a new long-term operating license, which would require 
retro-fitting the dams for fish passage and remedying water quality and 
temperature issues below the lowermost dam. Provisions of a new 
license, plus additional operational restrictions, would decrease power 
production by 20 percent and result in the loss of the majority of 
peaking power at J.C. Boyle Dam. PacifiCorp's estimated that 
relicensing would involve at least $400 million in capital costs for 
retro-fits, and $60 million in operation and maintenance cost over the 
40-year life of the new operating license. The Public Utilities 
Commissions for both Oregon and California agreed that relicensing 
would include substantial costs and that there was a significant risk 
that ratepayers would face much higher costs if PacifiCorp sought 
relicensing than they would under the KHSA. When this is combined with 
flow requirements that will decrease hydropower generation and peaking 
power, both Commissions determined that dam removal as laid out in the 
KHSA, was preferable to relicensing. Simply operating these dams as 
they have been operated for the last 50 years is not a viable option. 
Additionally, our climate change analysis shows that water temperatures 
will increase 2-5 degrees Fahrenheit over the coming decades, 
exacerbating the warming influence on the river from the dams and 
reservoirs, further impacting salmon, and increasing costs to 
ratepayers for keeping the dams in place. These additional facts are 
why we have undertaken an analysis of potential facilities removal 
within the context of the great promise of the Klamath Agreements to 
restore resources and help struggling communities in the basin.
    There are others who favor of dam removal but do support the 
Klamath Agreements because they either want to remove or significantly 
limit irrigated agriculture from the Basin or believe that the 
assurances in the Agreements regarding water supply and, the connected 
issue of river flows, terminate tribal rights. As to the former, 
irrigated agriculture is part of the societal fabric of the Basin and, 
as mentioned earlier, provides significant jobs and economic support to 
all communities of the Basin. While the KBRA does provide further 
funding for voluntary retirement of up to 30,000 acre-feet of 
irrigation water on a willing seller or buyer basis, total removal of 
irrigated agriculture is simply not consistent with a comprehensive and 
durable restoration program meant to restore the communities of the 
basin. As to the concern regarding tribal rights, there is nothing in 
the Klamath Agreements that would ``terminate'' the rights of any non-
signatory Tribe. The United States believes the Klamath Agreements are 
consistent with any federal trust obligations to Tribes in the Basin 
and provide the best hope for restoration of thriving fisheries in the 
Basin. Our analysis of the fishery with dams removed and under the 
management of the KBRA shows significant improvement for many fish 
populations, such as steelhead, coho salmon, and redband trout, and 
increases in the annual production of Chinook salmon by about 80 
percent in the Klamath Basin. Improvements in fish production would 
result from restoring fish access to the Upper Basin through dam 
removal, including access to critical cool-water streams, and from 
actively restoring spawning and rearing habitats. Thus, we respectfully 
disagree with those who point to comparisons of flow rates in the KBRA 
to current or recent conditions as a reason to challenge the 
sufficiency of the Klamath Agreements. Our view is that a comparison of 
only flows in the river tells an incomplete story. You must also 
account for the habitat improvements and habitat expansion that will 
occur as a result of both dam removal and restoration actions. Chinook 
salmon are critically important for commercial, sport, and tribal 
fisheries in the river and the ocean and are a cultural, subsistence, 
and economic mainstay of the Basin's Tribes. After much study and 
evaluation, the scientific record shows that the Klamath Agreements 
provide significant benefits to the resources of the Tribes in the 
Basin, a conclusion validated by the support of most of the affected 
Tribes.
    We have also heard the concerns of those around the reservoirs 
whose properties and businesses would be most directly impacted by 
removal. On this point, we believe that if the Klamath Agreements are 
ultimately authorized, consideration should be given to establishing a 
fund to be managed by representatives in local communities to 
recompense land owners for any lost value that occurs as a result of 
dam removal. The size and scope of this fund can be worked out with the 
interested parties at the appropriate time in the legislative process. 
This would however, increase the costs of implementing the settlement 
and create an additional burden on the general taxpayer.
2013 Operations and Biological Opinion
    This year, the Klamath Falls area reported the second driest 
January through March period on record and precipitation has been below 
average throughout the Klamath Basin. As a result, in April the Klamath 
Basin Area Office implemented a 10-day delay for the startup of the 
irrigation season to ensure that the water elevation in Upper Klamath 
Lake would rise above critical elevations identified in the 2008 U.S. 
Fish and Wildlife Service (USFWS) BO. As a result of the dry hydrologic 
conditions, Reclamation is anticipating that full water user demand 
will not be met in 2013 consistent with eight of the last ten years. 
Reclamation is working with the Klamath Water and Power Agency (KWAPA), 
which administers the Water User Mitigation Program, to address 
potential water shortages to the extent possible given existing 
authorities and available appropriations. Shortages of approximately 
75,000-100,000 acre-feet or more are currently expected, depending on 
weather conditions and the associated irrigation demand during the 2013 
irrigation season. Additionally, it is possible that little or no water 
will be available for the Lower Klamath National Wildlife Refuge.
    Over the past two years, Reclamation, NOAA Fisheries and USFWS 
worked together to develop an new water management approach for 
Reclamation's Klamath Project that has the flexibility to optimize the 
benefits of available water for federally-listed species while 
providing more certainty related to irrigation deliveries to the 
Project. Late last month, NOAA Fisheries and USFWS jointly issued an 
integrated Endangered Species Act (ESA) biological opinion on 
Reclamation's new water management strategy for the Klamath Project. 
They concluded that this approach adequately protects the federally-
listed fish in the lake and river under the ESA for the next 10 years 
and is not likely to jeopardize their continued existence or to result 
in the destruction or adverse modification of their critical habitat. 
This new water management process relies upon real-time hydrologic 
conditions in the Upper Klamath Basin, provides more flexibility, 
ensures more water certainty for farmers (even in drought years), and 
includes a process where a team of agency and tribal technical staff 
work together to track real-time ecological conditions in Upper Klamath 
Lake and the Klamath River to support adaptive management changes that 
would provide additional conservation benefits to listed fish. Such 
innovation is absolutely critical, especially with the limited water 
supplies of the Upper Klamath Basin.
    Just like the Tribes, farmers and fishermen who have found a new 
working paradigm under the Klamath Agreements, agency staffs have also 
discovered a better way. Building off a shared goal of enhanced inter-
agency efforts to develop a proposed action that protects listed fish 
while also providing more certainty of water supply for the Klamath 
Project farmers, agency staff built effective relationships which 
enabled a collaborative process that produced tangible results. An 
early decision by the Regional Directors to bring the ESA analyses from 
each agency together into one document, instead of two biological 
opinions, encouraged higher levels of coordination among the agencies 
than ever before and served to ensure that terms and conditions for the 
Project from one fishery resource agency did not conflict with those 
from the other.
    While Reclamation's new water management system is more flexible, 
provides more certainty for irrigation deliveries, and adequately 
protects endangered species as required by the ESA, I do not believe 
any biological opinion is the long-term and comprehensive solution for 
the Klamath Basin. NOAA Fisheries and the USFWS have concluded that 
Reclamation's new water approach is protective enough for listed fish; 
the ESA's ``no jeopardy'' conservation standard means that 
Reclamation's Klamath Project will not stand in the way of recovery. 
However, it does not mean that the new approach will recover listed 
fish or fully address tribal interests without other recovery actions 
occurring throughout the Basin that go well beyond the discretion of 
Reclamation. The recovery and restoration of listed fish species in the 
Klamath Basin requires a basin-wide solution that is built, supported, 
and undertaken by those that live and work in the Basin. While ESA 
biological opinions are fundamental to ensuring that federal actions 
protect listed species, Congress did not intend these consultations to 
be the sole tool for recovery. Building a better and holistic solution 
that will advance recovery of listed fish while also building 
sustainable fisheries for fishing and tribal communities, as well as 
creating sustainable agricultural communities, requires a more 
comprehensive solution with Basin support. The Klamath Agreements hold 
great promise for being such a solution.
Adjudication
    In March of this year, the Oregon Water Resources Department issued 
its Final Order of Determination (FOD) in the Klamath Basin 
Adjudication. A number of federal entities received water rights under 
the FOD including the National Park Service, USFWS, Forest Service, 
Reclamation, and the Bureau of Indian Affairs. The most senior rights 
in the basin were jointly awarded to the Klamath Tribes and the United 
States to support tribal trust resources. Although not as senior as the 
tribal water right, the Klamath Project was also awarded a relatively 
senior water right. Because of the current water year, and our 
obligations to the tribes, water users, and refuges, we are exercising 
these water rights. Because of the current water year, and to project 
the tribal, refuge, and irrigation interests that rely on our water 
rights, we are exercising these rights.
    To be clear, we believe the impacts of regulation of water rights 
can be addressed through the KBRA or similar negotiated agreements. For 
parties to the KBRA, issues surrounding the enforcement of water rights 
have largely been resolved through agreements among the parties that 
are included in the KBRA. Once again, the goal of the parties has been 
to provide increased certainty and overall sustainability for all 
parties to the agreements. There are still a number of water rights 
holders in the basin, however, that have not settled their disputes 
regarding either the tribal or Project water rights. With the 
assistance of the Governor, we are continuing to reach out to those 
water rights holders in an effort to secure a resolution of these 
longstanding issues and are hopeful that a solution can be had.
Conclusion
    This concludes my written statement.
                                APPENDIX
    summary of key findings regarding klamath river dam removal and 
                       implementation of kbra\3\
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    \3\ This document is intended to serve as a summary and, as such, 
numbers cited herein represent averages and/or aggregates which may 
include associated levels of uncertainty that are explained fully in 
the contributing studies. All of the scientific studies, which include 
the complete scientific analysis and associated uncertainties, are 
available at klamathrestoration.gov.
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    Dam removal, sediment processes, and impacts on flooding

   The most probable cost for full dam removal, which is the 
        preferred alternative identified in the FEIS, is about $292 
        million and is under the State cost cap of $450 million (1 
        percent and 99 percent probability for removal costs range from 
        $238M to $493M, in 2020 dollars).
   Dam removal would mobilize between one-third and two-thirds 
        of the 13 million cubic yards of sediment behind the dams. The 
        majority of the sediment is fine-grained material that would be 
        readily transported to the Pacific Ocean 2 to 3 months 
        following the drawdown of reservoirs in the winter of 2020.
   Extensive chemical testing of sediments behind the dams 
        shows that human health would not be at risk due to contact 
        with these sediments.
   Dam removal would immediately restore more natural water 
        temperatures and dissolved oxygen concentrations important to 
        downstream fish and fisheries.
   Dam removal would immediately eliminate toxic algae produced 
        in the reservoirs; toxic algae create health concerns in the 
        reservoirs and downstream in the Klamath River for people, 
        fish, and wildlife.
   Long-term flood risks would increase slightly for about 18 
        miles downstream of the location of Iron Gate Dam. Analyses 
        show that some additional structures currently outside the 100-
        year flood plain would be located in a new 100-year floodplain 
        following dam removal. If dam removal were to proceed, the Dam 
        Removal Entity would work with willing landowners to reduce or 
        eliminate flood risk for these additional structures.

    Impacts of dam removal and KBRA on fish and fisheries

   The timing of reservoir drawdown in a single winter season 
        was designed to minimize negative impacts of released sediments 
        on sensitive fish species, particularly federally listed Coho 
        salmon.
   Basin-wide adult and juvenile salmon mortality is expected 
        to be less than 10 percent in the year following dam removal, 
        even under worst-case flow conditions.
   In the long run, opening up fish passage to the Upper 
        Klamath Basin through dam removal and restoring aquatic habitat 
        under the KBRA would increase salmon and steelhead production. 
        For example, annual Chinook salmon production would increase 
        about 80 percent (ranging from 40 to 190 percent among modeled 
        years).
   The increased production would increase Chinook salmon 
        harvest about 50 percent for commercial and sport ocean 
        fisheries, as well as for in-river tribal fisheries.
   Coho salmon would be expected to access 68 miles of stream 
        habitat upstream of Iron Gate Dam, including 23 miles currently 
        inundated by the reservoirs, thereby advancing the recovery of 
        this federally listed species.
   Steelhead trout would be able to migrate to historical 
        habitat above Iron Gate Dam, including up to 420 additional 
        miles of stream, and thereby advancing the most prized game 
        fishery in the Basin.
   Dam removal would also expand the distribution and number of 
        trophy redband rainbow trout, another prized game fishery, 
        throughout the hydroelectric reach of the river.
   Dam removal would totally eliminate a large non-native game 
        fishery on the reservoirs, which includes bass and yellow 
        perch.

    Climate change impacts on water temperatures, fish, and flows

   Over a period of 50 years (2012 to 2061), climate change 
        models show that water temperatures in the Klamath Basin would 
        increase 1 to 3 degrees C (2 to 5 degrees F) and earlier snow 
        melt would decrease summer flows.
   Removing the Klamath River dams would restore salmon access 
        to critical cool-water habitat for spawning and rearing in the 
        Upper Basin, thereby helping to buffer against effects of 
        climate change.
   Removing the dams would immediately improve late summer and 
        fall water temperatures for salmon below this reach, thereby 
        buffering against future impacts of climate change.
   Decreased summer flows will worsen already strained water 
        supplies needed to support farms, refuges, and fisheries.

    Impacts on jobs and regional economies

   Dam removal and full KBRA implementation would create a 
        number of full time, part time, and temporary jobs:

    --Hundreds of commercial fishing jobs in five management areas from 
            northern California to central Oregon;
    --1,400 jobs during the year of dam removal;
    --300 annual average jobs over 15 years for KBRA programs;
    --70 to 695 farm jobs in drought years depending on drought 
            intensity.

    Dam removal would also result in the loss of about 70 jobs 
associated with the operation and maintenance of the dams and changes 
in the recreational industry (reductions in whitewater rafting and 
reservoir fishing/boating).
    Tribal and Cultural Impacts:

   All of the native people residing in the Klamath River 
        environment have spiritual beliefs and traditional practices 
        that are inseparable from the River and surrounding homeland 
        environments. Dam removal and implementation of the KBRA would 
        help address tribal trust and social issues identified by the 
        Klamath River Basin Tribes as detrimental to their traditional 
        way of life. Dam removal would have beneficial effects on water 
        quality, fisheries, terrestrial resources, and traditional 
        cultural practices. Dam removal would enhance the ability of 
        Indian tribes in the Klamath River Basin to conduct traditional 
        ceremonies and other traditional practices.
   Dam removal and reservoir drawdown could affect Native 
        American cultural resources sites reported to be currently 
        submerged beneath the reservoirs. Human remains may be 
        associated with these sites. Plans to identify cultural 
        resources and to avoid, minimize, or mitigate impacts to those 
        resources would be developed in consultations with the 
        appropriate State Historic Preservation Office, Tribes, and 
        other Native American organizations.
   The removal of the dams and associated facilities, all part 
        of the Klamath Hydroelectric Project, would result in effects 
        to those historic properties. Plans to avoid, minimize, or 
        mitigate effects to historic era properties would be developed 
        in consultation with the appropriate State Historic 
        Preservation Office and other historic preservation entities.

    Hydropower, Green House Gas emissions, and electricity customers:

   Dam removal would eliminate about 82 megawatts of hydropower 
        in 2020 (enough power for 70,000 homes), which would be made up 
        by a mix of other energy sources.
   Following dam removal in 2020, approximately 526,000 metric 
        tons of carbon dioxide equivalents (MTCO2e) per year would be 
        emitted to the atmosphere from replacement power assuming 
        PacifiCorp's current resource generation mix. This number would 
        decrease to approximately 451,000 MTCO2e per year assuming 
        PacifiCorp met California's goal for replacement power sources.
   A 2010 analysis by PacifiCorp prepared for the Oregon and 
        California PUCs demonstrates that dam removal as laid out in 
        KHSA would be less costly for their customers (about $251 
        million), and less risky, as compared to likely customer costs 
        associated with relicensing the four dams, which would be in 
        excess of $460 million over a 40-year license term.

    Wildlife refuges

   Dam removal and KBRA implementation would allow the refuges 
        associated with Reclamation's Klamath Project to have greater 
        certainty about water deliveries with 14 newly established 
        allocations, even during drought years, and increased 
        flexibility in the timing of water deliveries.
   Full refuge needs would likely be met in 88 percent of 
        years; currently refuge needs for water are met in less than 10 
        percent of the years. These NWRs wetlands are critical 
        components of the Pacific Flyway, the corridor for migrating 
        birds from as far away as Alaska and Mexico.
   The additional water deliveries-and the increased 
        predictability of those deliveries-would mean that greater 
        numbers of migratory waterfowl, non-game water birds, wintering 
        bald eagles, and other sensitive species would be supported by 
        the refuges and would increase recreational wildlife viewing.
   The estimated increase of over 190,000 waterfowl in the fall 
        would result in an additional 3,600 hunting trips annually.

    Real Estate

   Upstream of Iron Gate Dam studies identified 668 parcels 
        near Copco 1 and Iron Gate reservoirs which either have water 
        frontage, water access, or views of reservoirs. Of these 668 
        parcels, 127 include single family homes. These 668 land 
        parcels would decline in value if dams were removed and 
        reservoirs drained.
   Land values of parcels downstream of Iron Gate Dam, with 
        river views and river access, may increase in the long-term 
        because of restoration of the river, including improved water 
        quality and more robust salmon and steelhead runs.

    Flows

   The differences in monthly average flows between dams 
        remaining in place and dam removal options are relatively 
        small; however, without the dams, pulse flows and other 
        seasonal fluctuations beneficial to fish would occur more 
        often.
   The absolute minimum flow target under the KBRA would be 
        approximately 800 cubic feet per second (cfs) at the location 
        of Iron Gate Dam. In most months and years, however, flows 
        would be much greater. In extreme drought years, flows could 
        drop slightly below this target, but never drop below 700 cfs 
        owing to the water-management provisions in the KBRA.

    The Chairman. Very good. Thank you, Mr. Connor.
    For all of you we'll put your full written statement into 
the record. Mr. Connor was trying to set a land speed record 
for trying to summarize. I appreciate that. We thank you very 
much, Commissioner.
    We've got Richard Whitman here who has been doing important 
work for Governor Kitzhaber on this. We welcome you, Mr. 
Whitman.

   STATEMENT OF RICHARD M. WHITMAN, POLICY DIRECTOR, OREGON 
 GOVERNOR JOHN KITZHABER'S NATURAL RESOURCES OFFICE, PORTLAND, 
                               OR

    Mr. Whitman. Thank you, Chairman Wyden and Ranking Member 
Murkowski. Appreciate the opportunity to participate in this 
very important round table this morning on one of the most 
vexing resource challenges we have in this country concerning 
the use of water. Challenges that have created no winners only 
conflict, only anger, only instability.
    It's a top priority of the State of Oregon and Governor 
Kitzhaber to resolve these vexing issues. A hallmark of the 
Governor's approach to these issues is very much echoed by your 
approach on this committee of the importance of taking 
collaborative approaches where everybody comes to the table, 
everybody shares in the success and the sacrifice necessary to 
get a long term, stable solution. So appreciate your leadership 
in bringing us all together today.
    There are 4 basic competing demands for water in the 
Klamath Basin.
    We have the downstream fisheries of importance to both 
States and downstream tribes and fishing communities on the 
coast.
    We have the upstream fisheries in Upper Klamath Lake of 
importance in particular to the Klamath tribes.
    We have the Klamath irrigation project.
    Then we have the Upper Basin Water Users, largely a 
ranching community above Upper Klamath Lake.
    In the past when we've had shortages on a regular basis the 
burden of those shortages has been borne unevenly between these 
different interests.
    In 2001, we had the Klamath irrigation project take the 
brunt of the shortage.
    In 2002, with the fish kill on the lower portion of the 
river, we had the downstream fisheries take the brunt of the 
shortage.
    At least arguably in many years with shortages we've had 
the Klamath tribes take the brunt in terms of being at the end 
of the line in terms of water availability in the upper portion 
of the Basin.
    With the completion of the water right adjudication in the 
State of Oregon we are now shifting to another allocation of 
burdens in terms of water shortages in the Basin. That's a very 
abrupt shift that's happening very dramatically this year both 
because of the completion of the adjudication and the historic 
levels of drought that are occurring in the Upper Basin. The 
burden is shifting for the first time to the ranching community 
in the Upper Basin. We are looking at a situation where it's 
very possible that we'll have a near complete shutdown of the 
ranching, the irrigation of the ranching community in that part 
of the Basin with very severe economic consequences to that 
portion of the Basin.
    We have to stop lurching from this set of complete winners 
and complete losers from one side to the other. Get to a 
solution where the burden of over allocation of water resources 
in this Basin is shared in some more equitable way between the 
parties. In reading the testimony, the submitted testimony, of 
the witnesses it's remarkable almost every witness talks about 
the need for a more equitable sharing of water resources. I 
think we're very encouraged by that consistency in the 
testimony today.
    Governor Kitzhaber has made resolution of Upper Basin water 
issues a top priority. Over the last 6 weeks we've been 
involved in formal discussions with a number of the key parties 
in the Upper Basin. We're very encouraged by those discussions 
as well as the testimony today. We believe there is a solution 
space in the Upper Basin where people can come together and 
share the shortages, share the sacrifice.
    We'd ask 2 things of you, Chairman Wyden and this 
committee.
    First of all, to work with the parties here to develop 
legislation that implements key provisions of the agreements 
that have been reached between these parties and that allows us 
to share the burden more equitably.
    Second, legislation that gives us additional tools to 
improve the resiliency of this Basin to withstand drought that 
we are inevitably going to face in the future.
    Secondly, we need the ongoing close engagement of key 
Congressional offices in this effort to bring the parties 
together so that they understand that this is the time to come 
to the table and reach a resolution here in the Klamath Basin.
    With that, I'll conclude my testimony. Thank you for the 
opportunity.
    [The prepared statement of Mr. Whitman follows:]

   Prepared Statement of Richard M. Whitman Policy Director, Oregon 
     Governor John Itchier's Natural Resources Office, Portland, OR
    Chairman Wyden, Ranking Member Murkowski, and members of the 
committee, my name is Richard Whitman, and I am the Policy Director for 
Oregon Governor John Kitzhaber's Natural Resources Office. I am here 
today to testify on behalf of Governor Kitzhaber, and to convey the 
urgency of the need for Congressional action to help the interests in 
the Klamath River Basin resolve the repeated crises brought on by many 
decades of poor management decisions.
    None of the interests before you today, including the states, the 
federal government and the people of the basin, are blameless for the 
situation we now face--competing demands for over-allocated water 
resources. The question before you today, however, is not how we got to 
where we are, but how we transform the management of this river basin 
so that it sustains all facets of our communities, our economy and our 
environment. If we do not act soon, serious harm is going to occur in 
many parts of the basin, from the upper basin off-project irrigators 
represented on this panel, to the lower Klamath wildlife refuges, and 
downstream to the Tribes and other fishing interests that depend on 
water to support Coho salmon, Chinook salmon and other fisheries.
    There is a way to move this basin away from conflict and crisis to 
stability. That way is outlined by the Klamath Basin Restoration 
Agreement (KBRA) and the Klamath Hydroelectric Settlement Agreement 
(KHSA). The State of Oregon is a signatory to the KBRA and the KHSA, 
and Governor Kitzhaber reaffirmed his and Oregon's support of those 
agreements last December in agreeing to extend and amend the KBRA. 
Oregon stands ready to work with Congress and all basin interests to 
craft legislation that moves this region away from the cycle of 
conflict we have seen over the past twelve years.
Oregon's Commitments and Interests
    Oregon's support for these agreements is not merely a matter of 
signing a piece of paper. Oregon ratepayers have already contributed 
over $50 million to implement the KHSA, through a surcharge on electric 
rates approved by the Oregon legislature and the Oregon Public 
Utilities Commission. Oregon also has invested millions of dollars in 
actions to improve water quality and restore habitat in the upper 
Klamath River Basin. Additional investments have been made by other 
governmental and non-governmental actors. Oregon is committed to 
continued investment in the Klamath basin, as it works with irrigators, 
the Klamath Tribes, local governments and industry to restore this area 
to health.
    We are already seeing improvements as a result of the KBRA, KHSA 
and related actions. Water quality is starting to improve in the upper 
basin. Levels of a key pollutant, phosphorus, are declining as a result 
of the restoration of marshes and riparian areas. Stream flows are 
increasing above the lake as well, albeit slowly. Collaborative actions 
have been undertaken to stabilize the threatened and endangered bull 
trout and sucker populations in the upper basin, with significant 
increases in bull trout numbers in local streams. Future actions 
contained in the KBRA are expected to move these populations toward 
recovery.
    Oregon's interests come down to assuring that the farming and 
ranching communities dependent on water resources in the Klamath River 
Basin are afforded reasonable stability and certainty on which they can 
base decisions, that the Klamath Tribes have a land base restored to 
them along with water quality and quantity needed for healthy 
fisheries, and that downstream fisheries are also healthy. Oregon is 
still very much a farm state. Agriculture is Oregon's number two 
industry, and agriculture in Klamath County is an important part of 
that success. Klamath County is ranked 7th out of 36 counties in Oregon 
for the value of agricultural production ($150 million in 2007 and $284 
million in 2011, with half in crops and half in livestock sales). 
Farming within the Klamath Irrigation Project generates about half of 
the value of agricultural production in the region, and approximately 
13% of the employment is in agriculture and agricultural processing.
    Oregon also cares deeply about the success of our Indian Tribes. 
Governor Kitzhaber signed an executive order to assure that state 
government works with Oregon Tribes on a government to government 
basis, and that order was subsequently enacted as legislation by the 
Oregon Legislature. Oregon has worked closely with the Klamath Tribes 
to improve water quality above Upper Klamath Lake, and the Oregon 
Watershed Enhancement Board has recently designated this area for its 
Strategic Investment Program. Oregon strongly supports the Klamath 
Tribes efforts to reacquire lands within the former Klamath Indian 
reservation, as it has supported other tribal efforts to acquire a land 
base.
Klamath River Basin Water Rights Adjudication
    Many members of the committee likely have read or heard that 
irrigators in the upper Klamath River basin are having their water shut 
off this year as a result of the severe drought conditions in this part 
of the state. I want to take this opportunity to describe for you what 
is going on, and how it relates to our current predicament.
    Up until this year, when water was short in the Klamath basin, the 
burden of that shortage fell largely on two sets of interests--the 
Klamath Tribes and the Klamath Irrigation Project. Oregon, like other 
western states, regulates water use by the prior appropriation 
doctrine: ``first in time--first in right.'' But in a basin where pre-
water code water rights, including those of both the Klamath Irrigation 
Project and the Klamath Tribes, had not been determined, those water 
rights were not and could not be protected under state law. As a 
result, water users in the upper part of the basin were able to use 
water without limitation, and shortages downstream of those uses--in 
tributaries to Upper Klamath Lake and in the lake itself, occurred 
regardless of seniority.
    The unregulated use of water in the basin ended this year, with the 
completion of the administrative phase of the Klamath Water Rights 
Adjudication. Now that water rights are quantified and confirmed, the 
state is required to protect them by regulating water use under the 
prior appropriation system. Last week, seven irrigation districts with 
a priority date of 1905, and the Klamath Tribes with the earliest 
priority date in the basin, among others, made ``calls'' for water to 
the state---requesting regulation to protect their senior water rights. 
Given current weather conditions in the basin, and the lack of snowfall 
this past winter, a large portion of the water right holders above 
Upper Klamath Lake may be required to stop irrigating.
    Most of the water use above Upper Klamath Lake is to irrigate 
pasture and grow hay for cattle. Many of these lands are used as summer 
pasture by operations that move livestock between California and 
Oregon. It is estimated that there are approximately 70,000 head of 
cattle on the lands above the lake. While ranchers were able to 
irrigate into early June, fields will begin to dry out quickly as we 
move to July, and ranchers likely will have to reduce herd sizes by 
selling or moving cattle as a result. As drought conditions are 
widespread in the west, opportunities to move cattle are very limited 
and hay prices are high.
    Another set of interests that will be affected by water regulation 
this year are the wildlife refuges managed by the U.S. Fish and 
Wildlife Service. These refuges have priority dates for their water 
rights of 1925 to 1985, well-after the Klamath Irrigation Project. As a 
result, the refuges are unlikely to receive much, if any, water (and 
this will be true in most drought years absent agreements to the 
contrary). These refuges seasonally support a large proportion of the 
migratory waterfowl and associated species in the Pacific Flyway, as 
well as significant wildlife-oriented recreation and tourism.
    Other interests affected by water regulation this year are likely 
to include Park Service facilities as well as Forest Service 
campgrounds and another Bureau of Reclamation facility that supplies 
water to the Medford, Oregon area. While the effects on the Medford 
area are expected to be minor this year, disruption of past patterns is 
likely to extend beyond ranchers.
    You may hear from some that the State of Oregon has ``given away'' 
water to federal and other interests in quantities well-beyond amounts 
that have ever been used. That allegation is simply not true, as 
demonstrated in the charts provided at the end of my testimony. The 
rights confirmed for the Klamath Tribes are rights that were reserved 
by the Tribes as part of their treaty with the United States. The 
priority dates of those rights were determined based on federal court 
decisions, and the quantities of those rights reflect legal standards 
set by federal court decisions and the evidence presented by the 
parties in the adjudication, quantities that were reduced substantially 
from what was claimed, and that are below the median stream flows in 
the Upper Basin.
    Some parties argue that their rights are being taken away before 
they have had their day in court. You need to know that the Klamath 
Adjudication afforded all participants a full opportunity to make their 
cases over a 38-year period. The claims and contests were heard first 
by an independent hearings officer, who then made a recommendation to 
an independent adjudicator. Yes, there is an opportunity for all 
parties to file exceptions in state circuit court, with yet another 
round of independent review. But under Oregon law, the rights confirmed 
by the adjudicator must now be enforced unless the circuit court grants 
a stay. A stay request is currently pending in state court, and is 
likely to be decided within the next month. All in all, it will likely 
be a number of years more before we all know the final results of the 
adjudication. For now, though, the burden of uncertainty has shifted to 
the Upper Basin.
    One set of interests that has elected to forgo challenges to the 
Klamath Tribes water rights is the irrigation districts within the 
Klamath Irrigation Project. Under the KBRA, and corresponding 
agreements in the Klamath Water Rights Adjudication, the districts have 
agreed not to contest the Klamath Tribes water rights, in return for 
agreement by the Tribes that they will not call water rights from Upper 
Klamath Lake and the Klamath River below the lake that have a priority 
date earlier than August 9, 1908--leaving the irrigation districts free 
from a tribal call for regulation. In return, the districts have agreed 
to support the KBRA and related provisions that limit their water 
demand to levels that are protective of fisheries using the lake.
    This form of agreement between water users is the basic model of 
the way forward in resolving water use disputes in the Upper Klamath 
Basin. The KBRA includes similar provisions allowing ``off-project'' 
water users assurances if they agree to participate in efforts to 
reduce water use by 30,000 acre-feet (by purchasing rights from willing 
sellers), and by participating in riparian restoration efforts that 
will improve water quality.
    With the completion of the adjudication in March, the Oregon 
Governor's office was asked to begin a renewed effort to bring the 
upper basin parties together to achieve a settlement. We are working 
actively to bring the key parties together to reach agreement on water 
use and riparian area restoration. Such an agreement is the key to 
avoiding the hard, black or white, winner-take-all contests that we now 
see. The next few months will be critical in this effort. We need the 
good faith and assistance of all parts of the farming and ranching 
communities, the Klamath Tribes, the other KBRA parties, local 
governments, and the multiple federal agencies involved in this complex 
system. We also need the encouragement and assistance of Congress. 
Enacting legislation that allows the key elements of the KBRA and KHSA 
to move forward is the only clear way to avoid years of escalating 
conflict and costs. Failure to act will result in major losses for many 
parts of the basin, and only escalate and inflate the ultimate price of 
reversing years of poor management decisions in the Klamath.

    The Chairman. That's very constructive, Mr. Whitman. The 
Governor has talked to me about this on a number of occasions. 
He is very passionate about the idea.
    A, this is the time.
    B, it is going to take a unique and collaborative effort to 
do it.
    So we will be working very closely with the Governor and 
you on this.
    We welcome Mr. John Laird, Secretary for Natural Resources 
in California in Sacramento.
    Welcome.

    STATEMENT JOHN LAIRD, CALIFORNIA SECRETARY FOR NATURAL 
 RESOURCES, CALIFORNIA NATURAL RESOURCES AGENCY, SACRAMENTO, CA

    Mr. Laird. Thank you very much. I really appreciate the 
opportunity to present today, Chairman Wyden, Ranking Member 
Murkowski. I'm here on behalf of Governor Jerry Brown to state 
the State of California's continued and firm support of both 
the agreements that you have. As somebody that is a recovering 
State legislator, I really appreciate the precedent of having 
people read their statements into the record.
    Hopefully shortly----
    The Chairman. You've probably dealt with a few of these 
kind of non-controversial piece of cake issues, huh?
    Mr. Laird. Exactly. But nobody appears to about to be 
arrested. So it is very different from California hearings.
    So let me make a few points in summary which is California 
has been taking a real run at a number of contentious problems 
in a real collaborative stakeholder driven way.
    We've negotiated with Nevada to back off from the brink of 
going away from our Tahoe Compact for lake clarity.
    We've negotiated a strong network of marine protected areas 
and did it with involving tribes so that historic takes were 
involved in the concept of protected areas.
    We have the mother of all problems, the Sacramento/San 
Joaquin River delta issues. We're working really hard to 
involve stakeholders and do it in a way that both restores the 
ecosystem and provides water reliability. We're doing a 
stakeholder driven process to site desert renewables to both 
use the best sites, do mitigation in a durable way and work 
with local governments. The Klamath is exactly in that spirit.
    The stakeholder driven process where over 40 stakeholders 
came together and it was a give and take. There were not 
winners and losers. Everybody got something. But everybody gave 
something. That is historic in the Klamath Basin.
    That is why we signed on to the agreements in 2010.
    That is why we re-signed on for the extension.
    The accomplishment is really remarkable given the history. 
I think we hear in meetings from people that also are not 
enthusiastic about the agreements and have their own solution, 
but usually there's no one else they bring with them in 
offering their solution. The significance is the give and take 
that resulted in the Klamath Agreements.
    The support is broad based in terms of resolving the years 
of conflict. It improves water reliability, particularly given 
the issue of drought. We in California have just measured a 
record low in our Sierra snowpack heading into this water 
season. We did not have, in some parts of the State, which is 
negligible reported rainfall or snowfall after the first of the 
year, unprecedented in the history of record keeping.
    That obviously extends to the Klamath Basin in the drought 
impacts. So what it does is it makes the point for these 
agreements. There are about to be some things that are going to 
happen in the Klamath Basin that really will be to the 
detriment of some stakeholders there. They would not be 
happening if these agreements were in place. That is very 
significant.
    So California requests the support, your support, for 
legislation implementing these agreements and appreciate your 
leadership.
    But I want to add one thing that's not in my statement 
that's responsive to a comment you made in your opening 
statement, Mr. Chairman. In short, California is good for its 
financial commitment. We are committed.
    In a little more detail. California, just as with Oregon, 
our Public Utilities Commission did a rate surcharge on all our 
rate payers that are in the Klamath Basin and in the Klamath 
watershed. Obviously there are many more rate payers on the 
Oregon side. So we did a similar rate surcharge even though it 
doesn't raise anywhere near as much as is raised on the Oregon 
side.
    We do have a bond that contains the remaining money here. 
That bond was postponed because just frankly in the great 
recession the voters were not disposed to spend money. One of 
the challenges the Governor undertook is he walked in the door 
January 2011 with a $26 billion deficit in the State budget.
    He is signing a budget this week that is completely in 
balance with surplus and presumed surplus in the future years. 
It was very hard sledding. Because as somebody who was chair of 
a legislative budget committee for 4 years, the budgets in the 
last 10 years might have been legally balanced, but were not 
structurally balanced.
    So the point is that this isn't required until 2020. If for 
any reason the bond doesn't pass we will be good for it in 
another way. We work on that. We know there's lots of fluidity 
in the cost estimates and to issues that were more forward to 
2020.
    But we hope that these agreements are implemented. We hope 
we can work with the stakeholders on how exactly to make good 
that commitment in the event that we hope is an unlikely event 
that the bond doesn't pass.
    So I just wanted to be responsive to what I presumed might 
be a question when you got to the question period. I look 
forward to the discussion. I'm grateful for having been able to 
participate here today.
    [The prepared statement of Mr. Laird follows:]

  Prepared Statement of John Laird, California Secretary for Natural 
     Resources, California Natural Resources Agency, Sacramento, CA
    Chairman Wyden, Ranking Member Murkowski, and members of the 
committee, I am California Secretary for Natural Resources John Laird. 
I am here on behalf of California Governor Jerry Brown to express the 
State of California's continued and firm support of both the Klamath 
Hydroelectric Settlement Agreement and the Klamath Basin Restoration 
Agreement.
    In California, Governor Brown is committed to tackling some of the 
most difficult issues of our time. California is a leader on climate 
change and marine protection--where we established a globally-
significant network of marine protected areas while still protecting 
tribal interests in historic gathering. We forged an agreement to 
resolve differences between the states of California and Nevada in 
protecting the clarity of Lake Tahoe, we have released a draft of a 
comprehensive plan to restore habitat and establish water supply 
reliability in the Delta, and are working on a landmark program for 
siting desert renewables.
    Part of that determination is reflected in California's continued 
commitment to the Klamath agreements. More than 40 coalition members 
representing all of the major interests in the Basin came together and 
spent years negotiating these complex agreements. California signed 
onto these agreements in 2010 and signed again, along with all of the 
other parties, last year to extend them.
    The Klamath Agreements represent the first stakeholder-driven 
compromise ever aimed at the success and health of this basin from, 
literally, its headwaters in Oregon to the Pacific Ocean in California. 
They reflect an enormously diverse community that has agreed to a 
common future for the Klamath Basin for their own stability, recovery, 
and future economic prosperity.
    This accomplishment is even more remarkable because of the history. 
In the early 2000s, when many of the very same individuals and 
stakeholders were locked in courtroom battles, bouncing between 
rotating crises for fisherman, Tribes, farmers, and conservationists, 
most observers predicted compromise would never occur. It did in the 
form of the Klamath Agreements.
    Every party receives some benefit and more importantly every party 
is carrying some burden. There are those at this hearing who will tell 
you that these agreements are not good enough. They may even tell you 
that they have an alternative. But if you ask them whether the same 
diverse stakeholders of the Basin will sign on to their alternative 
like they have signed onto the Klamath Agreements, they don't have an 
answer.
    In the Upper Klamath Basin, irrigation provides over $300 million 
annually in direct revenues, an additional $300 million in indirect 
revenues, and provides 4,500 jobs. The commercial salmon fishery 
provides an additional $150 million into the Basin. In 2006, Congress 
had to provide more than $60 million in disaster relief to commercial 
fishing families when the Klamath salmon stocks were closed to 
commercial fishing, resulting in over $100 million in losses. The 
Klamath Agreements reduce water supply uncertainty for all of the Basin 
interests that rely on Klamath water. The agreements provide 
substantial economic benefits to regions that have been impacted by 
these dams for many years. An analysis under the National Environmental 
Policy Act indicated the implementation of the agreements would 
generate 4,600 jobs regionally and protect the $750 million farming and 
fishing industries that are still at risk. Support for these agreements 
and legislation implementing them is support for a broad-based solution 
that will resolve years of conflict, it is support for one of the 
single most beneficial actions we can take to restore salmon in the 
United States and set the Klamath Basin on a stronger economic path 
going forward.
    The agreements also improve water reliability. They provide for a 
drought planning mechanism to deal with low water years and prevent 
abrupt reductions and stop gap measures like additional releases by the 
United States Bureau of Reclamation from the Trinity River Division to 
augment flows in the Lower Klamath.
    Improving water reliability and restoring habitat are key goals of 
our Administration in California and these goals are reflected in our 
continued support of the Klamath agreements. The State of California 
requests your support for legislation implementing these historic 
agreements. We thank you for your leadership in working with these 
diverse stakeholders to make the Klamath Basin a better place.

    The Chairman. Thank you very much, Mr. Laird, for bringing 
some more good news. We've been at it about 40 minutes or so 
and the fact that the utilities are trying to step up and 
provide some rate relief to some of these farmers that are hard 
hit, you're saying that California is going to be good for its 
commitment on the financing side.
    I can't tell everybody to take the rest of the day off, but 
we're making some progress.
    Mr. Laird. I can't do 250 million every 40 minutes. I'll 
just do it in the first increment.
    The Chairman. I got the drift on that.
    [Laughter.]
    The Chairman. But certainly that is encouraging. Very much 
appreciate you and Governor Brown, who I know is spending a lot 
of time trying to figure out a way to show fiscal discipline 
and still solve some problems.
    Mr. Laird. Thank you.
    The Chairman. We appreciate it.
    Our next witness is going to be the Honorable Don Gentry, 
Chairman of the Klamath Tribe. As we begin, Chairman Gentry, I 
want people to know how much I appreciate the good--will that 
you and so many in the Tribe have been showing. Again and again 
in these discussions you've said we want to find a way to 
resolve this. We are going to work in good faith. I so 
appreciate the constructive tone that the Tribe has been 
taking.
    So please proceed with your comments.

 STATEMENT OF DONALD C. GENTRY, CHAIRMAN OF THE KLAMATH TRIBES 
                    OF OREGON, CHILOQUIN, OR

    Mr. Gentry. Thanks so much, Chairman Wyden and Ranking 
Member Murkowski.
    The Chairman. I have a feeling, Mr. Gentry, your--yes, get 
your mic.
    Mr. Gentry. There we go.
    The Chairman. There you are.
    Mr. Gentry. Thanks so much, Chairman Wyden and Ranking 
Member Murkowski. As you know I'm Don Gentry, Chairman of the 
Klamath Tribes. I thank you so much for holding this hearing 
today to help us better understand the serious and complexity 
of the issues that are facing us in the Basin.
    I represent the Klamath Tribes, the Klamath, the Modoc and 
the Yahooskin Band of Snake Indian River people. Our time 
immemorial water right in the Klamath Basin supports our 
inherent right to hunt, fish, trap and gather.
    In an 1864 treaty with our people, the United States 
promised to honor our treaty rights. It supports our right to 
hunt, fish, trap and gather. Our ancestors ensured these rights 
were reserved to us forever in the treaty.
    In addition to providing for subsistence the treaty 
resources are central to exercising our cultural and spiritual 
practices. Exercising our rights to these resources, like our 
endangered c'waam or Lost River Suckers is critical to the 
overall health, social health and well being of our people. 
Without the resources like our endangered c'waam, we simply 
can't live as the people we believe Creator intended us. This 
is why we have such a deeply felt responsibility to protect our 
treaty resources for our people and the future generations.
    Decades of failed State and Federal policies of over 
promised water across a diverse set of groups in the Basin and 
few decades of conflict. These failed water polices have 
acerbated treaty resources and brought the remnant of our 
treaty protected fisheries to the brink of collapse. Make no 
mistake this is a breach of the United States treaty based 
trust responsibility to us.
    We take no pleasure in the fact that water must sometimes 
be cutoff to our neighbors to satisfy the United States 
obligations. Even some of our own Klamath tribal families have 
had to make the sacrifice.
    After years of contentious litigation many in the Basin 
realized that a collaborative approach was necessary. Our 
negotiations led to the delicate balance of needs and 
compromise within the Klamath Basin Restoration Agreement. 
Unfortunately conflicts continue with those who chose not to 
become KBRA parties.
    We are in a State water adjudication process where the 
tribe's senior time immemorial water rights were recently 
reaffirmed and recognized as enforceable by the State of 
Oregon. This litigious process is not our preferred path 
forward. It is in stark contrast to the collaborative approach 
of the KBRA.
    The door remains open however for those tied up in 
litigation to seek a settlement within the framework of the 
KBRA. Congress must act to implement the KBRA and KHSA. 
Congressional inaction will guarantee continuing conflict, 
economic calamity and disasters that have already cost the 
Federal Government 170 million dollars in emergency relief.
    None of the KBRA parties created the situation that we're 
dealing with in the Basin. But we have worked hard to develop a 
consensus based, locally solution. Now the onus is on Congress 
to act.
    Chairman Wyden, I thank you and committee for holding this 
hearing. I'm happy to answer any questions you may have.
    [The prepared statement of Mr. Gentry follows:]

Prepared Statement of Donald C. Gentry, Chairman of the Klamath Tribes 
                        of Oregon, Chiloquin, OR
    Chairman Wyden, Ranking Member Murkowski, and members of the 
Committee, my name is Don Gentry and I am the Chairman of the Klamath 
Tribes. I want to thank the Committee and Chairman Wyden in particular, 
for holding this Hearing to better understand the serious water-related 
issues we are grappling with in the Klamath River Basin (Basin). As 
Chairman of the Klamath Tribes, it is my honor to convey to this 
Committee the views of the Klamath Tribes on these important matters. I 
am also joined today by Jeff Mitchell, a former Klamath Tribal 
Chairman, who has been the Tribes' lead negotiator on the Klamath Basin 
Restoration Agreement.
    I represent the people of the Klamath Tribes who are comprised of 
the Klamath Tribe, the Modoc Tribe, and the Yahooskin Band of Snake 
Indians. In 1864 our respective leaders entered into a Treaty with the 
United States. In one section of the Treaty our ancestors reserved to 
us, with the complete agreement of the United States, water rights that 
we have held since time immemorial. While we ceded other lands and 
rights in the Treaty to the United States for the benefit of its 
citizens, we reserved our water rights for hunting, fishing, gathering, 
and trapping. The treaty resources are essential to the Klamath people 
and make us who we are. They allow us to live our tribal way of life. 
In addition to providing for our subsistence, the resources are central 
to our ability to exercise our cultural and religious practices, which 
is critical to providing for the physical and social health of our 
families and community. Without the treaty resources like the 
endangered c'waam (Lost River Sucker), we simply do not have the 
ability to live as Klamath People in the way Creator intended. That is 
why our people and the government of the Klamath Tribes have a deeply 
felt responsibility to steward our Treaty resources for our 3,700 
members and our future generations.
    Below I provide a brief summary of our history, which is essential 
to understanding how we have approached water-related issues. Then, 
some of the cyclic catastrophes that have plagued the Basin are 
described, with an emphasis on the Upper Basin. In addition, specific 
water-related issues are examined, followed by an explanation of how 
the two recent settlement agreements, the Klamath Basin Restoration 
Agreement (KBRA) and the Klamath Hydroelectric Settlement Agreement 
(KHSA) will resolve these issues and bring stability to the Basin.
What Came Before--Land Loss, Tribal Fishery Loss, Tribal Termination, 
        and Tribal Restoration
    In the Treaty of 1864, the Klamath Tribes relinquished claim to a 
vast territory of 20 million acres of what is now southern Oregon and 
northern California. However, we reserved to ourselves 2.5 million 
acres of land, encompassing the entire Upper Klamath River Basin above 
Upper Klamath Lake. By 1954, fraudulent surveys and various federal 
Indian polices reduced the Klamath Indian Reservation to 1.2 million 
acres, of which 882,000 were Tribal trust lands.
    More was yet to come. The Termination Act of 1954 led to the loss 
of federally recognized Tribal status, the conversion of a major 
portion of our ancestral lands into the Winema and Fremont National 
Forests, and the abrupt loss of the forest-based foundation of our 
Tribal economy. At the time of termination, the Klamath Tribes was 
among the most prosperous Tribal Nations in the United States. 
Ironically and brutally, the federal Termination policy was based on 
the idea that because of our success, we could do without the land base 
that was the very source of that success. Predictably, Termination 
precipitated severe economic and social devastation from which we are 
still struggling to recover.
    In 1986 the United States acknowledged the failure of the 
termination era policies by restoring our federally recognized Tribal 
status. While this step restored some capability and authority to 
influence resource management, it was not accompanied by the return of 
our ancestral lands. Federal recognition did not re-start our forest-
based economy and the social devastation wrought by termination is 
still with us. To date the Tribes have reacquired only about 700 acres 
in scattered parcels.
    Our aquatic resources, which are fundamental to Klamath tribal 
life, suffered too. Over the past century as the Klamath land base was 
eroded, development focused on putting water to beneficial use. Vast 
tracts of wetlands and even lakes were diked, drained, and transformed 
to farmland. Floodplains of our major river systems were developed for 
agricultural uses and hydropower dams were built on the Klamath River. 
Upper Klamath Lake was put to work as the primary reservoir serving the 
needs of hydropower and agriculture. These developments enabled robust 
non-tribal economies to develop around the water resources of the Upper 
Basin.
    But these changes involved significant loss to the Klamath Tribes. 
Our salmon and steelhead runs were completely wiped out when the first 
Klamath Hydroelectric Project dam was built in 1917 without fish 
passage facilities, despite the Klamath Tribes' strong protests and 
written promises from the California Oregon Power Company that such 
passage would be built. In addition to obliterating the salmon and 
steelhead runs, the resulting changes in the hydrology of Upper Klamath 
Lake and its tributaries damaged other Treaty-protected fisheries. Loss 
of wetlands and riparian ecosystems, along with other land use changes, 
increased the flow of nutrients into Upper Klamath Lake. This excessive 
nutrient enrichment causes enormous summertime cyanobacterial (blue-
green algae) blooms, impairing water quality so severely that the two 
lake-dwelling sucker species-some of the toughest fish, and once among 
the most abundant fish in the Basin-have been pushed to the brink of 
extinction. Effects of this nutrient enrichment are felt by other 
fisheries and water users in the Klamath River far downstream of Upper 
Klamath Lake.
    While a lot of focus is placed on the Tribes' fishery resources we 
must not forget that the Tribes treaty resources include other plant, 
wildlife, and water fowl. For example, the wokas, or woksam in Klamath, 
is the yellow "water lilly" that is one of the main nutritious food 
staples of our people. Wokas is used year round and the dried seed 
shells can be used as a dye for the tule reeds used in making baskets. 
In the 1800s, it was estimated that the Klamath Marsh contained 
thousands of acres of wokas. The same can be said of the Upper Klamath 
Lake, Lower Klamath Lake and Tule Lake. Today the wokas beds are 
dwindling and are only a mere fraction of what they used to be. It's 
difficult to depend on the wokas from year to year as the crops 
continue to shrink, yet the wokas is an integral part of Klamath 
culture and diet. Our collective memory always comes back to the wokas 
as the one thing that ties us together. It in part has, after all, 
helped us persevere through the millennia.
    The Klamath Tribes have borne many severe costs associated with 
developing the Basin, but have received few of the benefits. Our salmon 
and steelhead are gone, while PacifiCorp shareholders and rate-payers 
have continuously benefited from the electricity produced by the dams 
that destroyed these fisheries. We have not fished for the endangered 
c'waam and koptu (Lost River and shortnose suckers) since 1986, while 
irrigated crops and livestock have been raised and sold each year from 
agricultural operations that take water from our rivers and lakes, and 
contribute to excessive nutrient loading that compromises ecosystem 
health. These fisheries sustained our people for millennia, but a mere 
century of development threatens their continued existence, and now, 
after centuries of harvesting tens of thousands of fish, we are 
restricted to two fish each year for ceremonial purposes. Many other 
examples exist. Make no mistake: the Klamath Tribes view these steep 
inequities as Treaty violations - a demonstrated failure of the United 
States to keep faith with our people. As may be imagined, deep, abiding 
anger and sadness about this situation has pervaded our people for many 
years.
    After the Klamath Tribes' federal recognition was restored, we 
initially worked in an adversarial manner to turn these realities 
around, but eventually came to see that a collaborative approach was 
necessary to resolve the Basin's persistent conflicts. For the decade 
of the 1990s, we did what everyone else was doing: we sought only what 
we needed, without particular regard to the needs of others. We came to 
realize that when everyone acts in this manner, then conflict and 
division prevails. This began our earnest efforts to seek collaborative 
settlement of these issues. Despite several failed attempts, our 
interest in settlement remained and when the large settlement efforts 
around the KBRA/KHSA emerged, we committed ourselves to helping them 
succeed.
The Basin's Many Conflicts
    Natural resource crises have plagued the Basin for decades, and 
while conflicts over water have taken center-stage, the fundamental 
issues driving these conflicts go beyond water. Recurring crises 
reflect the continued inability of various groups to attain or maintain 
social, cultural and economic sustainability, which inevitably causes 
strife as groups fight one another to ease their social and economic 
pain. Most who understand the issues have realized that the status quo 
simply dooms us all to the unabated continuation of these catastrophes 
and conflicts until precious things are lost forever.
Rotating Catastrophes
    Due to continuing population declines, in 1986 the Klamath Tribes 
closed their fisheries for c'waam (Lost River sucker) and koptu 
(shortnose sucker). The United States' failure to preserve these treaty 
resources for the Tribes is a treaty violation as well as an economic 
and cultural bombshell for the Tribes. Two years later, the Lost River 
and shortnose suckers were listed as Endangered under Endangered 
Species Act and in 1997 coho salmon were listed as Threatened. While 
listing was important for protecting fish populations, a comprehensive 
management scheme has never been established. Accordingly, beginning in 
1991, and continuing to the present, rather than being managed in a 
sustainable way, water has been managed via Biological Opinions and 
litigation in Upper Klamath Lake and the Klamath River.
    Between 1995 and 1997, there were severe fish kills in Upper 
Klamath Lake. These kills were dominated by endangered suckers, further 
imperiling the existence of the fish the United States is responsible 
for protecting.
    In 2001, as a result of Biological Opinions for Upper Klamath Lake 
and Klamath River flows, there was an almost complete cessation of 
water deliveries to the Klamath Irrigation Project. Irrigators who 
relied on the water occupied the head gates and protesters gained 
national attention. Eventually there was $40 million in disaster relief 
funding for irrigators, but the crisis starkly demonstrated the results 
of decades of failed federal policy in the Basin.
    In 2002, there was a severe fish kill in the lower Klamath River, 
dominated by adult salmon and steelhead. This was another economic and 
cultural blow, this time to lower river Tribes. By 2006, the perilous 
condition of Klamath Chinook salmon stocks precipitated severe 
restrictions on ocean salmon harvest along the Pacific coast. This was 
catastrophic for coastal communities and even more disaster relief 
funds had to be dispersed because there was no management plan in place 
for the Basin. Throughout 2008 there were recurring, severely 
restricted ocean salmon harvests due to low salmon returns along the 
West Coast, including the Klamath River.
    In October, 2009, Upper Klamath Lake levels were very low, the 
result of river, irrigation, and refuge demands. The dry winter that 
followed, coupled with relatively high court-mandated winter flows in 
the Klamath River, prevented the Lake from filling, which caused severe 
water shortages in 2010. This was a test of key relationships formed in 
the KBRA/KHSA negotiations. Former adversaries worked together to 
successfully manage the problem. This situation demonstrated the value 
of the new relationships. However, while these relationships are 
strong, they hinge on the common purpose of implementing the 
agreements. Therefore, Congress must act to implement the KBRA and KHSA 
if this cooperation is to endure.
    That brings us to the present. Similar to 2009, in October 2012, 
Upper Klamath Lake was taken to very low levels by meeting demands from 
the Klamath River, irrigators, and refuges. Upper Klamath Lake then 
failed to fill during the dry winter that followed. Despite the fact 
that a new Biological Opinion has altered and improved water management 
strategies, beginning the irrigation season with so little water in the 
Lake severely complicates water management in 2013. Project irrigators 
face a large shortage, refuges will be nearly dry, and the Tribes' 
water right will not be met in the lake. Environmental groups and one 
lower river Tribe have filed lawsuits under the ESA over water 
management issues.
    Conditions in 2013 clearly demonstrate that the crisis-generating 
stressors are still present and remain intractable. The KBRA and KHSA 
offer the Basin its best hope of breaking the cycle of catastrophes and 
conflict. The success of settlement efforts is largely due to a shared 
commitment of the parties to put these conflicts and catastrophes 
behind us. The only thing holding back success is the inaction of 
Congress.
    While some complain that the KBRA's cost is too high, it is clear 
to those who thoroughly understand the issues that the cost of doing 
nothing and maintaining the status quo is unsustainable. The recurring 
calamities already cost the federal government significant sums. For 
example, all told, disaster relief funding in the Basin has averaged 
$18 million per year since 2001. Disaster relief alone has cost $110 
million, of which $60 million was a direct cost to the federal 
government. Therefore, the question before Congress is not whether to 
spend money, but whether to spend it on an endless series of band-aids 
or to spend it on a permanent remedy. Federal financial resources would 
be much better allocated to the long-term solutions conveyed by the 
KBRA and KHSA.
    The status quo has been costly to local economies. For example, in 
2006 the Chinook salmon fishery closure resulted in $100 million in 
lost fishing revenues. Clearly, the status quo is costly to the federal 
government, states, local economies, tribes and families. The parties 
to the KBRA and KHSA are the only ones offering a solution.
Specific Water Issues and their Relation to Settlement Agreements
    In 1975, the Klamath Basin Water Adjudication began in Oregon, 
which involves most of the Klamath River Basin in Oregon. The 
difficulties associated with the Adjudication process illustrate the 
necessity of the KBRA. Oregon's Adjudicator issued a Final Order of 
Determination in March, 2013, which in part determined that the Klamath 
Tribes possess the most senior (time immemorial) priority dates for 
water, and large and geographically extensive rights for water in 
streams, rivers, seeps, springs, marshes and lakes in the Upper Basin. 
Accordingly, the Klamath Tribes has an enforceable senior water right. 
Because water in the Basin has never been carefully measured or 
monitored, it is not possible to say precisely what impact the now-
enforceable Tribal water rights will have on prior water management 
practices. But it is safe to predict that significant changes in that 
management will be required.
    The Adjudication has moved from an administrative to judicial 
phase. Here, the conflict continues with parties other than our KBRA 
partners and is expensive, very adversarial, and antithetical to 
cooperative relationships. At least twice in the press, Klamath Country 
officials have speculated about the likelihood of violence in the wake 
of the adjudication decision favoring the Klamath Tribes.
    The Basin's difficulties are driven by underlying problems like 
water availability, water quality, habitat degradation and extirpation 
of salmon and steelhead from the Upper Basin. The Adjudication is 
concerned solely with water availability and will therefore not address 
all of the Basin's problems. By contrast, successful implementation of 
the KBRA will largely resolve water issues among the Klamath 
Reclamation Project farmers, the Klamath Tribes, and others. The KBRA 
also outlines a process for reaching agreement with the Off-Project 
agricultural community, which is underway. If Congress fails to enact 
the KBRA, it guarantees descent into winner-take-all litigation.
The Endangered Species Act
    Three listed fish species (coho salmon, c'waam (Lost River 
suckers), and koptu (shortnose suckers) are very important cultural and 
subsistence resources for Basin Tribes. The Klamath Reclamation 
Project, managed by the US Bureau of Reclamation, is subject to 
Biological Opinions from the US Fish and Wildlife Service (for effects 
on suckers) and the National Marine Fisheries Service (for effects on 
coho). Currently, there is competition and constant tension surrounding 
resources and water management decisions among water levels in Upper 
Klamath Lake for suckers, irrigation deliveries to Project farmers, 
flows in the Klamath River below Iron Gate Dam for coho, deliveries to 
the Tule Lake and Lower Klamath Wildlife Refuges, and off-Project 
agricultural and ranching. Under the status quo there is not enough 
water to fulfill all of these demands. Most water management decisions 
since the early 1990's have been dictated by an inconsistent series of 
Biological Opinions under the ESA, which have changed frequently, 
hurting or helping each of the interests at various times.
    The KBRA shifts energy and resources from fighting over ESA 
jeopardy determinations and water allocations based in Biological 
Opinions and focuses instead on cooperatively managing for species 
recovery. The KBRA strongly emphasizes ecosystem restoration, 
reintroduction of salmon and steelhead above Iron Gate Dam, and 
equitable distribution of limited water resources. It also shifts 
regulatory focus to the use of Habitat Conservation Plans and related 
tools to harness the portions of the ESA best suited to fostering 
species recovery in cooperation with local communities.
Damaged Ecosystems
    Recurring social, political, and economic crises are direct and 
predictable results of many decades of water and land use practices 
that have impaired critical ecosystem functions. If the present 
degraded ecosystem conditions are not acknowledged as a fundamental 
cause of difficulties in the Klamath Basin, and if comprehensive 
ecosystem rehabilitation measures are not implemented as a primary 
component of the solution to these difficulties, then the Basin's on-
going, cyclic conflict will continue.
    Klamath Hydroelectric Project dams owned by PacifiCorp extinguished 
salmon and steelhead runs to the Upper Basin in 1917 and continue to 
damage remaining runs. Tribes up and down the Klamath River, as well as 
many other groups and governments, have fought hard within the Federal 
Energy Regulatory Commission relicensing process to return salmon and 
steelhead to the Upper Basin. Removing the lower 4 dams under the KHSA, 
coupled with restoration actions delivered by the KBRA will resolve 
this conflict. However, if the agreements do not move forward, this 
conflict will re-ignite, and litigation will likely continue for 
decades while the damage to fisheries and water quality continues, and 
costs to electrical ratepayers mount.
    Over-allocated water leaves too little for ecosystem needs and 
guarantees extreme conflict over who gets how much water. To date, 
there have been two avenues for determining water allocation: the 
Klamath Basin Adjudication and Biological Opinions. Neither of these 
avenues facilitates the collaboration and compromise required to move 
beyond conflict. However, the KBRA and KHSA have settled significant 
portions of these conflicts and offer promise to settle more through an 
Off-Project water settlement.
    Non-point source loading of nutrients into rivers and Upper Klamath 
Lake causes serious water quality problems, leading to battles over 
Clean Water Act implementation (TMDLs, CWA certification for dams, 
etc.). The Klamath Hydroelectric Project is plagued by water quality 
problems that can only be resolved by dam removal. These problems 
include massive blooms of toxic cyanobacterial (blue-green algae) in 
reservoirs that pose a serious risk to human health, and changed 
temperature regimes of the Klamath River that damage salmon runs. Above 
Upper Klamath Lake, agricultural uses have damaged riparian ecosystems 
and increased nutrient loading.
    The only existing solution is to implement the two agreements. The 
KBRA delivers an aquatic ecosystem restoration program that will 
accompany a reintroduction program for salmon and steelhead. Aquatic 
ecosystem restoration and the reintroduction programs are both large, 
but are necessary for success. The KHSA charts a course to removing the 
lower four dams on the Klamath River. Accompanied by an equitable 
distribution of water delivered through the KBRA, successfully 
implementing these collaborative programs will radically change the 
past reality of permanent conflict in the Klamath Basin. For the first 
time, energy and resources will flow to solutions of the foundational 
problems.
The Klamath Tribes Strongly Support the KBRA and KHSA
    The Klamath Tribes' support of the KBRA and KHSA is unwavering. 
Twice now, the Klamath Tribes have held referendum votes on these 
agreements and each time the outcome has been positive. Such support 
reflects our tribal citizens' understanding that the agreements 
represent the best opportunity to find stability and a positive future 
for all communities, resources, and economies in the Klamath Basin. 
These agreements support recovery of fish populations to eliminate 
litigation and reinvigorate fishing economies, provide reliable water 
deliveries for farming and fish, and invest in environmental and 
economic stability for Tribal and agricultural communities.
    Such outcomes were important enough to the Tribes to justify 
compromise with the Klamath Reclamation Project irrigators regarding 
some of our senior water rights. In addition, we agreed to certain 
performance-based relinquishment and release of breach of trust claims 
against the United States.
Economic & Land Recovery
    Like the other settlement parties we seek economic stability, but 
it will be decades before the Klamath Tribes' will see the full benefit 
to our fisheries from dam removal. Therefore, one of our key bargained-
for benefits in the KBRA was re-acquisition of former reservation 
lands, the 90,000 acre Mazama Forest. Tribal ownership of this tract 
will put Tribal and non-tribal members to work in forest products, one 
of the area's traditional economies. Klamath County needs forest 
products businesses and it needs jobs for its people. Currently, the 
Klamath Tribes contribute more than $50 million per year to the Klamath 
County's economy in the form of payroll, direct expenses and goods and 
services. Furthermore, the Tribes employ approximately 450 people, 
approximately half of which are non-tribal members. With the recovery 
of the Mazama Forest the Tribes will put many more people to work in 
the community.
    Loss of our land destroyed the Tribal economy and recovery of land 
is a key to economic recovery. Other parties to the KBRA will get 
economic benefits quite soon in the form of power benefits, reliability 
of water supply, and healthier runs of harvestable fish. By contrast, 
most benefits for the Klamath Tribes depend upon full, successful 
implementation of both the KBRA and the KHSA, and will therefore 
manifest gradually over many decades. We need short term, tangible 
benefits as well, and Mazama Forest allows recovery to begin soon by 
returning Tribal members to jobs in the woods, which was our main 
economic base before the United States terminated our reservation. Our 
development plans revolve around green energy production closely linked 
to improved forest health and reduced danger of catastrophic wildfire.
    Woody materials removed from the forest pursuant to implementing 
forest management strategies designed to restore healthy stands will 
provide feedstock for a biomass energy facility and other businesses. 
The Tribes will use the guidelines of our rigorous, peer-reviewed 
Tribal Forest Management Plan (http://www.klamathtribes.org/background/
documents/ Klamath__Plan__Final__May__2008.pdf) to restore the forest 
to a healthy ecosystem that also provides for sustainable timber 
harvest and wildlife habitat.
    Reacquisition by the Klamath Tribes of the Mazama Forest is an 
essential and appropriate ingredient of the KBRA. It offers economic 
opportunities in fields familiar to the Tribes and the surrounding 
community. Moreover, it acknowledges the Tribes' need to express the 
fullness of their connection to their homeland. Reacquisition creates 
acceptable parity among KBRA participants, establishing a balance 
enabling the Klamath Tribes to agree to other core elements of the 
KBRA. Without this balance, the KBRA would be unacceptable to the 
Klamath Tribes.
Conclusion
    I once again extend my thanks for this opportunity to deliver this 
message from the Klamath people. We have put enormous effort into 
finding productive, collaborative ways to resolve difficult issues that 
profoundly affect Klamath Tribal interests. After nearly a century of 
conflict in the Basin, we have an opportunity with the KBRA and KHSA to 
put an end to these persistent battles and move our communities and 
economy forward. The only thing standing between the present 
dysfunction in the Basin and the implementation of an already-
negotiated agreement is the United States Congress. We ask the United 
States to honor its trust and treaty obligations and enact legislation 
implementing the KBRA and KHSA.
    Thank you again for holding a hearing on this important topic. I am 
happy to answer any questions you may have.

    The Chairman. Very good, Mr. Gentry. We thank you and 
particularly thank you for all your cooperation.
    Leaf G. Hillman is Director of the Karuk Department of 
Natural Resources. The tribe is in Happy Camp, California.
    We welcome you, sir.

 STATEMENT OF LEAF G. HILLMAN, DIRECTOR OF NATURAL RESOURCES, 
                  KARUK TRIBE, HAPPY CAMP, CA

    Mr. Hillman. Thank you.
    Good morning, Mr. Chairman, Ranking Member Murkowski. 
Appreciate the opportunity to be here. On behalf of the Karuk 
Tribe I/we do appreciate the opportunity to engage in this 
important conversation that affects both States.
    I appreciate the discussion and would point out that the 
entire Basin, this revolving crisis, affects from top to 
bottom. Past attempts to resolve problems in the Basin have 
been focused both in the lower Basin, restoration legislation 
to restore the Klamath Basin ended at upstream at the dams. 
Other attempts at restoration began at the dams and looked at 
upstream and Upper Basin issues.
    Never before have we had the opportunity to look at a 
holistic solution that includes both the Upper and Lower Basins 
and looks at the system as it truly is, one system. Although 
the complexities of looking at the one Basin system that it is 
includes obviously 2 States and increases the size of the tent, 
as you may. This is the approach that is necessary to truly 
resolve the years of conflict that have plagued the communities 
in the Basin from top to bottom.
    The revolving crisis in the Basin has affected our 
communities from the coast of California, 700 miles of 
coastland and the fisheries, commercial salmon fishery at the 
coast that's dependent on the salmon runs and the health of the 
system as a whole. We can't restore and solve the problems from 
the top to the bottom, this one system, without taking this 
holistic approach. We do appreciate the leadership of the 
chairman to take on this issue and appreciate the nuances of 
all of the communities that are affected here.
    The Karuk Tribe is located directly below the last dam on 
the Klamath. As such have witnessed the impacts created by the 
hydro projects and the ongoing impacts that they have. This 
effort that we've been engaged in, many parties in the Basin, 
for a number of years, all of us have suffered and our 
communities have suffered, you know, the economically as well 
as culturally. Our communities are looking for leadership to 
resolve these conflicts.
    The KBRA represents something that's very unique in the 
history of the water struggles in the Klamath Basin. It 
represents compromise. A true compromise, a very large tent 
that represents many communities, very diverse and when we 
began this a number of years ago sitting across the table from 
one another people who considered themselves historic enemies 
put those differences aside and worked together to resolve 
these issues. We appreciate the committee committing itself to 
do the same.
    Thank you.
    [The prepared statement of Mr. Hillman follows:]

 Prepared Statement of Leaf G. Hillman, Director of Natural Resources 
                      Karuk Tribe, Happy Camp, CA
    Ayukii Mr. Chairman and Members of the Committee. On behalf of the 
Karuk Tribe, I thank you for the opportunity to participate in this 
important conversation on water resource issues in the Klamath Basin.
    My name is Leaf Hillman and I am the Natural Resources Director for 
the Karuk Tribe. The Karuk Tribe is the second largest federally 
recognized Indian Tribe in California with over 3,600 members. Our 
aboriginal territory is located immediately downstream of the Klamath 
River dams and spans large portions of Siskiyou and Humboldt Counties 
in Northern California.
    I was born on the Klamath River and have lived on it my entire 
life. I am a hereditary dance owner and ceremonial leader responsible 
for carrying on our ancient traditions of Piky'avish or World Renewal 
Ceremonies. Every year since the beginning of time, Karuk People have 
remade the world through these ceremonies handed down to us by the 
Creator where we pray for all things and all the peoples of the earth. 
So for my People, these issues are not just about fish or water but 
about something far deeper and more meaningful. Our physical health, 
our spiritual health, and our cultural identity are intimately tied to 
the ecological integrity of the Klamath River Basin.
    The Karuk traditionally lived in over 120 villages and subsisted on 
the bountiful runs of salmon, steelhead, and lamprey in the rivers and 
the abundance of acorns, mushrooms, deer, and many other native plants 
and animals in the forests. The productivity of the natural landscape 
enabled the Karuk to develop a sophisticated culture replete with its 
own currency, basketry, natural resource management practices, and 
ceremonial structure. Trade networks were well established with 
neighboring tribes in the area. The productivity of the landscape and 
the Karuk's sophisticated civilization inspired historian Arthur 
McElvoy to describe the Karuk at the time of contact with Europeans as 
`` . . . at once the wealthiest of all California Indians in terms of 
disposable resources and the most specialized economically.''
    In the 1850s, the traditional Karuk lifestyle ended suddenly and 
violently with the onset of the California gold rush. As miners moved 
into Northern California to stake their claims--and as the U.S. Calvary 
moved in to ensure miners' safety--Karuk People were murdered, 
massacred, and enslaved. Many who escaped the violence fell to disease 
or starvation. Whole villages were burned and the life giving Klamath 
watershed was damaged by hydraulic mining and mercury contamination. 
Still many Karuk remained in our traditional territory, refusing to 
succumb to the violence and oppression of the invaders.
    The gold rush was only the beginning. For over 160 years, the 
economy and politics of the middle Klamath River region was driven by 
the quest to extract natural resources; gold and copper mining 
operations were soon followed by the hydropower industry which 
constructed a series of dams between 1918 and 1962; the timber industry 
peaked in the mid-20th century; industrial agriculture has dewatered 
the river increasingly over the past 100 years; and today the middle 
Klamath is a destination for illicit marijuana growing operations which 
pose a new set of environmental and social problems.
    Today the middle Klamath River region remains unhealed from the 
devastating effects of this series of disruptions to social, economic, 
and natural systems. Historically, Klamath River salmon runs numbered 
up to a million returning adults per year. (Hamilton, Crutis, Snedaker, 
& White, 2005). Today, runs are a fraction of this with some runs of 
salmon, such as chum and pink salmon, extirpated from the Klamath 
system altogether, and others such as coho salmon on the Endangered 
Species List.
    The cumulative effects of mining, destructive logging practices, 
irrigation diversions, dam building, and the attempted genocide can be 
seen in Karuk communities today. In contrast to McElvoy's observation 
that the Karuk were `` . . . at once the wealthiest of all California 
Indians in terms of disposable resources,'' today the Karuk experience 
poverty at alarming rates. According to a recent government report, 91% 
of Karuk Tribal members in Klamath River communities live below the 
poverty line. (U.S. Department of the Interior, Bureau of Indian 
Affairs, 2005).
    The dramatic decline in fisheries also affects our physical health 
by denying Karuk People access to healthy foods. Before contact, 
research indicates that the average Karuk consumed over a pound of 
salmon, per person, per day. Today, the average Karuk living along the 
river consumes less than 5 pounds of salmon in a year. Thus, the 
decline in fisheries has led to a rapid shift in diet for Karuk People 
from fish to what is available through government food programs. The 
result of this altered diet is that today, the diabetes rate among the 
Karuk is 21%, nearly 4 times the national average. Similarly, the rate 
of heart disease is 39%, or 3 times the national average. (Norgaard, 
2005).
    As previously noted, the reasons for the decline in Klamath River 
fisheries is manifold; however, we assert that Klamath River dams are 
one of the two greatest factors to consider (the other being operation 
of the Klamath Irrigation Project discussed below). The Karuk Tribe has 
been one of the leading proponents of Klamath Dam removal for decades. 
That's because we have witnessed the impacts of Klamath River dams 
first hand. With the completion of Iron Gate Dam in 1962, we saw the 
utter collapse of Klamath fisheries which were already imperiled by a 
century of mining, poor forest management, dams, and diversions. Today 
we live with massive blooms of toxic algae that originate in the 
Klamath Reservoirs. When our Tribe's medicine men are required to bath 
in the Klamath River to fulfill their religious obligations, the river 
is often posted with signs warning against bodily contact with the 
water due to high levels of algal toxins. In the summer, we can't let 
our children swim in the river or let our dogs drink from it.
    Thus dams harm Klamath River fisheries by blocking salmon's access 
to nearly half of their historic range in the Klamath Basin (Hamilton, 
Curtis, Snedaker, & White, 2005) and facilitate massive blooms of the 
toxic blue green algae Microcystis aeruginosa which create a 
significant human health risk (Kann, 2006).
    As the health of the river has declined, the conflicts between 
Klamath basin communities have intensified. That's because in any given 
year, at least one community in the Klamath Basin is doomed to suffer. 
Sometimes its irrigators who get their water shut-off; sometimes its 
commercial fishermen who are not allowed to fish for a living; and in 
many years it is the Klamath River Tribes who cannot harvest enough 
fish to meet basic subsistence needs. We live with a rotating crisis 
that for years has led neighboring communities to engage in bitter 
political and legal battles. After decades of trying to shift the 
burdens of this crisis to someone else, leaders from the Basin's 
diverse rural communities decided to try something new. Something 
unprecedented in the Klamath Basin: compromise.
    This effort started soon after the back to back disasters of 2001 
and 2002. Although the Klamath Crisis started many years earlier, it 
was the irrigation shut-off to the Klamath Project Irrigators in 2001 
followed by the massive fish kill of 2002 that elevated the Klamath 
Crisis into the national spotlight. Immediately following these events, 
Tribes, irrigators and other parties engaged in a series of court 
battles while at the same time they sought help from their respective 
members of Congress. At the time, these disputes focused on the 
operation of the Bureau of Reclamation (BOR) Klamath Irrigation Project 
(KIP) which is the primary factor controlling flows in the main-stem 
Klamath River. The KIP represents nearly 250,000 acres of irrigated 
farmland in southeastern Oregon and northwestern California. The KIP is 
made up of over 1,400 family farms and the Klamath Wildlife refuges 
which are fundamentally important nesting and feeding grounds for birds 
migrating along the Pacific Flyway.
    Much of the litigation revolved around the Biological Opinion on 
the BOR irrigation plan. Since there are Endangered Species Act (ESA) 
listed suckers in Upper Klamath Lake and ESA listed coho salmon in the 
lower river, the BOR operational plan must be evaluated by wildlife 
agencies to determine if its implementation will jeopardize the 
survival of these species. It is important to understand that when we 
talk about balancing water in the Klamath, we are balancing water 
between 1) the lower river for ESA listed coho and other anadromous 
species, 2) ESA listed suckers that dwell in Upper Klamath Lake and 
other areas, 3) the wetlands of the Klamath Wildlife Refuges that are 
vitally important for migratory waterfowl, and 4) the Klamath 
Irrigation Project. Needless to say, in the past it has been impossible 
to balance water resources in the Klamath Basin in a manner that 
satisfies the needs of all communities.
    About the same time that Klamath communities were dealing with the 
aftermath of the 2001/2002 catastrophes, PacifiCorp's fifty year old 
Federal Energy Regulatory Commission (FERC) license to operate the 
Klamath River dams downstream of the BOR KIP expired. With PacifiCorp's 
application for a new dam license came an opportunity to participate in 
a process that could mitigate or end the devastating impacts of the 
dams. It also meant that for the first time, the two greatest factors 
limiting fish production in the Klamath Basin were subject to 
regulatory review at the same time: KIP diversions were subject to a 
Biological Opinion and PacifiCorp dams were subject to FERC 
relicensing.
    In many ways, the timing of the 2001 water shut-off, 2002 fish 
kill, and the expiration of PacifiCorp's Klamath dam license was 
serendipitous. However, it was the leadership from Klamath Basin 
Tribes, irrigation districts, fishermen's organizations, conservation 
organizations, and local governments that recognized the opportunity 
and seized it. What started out as a FERC relicensing process evolved 
into a broad based discussion aimed at solving once and for all the 
Klamath Crisis. The products of these negotiations are the two Klamath 
Restoration Agreements. The Klamath Hydropower Settlement Agreement 
(KHSA) lays out a strategy for removing the lower four Klamath Dams in 
2020 pending regulatory reviews, a public interest determination by the 
Secretary of Interior, and congressional approval. The Klamath Basin 
Restoration Agreement (KBRA) represents a roadmap for restoring the 
fisheries and water quality of the Klamath Basin while providing water 
security for Klamath Basin farmers, ranchers, and irrigators. It was 
not easy and some parties who were there in the beginning were not 
there in the end. But after years of conflict, I think that the parties 
whose cultures and livelihoods are most at risk realized that we all 
share a common destiny. We will either emerge from this crisis together 
or suffer perennial conflict and community instability for generations 
to come, which means many of our communities could simply perish.
    The process has led to some very unique and unlikely alliances. I 
sit before you today in partnership with farmers and ranchers, 
commercial fishermen, conservationists, neighboring Tribes, and dam 
owner PacifiCorp. It's true that we still don't see eye to eye on every 
issue, but we are uniformly committed to a long term solution to the 
Klamath Crisis. That solution is embodied in the Klamath Restoration 
Agreements. These Agreements are not perfect. The Karuk Tribe is not 
getting its every need met. Neither is anyone else. That is the nature 
of compromise. But the alternative, as I see it, is the continued 
collapse of west coast salmon fisheries, economic disaster for the 
region's unique and diverse rural communities, and the failure of the 
United States to live up to its obligations and to fulfill its legal 
and moral commitments to Klamath River Tribes. I respectfully and 
emphatically urge this committee to act quickly to introduce 
legislation that would see the Klamath Restoration Agreements fully 
enacted as soon as possible.
    I realize that even if the Klamath Agreements are fully implemented 
there will remain some unresolved issues in the Klamath Basin. We still 
have water quality issues to address and degraded habitat in many 
tributaries will still need to be rehabilitated. But I firmly believe 
that if implemented, the Klamath Agreements would serve to set the 
Klamath Basin's ecosystems and economies firmly on the road to 
recovery.
    The Karuk Tribe truly appreciates your attention to this important 
issue and the opportunity to share our perspective. Please let us know 
if we can provide any additional information or assistance to the 
Committee as it moves forward to address the ongoing Klamath Crisis.

    The Chairman. Thank you very much, Mr. Hillman. That's very 
much appreciated.
    Ms. Hayley Hutt, welcome.

 STATEMENT OF HAYLEY HUTT, HOOPA VALLEY TRIBAL COUNCIL MEMBER, 
                           HOOPA, CA

    Ms. Hutt. Good morning.
    I'm Hayley Hutt, an elected member of the Hoopa Valley 
Tribal Council located in Northern California. Thank you for 
the opportunity to participate in this hearing.
    The Hoopa people have resided in Hoopa Valley and 
surrounding territories since time immemorial. After military 
campaigns in the 19th century failed to drive us from our 
homeland the United States withdrew its soldiers and 
established the Hoopa Valley Reservation in 1864. Both the 
Klamath and the Trinity Rivers flow through our reservation 
land. We have been fighting for decades to protect our rights 
in these rivers and to restore their fisheries.
    We have several needs for the committee to take into 
account as consideration to the Klamath River water issues.
    The need to enforce Federal trust responsibilities for 
Indian water and fishing rights.
    The need to honor the law of the Trinity River to restore, 
preserve and propagate our fishery resources. The United States 
holds in trust the KBRA's subordinates the Trinity record of 
decision.
    The need to prevent the over allocation of Klamath River 
water to the Klamath Reclamation Project in Oregon at the 
expense of tribal trust fishery needs in California.
    The need to identify specific Klamath fishery restoration 
goals based on the best available science. The fishery goals 
should really be to pre-dam levels.
    The need to respect tribal self determination and the 
sovereign authority of a tribe to decide whether proposed water 
agreements are in the best interest of its members.
    The need not to adopt any settlement that terminates the 
rights of or imposes adverse consequences upon a tribe that 
chooses to retain its water rights instead of settling on terms 
desired by the Federal Government.
    The need to separate hydroelectric relicensing from 
settling of water rights in the Upper Basin. Separate the FERC 
licensing process from the KBRA. Allow the California Water 
Board to enforce the Clean Water Act.
    The need to protect senior Klamath Basin water rights in 
California.
    The need to build a basin wide management structure.
    I look forward to discussing these needs and have tribal 
staff on hand to address any technical questions that you might 
have. Our written testimony includes additional details on 
these points.
    Thank you.
    [The prepared statement of Ms. Hutt follows:]

Prepared Statement of Hayley Hutt, Hoopa Valley Tribal Council Member, 
                               Hoopa, CA
    Thank you for the opportunity to present testimony on behalf of the 
Hoopa Valley Tribe concerning Water Resource Issues in the Klamath 
River Basin. The Hoopa Valley Indian Reservation, established in 1864, 
is the largest land based Indian reservation in California. The Klamath 
River runs through the northern part of our Reservation, and the 
Trinity River, the largest tributary of the Klamath, bisects our 
Reservation running south to north. The rivers join at the northern 
boundary with the Yurok Reservation.
    We are very familiar with the problems caused by over-appropriation 
of waters from the Klamath River system from our long experience 
addressing the over-appropriation of waters from the Trinity River 
system. There are strong similarities between the Klamath River today 
and what happened on the Trinity River in the 1970's where the Bureau 
of Reclamation, in disregard of the Trinity River Division Act, 
diverted up to 90% of the flow of the Trinity at Lewiston, California 
to the Central Valley Project (``CVP''), nearly destroying the 
anadromous salmon runs. Secretarial decisions in the 1980s and advocacy 
by our Tribe led to studies and ultimately to passage of the Central 
Valley Project Improvement Act of 1992 (CVPIA), Pub. L. 102-575, Sec.  
3406(b)(23). In recognition of the Tribe's long record of stewardship 
of the Trinity River, the CVPIA required the Secretary to obtain the 
concurrence of the Tribe before any program to restore the Trinity 
River fishery could take effect. Pursuant to that act studies in which 
tribal scientists played a crucial role identified water needed for 
fishery restoration and associated restoration activities. The 
Secretary and the Tribe convened in Hoopa in December 2000 to execute 
their joint decision for Trinity fishery restoration. That agreement to 
restore the Trinity River fishery is a modern Treaty between the Hoopa 
Valley Tribe and the United States. Restoration work and carefully 
regulated water diversions and releases are in place.\1\ As discussed 
later in this testimony, our Tribe has also been deeply involved in 
efforts to restore the Klamath River fishery. This experience informs 
our testimony concerning water issues in the Klamath River.
---------------------------------------------------------------------------
    \1\ See Westlands Water Dist. v. Hoopa Valley Tribe, 376 F.3d 853 
(9th Cir. 2004) (restoration decision complied with NEPA and Endangered 
Species Act).
---------------------------------------------------------------------------
    Our testimony will address: (1) protection of rights to Klamath 
River water in California; (2) a Basin-wide management structure in the 
form of a Joint Directorate for coherent oversight and decision making 
about Klamath River water supplies and needs; (3) authority and funding 
for acquisition of water rights in Oregon; (4) the need to restore 
ecological functions of the Lower Klamath and Tule Lake Wildlife 
Refuges to improve water quality in the River; (5) limiting the effects 
of certain Tribes' waiver of their claims so that other rights are not 
adversely affected; and (6) separation of the relicensing or settlement 
of the Klamath Hydroelectric Project from water rights of the Klamath 
Basin.

          1. Protection of Klamath River Water Rights in California.

    For several years, water users in the Klamath basin have focused on 
the negotiation of the Klamath Basin Restoration Agreement (KBRA) to 
satisfy Oregon demands for Klamath water. But the KBRA substantially 
infringes on needs for water in the Klamath River below Iron Gate Dam 
in California. Dry conditions in the Oregon portion of the Klamath 
Basin coupled with over-appropriation of waters from Upper Klamath Lake 
by the Bureau of Reclamation last year, now threaten serious adverse 
consequences that ripple all the way to southern California. The KBRA 
also has a direct impact on the Central Valley Project (CVP) and the 
Bay Delta Conservation Plan (BDCP) because by reducing water supplies 
in California's portion of the Klamath River, the KBRA would put 
greater demands on the CVP's Trinity Division to serve Klamath/Trinity 
needs. The un-reconciled demands for water from the north and the south 
could lead to catastrophe for the Trinity and the Lower Klamath salmon 
fishery. The Tribe has spent decades working to avoid that outcome and 
needs the help of this Committee in order to succeed.
    The BDCP--and the proposed tunnels around the San Francisco Bay 
Delta--assume that Trinity River water that Congress allocated to the 
Klamath Basin more than a half century ago will be available to the 
rest of California. In addition, the reduced availability of Upper 
Klamath Lake water has caused the Pacific Fisheries Management Council, 
the Trinity Management Council, and California Salmon and Steelhead 
Advisory Committee to call on the Secretary of the Interior to take 
action this summer to release additional water from Trinity reservoirs 
into the Klamath basin to prevent a die-off of adult salmon in the 
Lower Klamath River. Already, CVP interests are protesting this 
reduction in water available to them. . See Letter from San Luis & 
Delta Mendota Water Authority to Bureau of Reclamation Regional 
Director David Murillo, May 31, 2013 (attached). Further, since at 
least 2003, the Department has refused to release Trinity Division 
water to Humboldt County and downstream users as required by: (1) the 
1955 Trinity Division authorization act; (2) the associated state 
permits for the TRD; and (3) the 1959 CVP water service contract 
between Humboldt County and the Bureau of Reclamation. The Trinity and 
Klamath are under stress from the CVP and BDCP.
    BDCP and Interior officials continue to deny requests that BDCP 
models incorporate Trinity water rights. They have refused to do so on 
the grounds that the water has not been historically used. But that is 
because of Interior's refusal to release the water. Moreover it is 
inconsistent with the Interior Department's practices in planning 
federal project water use in
    California.--For example, the BDCP water supply model includes 
anticipated future uses in the Sacramento basin, so it makes no sense 
for the Bureau to refuse to do the same for existing rights in the 
Klamath basin. As mentioned above, the CVP contractors are putting 
heavy pressure on the Bureau of Reclamation not to use any Trinity 
Division water for the Lower Klamath fishery.
    As less volume and more polluted water flows into California from 
Oregon, the stress on California salmon increases sharply. For most of 
the last decade, the only safety valve for fish survival in the Lower 
Klamath estuary has been increased releases of water from Trinity 
reservoirs. That means less water for California and disregards our 
Tribe's senior water rights. In Wyoming v. Colorado, 259 U.S. 419 
(1922), the Supreme Court ruled that the waters of a stream rising in 
one State and flowing into another State may not be disposed of by the 
upper State without regard to the harm that may inure to the lower 
State. Even without an interstate adjudication, the relative rights of 
two adjoining states which have both adopted the doctrine of prior 
appropriation should be determined on that basis. Therefore, Oregon is 
not free to adjudicate and dispose of all of the waters of the Klamath 
River Basin in Oregon, but must respect the senior, 1864, rights 
reserved by the United States for the Hoopa Valley Tribe in order to 
support a moderate living based upon the taking of salmon and other 
aquatic species in California. See Parravano v. Babbitt, 70 F.3d 539 
(9th Cir.1995).
    The Department of the Interior understands the water supply needs 
for Klamath fishery purposes in California. The United States retained 
Utah State University and Dr. Thomas Hardy to investigate those needs. 
Dr. Hardy's Evaluation of In-Stream Flow Needs in the Lower Klamath 
River--Phase 2--Final Report (July 31, 2006) represents the best 
science available as to the water required to satisfy the Hoopa Valley 
Tribe's senior water rights. This peer-reviewed science document has 
not been used as a basis for water planning, but instead has been 
simply set aside without explanation. The Tribe requests the Committee 
to ask the Department why that was done.
    The diversions of Klamath River water to the Klamath Reclamation 
Project in Oregon provided for in KBRA Appendix E-1 will leave too 
little water in the River to support anadromous fish runs in 
California, setting up degraded habitat conditions year after-year like 
those that occurred in the 2002 fish kill, the largest in history.
    How much water will be needed for fisheries in California after 
removal of four dams on the Klamath River cannot now be known. What is 
known is that the Bureau of Reclamation's studies prepared in support 
of the Environmental Impact Statement on the Secretarial Determination 
show that in dry water years the KBRA will provide less water to the 
Klamath River than the amount currently required by the Biological 
Opinion issued pursuant to the Endangered Species Act (``ESA'').\2\ The 
KBRA parties deal with this reality by pledging among themselves to 
lobby the National Marine Fisheries Service to reduce the ESA flow 
requirements. See KBRA Sec.  21.3.1.B. Using political pressure to 
repudiate the best available science is a recipe for disaster. The 
Hoopa Valley Tribe's experience with the Trinity River shows that 
scientific investigation is essential to determination of flows needed 
for fish restoration. The needs of species cannot be determined by a 
political compromise among a few interested parties.
---------------------------------------------------------------------------
    \2\ See Technical Report No. SRH-2011-02, Hydrology, Hydraulic and 
Sediment Transport Studies for the Secretary's Determination on Klamath 
River Dam Removal and Basin Restoration and Appendix F of that document 
(``the 90% exceedence [dry year] flows are similar for the two 
alternatives from March through September, but for the months of 
October to February the No Action Alternative [current flows] 90% 
exceedence flows are about 20% to 30% larger.'').

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          2. Basin-Wide Management.

    It was apparent by the early 1980s that the Klamath and Trinity 
fishery and watershed management activities were in need to being 
coordinated if proper fishery, habitat and water management were to be 
successful. In 1986, we worked with the States of California and 
Oregon, the Departments of the Interior and Commerce through the 
Pacific Fishery Management Council to coordinate fishery management, 
fish habitat, and water management that would complement our work on 
the Trinity. The Tribe was instrumental in enacting Pub. L. 99-552, the 
Klamath River Basin Fisheries Task Force (Task Force), which created 
the Klamath Fishery Management Council and Klamath Task Force. The 
Klamath Fishery Management Council worked to bring together resource 
managers from the States and Federal agencies, while the Task Force 
focused its attention on habitat and water management issues.
    Pub. L. 99-552 provided a framework to:

                  1) ensure more effective long-term coordination of 
                Klamath-Trinity River fisheries under sound 
                conservation and management principles that ensure 
                adequate spawning escapement and monitoring;
                  2) improve area hatcheries to assist in rebuilding 
                natural fish populations and maintaining genetic 
                integrity and diversity among subbasin stocks;
                  3) improve upstream and downstream migration by 
                removal of obstacles to fish passage; and
                  4) rehabilitate watersheds.

    The Act was amended to provide for the expansion of restoration and 
management activities in areas above the Iron Gate Dam and added 
members to the Task Force representing the Klamath Tribes and 
Commissioners of Klamath County in Oregon.
    The Klamath Fisheries Management Council successfully worked among 
the agencies and stakeholders to establish a balanced harvest and 
spawning escapement management structure that remains in place for 
Klamath River Fall Chinook Salmon. See Pacific Fisheries Management 
Council Amendment 9. The Task Force's reports, findings and 
recommendations on habitat and restoration are posted on line by the 
U.S. Fish and Wildlife Service's Office in Yreka, California. The Task 
Force has attempted to bring balanced management to Klamath and Trinity 
fishery restoration activities and water quality and quantity concerns. 
Unfortunately, Pub. L. 99-552 expired in 2006 and was not reauthorized.
    In 1996, Pub. L. 104-143, the Trinity River Basin Fish Management 
Reauthorization Act of 1995, was enacted to expand the definition of 
Trinity River fishery habitat to include the 42-mile reach of the 
Klamath River from the Trinity confluence to the Pacific Ocean. Pub. L. 
104-143 also required improvements in the Trinity River Fish Hatchery 
so that it can best serve its purpose of mitigation of fish habitat 
above Lewiston Dam while not impairing efforts to restore and maintain 
naturally reproducing anadromous fish stocks within the basin.
    Basin-wide management, based on the Trinity River Restoration 
Program model, is important for an additional reason. The Trinity River 
stands as the sole safety net for the Klamath River Basin. As 
demonstrated in 2003, 2004, 2012, and 2013, the Trinity River has been 
the only source of available water to address low flow, warm water, and 
disease conditions that have come to characterize the Klamath River 
Basin. In order to keep the Trinity River in a position of being able 
to meet Lower Klamath River fishery needs, not only must the Trinity 
River Restoration Program be fully implemented but the other supplies 
of CVP water from the Trinity Division dedicated to the Klamath basin 
must remain available.
    The National Research Council Report on Klamath (2007)\3\ urged 
establishment of a Basin-wide management structure. The National 
Research Council Report pointed to the final Trinity River Mainstem 
Fishery Restoration EIS/EIR [2000] as:
---------------------------------------------------------------------------
    \3\ Committee on Hydrology, Ecology, and Fishes of the Klamath 
River Basin, National Research Council (2007), (Chap. 6 ``Applying 
Science to Management'').
---------------------------------------------------------------------------
    [A] governance structure that is explicitly intended to facilitate 
the program's Adaptive Environmental Assessment and Management efforts 
. . .  [T]his governance structure appears to provide clear paths for 
bringing information that is critical to land, water and species 
management to those who can use it. Adaptive management in the greater 
Klamath River Basin would benefit substantially by adopting 
organizational and process approaches that are being used to support 
restoration planning in the Trinity River sub-Basin.\4\
---------------------------------------------------------------------------
    \4\ Hydrology, Ecology, and Fishes of the Klamath River Basin (NRC 
2007) at 141.
---------------------------------------------------------------------------
    In response to this recommendation, the Hoopa Valley Tribe has 
proposed a Joint Directorate that would similarly provide for 
management of the remainder of the Klamath Basin, and recognize the 
role of state, federal and tribal governments in resource management. 
Our ideas for a comprehensive management structure for the Klamath 
basin are based on our work in recent decades to coordinate management 
in the Klamath and Trinity Basins.
    Rather than continuing a coordinated Klamath-Trinity basin 
approach, the parties to KBRA adopted a structure called the Klamath 
Basin Coordinating Committee (``KBCC'') which also includes a technical 
team. But the KBCC is made up solely of the signatory parties to the 
KBRA which, for example, excludes the Hoopa Valley Tribe and the 
federal agencies, and also fails to address management issues arising 
in the California portion of the Klamath Basin, which is more than half 
of the watershed.

          3. Water Rights in the Oregon Portion of the Basin.

    Dry conditions during 2013 have again illustrated that too much 
water is promised to too many parties in the Oregon portion of the 
Klamath Basin. The good news is that the Final Orders issued by the 
Oregon Water Resources Department in the Klamath Basin adjudication 
have finally created enforceable water rights in Oregon. While these 
Orders are subject to appeal, they are sufficiently identified to 
enable parties to develop forbearance agreements and otherwise use 
contracts to reflect market forces for allocation of valuable water.
    The Bureau of Reclamation in the past has made forbearance 
agreements with landowners in the Klamath Reclamation Project and 
appears to have authority under existing law to extend that practice. 
Another available alternative is provided by 25 U.S.C. Sec.  465, which 
authorizes the Secretary of the Interior to acquire through purchase, 
relinquishment, exchange, or assignment ``any interest in water 
rights.'' Because of the Indian trust water and fishery resources at 
stake, that statute would authorize acquisition of necessary water 
rights, if Congress provides the financial support necessary.
          4. Rehabilitate the Wildlife Refuges.
    One of the essential ecological functions of the Lower Klamath 
Wildlife Refuge and the Tule Lake Wildlife Refuge is to filter water 
through marshes and wetlands. Those processes have been severely 
disrupted by the Bureau of Reclamation and railroad construction 
projects. The Wildlife Refuges have been so dewatered by management 
practices in the Upper Basin, that they fail to effectively address the 
needs of wildlife and fall far short of providing the filtering and 
water quality improvement functions that historically have made the 
Klamath River such a bountiful source of salmon and other fish and 
wildlife. These functions must be restored, both for water quality 
purposes and to serve the original purposes for which the Wildlife 
Refuges were created. The KBRA does nothing to achieve these 
objectives, instead it binds the parties to support continued farming 
in large portions of the Refuges. KBRA Sec.  15.4.3. Farming is 
inconsistent with the purposes for which the Refuges were created and 
those activities frustrate the water quality improvement functions that 
would ordinarily be performed by those wetlands.

          5. Avoid Abrogating the United States' Trust Responsibility 
        to Indians.

    The KBRA limits tribal water and fishing rights. Under existing 
law, the United States and the Bureau of Reclamation are obligated to 
ensure that irrigation projects do not interfere with the tribes' 
senior water rights.\5\ The United States has a trust responsibility to 
ensure that its activities would not adversely affect the tribes' 
fishing rights. The KBRA, if approved by Congress, would change this 
because in Sec.  15.3.9 the United States agrees that it will not 
assert tribal water or fishing rights in a manner that interferes with 
the diversion of water for the Klamath Irrigation Project as authorized 
by the KBRA.
---------------------------------------------------------------------------
    \5\ See Memorandum of Regional Solicitor, Pacific Southwest Region 
to Regional Director, Bureau of Reclamation Mid-Pacific Region re 
Certain Legal Rights and Obligations Related to the U.S. Bureau of 
Reclamation, Klamath Project (July 25, 1995) and Memorandum to Regional 
Director from Regional Solicitor, Pacific Southwest Region re Oregon 
Assistant Attorney General's March 18, 1996 Letter (January 9, 1997).
---------------------------------------------------------------------------
    KBRA Sec.  15.3.9 was approved by three tribes that agreed to 
related provisions of the KBRA. However, it is unclear how these 
waivers will be enforced in the future. It is important to note that 
the waivers have very broad applications. For example, among other 
things they will prohibit the signatory tribes from bringing trust 
challenges against the United States for losses related to water 
diversions that are associated with the U.S. Bureau of Reclamation's 
operation of the Klamath Project. They also will limit tribal 
challenges to loss of harvest opportunities that are associated with 
the Phase I and II fish restoration activities above Iron Gate Dam and 
Link Dam, respectively. The KBRA also provides that harvest 
restrictions will continue until the fish stocks have been rebuilt, 
which may mean permanent harvest restrictions. The Hoopa Valley Tribe 
must be assured that these waivers by signatory tribes are in fact 
enforceable by regulatory harvest restrictions, and not result in 
transferring harvest pressure to Trinity and other fish stocks. 
Shifting harvest pressure would undermine the Trinity River fishery 
restoration program . We are concerned that the KBRA does not provide a 
way of ensuring that the Federal Government will take the necessary 
actions to develop regulations and establish needed enforcement 
programs.
    The second problem with the tribal waiver provisions of the KBRA is 
the unilateral termination or limitation of the government's trust 
responsibility to non-signatory tribes that would become lawful by 
enacting KBRA ratification legislation. The National Congress of 
American Indians and the Northwest Affiliated Tribes have enacted 
resolutions opposing such unilateral abrogation of federal trust 
responsibility.\6\ Both the National Congress of American Indians and 
Affiliated Tribes of Northwest Indians do not oppose any tribe 
exercising its rights to waive its trust obligations; however the 
organizations adamantly oppose a non-consensual waiver that is being 
imposed against a tribe's objections. Most tribes believe this is a 
modern version of historic termination policies that have been used 
against tribes and believe that this, if enacted, will re-open wounds 
between tribes and the United States that have long since been declared 
as improper and dishonorable U.S. policies toward Native people. We ask 
this Committee to assure us that no such provision will be enacted into 
law.
---------------------------------------------------------------------------
    \6\ See National Congress of American Indians Resolution PSP-09-051 
and Affiliated Tribes of Northwest Indians Resolution ATNI-res-09-63.

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          6. Separate FERC Licensing From Water Rights.

    The KBRA and the Klamath Hydroelectric Settlement Agreement 
(``KHSA'') contain provisions tying the two Agreements together such 
that neither can proceed without enactment of legislation that ratifies 
both. The two Agreements should not be linked. The proposed ratifying 
legislation (e.g., S. 1851 in the 112th Congress) is, among other 
things, unnecessarily expensive and damaging. Existing statutes and 
regulations provide for hydroelectric licenses that incorporate modern 
environmental laws and protections. Such modern licenses lead to dam 
removal when dam owners conclude that they can no longer economically 
operate dams under contemporary environmental laws, as illustrated by 
removal of the Condit Project near Portland, Oregon in 2011. The 
parties' agreement in the KHSA to suspend the FERC licensing process 
indefinitely pending ratification of both Agreements and funding by 
Congress undermines the environmental benefits promised by existing law 
and shifts the cost of dam removal from PacifiCorp, on which it rests 
under existing law, to the public.
    The FERC licensing process has been suspended with the tacit 
participation of California and Oregon and the benign neglect of FERC. 
Clean Water Act Sec.  401 Certification delay is the means by which 
FERC has been given a fig leaf to hide its inaction. A Sec.  401 
Certification contains standards that the federal licensee must meet in 
order for the project to meet state water quality standards. A FERC 
license cannot normally be issued without a Sec.  401 Certification. 
However, the Act requires that a certification must be issued within 
one year of license application. Where, as here, the States have 
entered into a contract to halt preparation of Sec.  401 certification 
for ten years or more, they have waived their certification right. See 
KHSA Sec.  6.5. Here, the fish passage and operational conditions 
already prescribed by the National Marine Fisheries Service and the 
U.S. Fish and Wildlife Service (and upheld by an administrative law 
judge) impose environmental remediation costs that exceed the benefit 
of future dam operations under a modern FERC license. Thus, issuance of 
a new FERC license will produce either dam removal or retrofitting of a 
project which will provide genuine environmental benefits to the 
Klamath River system.
    Thank you for the opportunity to testify in this matter.

    The Chairman. Thank you very much. Very helpful.
    Mr. Troy Fletcher, Executive Director of the Yurok Tribe in 
Klamath, California.

 STATEMENT OF TROY FLETCHER, EXECUTIVE DIRECTOR, YUROK TRIBE, 
                          KLAMATH, CA

    Mr. Fletcher. Thank you, Chairman Wyden and Senator 
Murkowski for the opportunity to provide testimony. My name is 
Troy Fletcher. I'm a member and Executive Director with the 
Yurok Tribe. I'm here today with Council Members Mattz and 
Hendrix and our Chairman, Mr. Thomas O'Rourke.
    The Yurok reservation is located on the lower 44 miles of 
the Klamath River. Everything that happens in the Klamath Basin 
impacts Yurok people. It impacts the health of our fishery, the 
health of the river.
    For Yurok the river is central to who we are and who we are 
as a people. We provided more detail in our written testimony 
for your consideration about our dependence. The Yurok are the 
largest harvester of Klamath River salmon.
    For us when it comes to the trust responsibility the United 
States does have a trust responsibility, but we can wait around 
for decades asking the United States to fulfill that trust 
responsibility or we could reach out and try to resolve issues.
    We know about conflict in the Basin.
    We've been a part of the revolving conflict in the Basin.
    We've been in litigation in the Basin.
    We've experienced a fish kill in 2002 after the 2001 
curtailment at the Upper Basin. That fish kill happened in our 
home, on our river, on the Yurok Indian reservation. Our people 
witnessed that carnage first hand. We know what loss is about. 
We know what impact is about.
    Because we know what that's about we sought out an 
opportunity to work with others in the Basin to try to resolve 
some of this long term conflict.
    We sought out partnerships with the company.
    We sought out partnerships with off-project irrigators, 
with project irrigators, with other tribes, with NGO's.
    The Klamath Basin agreements represent an opportunity, a 
pathway forward, to resolve many of these outstanding issues. 
It's an opportunity. It's an opportunity we hope we don't lose, 
that we're able to take advantage of.
    We understand that people didn't make it across the finish 
line. Many people around this table and nearly everybody that I 
can see were part of those negotiations. Some people couldn't 
make it. But I ask you to look at those who couldn't make it.
    Many people are entrenched. I think you provided some wise 
council when in your opening statements about moving off 
entrenchment, moving off entrenchment. So it's one thing to 
talk to people who are like minded and to get people who are 
like minded to say, yes, we agree with you.
    It's another thing to reach across the table to those that 
may not be from your position or see things in your perspective 
and get those people to say, yes, we agree with you.
    We're proud to say that we struck strong partnerships.
    We support our partners throughout the Basin.
    We're concerned about the opportunity and the conditions 
this year for example, could lead to another fish kill in the 
Lower Basin. We're going to continue to work with the 
Department of the Interior and other interests to make sure 
that doesn't happen. We'll take whatever steps we need to to 
make sure that doesn't happen.
    The KBRA presents an opportunity for us to work together 
into the future and to resolve some long standing issues. We 
hope that you will work with us to make sure that that gets 
passed. We're willing to work with and speak to anybody about 
anything else and about coming to the table and working with us 
collaboratively.
    But people have got to move off their entrenched positions. 
It's not going to work.
    With that, thank you for the opportunity. We look forward 
to more questions.
    [The prepared statement of Mr. Fletcher follows:]

 Prepared Statement of Troy Fletcher, Executive Director, Yurok Tribe, 
                              Klamath, CA
    The Yurok Tribe provides this written testimony regarding water 
issues in the Klamath River Basin.
    The Yurok Reservation is located on the lower 44 miles of the 
Klamath River extending from the Pacific Ocean upstream to above the 
confluence of the Trinity and Klamath Rivers. Yurok people have lived 
in this area since time immemorial. Any activities within the Klamath 
River Basin that affect the health of the Klamath River and its fishery 
resources have a direct impact upon the Yurok Tribe. The Klamath River 
Basin includes the Trinity, Scott, Shasta, Salmon, Williamson, Wood and 
Sprague Rivers including all connected tributaries.
    The following principles must be applied when the United States is 
involved in any issue that affects Klamath River Basin fish, water or 
other resources:

          1) That the United States fully and properly protect and 
        restore all trust resources of the Yurok Tribe. This principle 
        includes the need to manage Klamath River Basin resources such 
        that the Yurok Tribe can fully participate in the subsistence, 
        commercial and ceremonial harvest of all species and races of 
        anadromous and other fish;
          2) That the United States abide by and honor the commitments 
        made in the Cooperative Agreement between United States 
        Department of the Interior and Yurok Tribe for the Cooperative 
        Management of Tribal and Federal Lands and Resources in the 
        Klamath River Basin of California [June 26, 2006];
          3) That any activities which affect fish and/or water 
        resources within the Klamath River Basin affect the Yurok Tribe 
        Reservation and the Yurok Tribe whether such activities occur 
        in California or Oregon;
          4) That the United States, including the Department of the 
        Interior, must provide the Yurok Tribe with any proposal, 
        initiative or other concept that affects the interests and 
        resources of the Yurok Tribe;
          5) That the United States, including the Department of the 
        Interior, pursuant to the cooperative management agreement 
        mentioned above, principles of the government-to-government 
        relationship, and in proper recognition of the dependence of 
        the Yurok Tribe upon Klamath River Basin fish, water and other 
        resources, will not take any action affecting Yurok interests 
        without the full, timely, and meaningful participation of the 
        Yurok Tribe in all decision and other processes;
          6) That the United States and the Department of the Interior 
        recognize that the Yurok Tribe harvests the vast majority of 
        Klamath River Basin fish as demonstrated by the Tribe's past 
        harvest;
          7) That the United States recognize and respect the Yurok 
        Tribe fishery interests as specifically recognized by the 1993 
        Opinion of the Solicitor, the 1988 Hoopa Yurok Settlement Act 
        and its legislative history and other appropriate sources.

    What follows is a description of the Yurok Tribe's dependence upon 
the Klamath River and its fisheries, including attached rights.
    The Yurok Tribe's message is that there is a continuing and 
substantial impact to the Yurok Tribe's fisheries and other resources. 
That impact has dire social and economic consequences on the lives of 
Tribal members, their families and Tribal communities. Any process 
regarding the management of Klamath River Basin fish, water or other 
resources must include the Yurok Tribe. The United States, including 
the Department of the Interior, must properly share all relevant 
information in its possession . Any decisions regarding tribal 
resources must be based upon the Tribe's unique circumstances and 
strengthen Tribal culture and related priorities.
    The Yurok Tribe Dependence on Klamath River Basin Fish
    Klamath River fish are irreplaceable to the Yurok Tribe's culture, 
religion and economy. From time immemorial, Yurok people have depended 
on the Klamath River and all of its streams and tributaries. The River 
is central to Yurok society by providing food, transportation, 
commercial trade, and numerous other activities essential to Yurok 
life. Throughout history and today, the identity of the Yurok people 
has been intricately woven into natural environment including the 
Klamath Basin watershed. Tribal religious and ceremonial practices 
focus on the health of the world; the Klamath River and its fisheries 
are a priority. The Yurok Tribe's obligation to protect the fishery has 
always been understood by Yurok people. The ancestral territory of the 
Yurok Tribe included coastal lagoons, marshes, ocean waters, tidal 
areas, redwood and other ancient forests, prairies and the Klamath 
River. The Preamble of the Constitution of the Yurok Tribe identifies:

                  Our people have always lived on this sacred and 
                wondrous land along the Pacific Coast and inland on the 
                Klamath River, since the Spirit People, Wo'ge' made 
                things ready for us and the Creator, Ko-won-no-ekc-on 
                Ne ka-nup-ceo, placed us here. From the beginning, we 
                have followed all the laws of the Creator, which became 
                the whole fabric of our tribal sovereignty. In times 
                past and now Yurok people bless the deep river, the 
                tall redwood trees, the rocks, the mounds, and the 
                trails. We pray for the health of all the animals, and 
                prudently harvest and manage the great salmon runs and 
                herds of deer and elk. We never waste and use every bit 
                of the salmon, deer, elk, sturgeon, eels, seaweed, 
                mussels, candlefish, otters, sea lions, seals, whales, 
                and other ocean and river animals. We also have 
                practiced our stewardship of the land in the prairies 
                and forests through controlled burns that improve 
                wildlife habitat and enhance the health and growth of 
                the tan oak acorns, hazelnuts, pepperwood nuts, 
                berries, grasses and bushes, all of which are used and 
                provide materials for baskets, fabrics, and utensils.

                  (Yurok Tribe Constitution 1993)

    The Yurok Reservation extends for a mile on each side of the 
Klamath River from the Pacific Ocean to above the confluence of the 
Klamath and Trinity Rivers. The Reservation stretches for a distance of 
approximately 44 miles.
    Because of the rivers' importance, one of the Tribe's highest 
priorities is to protect and preserve the resources of the rivers, and 
in particular, to restore the anadromous fish runs to levels that can 
sustain Yurok people. When the original Klamath Reservation was 
established in 1855, the rivers were filled with abundant stocks of 
salmon, steelhead, eulachon, lamprey, and green sturgeon. Today, the 
abundance of fish in the Klamath River and its tributaries are only a 
small fraction of their historic levels. Many species of fish have gone 
extinct, many other species, such as fall Chinook, are in serious 
trouble. Nonetheless, anadromous fish continue to form the core of the 
Yurok Tribal fishery. The Yurok Tribe is pursuing its fishery 
restoration goals through a fish management and regulatory program, 
participation in various forums to reach long term solutions to Basin 
problems and when necessary, litigation. The Tribe has devoted a large 
share of scarce funding resources to budgets for fishery management and 
regulation. The Tribe has enacted a fisheries ordinance to ensure that 
the fishery is managed responsibly and in a sustainable manner and has 
a longstanding record of resource protection. The Tribe's fisheries 
department is well respected and recognized as a knowledgeable and 
experienced fisheries entity in the Klamath Basin. The Yurok Tribal 
Council and the Tribal members they represent are well known for taking 
and supporting responsible actions to protect fisheries resources.
    The Yurok Tribe's dependence upon Klamath River fish is supported 
by Tribal harvest data. Since the passage of the Hoopa Yurok Settlement 
Act in 1988, the Yurok Tribe harvest of Klamath River fall Chinook 
represents approximately 87% of the 50% Tribal allocation (see Figure 
1.).* In terms of the overall allocation of Klamath River fall Chinook, 
comprised of Tribal and non-Tribal fishing groups, the allocation of 
fall Chinook for the Yurok Tribe is the largest single allocation of 
any group, tribal or non-tribal, harvesting Klamath River fall Chinook. 
The Tribe's allocation is 80% of the Tribal allocation, or 40% of the 
total allocation of harvestable surplus of Klamath fish.
---------------------------------------------------------------------------
    * All figures have been retained in committee file.
---------------------------------------------------------------------------
    The Tribe's dependence on Klamath River fish and the expectation 
that the Tribe would have significant economic opportunities from the 
fishery was identified by Congress during passage of the 1988 Hoopa 
Yurok Settlement Act. Unfortunately, the lack of Klamath River fish has 
prevented the Yurok Tribe from realizing the benefits of the Klamath 
fishery as intended by Congress. The legislative history confirms that 
Congress intended to vest in the Tribe property rights to the fishery 
on the Klamath River. The Committee noted that the Act ``will also 
establish and confirm the property interests of the Yurok Tribe in the 
Extension, including its interest in the fishery. Senate Report No. 
564, 100 Cong., 2d sess. (1988).
Legal Basis of Yurok Fishing Rights
    The fishing rights of the Yurok Tribe are well-established as a 
matter of federal law. The Yurok Reservation, created pursuant to an 
1855 act of Congress, was established within the Yurok Tribe's 
aboriginal homeland primarily to provide a territory in which the 
Tribe's fishing-based culture and way of life could thrive and continue 
to exist. This fact has been recognized repeatedly since the 
Reservation was established--by the Departments of the Interior and 
Commerce, the United States Supreme Court, the lower federal courts, 
and the California courts. See, e.g., Mattz v. Arnett, 412 U.S. 481, 
487 (1973); Donnelly v. United States, 228 U.S. 243, 259 (1913); 
Parravano v. Masten, 70 F.3d 539, 545-46 (9th Cir. 1995), cert. denied, 
116 S. Ct. 2546 (1996); Blake v. Arnett, 663 F.2d 906, 909 (9th Cir. 
1981). As Justice Blackmun observed in Mattz v. Arnett, the original 
Klamath River Reservation, the precursor to the current Yurok 
Reservation, ``abounded in salmon and other fish'' and was in all ways 
``ideally suited for the Yuroks.'' 412 U.S. at 487.
    The Yurok Tribe's right to take fish on the Klamath River is 
protected and guaranteed by federal law. The Ninth Circuit Court of 
Appeals confirmed that the executive orders that created the Yurok 
Reservation vested the Yurok Tribe with ``federally reserved fishing 
rights.'' Parravano v. Masten, 70 F.3d 539, 541 (9th Cir. 1995), cert, 
denied, 518 U.S. 1016 (1996). The same court has aptly observed that 
the salmon fishery of the Yurok Tribe is ``not much less necessary to 
the existence of the Indians than the atmosphere they breathed.'' Blake 
v. Arnett, supra, at 909. The Solicitor of the Department of the 
Interior has determined that the Yurok Tribe is entitled to a 
sufficient quantity of fish to support a moderate standard of living, 
or 50% of the Klamath fishery harvest in any given year, whichever is 
less. Memorandum from Solicitor to Secretary of the Interior, No. M-
36979, October 4, 1993. The right includes fishing for subsistence, 
commercial and cultural purposes. As the court in Parravano noted, the 
purpose of the Yurok Reservation was to enable the Yurok people to 
continue their fishing way of life. The River and its fish are 
undeniably the cultural heart of the Yurok people.
The Klamath Agreements
    The Yurok Tribe has been involved in Klamath Basin conflict since 
the Tribe formally organized in the early 1990's. The Tribe's interest 
flows from the reliance and responsibilities Yurok people have on and 
to the Klamath River and its fish. The Tribe's social and economic 
structure has been decimated, in large part, due to the decimation of 
the Tribe's fisheries. The Yurok Tribe is the single largest harvester 
of Klamath River fish. No one single factor accounts for the loss of 
our fish; these factors have combined with each other to result in the 
poor situation we find today.
    The Yurok Tribe has worked hard with environmental, agricultural, 
county, tribal, State and Federal interests to address many of the long 
standing issues that cause conflict in the Klamath Basin. The result of 
hard work by all the Parties was the historic signing of the Klamath 
Agreements in Salem Oregon in 2010 by these parties; the Klamath 
Hydropower Settlement Agreement and the Klamath Basin Restoration 
Agreement.
    Combined, these agreements address the need to remove Klamath River 
dams, provide funding for fisheries restoration and provide more water 
for environmental purposes (fish, wildlife, refuges, etc.). These 
agreements in turn provide more reliable water for agriculture in the 
upper Klamath Basin and more certainty to the power company regarding 
the fate and operation of the Klamath hydropower project.
    The Tribe urges the Congress to pass legislation that authorizes 
and implements the Klamath Agreements.
    It is critical that the foundation of the Klamath Agreements remain 
intact through the legislative process. The Yurok and other Parties 
negotiated agreements to resolve a number of complex issues that have 
been the center of conflict in the Klamath Basin for many years. These 
agreements contain support for funding various activities necessary to 
address issues of conflict. If the budget or other obligations attached 
to these agreements change, then the Yurok support for these agreements 
change as well. It is important that any legislation to authorize and 
implement the Klamath Agreements not change the timing or other actions 
necessary to implement the agreements signed by the Yurok Tribe and 
other Parties.
    The Klamath Agreements do not solve all the water and fisheries 
issues in the Klamath River Basin. They were never intended to do so. 
The Parties realized that it would not be possible to solve the issues 
on the Shasta, Scott and Trinity Rivers. What the agreements do is to 
begin to address some of the most immediate and serious issues in the 
Klamath Basin. The Yurok Tribe will continue to work with other 
interests to address outstanding issues on these rivers.
    Some interests claim that the Klamath Agreements terminate tribal 
rights and the federal trust responsibility to Klamath Basin Tribes. As 
these positions are considered we ask that individuals appreciated that 
the Klamath Tribes with the most significant reliance on fish from the 
Klamath side of the Klamath River Basin support these agreements. The 
agreements are an expression of tribal sovereignty and self-
determination. Attached to this testimony is a review of the Klamath 
Agreements as it pertains to tribal rights. A number of sections in the 
Klamath Restoration Agreement address tribal rights. Below is an 
important section for the Yurok Tribe:

                  2.2.11. No Determination of Water Rights by the 
                Agreement

                  No water rights or water rights claims of any Party 
                are determined or quantified herein. No water rights or 
                potential water rights claims of any non-party to the 
                Agreement are determined herein. No provision of this 
                Agreement shall be construed as a waiver or release of 
                any tribal water or fishing rights in the Klamath River 
                Basin in California, including claims to such water or 
                fishing rights that have not yet been determined or 
                quantified. The Secretary will not take any action in 
                any proceeding within the adjudication of Klamath Basin 
                water rights in the State of Oregon that eliminates the 
                existence or quantifies the amount of any tribal water 
                or fishing rights in California.
Trinity River Issues
    The Yurok Tribe depends upon the health of the Trinity River and 
its fisheries resources, as it is the largest Tributary to the Klamath 
River.
    The Yurok Tribe supports that no less than 50,000 acre-feet shall 
be released annually from the Trinity and made available to Humboldt 
County and downstream users as was provided for in the 1955 Act 
regarding the Trinity River.
    It is critical that water from the Trinity River be made available 
during dry water years when in-river run size of Fall Chinook is 
projected to be large. The Yurok Tribe and others have a serious 
concern that water from the Trinity River is necessary to protect ESA 
and other species of fish as they enter the Klamath River this fall. 
Projected Fall Chinook run size returning to the Klamath River will be 
the second largest. At the same time, the Klamath Basin is in a dry 
water year. This combination of factors is a concern to the Yurok 
Tribe, as there is a risk of another fish kill in the Klamath River 
similar to 2002. Everyone associated with the Klamath Basin should 
share that concern.

    The Chairman. Very good. Thank you.
    Commissioner Mallams, you're next. I appreciate you making 
the trip. I also want to tell you I was very appreciative of 
the meeting that we had after the town hall meeting in Klamath 
Falls when you and several colleagues filled me in to a greater 
extent on your point of view. So we appreciate that.
    Please proceed.

 STATEMENT OF TOM MALLAMS, COMMISSIONER, POSITION ONE, KLAMATH 
                   COUNTY, KLAMATH FALLS, OR

    Mr. Mallams. Thank you for the opportunity to speak today 
and especially, Senator Murkowski also, for being here to 
address this very important issue.
    Today I want to make sure that I recognize that some 
people.
    The Chairman. Commissioner, do you have your microphone on 
or you may just have a soft voice.
    Mr. Mallams. I need it to be closer.
    The Chairman. Pull it a bit closer.
    Mr. Mallams. OK. Is that better?
    The Chairman. Yes. Good.
    Mr. Mallams. Thank you.
    Now I do have to recognize that some people say I have a 
conflict of interest here because I am an irrigator, a very 
small irrigator. I pump water out of the ground. So I want to 
make sure to people to recognize that.
    But I'm here as an elected County Commissioner. I am very 
frustrated with the division that has happened in our community 
for many, many years. One of the people, one of the 
stakeholders that have been left out of this is the citizens in 
whole.
    I represent all the citizens of Klamath County and do other 
elected representatives. In last 4 years have been many 
elections held in our area. The common denominator has been 
those that support dam removal and the KBRA.
    The Chairman. I can barely hear you which makes me think 
that a bunch of other people may have a challenge too.
    Mr. Mallams. Yes.
    The Chairman. So if you can speak right into it.
    Mr. Mallams. OK.
    The Chairman. There we go.
    Mr. Mallams. That's better. OK.
    The Chairman. Good.
    Mr. Mallams. Anyway there have been many elections 
happening in our area that have shown that the people do not 
want this direction right now. They are not in favor of this. 
The votes have been anywhere from 65 to 80 percent in Northern 
California and Southern Oregon.
    We do believe there's no doubt we need a settlement. The 
current direction with dam removal and the current KBRA just 
doesn't fit the bill. I recognize, hopefully recognize, all the 
very good relationships that have been forged through this 
process. I understand that. I don't think that has to go away.
    I think if they are very strong relationships they will be 
able to weather a slight deviation from the course that they've 
been taking. The KBRA, by itself, was a very noble cause and 
still is. I believe it still is and still can be. This 
settlement has to happen for us.
    So from our perspective what did--we've been asked what our 
next step? There are other options out there that have been 
systematically ignored through this whole process. That's--
there's lots of off stream storage. The Federal Government 
getting out of the Federal project which was originally 
designed that way.
    There's lots of other options out there. Dredging the lake 
in certain areas and juniper removal and removing the Caspian 
Terns and the birds that feast on the sucker fish. Until the 
current direction changes though, these other options will 
never be allowed. In those KBRA meetings it was a very, very 
definite direction. KBRA, as it was in dam removal, was the 
only option that was being put on the table.
    I look at this as like a big family. Our Klamath Basin is a 
large family with very different structures within our many 
people whether tribal members, project irrigators or whatever. 
We're all aunts and uncles, cousins, whatever. We need to get 
together and continue this dialog and make sure that this 
agreement really does happen that we can all get together and 
make sure that we all get something out of this.
    Everybody has to give, I understand that. I'm 
wholeheartedly on that side. It just has to be a balanced 
approach. I don't feel it's there yet. I still am an optimist 
that it can happen and it must happen.
    Thank you again for holding this hearing.
    [The prepared statement of Mr. Mallams follows:]

Prepared Statement of Tom Mallams, Commissioners Position One, Klamath 
                       County, Klamath Falls, OR
    First, I want to thank Oregon's Senator Ron Wyden for putting this 
Committee Hearing together. Bringing interested parties together can 
implement positive discussion seeking that illusive settlement on 
generational water conflicts. In 200 I, our community was united when 
water was shut off in the Reclamation Project. U.S. Congressman Walden, 
along with over 15,000 citizens, helped with buckets of water being 
pulled out of the Lake Ewauna, and poured into the ``A'' Canal, 
protesting this action.
    As a Klamath County Commissioner, I watch in total frustration, as 
our community has been divided by the age old method of ``divide and 
conquer.'' As far as the dam removal and KBRA is concerned, the great 
majority or the Klamath River Basin , has been very consistent in the 
direction they DO NOT want to go.
    The areas elections in the last four years have proven this beyond 
any doubt. All three County Comm issioners have been replaced, local 
State Senator Doug Whitsett and State Representative Bill Garrard 
retained their seats. Gail Whitsett as a newly elected State 
Representative. All these elections were won by a margin between 65-73 
percent. The common denominator was that the winners opposed dam 
removal and the KBRA. Yes, there were other issues, but this was the 
most prominent issue that was the main focus. Siskiyou County Measure G 
also passed opposing dam removal by 80 percent.
    As we speak, irrigators in the upper basin are now being denied the 
irrigation water needed to keep their crops and animals alive.
    The Klamath River Basin is comprised of families of all shapes and 
sizes. Our communities are full of families that love our basin. They 
want, more than anything else, to stay here, working and raising their 
families as the generations before have done.
    Our Communities have seen the devastation of the timber industry. 
Even with this loss, our citizens continued on, refusing to give in or 
giving up. Our sometimes harsh environment and numerous conflicts help 
create a very resilient people. The true spirit of the ``American Way'' 
still prevails in the Klamath River Basin. Often times, it seems as 
though the Klamath River Basin is ``ground zero'' for out of control 
regulation on our ability to use our Natural Resources. What ultimately 
happens here in the Klamath Basin will affect our entire nation.
So what is the next step?
    In many ways, our Klamath River Basin is like a very large, 
extended family. We have many diverse members, with different 
strengths, weaknesses, life experiences, and desired outcomes for the 
issues facing all of us. Just because we may not agree with one another 
100 percent of the time, does not mean that we cannot find common 
ground. Just like families do, we must focus on moving forward, finding 
that elusive balance.
    The KBRA itself began as a noble cause. Numerous improved 
relationships came out of the KBRA process. Unfortunately, dam removal 
and the KBRA have obviously, failed to deliver what is ultimately 
necessary for a true, comprehensive settlement, embraced with Basin 
Wide and Congressional support. In its present form, it cannot go 
anywhere!
    There are numerous options that can address the water issues in the 
Klamath Basin besides dam removal and the current KBRA. Unfortunately, 
all these viable options were systematically ignored. Being forced to 
accept dam removal and the KBRA as the absolute only option, ignoring 
all other directions is unacceptable. Deep, Off stream storage, 
dredging Klamath lake, juniper removal and the list goes on and on.
    We must regroup! We must keep striving ahead especially in these 
troubled times. We must follow the example of our ``Founding Fathers'' 
in never giving up.

    The Chairman. Thank you. I very much like your analogy to 
family. I won't break into song, but that's constructive.
    [Laughter.]
    Mr. Mallams. You don't want to hear me sing. So I guarantee 
you.
    The Chairman. Alright.
    Let's go next to Michael Kobseff, Supervisor, District 3, 
Siskiyou County Board of Supervisors.
    Let's see that would put Michael up there. OK.
    Your mic isn't on either.

STATEMENT OF MICHAEL KOBSEFF, VICE-CHAIR, BOARD OF SUPERVISORS, 
                      SISKIYOU COUNTY, CA

    Mr. Kobseff. How about that?
    The Chairman. There.
    Mr. Kobseff. There we go?
    The Chairman. Yes.
    Mr. Kobseff. Thank you, Senator Wyden for extending this 
opportunity to participate in this hearing.
    For Mt. Shasta this past year has been the driest year for 
the past century. Emphasizing as forcefully as nature can, that 
water and water quality are vital for agriculture, salmon and 
our very existence. But there is no connection between dam 
removal and the Upper Basin water supplies.
    Three of the 4 dams on the Klamath River proposed for 
removal are in Siskiyou County which is why our county is 
leading the pursuit of alternative solutions that will actually 
provide more water for farms, more fish for tribes and 
fishermen while retaining our existing source of clean 
hydroelectric power. There are options other than dam removal 
to pursue. New mitigation measures have been implemented by 
PacifiCorp since 2010 and these measures have been--are 
improving water quality and fish habitat.
    These improvements are evidenced by population trends with 
nearly 30 thousand Chinook salmon returning to the Shasta River 
in 2012, the highest number since Basin wide monitoring began 
in 1978. The subsequent result was a record out migration this 
year of nearly 5 million juvenile salmon.
    However there are more ambitious and promising actions that 
can be taken into benefit for fisheries and water supplies. As 
an example, for 15 years Siskiyou County has advanced the Five 
County Salmonid Conservation Program which has contributed to 
the turnaround in fish population trends. Siskiyou County has 
been working with NOAA fisheries and key stakeholders to 
develop a Coho supplementation program on the Shasta River, a 
major tributary of the Klamath River.
    Siskiyou County supports the development of a trap and haul 
pilot project for fish and passage, for fish passage, around 
the Lower Klamath dams. Trap and haul is currently being 
pursued by NOAA fisheries in the Bureau of Reclamation on the 
other side of our county on the Sacramento River. The potential 
of existing prime salmon habitat should be maximized by 
properly managing national forest system lands in the Klamath 
River watershed.
    The Long Lake Valley Water Project, storage project, with 
350 thousand acre feet of water storage should be reconsidered 
with a review of the cost benefit analysis in context with the 
cost of dam removal and the watershed restoration. The interim 
measures that PacifiCorp has already implemented should be 
continued and expanded.
    As the committee considers how to address Klamath Basin 
issues it should not overlook the effects of forest management 
on water supply and water quality. The overgrown forest 
conditions that result in bark beetle infestations and 
catastrophic fires are the same conditions that are stealing 
more water from our streams and rivers, water that would 
otherwise benefit farms and fish.
    Thank you.
    [The prepared statement of Mr. Kobseff follows:]

    Statement of Michael Kobseff, Vice-Chair, Board of Supervisors, 
                          Siskiyou County, CA
    Siskiyou County, home to approximately 150 miles of the Klamath 
River and three of the four dams that were proposed for removal, fully 
recognizes that there are longstanding water issues that must be 
addressed in the Klamath Basin. Our county is leading the pursuit to 
find alternative solutions to dam removal that will provide farms with 
more water, tribes and commercial and recreational fishing interests 
with more fish, and still retain our existing sources of renewable, 
clean hydroelectric power.
    The Klamath Hydroelectric Settlement Agreement (KHSA) and the 
Klamath Basin Restoration Agreement (KBRA), the two agreements reached 
by certain stakeholders in 2010 to address some of the longstanding 
water issues in the Klamath Basin, raised great expectations about 
finally achieving ``peace on the river.'' However, with implementation 
of these proposals at a standstill, the agreements have actually become 
an impediment to addressing the basin's water issues when they are 
pointed to as the one-and-only Klamath River solution.
Alternatives to Dam Removal
    A Klamath River solution must equitably spread its costs and risks 
among the many stakeholders. As currently proposed, the risks and 
burdens of mitigating any failings of a dam removal experiment will 
fall upon the water users in Siskiyou County's Scott and Shasta 
Valleys. A viable solution must also achieve its goals through 
scientifically defensible means. Here, there is no connection between 
dam removal and Upper Basin water supplies, except for that 
artificially created by the KHSA and KBRA. For these and many other 
reasons, it is time to advance alternatives to dam removal and to move 
toward measures that will be able to garner the degree of popular 
support required to finally get something done for the Klamath Basin.
    The new mitigation measures implemented by PacifiCorp under the 
KHSA are a starting point for reassessing alternate means of improving 
Klamath water quality and fisheries. These measures are improving both 
water quality and fish habitat and are a reminder that there are 
options other than dam removal yet to be pursued. PacifiCorp's 
``interim'' mitigation measures include:

   A Habitat Conservation Plan under the Endangered Species Act 
        that will minimize the effects of project operations on coho 
        salmon, which includes:

    --Habitat enhancement through a Coho Enhancement Fund and grant 
            program
    --Iron Gate Reservoir turbine venting to increase downstream levels 
            of dissolved oxygen
    --Increase the variability of downstream releases from Iron Gate 
            oResearch on Klamath River fish disease

   A similar Habitat Conservation Plan for sucker species, 
        including

    --A Sucker Conservation Fund
    --Reoperation of the East Side/West Side development to avoid take
   A hatchery and genetics management plan to support coho 
        recovery by conserving genetic and behavioral diversity
   Gravel enhancement on the Klamath River between J.C. Boyle 
        Dam and Copco Lake
   Nutrient reduction projects in the Klamath watershed

    PacifiCorp's June 2012 Implementation Report encouragingly reports 
progress is being made with ``various measures that are resulting in 
improvements to water quality and fish habitat.'' This observation is 
supported quantitatively by trends in fish populations. Nearly 30,000 
Chinook returned to the Shasta River in 2012, the highest number since 
basin-wide monitoring began in 1978. The subsequent result was a record 
out-migration of nearly 5 million juvenile salmon this year.
    Beyond the ``interim'' measures that are already evidencing 
successful effect in the watershed, there are a range of much more 
ambitious and promising actions that can be taken to benefit fisheries 
and water quality. As examples:

   for 15 years, Siskiyou County has advanced the Five Counties 
        Salmonid Conservation Program, which has contributed to the 
        turn-around in fish population trends;
   Siskiyou County has been working with NOAA Fisheries and key 
        stakeholders to develop a coho supplementation program on the 
        Shasta River, a major tributary of the Klamath River;
   Siskiyou County supports the development of a trap and haul 
        pilot project for fish passage around the lower Klamath dams. 
        Trap and haul is currently being pursued by NOAA Fisheries and 
        the Bureau of Reclamation on the other side of our county for 
        the Sacramento River;
   the potential of existing prime salmon habitat should be 
        maximized by properly managing National Forest System lands in 
        the Klamath River Watershed;
   the Long Lake Valley water storage project with 350,000 
        acre-feet of water storage should be reconsidered, with review 
        of the cost/benefit analysis in the context of the costs of dam 
        removal and watershed restoration; and
   the ``interim measures'' that PacifiCorp has already 
        implemented should be continued and expanded.
Value of Klamath River Dams
    In considering alternatives to dam removal, it is important to 
remember that there are important reasons to maintain the dams. The 
dams are valuable, existing sources of renewable, clean electrical 
power. The dams, being practically immune to increases in the cost of 
fossil fuels, have kept electricity costs down for our region's farmers 
and ranchers.
    These dams also provide local and regional recreational 
opportunities, which attract tourists to the area. The dams transformed 
former marginal habitat into world-class fisheries. The lakes behind 
the dams also provide substantial sanctuary to many kinds of birds. 
This habitat will be lost with the removal of the dams. The dams serve 
an important health and safety function, allowing the County to control 
potentially hazardous flooding of its river valleys and to flush the 
river in times of drought. Before the dams had been constructed, 
Siskiyou County suffered both immense flooding problems and drought. 
The dams have provided the County with an important mechanism to 
control peak flood conditions, saving lives and property from 
catastrophic flooding events, and reducing the cost of insurance for 
our residents. In times of drought these dams allow the flushing of the 
river to reduce algae and to provide instream flows for salmon and 
other aquatic life. If the dams are removed this important function 
will be lost.
    The dams improve water quality generally by providing a settlement 
basin for naturally occurring phosphates and other detrimental elements 
products in the water. The dams also cool warm water coming in from the 
upper high desert basin in Oregon.
    The effectiveness of the hatchery at Iron Gate is dependent on the 
use of cold water that is obtained by drawing water from the lower 
levels of the reservoir. The stratification of layers of water in the 
dam is an important adjunct function of the dam and is responsible for 
the hatchery's historically acknowledged success in producing 
consistently enhanced salmon populations. The hatchery at Iron Gate 
produces over six million salmon smolts annually.
    Finally, an important cultural function of the dams is the 
protection they provide for historic Native American gravesites. 
Leaving the dams in place will protect the historic gravesites of the 
Shasta Tribe from the elements and from potential pillaging. Removal 
will violate both the cultural aspects of the Shasta Nation and federal 
policy.
    Beyond the loss of important functions served by the dams, Siskiyou 
County remains concerned about other potentially negative impacts of 
dam removal on the region. In a recent election, nearly 80% of voters 
in Siskiyou County expressed their opinion that the dams should not be 
removed.
    Siskiyou County continues to have grave concerns about the release 
of nearly 20 million cubic yards of sediments behind the dams, which is 
loaded with toxic minerals. This release may result in massive 
destruction of the ecosystem, a fact recognized by the Department of 
the Interior (DOI), as well as its studies, although DOI claims the 
damage may be short lived. DOI's studies acknowledge that we will not 
know if restoration through dam removal is successful until possibly 
2050. Although on considerably smaller scales, one need only look to 
the damage done by the removal of other dams (Elwha, Condit, Gold Ray, 
Savage Rapids) to see the destructive consequences of dam removal. This 
damage to the environment from sediment release is rationalized on the 
basis that salmon will have ``access'' to approximately 35 miles of 
historically inconsistent and marginal habitat.
    Loss of the dams, and their water storage, will ultimately result 
in demands being made on farmers and ranchers to further reduce their 
use of water, eventually curtailing late season uses, resulting in 
uneconomic ranch practices. Except for a minority of agricultural 
interests receiving promises of water, the majority of agriculture and 
ranchers will suffer significant losses.
Issues of Scientific and Scholarly Integrity
    The KHSA requires the Secretary of the Interior to make a 
``Secretarial Determination'' as to whether dam removal should proceed. 
The agreement promised that the Secretarial Determination would be made 
only after thorough review and careful scientific scrutiny. Section 3 
of the KHSA requires the Secretary to review existing studies and data, 
undertake new ``appropriate'' studies, and comply with the National 
Environmental Policy Act (NEPA), among other things. Since this review 
began, more than 200 studies, reports, and other documents have been 
presented to the public on the klamathrestoration.gov website. All of 
this information was supposedly synthesized and summarized in the 
Klamath Dam Removal Overview Report for the Secretary of the Interior: 
An Assessment of Science and Technical Information (Overview Report).
    Despite the tremendous amount of time and taxpayer money that has 
been devoted to this process, the Overview Report and underlying 
materials are completely overshadowed and tainted by former Secretary 
Ken Salazar's publicly-announced, predetermined outcome: dam removal 
will not fail! Staff from the Interior Department and its subsidiary 
agencies received clear direction as to where they needed to end up. 
Lest there be any doubt, others need only look to the examples of the 
Bureau of Reclamation's removal of its scientific integrity officer or 
the proposal to terminate the science unit in the Klamath Area Office.
     The Overview Report is replete with examples of bias, distortion, 
and circumvention of legal, scientific, and scholarly standards, 
including the following examples:

          1. False Choices Under the Dams-In Scenario.--The Overview 
        Report compares two scenarios described as the ``dams in'' and 
        the ``dams out'' alternatives. However, a false choice is 
        presented by defining the dams-in scenario as indefinite 
        operation under annual FERC licenses without implementation of 
        any of the protection, mitigation, and enhancement measures 
        that have already been prescribed for a new license. This false 
        choice makes the dams-out scenario seem far better by 
        comparison than it actually is and is an over-arching example 
        of the bias that runs throughout the Overview Report.
          2 Adaptive Management vs. Inflexible Management.--The dams-
        out scenario makes great fanfare about its ``commitment to 
        `adaptive management.''' In stark contrast, the dams-in 
        scenario is constrained to a locked-in, minimalist approach. 
        Once again, a false choice is presented to shade the report 
        toward dam removal.
          3. False Assumption of Status Quo Fish Populations with Dams 
        In.--The Overview Report goes to great lengths to emphasize the 
        uncertainty of trends in fish populations under a dams-in 
        scenario. Based upon that uncertainty, the report then leaps to 
        the assumption that the ``current status'' of ``markedly 
        declined'' fish populations will continue into the future. The 
        past year's record-level returns of Chinook salmon belie that 
        erroneous assumption. The report ignores the reality of 
        improving population trends resulting from TMDL implementation, 
        fish flows, and basin-wide habitat enhancement efforts, 
        including installation of fish screens on water diversions and 
        the Five Counties Salmon Program implementing best management 
        practices for road construction and maintenance.
          4. Omission of Ocean Conditions from Analysis.--The Interior 
        Department has taken the position that ocean conditions that 
        affect salmon populations are beyond the scope of analysis for 
        the determination regarding dam removal. The intentional 
        omission of this predominant element further skews the equation 
        in favor of dam removal. As evidenced by the record numbers of 
        salmon that returned to the Klamath system last year, factors 
        such as the Pacific decadal oscillation have a much greater 
        influence on population trends than having the dams in or out.
          5. Nonuse Values and Net Economic Benefit.--The Overview 
        Reports paints a picture of net economic benefit of between $14 
        billion and $84 billion will full facilities removal. However, 
        the only reason a net benefit can be claimed is by including 
        ``nonuse values'' that are claimed to be over $98 billion 
        dollars. Without these phantom benefits, the proposal for full 
        facilities removal has negative economic results.
          6. Inflated Benefit Estimates.--While making passing 
        reference to varied results from different studies, the 
        Overview Report states that there will be an 81 percent 
        increase in Chinook Salmon. In reality, the expert panel that 
        reviewed Chinook provided a list of independent factors that 
        would all have to be successfully addressed to achieve 
        substantial gains in Chinook populations, including water 
        quality, disease, colonization of the upper basin, harvest and 
        escapement, hatchery influences, predation, climate change, 
        fall flows, and dam removal impacts. This list does not even 
        include ocean conditions which, as noted above, are a 
        predominant factor.

    The Overview Report is only the latest example of how the KHSA and 
KBRA have sacrificed science and an honest assessment of ecosystem 
conditions and processes in favor of a predetermined outcome based on a 
belief that removal of the lower four dams on the Klamath River is a 
condition precedent to enhancing fisheries. That is clearly not the 
case, as the population trends discussed above firmly demonstrate.

    The Chairman. Thank you very much.
    Our next witness will be Mark Lovelace, 3rd District 
Supervisor of Humboldt County in Eureka.

   STATEMENT OF MARK LOVELACE, HUMBOLDT COUNTY SUPERVISORS, 
                           EUREKA, CA

    Mr. Lovelace. Good morning, Chairman Wyden. I appreciate 
the opportunity to provide testimony on behalf of our county's 
135 thousand residents.
    Humboldt County lies on the rugged far northern coast of 
California, much closer to Oregon than we are to San Francisco. 
Virtually the entire 16 thousand square mile Klamath Basin 
drains through Humboldt County for a distance of 50 miles 
before it meets the sea. That's an area larger than 9 States. 
Everything that happens in the Upper Basin impacts our 
downstream communities.
    The mighty Klamath River has historically been the third 
most productive salmon fishery in the United States outside of 
Alaska. This powerful economic engine drove the coastal 
economies of Northern California and Southern Oregon and 
blessed us with abundant salmon that supported our commercial, 
sport and tribal fisheries. Today, however, over 90 percent of 
the river's salmon habitat has been destroyed or blocked by 
aging dams with more than 420 miles of historic stream habitat 
completely inaccessible.
    Our once abundant Klamath Chinook salmon have declined 
sharply from nearly 900 thousand to as few as 35 thousand or 
less in some years. With this decline has come the shuttering 
of commercial processing facilities, the loss of onshore jobs 
and a dwindling fishing fleet. With each boat lost an 
independent, family owned, small business now gone.
    It's important to note that our downstream communities did 
not have the benefit of environmental impact studies, economic 
analyses and Senate hearings before our natural wealth, in the 
form of water, was taken from us. The Klamath Basin has 
suffered through decades of conflict, chaos and crisis as a 
result of these dams with no stability for either the 
downstream fisheries or the Upper Basin farmers. Demand for 
water exceeds supply resulting in abrupt water shut offs to 
irrigators, devastating fish kills and commercial fishing 
closures.
    The Federal Government has had to pick up the tab for these 
conflicts spending hundreds of millions of dollars on drought 
relief, disaster assistance and lawsuits just to manage an 
ongoing crisis that leaves no one happy. If nothing is done, 
the Federal Government should reasonably expect to spend more 
over time than is proposed by these agreements without fixing 
the underlying problems and with nothing to show for it in the 
end.
    Humboldt County worked with a broad coalition of some 30 
other Klamath stakeholders for 5 years to develop a cooperative 
approach to managing the Basin's resources and permanently 
fixing these unresolved problems. These Klamath agreements do 
far more than remove the 4 dams. They create a comprehensive 
framework to share resources to improve river flows, to restore 
this vital river and to end the persistent cycle of crisis, 
conflict and fiscal waste of unending spending without an end 
goal.
    These agreements are the very model of a well crafted 
compromise. No one party gets everything they want. But the 
broad majority gets something they can live with. The entire 
Basin, for the first time ever, gets stability.
    Humboldt County is committed to supporting the Klamath 
agreements, to maintaining the partnerships we've built 
throughout the Basin and assisting with the implementation of 
these agreements over the next 50 years.
    I thank you for the opportunity to provide this testimony.
    [The prepared statement of Mr. Lovelace follows:]

   Prepared Statement of Mark Lovelace, Humboldt County Supervisor, 
                               Eureka, CA
    The County of Humboldt appreciates the opportunity to provide this 
statement for the record on water resources issues in the Klamath 
Basin. Our County is a signatory party to both the Klamath Hydropower 
Settlement Agreement (KHSA) and the Klamath Basin Restoration Agreement 
(KBRA). Federal implementation of these agreements would result in 
removal of the four lower-most dams on the Klamath River by 2020 and 
would create a comprehensive framework and mechanisms to achieve major 
watershed restoration through improved river flow regimes, habitat 
rehabilitation, improved water quality, and fisheries reintroduction. 
The County of Humboldt strongly supports the Klamath settlement 
agreements, as they provide an unprecedented opportunity to resolve 
longstanding disputes involving dams, water diversions, and salmon runs 
in the Klamath Basin.
Humboldt County
    Humboldt County lies on the rugged coast of far-northern 
California, some 270 miles north of San Francisco. Humboldt is isolated 
from the rest of the State by mountainous terrain carved with steep 
river canyons, accessed only across twisting and temperamental mountain 
roads. Our isolation earns our region its nickname, ``the Lost Coast'', 
and endows us with a strong sense of self-reliance. Our economy has 
long been dependent upon our natural wealth, the hard work of our 
multi-generational timber, farming and ranching families, and our 
prosperous coastal fisheries.
    More than half of the County's 135,000 residents live in 
unincorporated rural areas, with the remainder dispersed across seven 
small cities, including the seaport city of Eureka (population 27,191) 
and the tiny fishing village of Trinidad (population 367), the fifth 
smallest city in California.
    The Klamath Basin spreads across 15,751 square-miles of southern 
Oregon and northern California; an area larger than nine states. 
Virtually the entire basin drains through Humboldt County for the last 
50 miles of its 254 mile journey from its Oregon headwaters to the 
Pacific Ocean. Whatever happens to the Klamath River in the upper basin 
impacts our downstream coastal communities.
Klamath Fisheries History
    The mighty Klamath River has historically been the third-most-
productive salmon fishery in the U.S, outside of Alaska, surpassed only 
by the Columbia River in Oregon and the Sacramento-San Joaquin Rivers 
in California. The Klamath's location provides an important mid-point 
linkage between the aforementioned West Coast river systems. This 
powerful economic engine drove the coastal economies of northern 
California and southern Oregon, blessing us with abundant salmon that 
supported our commercial, recreational and tribal fisheries.
    Beginning in 1918 and continuing through 1962, the Klamath 
Hydroelectric Project constructed a series of dams on the Klamath 
River, none of which included any provision for fish passage, 
effectively cutting off hundreds of miles of Fall and Spring Chinook 
and steelhead spawning habitat in the Upper Basin.
    In the reservoirs behind the dams, the cold, swift-running waters 
of the Klamath are brought to a standstill, allowing the water 
temperature to warm well above tolerable levels for cold-water salmon. 
The still, warm waters also serve to concentrate nutrients and to 
encourage the explosive growth of toxic blue-green algae blooms and 
other fish pathogens, which are now endemic in the Klamath Basin. These 
pathogens were implicated in the September 2002 fish kill in which as 
many as 64,000 Chinook salmon were killed in the lower Klamath. This 
preventable disaster was the largest fish kill in the history of the 
Northwest.
    Today, however, over 90 percent of the river's salmon habitat has 
been destroyed or blocked by these aging and obsolete dams. More than 
420 miles of historic stream habitat is now completely inaccessible to 
returning salmon. Over the past 60 years, once-abundant Klamath Chinook 
salmon have declined sharply, from a historic average of nearly 900,000 
to as few as 35,000 or less in some years. Coho salmon are listed as 
endangered under the Endangered Species Act (ESA), and other species - 
such as green sturgeon and Pacific lamprey-are declining as well.
    In the late 1970's, commercial troll ocean fisheries in the Klamath 
Management Zone landed an average of over 3.6 million pounds of salmon. 
For the period from 2005 through 2009, that number had plummeted to an 
average of just 124,000 pounds, representing a decline of 92 percent 
for the Port of Brookings, and 98 percent for the ports of Eureka and 
Crescent City (see Table 1).
    This precipitous decline has brought the shuttering of commercial 
processing facilities, the loss of on-shore jobs, an ever-dwindling 
fishing fleet, and pain and suffering among the families in our fishing 
communities. Each fishing boat lost represents an independent, family-
owned small business that is now gone. Coastal communities in Northern 
California and Southern Oregon have had to deal with the environmental 
and economic impact of these dams for many decades, yet these 
communities did not have the benefit of environmental impact studies, 
economic analyses, and Senate hearings before their natural wealth, in 
the form of water, was taken from them.
    The impact of the decline in Klamath salmon is felt far beyond the 
ports of Eureka, Crescent City and Brookings. As previously stated, the 
Klamath River creates a `bridge' between salmon populations from the 
Columbia and Sacramento-San Joaquin River systems. Additionally, 
Klamath salmon inter-mingle in the ocean with other salmon stocks from 
as far away as Monterey, CA to central Washington. In this way, 
declines in Klamath Chinook salmon stocks can affect fisheries across 
the entire West Coast, triggering ocean salmon season closures over 
most of the northern California and Oregon coastline and other 
restrictions as far away as southern Washington.
The PacifiCorp Dams
    The lower four dams on the Klamath River (Iron Gate, Copco 1, Copco 
2, and JC Boyle) are not a Federal project. Rather, these dams are 
owned by PacifiCorp, a privately-owned utility company. These low-power 
hydroelectric dams do not provide any irrigation water, nor do they 
provide flood control. They are neither large nor particularly 
powerful, generating a combined annual average of just 78 megawatts 
(MW) for some 70,000 customers in northern California and southern 
Oregon, and representing less than two percent of PacifiCorp's 
electricity portfolio. By comparison, a single, more-modern facility 
could be expected to generate 1,000 MW or more.
    As noted previously, these dams were all built without any 
provision for fish passage, which would make them illegal by any modern 
standards. The license to operate these dams expired in 2006 and, as a 
part of the Federal Energy Regulatory Commission's (FERC's) relicensing 
process, PacifiCorp would be required to retrofit all four dams with 
fish passage and make other upgrades, at a cost of at least $350 
million. Fish passage would also further limit the dams' energy 
production capacity, as it would reduce the amount of water available 
for energy generation.
    The cost of full dam removal is estimated to be $291 million, 
making it a far-better proposition for PacifiCorp's ratepayers. 
PacifiCorp continues to operate these dams under a year-to-year 
license, pending Congressional approval and implementation of the 
Klamath Agreements. Under the agreements, PacifiCorp and its ratepayers 
would bear full responsibility for the costs of dam removal, up to $200 
million. PacifiCorp has already begun collecting a surcharge from its 
ratepayers to cover this anticipated cost. Any costs beyond that amount 
would be borne by the State of California. No Federal money would be 
used for dam removal.
History of Conflict
    As with many waterways in the western United States, water rights 
in the Klamath basin have been oversubscribed. In most years, there is 
not enough water to meet the demands of all users and still provide for 
the needs of salmon and downstream communities. This essential truth 
has led to many decades of fighting in the Klamath basin, but all of 
that conflict has failed to yield more water.
    Klamath water conflicts have been the focus of regulatory 
proceedings and litigation in various venues, without resolution. These 
conflicts intensified in the late 1980s and early 2000s with listings 
of threatened and endangered fish species, abrupt water shut-offs to 
irrigators, blooms of toxic algae, water disease outbreaks, devastating 
fish kills, and commercial fishing closures.
    In the midst of the 2001 drought, the Bureau of Reclamation (BoR) 
terminated irrigation contracts to some 1,400 upper basin farmers to 
protect the endangered coho on the basis of biological opinions issued 
under the ESA. The farmers and their supporters staged street protests 
in Klamath Falls, Oregon, and some took control of the head gates on 
the project's canals. When local police refused to arrest them, federal 
agents had to patrol the canals to prevent further water seizures.
    A year later, the Bush administration issued a controversial new 
biological opinion in which it determined that water diversions were 
"not likely to adversely affect" coho salmon for a below-average water 
year. BoR subsequently reduced the amount of water it would release 
downriver by half, diverting the balance to farmers through the 
project's canals.
    By September of 2002, the low flows, warm water temperatures, and 
an exploding population of parasites killed as many as 64,000 fish in 
the lower Klamath. It was the largest fish kill in the history of the 
Northwest.
    Responding to these recurrent crises, the Federal government has 
spent at least $181.4 million since 2001 on emergency drought relief 
and disaster assistance. This amounts to an average of over $18 million 
per year:

   2001-$46 million on Klamath disaster relief and other 
        government outlays
   2002-2004-$62 million-Special allocation through the Farm 
        Bill and BOR to support water conservation infrastructure and 
        water banking
   2006 - $61.4 million in State of Oregon disaster relief and 
        Commercial Fishery Disaster Assistance
   2010-$12 million on drought relief and conservation

    The Klamath Basin has suffered through decades of conflict, chaos 
and crisis, with no stability for either the farmers or the downstream 
fisheries. The Federal government has historically had to pick up the 
tab, spending hundreds of millions of dollars on drought relief, 
disaster assistance, and lawsuits just to manage an ongoing crisis that 
leaves everyone unhappy.
    Left unchecked, the Federal government could reasonably be expected 
to spend far more over time than is proposed by these agreements 
without fixing the underlying problems, and have nothing to show for 
it.
The Klamath Negotiations
    Following the disasters of 2001-2002, President George W. Bush 
convened a Cabinet-level Workgroup to focus on Klamath issues. In 2003, 
Interior Secretary Gale Norton highlighted the Klamath Basin as the 
poster child for water conflicts in the west and advocated for the 
development of a locally driven solution to be implemented by Federal 
and State agencies. Informal meetings and conferences were convened 
between tribal leaders, irrigators, conservationists, commercial 
fishermen, elected officials and concerned residents throughout the 
Basin, with the support of the Department of the Interior, BoR, 
National Oceanic and Atmospheric Administration, and the US. Fish and 
Wildlife Service.
    In 2004, with the support of President Bush, Oregon Governor Ted 
Kulongoski and California Governor Arnold Schwarzenegger, Klamath 
stakeholders began a five-year process of negotiation that resulted in 
``the Klamath Agreements,'' a cooperative approach to managing the 
Basin's resources and permanently fixing unresolved problems. Humboldt 
County, along with other local governments, State and Federal agencies, 
tribes, irrigators, fishermen, conservation groups, and a private 
utility, was among the nearly 30 parties that actively participated in 
the negotiation process leading to the development of the agreements. 
Through compromise, planning, transparency, and fairness, these 
resource-sharing agreements are designed to end the persistent cycle of 
crisis, conflict, and financial waste.
    These voluntary agreements offer balanced solutions for realizing 
better water certainty and water sharing, restoring imperiled fish and 
wildlife, and sustaining a strong natural resource-based economy in the 
region. The agreements are supported by the majority of basin interests 
who depend upon surface water, and who were able to put aside their own 
ideology and vision of the perfect outcome, to embrace a collaborative 
path that they believe is in the best interest of the entire basin.
Benefits of the Klamath Agreements
    As previously noted, the cost of continued inaction in the Klamath 
watershed has been very high, with the Federal government, alone, 
spending over $181 million dollars since 2001 managing an ongoing 
crisis, with no endpoint in sight. If the Klamath agreements are not 
implemented, there is no reason to believe that this pattern of 
sporadic, uncoordinated emergency relief will not continue or even 
increase indefinitely into the future.
    The Klamath Agreements propose to end this repeated cycle of 
throwing federal money at an ongoing crisis and to instead invest in 
long-term solutions that actually prevent future economic disasters. 
Implementation of the Klamath Agreements will:

   Re-program and more efficiently use $17 million per year 
        that is already and routinely being spent on federal programs 
        in the Basin by linking these currently disconnected programs 
        together as part of an overall restoration plan;
   For a fifteen year period, re-direct $36 million per year of 
        federal resources to establish long-term solutions, instead of 
        continuing ad-hoc and emergency measures that have totaled over 
        $180 million since 2001; and,
   Leverage significant state and private (PacifiCorp & 
        ratepayer) funding for habitat restoration and dam removal--
        capping ratepayer expenses as compared to the unknown costs of 
        relicensing the dams.

    The Klamath Agreements bring certainty and predictability to a 
region that has not previously known what to expect from one year to 
the next. These agreements protect, stabilize and grow essential jobs 
and businesses in the region's core natural resources industries of 
agriculture and fishing. The economic impact of these agreements in the 
basin is significant, creating both near-term and long-term jobs 
throughout the basin. Studies prepared as part of the economic impacts 
documentation demonstrate that the agreements will:

   Protect or create 4,600 additional temporary or permanent 
        jobs in restoration, agriculture and recreation, and increase 
        regional economic activity by at least $445 million;
   Create over 1,600 short-term jobs and nearly $200 million in 
        economic output based on dam removal and associated mitigation 
        activity;
   Provide a permanent average annual increase of more than 450 
        new jobs in commercial fishing between California and Oregon; 
        and,
   Support significant increases in jobs, from 70 to 700 
        depending on the year, in Upper Basin agriculture.

    Additionally, watershed restoration and improved water supply are 
expected to create millions of dollars and new local jobs from 
increased recreational fishing, hunting and bird-watching on National 
Wildlife Refuges and private lands.
    Investment in the Klamath is a small price to help protect a $750 
million per year farming and fishing industry, sustain or grow over 
4,500 jobs, restore the third largest and most valuable salmon run in 
the lower 48 states, and spark the revitalization of communities facing 
some of the highest unemployment and poverty in the region.
Conclusion
    Humboldt County strongly supports the Klamath agreements because 
they provide an unprecedented opportunity to bring long-needed 
stability to the basin, resolve long-standing disputes, and provide 
assurances of water, for the first time ever, for both the fish and the 
farmers. Beyond removal of the four lower-most dams, these agreements 
create a comprehensive framework to achieve major watershed restoration 
through improved flow regimes, habitat rehabilitation, improved water 
quality, and fisheries reintroduction.
    These agreements are the very model of a well-crafted compromise; 
neither side gets everything they want, but the broad majority gets 
something they can live with. And the entire basin gets stability.
    Humboldt County respectfully requests the Committee's assistance in 
enacting these agreements through enabling legislation. Our county is 
committed to supporting the Klamath settlement agreements, maintaining 
the strong, underlying partnerships we've built throughout the basin, 
and assisting with implementation of these agreements over the next 50 
years. We look forward to working with the Energy and Natural Resources 
Committee on this issue, and we thank Chairman Wyden, Ranking Member 
Murkowski, and the entire Committee for the opportunity to provide 
these comments for the record.


    The Chairman. Mr. Lovelace, thank you.
    Dean Brockbank, Vice President, General Counsel, 
PacifiCorp.

    STATEMENT OF DEAN S. BROCKBANK, PACIFICORP ENERGY, VICE 
          PRESIDENT AND GENERAL COUNSEL, PORTLAND, OR

    Mr. Brockbank. Yes, thank you. Good morning. Thank you for 
holding these important hearings, Chairman Wyden.
    My name is Dean Brockbank, Vice President and General 
Counsel for PacifiCorp Energy. We provide electricity to 1.8 
million customers in portions of 6 Western States including 600 
thousand customers in Oregon and Northern California. The 
company owns and operates the Klamath Hydroelectric project 
which covers 64 miles on the Upper Klamath River along the 
Oregon/California border.
    Four of the project's dams would likely be removed under 
the Hydroelectric Settlement Agreement. This settlement 
represents a serious collaborative attempt to resolve Klamath 
Basin resource issues. These agreements are not perfect to be 
sure, but the status quo is simply not an option.
    We've also heard your admonition this morning, Senator, to 
continue thinking creatively to solve these issues. We commit 
to be a part of this ongoing dialog.
    PacifiCorp supports the KHSA primarily as a business 
decision. Settlement represents the best balance between the 
various interests of our electricity customers and other 
stakeholders. The public policy preference of both the Bush and 
Obama Administrations as well as 2 States and 4 separate 
Governors is that dam removal be a key element in this Klamath 
settlement.
    While PacifiCorp favors a settlement of these issues, we've 
been clear that we could only put dam removal on the table if 
it was a fair deal for our electricity customers. The Public 
Utility Commissions in both Oregon and California agree that 
the company's decision to sign the KHSA is in the best interest 
of our customers. The company is not for or against dam removal 
as a matter of policy. Our key objective in this process is to 
minimize the cost and the risks that our customers will face. 
Simply put the settlement is what makes dam removal possible.
    I want to touch on 2 final issues.
    First, the drought this year in the Klamath Basin is of 
great concern for all of us. In response to this crisis we have 
offered to operate our hydro project to make available up to 20 
thousand acre feet of water this year to help alleviate drought 
conditions. We believe that we can do this while also 
maintaining river flows sufficient for and protective of fish.
    Second, PacifiCorp is committed to continue carrying out 
the many interim commitments under the KHSA which are helping 
to improve environmental conditions and fish habitat during the 
period before the dams would be removed in 2020.
    We look forward to working with you, Senator Wyden and this 
committee, to solve these problems.
    Thank you.
    [The prepared statement of Mr. Brockbank follows:]

 Staement of Dean S. Brockbank, PacifiCorp Energy, Vice President and 
                     General Counsel, Portland, OR
    My name is Dean Brockbank, and I serve as PacifiCorp Energy's vice 
president and general counsel.
    Thank you for the opportunity to appear before the Committee today 
and present the views of PacifiCorp on an issue of importance to our 
customers, the Klamath Basin and the region.
    I also applaud the committee for its interest in seeking solutions 
to the complex natural resource issues and conflicts that have 
unfortunately been a part of living and doing business in the Klamath 
Basin for more than a century. Like many before you toda -Basin tribes, 
farmers, agencies, and other stakeholders-PacifiCorp has been embroiled 
in the resource-related conflicts and litigation that have marked the 
Klamath Basin, an important part of the company's service territory.
    PacifiCorp is a regulated utility that generates and provides 
electricity to 1.8 million customers in portions of six Western states, 
including nearly 600,000 in Oregon and Northern California.
    The company also owns and operates the Klamath Hydroelectric 
Project (Project) dams on the Klamath River that would be removed under 
the Klamath Hydroelectric Settlement Agreement, or KHSA, which the 
company signed in 2010 along with more than 40 parties that include 
federal agencies, the states of Oregon and California, Tribes, 
irrigators, commercial fishing interests and several environmental 
groups.
    The Klamath Hydroelectric Project is a 169 megawatt hydroelectric 
facility on the Klamath River in southern Oregon and northern 
California. It consists of eight developments including seven 
powerhouses, five mainstem dams on the Klamath River (Iron Gate, Copco 
No. 1, Copco No. 2, J.C. Boyle, and Keno), as well as two small 
diversion dams on Spring Creek and Fall Creek, tributaries to the 
Klamath River. The Project as currently licensed includes the East Side 
and West Side generating facilities, which use water diverted by the 
Link River Dam, a facility owned by the Bureau of Reclamation that 
regulates the elevation and releases of water from Upper Klamath Lake 
and which is not included in the Project. The Project also includes 
Keno Dam, which has no hydroelectric generation facilities, but which 
serves to regulate water levels in Keno Reservoir as required by the 
Project license and for the benefit of Klamath irrigators and in 
support of the Bureau of Reclamation's Klamath Project. The Company 
operates all eight developments under one FERC license (FERC Project 
No. 2082). The Project is partially located on federal lands 
administered by the Bureau of Land Management and the Bureau of 
Reclamation. The first hydroelectric development, Fall Creek, was 
completed in 1903 and Iron Gate, the last hydroelectric development, 
was completed in 1962. Keno Dam was completed in 1968. A map of the 
Project is included as an exhibit with my testimony.
    In 2000, PacifiCorp began the process of seeking a new long-term 
federal license for the company's Klamath Hydroelectric Project. The 
50-year license for the project expired in 2006 and it was the 
proceedings around relicensing the dams that led state and federal 
agencies, Tribes, irrigators, commercial fishermen, environmental 
interests and other basin stakeholders to eventually negotiate and 
release for public comment the Klamath Basin Restoration Agreement, or 
KBRA in January 2008. The KBRA seeks to resolve the water allocation 
issues that have so divided the various communities and interests in 
the Klamath Basin. The KBRA also seeks to restore fish habitat, achieve 
much-needed water quality improvements in the Upper Klamath Basin, and 
support local communities and economies by providing more certainty 
regarding water allocation, addressing power cost issues for basin 
irrigators, and implementing other programs to assist basin communities 
in better managing and restoring the limited resources within the 
basin.
    Although the company did not participate in the negotiation of the 
KBRA, the policy preference of the federal resource agencies and the 
states of Oregon and California was made clear during the relicensing 
process and with the release of the KBRA-which called for an agreement 
with PacifiCorp that would result in the removal of the Company's 
hydroelectric project. This state and federal policy view-shared by 
many basin stakeholders, though certainly not all-has been that removal 
of the Company's hydroelectric dams is a key component to their efforts 
to resolve the broader resource-based conflicts that are beyond the 
scope of the Company's relicensing process.
    PacifiCorp is not in the business of removing dams. In fact, the 
company continues to value hydropower, including the Klamath Project, 
as a carbon-free and highly flexible power source that helps meet 
electricity demand in peak hours and assists with the integration of 
variable renewable energy resources. However, at the time of the 
release of the draft KBRA in 2008, the relicensing process had advanced 
to the point where the improvements to the facilities that would be 
necessary to secure another 40- to 50-year license to operate the dams 
under current laws and regulations were largely known.
    Although the Company advanced and defended other means to restore 
fish passage to the upper basin through a trap and haul program, the 
agency terms and conditions for a new license required the installation 
of fish passage at each and every project facility. These facilities 
would require significant capital investment, and other conditions of a 
new license would mandate reduced river flows through the powerhouses, 
impacting the economics of the project.
    Thus, the company realized that doing nothing regarding the dams 
was not an option. But despite the costs and impacts from the 
requirements of a new license, making those improvements so that the 
project could continue to serve our customers into the future remained 
the best available option.
    The company is not for or against dam removal as a matter of 
policy. We have both removed and relicensed hydro projects in recent 
years. The company approaches these decisions on a case-by-case basis 
and in the case of Klamath-which to our knowledge would be the biggest 
dam removal project in the history of the world-the company simply 
concluded that it could not support a dam removal outcome absent a 
settlement agreement that would provide key protections to the Company 
and its customers from the unknown costs and risks of such an endeavor. 
And though PacifiCorp generally favors balanced settlement over costly 
and uncertain litigation to resolve complex issues such as the 
relicensing of the Klamath project, the company also made it very clear 
that we could only support dam removal if it was a fair deal for our 
customers.
    And as a state-regulated utility, we are obligated to evaluate and 
pursue the available alternative that presents the least cost and risk 
to our customers. With that in mind, the Company negotiated with the 
state and federal governments, and ultimately other Klamath Basin 
stakeholders, to develop the KHSA. What ultimately made certain the 
company's support for a settlement that would result in dam removal is 
the inclusion of terms in the agreement that ensured removing the dams 
and replacing the carbon-free power they provide would cost less and 
present less risk for our customers than relicensing. Those terms 
include:

   A customer cost cap of $200 million that protects customers 
        from uncertain and potentially escalating costs related to dam 
        removal;
   The transfer of the dams and related project lands to a 
        third party for removal;
   Liability protection for the Company and its customers 
        should dam removal result in unintended consequences or create 
        unforeseen problems; and
   The ability for our customers to continue to benefit from 
        the low-cost power provided by the facilities until their 
        planned removal in 2020.

    The inclusion of these terms into the KHSA allowed the Company to 
conclude that the KHSA presented a better outcome for customers than 
continuing to relicense the project. The Company has presented its 
conclusion to the public utility commissions in both Oregon and 
California and they have agreed that the Company's decision to sign the 
KHSA is in the best interest of our electricity customers based upon 
these key terms. It is important here to note that neither PacifiCorp 
nor the public utility commissions have concluded that dam removal by 
itself is in the best interests of customers or a better alternative 
than relicensing. Rather, it is the KHSA - along with its protections 
for the Company and its customers - that represents the better 
alternative to relicensing.
    Thus, the terms and protections of the KHSA allows the policy 
preference of the federal and state signatories, as well as the 
priority of the tribes, fishermen, and environmental stakeholders, to 
proceed and for dam removal to be a core component of their broader 
settlement-while also making certain that dam removal is the better 
outcome for customers as compared to relicensing.
    However, without terms such as those in the KHSA, the company would 
not support removal of its dams and could not justify doing so as being 
in the best interest of customers, which is the top priority in our 
decision-making as a rate-regulated utility.
    That's a point I want to emphasize-that absent the terms of the 
KHSA or a similar settlement that ensures a fair deal for our 
customers, the company would not pursue removal of our Klamath dams.
    It is the company's hope and intent to be part of a broader 
settlement that will hopefully address the priorities of other 
stakeholders and our neighbors in the Basin. We cannot make decisions, 
however, that expose customers and the company to unacceptable cost and 
risk.
    PacifiCorp's role in efforts to find solutions to Klamath Basin 
resource issues is primarily connected to the future and ongoing 
operation of our hydro project-which is how Klamath issues can affect 
customers in all of our six states. But before concluding I want to 
touch on a few other issues I know are of concern to the committee and 
PacifiCorp as well.
    The company is well aware of the angst among the irrigation 
community in the Klamath Basin surrounding the increase in irrigation 
power rates that have occurred with the expiration of the special 
contract rates that were tied to our expired hydro license. The company 
knows that the transition to higher rates under retail tariffs that 
have been approved by the Oregon and California public utility 
commissions presents a challenge for many irrigation customers.
    The company is bound by statutes and regulations that do not permit 
special contracts, cost shifts between different classes of customers, 
and other restrictions regarding costs we are allowed to charge 
customers without the approval of our regulatory commissions - but we 
will continue to work with our customers in the Basin, federal 
agencies, members and staff of this committee and anyone else who can 
contribute to finding a way to alleviate the pressure of power costs on 
Klamath Basin irrigators.
    To that end, PacifiCorp and affected stakeholders have held recent 
discussions with the Klamath Basin irrigators, the Bureau of 
Reclamation, Bonneville Power Administration, and the Oregon Public 
Utility Commission staff on how to move this program forward. We 
believe that we can lay out a path forward to achieve the objective of 
the settlements of delivering federal power to Klamath Basin irrigators 
and are proceeding to develop an agreement in principle that would 
outline how such a program would work and be treated by the respective 
agencies with discrete authority over its federal and state components-
Bonneville Power, Reclamation, Western Area Power Administration, and 
the state public utility commissions. We look forward to working with 
all interested stakeholders in the development of this agreement in 
principle and are committed to making the necessary regulatory filings 
to advance this program such that the program is ready to be 
implemented when the federal legislation enacting the settlements - 
which is necessary for this program to be extended to all eligible 
Klamath Basin irrigators-has been enacted. PacifiCorp alone can't solve 
the power cost issue, but we are willing to play a helpful role 
consistent with the rules and regulations we must follow as a rate-
regulated utility.
PacifiCorp's Water Sharing Proposal
    The drought this year in the Klamath Basin is obviously also a 
great cause for concern for Basin farmers, ranchers, Tribes, fishermen 
and others.
    While we obviously can't change the weather, the company has looked 
hard at creative ways to operate our hydroelectric project to assist 
with this developing crisis. To this end, the company has determined 
that a drawdown of water storage from our hydroelectric project could 
provide an additional 20,000 acre-feet of water supply in the Upper 
Klamath Basin by reducing withdrawals from Upper Klamath Lake necessary 
to achieve Reclamation's flow requirements below PacifiCorp's Iron Gate 
Dam-the furthest downstream facility on the Klamath River. While there 
is 85,000 acre-feet of available storage within our reservoirs, not all 
of that water volume can be immediately tapped without changes to the 
facilities or creating operational or water quality issues. However, we 
do believe that we can provide 20,000 acre feet of water on an 
immediate basi-while still ensuring that Reclamation's minimum flow 
requirements below Iron Gate Dam are delivered consistent with the 
flows directed by the National Marine Fisheries Service in the 
recently-issued joint biological opinion for Reclamation's Project. 
Using the Company's reservoir storage to increase water supply 
availability during this year's drought situation could reduce the need 
for water shutoffs that may otherwise be required to attain desired 
Upper Klamath Lake levels. Alternatively, this water could be used to 
increase water supplies for thousands of acres of irrigated agriculture 
and pastureland, or for other beneficial uses including fish and 
wildlife purposes. Although this action would certainly help to ease 
the situation, it would not fill the entire gap of water shortfalls.
    PacifiCorp and the Bureau of Reclamation have a long history of 
coordinating our operations on the Klamath River for the benefit of 
water users and electricity customers, while also complying with 
regulatory requirements. Given the dire conditions that are developing 
in the Klamath Basin, PacifiCorp believes it is prudent to immediately 
explore creative ways to alleviate the situation and lessen the impact 
on Klamath Basin communities-many of which are comprised of 
PacifiCorp's customers.
    PacifiCorp has communicated this proposal to the Bureau of 
Reclamation and looks forward to further discussions with Reclamation, 
state and federal agencies, Klamath Basin irrigators, and other 
stakeholders regarding how our hydroelectric project may provide a 
stop-gap water supply during this critical drought period.
KHSA Implementation
    PacifiCorp also will continue carrying out our many 
responsibilities under the KHSA and other voluntary actions to improve 
environmental conditions within the Klamath Basin. These efforts have 
been ongoing since the agreement was signed and don't require 
authorization by Congress or further action by the Secretary of the 
Interior. I've included with my testimony PacifiCorp's annual report on 
its implementation efforts pursuant to the KHSA. The report highlights 
the many activities that PacifiCorp is undertaking in collaboration 
with our settlement partners and state and federal agencies to 
implement our obligations under the KHSA and advance the settlement 
process.
    Among these actions are approximately $80 million the company has 
committed to spend to implement the KHSA and implement a series of 
interim measures to improve environmental conditions during the interim 
period prior to anticipated dam removal in 2020. These actions are 
focused on improving water quality within the hydroelectric project as 
well as in the Upper Klamath Basin, working with the California 
Department of Fish and Wildlife to update and improve the 
infrastructure and operations of the Company's Iron Gate Hatchery, and 
working with the U.S. Fish and Wildlife Service and the National Marine 
Fisheries Service on actions to enhance fish habitat within the Klamath 
Basin to benefit and speed the recovery of threatened and endangered 
fish species. Working with these agencies and our many other partners 
in the settlement process is resulting in meaningful improvements that 
would not be occurring but for the collaboration and relationships that 
have been formed and strengthened over the past several years.
    I would like to thank the committee once again for its attention to 
these important issues and I would be happy to answer any questions you 
may have.

    The Chairman. Thank you very much. As I indicated in my 
opening statement, we very much appreciate the commitment to 
the rate relief that was discussed today. Obviously we have 
more to do. Congressman Walden and Senator Merkley and I will 
be following up with you on those matters very quickly.
    Our next witness will be Roger Nicholson, President of 
Resource Conservancy and Fort Klamath Critical Habitat 
Landowners.
    Mr. Nicholson, I also want to thank you for that meeting 
that we had after the town hall meeting in Klamath Falls that I 
referenced with the Commissioner and appreciated your interest 
in working on these issues now and getting a solution.

 STATEMENT OF ROGER NICHOLSON, PRESIDENT, RESOURCE CONSERVANCY 
 AND FORT KLAMATH CRITICAL HABITAT LANDOWNERS, FT. KLAMATH, OR

    Mr. Nicholson. I guess this is on.
    Senator Wyden, I wanted to thank you personally for your 
interest. Yes, indeed, we are one of the groups that you 
referenced in your preliminary comments that have not been 
involved in the KBRA process. A group that wanted to be 
involved with the KBRA process.
    We went to the KBRA and we were turned down from 
representation of the KBRA. My group represents literally tens 
of thousands of acres of irrigated ranch lands in the Upper 
Klamath Basin. A lot of those lands have been irrigated since 
the 1870s and 1880s continual with previously adjudicated water 
rights.
    Right today some of our membership is being shut down that 
has 1872 water rights. Those are family ranches have irrigated 
continually since that time with the assurances from the State 
of Oregon that would be a continual process. They would always 
have that priority. Then we had another adjudication.
    In the other adjudication, of course, the Klamath tribe was 
granted the rights that they should have always been. Time 
immemorial rights. Pontification of those rights is very 
questionable in our minds, very, very questionable. All being 
dictated by the former Adair decision which quite clearly said 
there will not be a wilderness servitude on those agricultural 
lands.
    To rapid forward to where we are now, we want a settlement. 
We desire a settlement. We are in the process of meeting with 
the tribes. Hopefully we can forge ahead and become part of a 
settlement process even though we probably will not even be 
allowed to be signator on the Basin Restoration Agreement, the 
KBRA. Perhaps that we can have a parallel agreement that would 
work with all parties.
    I have to say a couple things about restoration activities. 
Restoration activities were so big within such an important 
part of the KBRA our people have instigated those restoration 
projects for years. What we're seeing right now is actually a 
major step backward.
    There's been some 40 some miles of Sprague River restored. 
The Wood River we've tried to make it a model watershed all the 
way from bright bearing fencing to fish greening to other 
activities for years. With the simple lack of feed, lack of 
stock water, by losing our irrigation water, I'm fearful that 
we're going to take a major setback in restoration activities 
which I personally don't want. I've been out in front for a 
long, long time on those issues.
    Anyway, in closing I'd like to say that I commend everybody 
that has worked on the KBRA. You have worked long and hard. We 
want to be part of that process. We want to be part of a 
settlement process today.
    Thank you.
    [The prepared statement of Mr. Nicholson follows:]

Prepared Statement of Roger Nicholson, President, Resource Conservancy 
     and Fort Klamath Critical Habitat Landowners, Ft. Klamath, OR
    I am Roger Nicholson. I irrigate in the Wood River valley on a 
family ranch, which has operated since the 1890's. I am representing 
irrigators above Upper Klamath Lake. Our umbrella organization, 
Resource Conservancy, represents the Fort Klamath Critical Habitat 
irrigators and the Sprague River Water Resource Foundation irrigators.
    Resource Conservancy supports the concept of a basin wide 
settlement agreement. Furthermore, Resource Conservancy appreciates the 
efforts and time spent in developing the Klamath Basin Restoration 
Agreement or KBRA.
    Unfortunately, the KBRA promotes the taking of large quantities of 
Upper Klamath Basin water, with no assurances any will be left for our 
irrigation usage. For this reason, we cannot support the KBRA as 
written, until such time as equity through water assurances can be 
provided to all stakeholders.
    Resource Conservancy is concerned with the KBRA for the following 
reasons:

          1. It calls for the diminishment of irrigated acreage in the 
        Upper Klamath Basin.
          2. It provides no water delivery assurances for the remaining 
        irrigated acreage in the Upper Klamath Basin.
          3. It provides for a new environmental water right in the 
        Upper Klamath Lake, which was created from a portion of the 
        Klamath Project waterusers water right. This portion of the 
        waterusers water right has not been used historically. The 
        result is a call on the Upper Basin irrigators to provide water 
        which has been used historically by the Upper Basin irrigators.
          4. It also reduces the storage capacity dedicated to the 
        Klamath Project waterusers, thereby making a live flow call on 
        the Upper Basin irrigators more likely to fulfill the storage 
        shortfall.
          5. Settlement under the KBRA does not reflect the realities 
        of the Klamath adjudication.

    For years there was a balance in water use, providing irrigation 
water for the Klamath Project waterusers, Upper Basin irrigators and 
water in the streams for fish habitat and downstream flows. With 
today's environmental constraints and increased understanding of 
downstream flow needs, this balance has been upset and there is not 
enough water to go around. Resource Conservancy recognizes the need for 
balance in water distribution, and thereby is asking that an equitable 
portion of the water be provided to the Upper Basin irrigators in the 
process of achieving this balance under the current operating 
parameters.
    Resource Conservancy supports the KBRA's ecosystem and riparian 
restoration efforts. We recognize the importance of having a healthy 
ecosystem and riparian areas not only for fish and wildlife habitat, 
but also for increased agricultural production. Healthy functioning 
ecosystems provide for sustainable agriculture, while also creates 
quality fish and wildlife habitat. As ranchers in the Upper Klamath 
Basin, we have implemented many river restoration projects, fenced 
miles of riparian area, provided off-site livestock watering, installed 
fish screens, and practiced best management practices for grazing and 
livestock management. These improvements, over more than the past three 
decades, have improved water quality, increased stream flows, and 
decreased sediment and nutrient loading. We look forward to continuing 
these conservation trends, but need to be economically whole to have 
the time and financial resources to continue making improvements to our 
operations and their ecosystems.
    As KBRA suggests, all retiring irrigated acreage needs financial 
compensation while remaining acreages need water delivery assurances. 
Purchasing priority should be provided to junior water rights. In 
return, landowners can continue restoration efforts.
    Resource Conservancy is very interested in working toward a 
comprehensive agreement. This comprehensive agreement can be structured 
such that it will parallel the KBRA and not contradict other parameters 
and benefits set forth in the KBRA. We appreciate the opportunity to 
continue settlement discussions, in an amicable arena which will lead 
to a solution for all parties relying on water and living in Klamath 
Basin. We would eagerly await the day when water wars and legal 
processes become a thing of the past and we can move forward to rebuild 
a productive community.

    The Chairman. Thank you. That's the whole point of the 
discussion to have everybody at the table and see if we can 
finally get this resolved now. I appreciate your willingness to 
be part of those discussions.
    Ms. Becky Hyde, Board Member of the Upper Klamath Water 
Users Association, Chiloquin.

  STATEMENT OF BECKY HYDE, BOARD MEMBER, UPPER KLAMATH WATER 
                USERS ASSOCIATION, CHILOQUIN, OR

    Ms. Hyde. Alright, guess this is on.
    Senator Wyden, I'm grateful for your leadership in holding 
this important hearing. My name is Becky Hyde, speaking today 
on behalf of the Upper Klamath Water Users Association. We seek 
power, water and regulatory security through settlement for 
family farms and ranches that irrigate in the tributaries above 
Klamath Lake, the same community Roger is talking about.
    I ranch on the Sycan with my husband and 4 children. We 
also run cattle on the Upper Williamson which has stayed in our 
family for over 100 years. Unfortunately the Klamath Basin is 
known for its water crisis, not for the healthy food the hard 
working families grow, our amazing wildlife refuges or the 
tribes whose ancestors have lived in our Basin for thousands of 
years.
    This year that water crisis is affecting around 96 thousand 
irrigated acres of family farm and ranch land in my home 
community. Just last Wednesday the water master delivered the 
news to my 9 year old son at home while my--his dad was out 
irrigating, that our water which enjoys some of the best 
priority dates in the Basin, 1864, would be shut off. The 
adjudication creates winners and losers and our family and 
others like us are on the losing end. That is why a Basin wide 
settlement and what we felt the KBRA, not adjudication, 
provides certainty for our operations.
    The Klamath Basin's $550 million a year Ag economy will be 
crippled this summer. Please imagine the spiral effects. The 
local timber industry, our other large economic driver is slow 
to recover from hard times. Tourism, while helpful, only 
generates $20 million.
    We have already shipped a load of cows and a load of 
yearlings off of our ranch. The remaining grass will dry out 
quickly forcing us to move more of our herd. 70 thousand 
animals could be without feed because of the enforcement of the 
adjudication, maybe more.
    To emergency feed hay, just for 4 months, could cost $27 
million. Fighting an alternative forge will be difficult and we 
will experience millions of dollars in loss take crops and 
available livestock forage. We can't afford this.
    I'm disappointed because we saw this crisis coming. We 
worked for years on compromise and collaborative agreements to 
avoid this suffering. If the Klamath Basin Restoration 
Agreement were in place today with it would come a reasoned 
plan for coping with the crisis of drought and also a bedrock 
vision for long term stability. I care because a clear plan 
helps our children build communities based on following the 
golden rule rather than responding with violence and blame for 
decades on end.
    I want my 9 year old son to remember this as the summer 
when we, as a community, worked through tough times together 
and not as the event that ended our ability to ranch near the 
Sycan. Our Klamath Basin is a national treasure. I hope 
everybody will repeat that today.
    Waiting for your attention. Please join me in choosing to 
end the water wars and rotating crisis that has come to define 
this special place.
    [The prepared statement of Ms. Hyde follows:]

  Prepared Statement of Becky Hyde, Board Member, Upper Klamath Water 
                    Users Association, Chiloquin, OR
    Thank you, Chairman Wyden, Ranking Member Murkowski and Members of 
the Committee:
    Senator Wyden I'm grateful for your leadership in organizing this 
important roundtable. My name is Becky Hyde speaking today on behalf of 
the Upper Klamath Water Users Association. We seek power, water and 
regulatory security through settlement for family farms and ranches 
that irrigate in the tributaries above Klamath Lake. I ranch on the 
Sycan with my husband and four children, and we also run cattle on the 
Upper Williamson, which has stayed in our family for over 100 years.
    Unfortunately, the Klamath basin is known for its water crisis, not 
for the healthy food that hardworking families grow, our amazing 
wildlife refuges, or the tribes whose ancestors have lived in our basin 
for thousands of years. This year that water crisis is affecting around 
96,000 irrigated acres of family farm and ranch land in my home 
community.
    Just last Wednesday the water master delivered the news to my nine-
year-old son at home while his dad was out irrigating, that our water, 
which enjoys some of the best priority dates in the basin, 1864, would 
be shut off. The adjudication creates winners and losers-and our family 
and others like us are on the losing end. That is why the Klamath Basin 
Restoration Agreement--not adjudication--provides certainty for our 
operations.
    The Klamath basins' $550 million dollar a year Ag economy will be 
crippled this summer, and please imagine the spiral affect. The local 
timber industry, our other large economic driver, is slow to recover 
from hard times. Tourism, while helpful only generates $20 million. We 
have already shipped a load of cows, and a load of yearlings off our 
ranch. The remaining grass will dry out quickly, forcing us to move 
more of our herd. Seventy thousand animals could be without feed 
because of the enforcement of the adjudication. To emergency feed hay 
just for four months could cost $27 million dollars. Finding 
alternative forage will be difficult. We will experience millions of 
dollars in lost hay crops and available livestock forage. We can't 
afford this.
    I'm disappointed because we saw this crisis coming. We worked for 
years on a compromise and collaborative agreement, to avoid this 
suffering. If the Klamath Basin Restoration Agreement were in place 
today, with it would come a reasoned plan for coping with the crisis of 
drought, and also a bedrock vision for long-term stability.
    I care because a clear plan helps our children build communities 
based on following the ``Golden Rule'' rather than responding with 
violence and blame for decades on end. I want my nine year-old son to 
remember this as the summer when we, as a community, worked through 
tough times together, and not as the event that ended our ability to 
ranch near the Sycan.
    Our Klamath Basin is a national treasure desperately waiting for 
your attention. Please join me in choosing to end the water wars and 
rotating crisis that has come to define this special place.
Sources of Information
    Klamath County Agriculture 2012 Report--William W. Riggs, Director 
OSU Klamath Basin Research and Extension Center-this short report was 
prepared at the request of Klamath County Commissioner Tom Mallams in 
regards to the Farm Gate Value of Agriculture in Klamath County Oregon. 
Data sources include Oregon Agricultural Information Network, (OAIN), 
Modified IMPLAN for Klamath County 2007, and Methodology utilized in 
Riggs Testimony to Governor Kulongoski March 9, 2010.
    Upper Klamath Water Users, Association--Danette Watson, consultant 
to the Upper Klamath Water Users, Association--has compiled GIS data 
from the Oregon Water Resources Department to estimate the number of 
surface water irrigators. UKWUA created a basic tally of minimum 
livestock numbers using local landowner knowledge. Emergency feed 
numbers were calculated by estimating the feed needed for 70,000 
animals for four months at $225. per ton, feeding each animal + a ton 
per month.
    Klamath Basin Restoration Agreement, (KBRA)--available at 
edsheets.com Sections in the KBRA that provide alternatives to 
adjudication include; Section 16, Off-Project Water Program. 16.2.1 
calls for an Off Project Water Settlement. Section 16.2.2 B Water Use 
Retirement Program. Section 17.3.2 outlines the Off-Project Power 
Users, making off-project eligible to receive the benefits of the 
(KBRA) Power for Water Management Program. Section 19.5 Off Project 
Reliance Program, outlines a program intended to mitigate unforeseen 
circumstances in the off project like drought. Activities may include 
funding water leasing to increase water availability for irrigation in 
the Upper Klamath Basin, or mitigating the economic impacts of lost 
agricultural production. Section 22.2.2 General Conservation Plan for 
Use in Application for Section 10 (a)(1) (B) Permit. Intended to 
provide the best regulatory protections for landowners to cope with the 
Endangered Species Act available under current law.
    Golden Rule--Matthew 7.12, Whatever you wish that men would do to 
you, do so to them.

    The Chairman. Thank you, Ms. Hyde. To you and Greg 
Addington, our next witness, the Executive Director of the 
Klamath Water Users, I also got a lot out of the session that 
we had before the town hall meeting. I appreciate both of you 
and the constructive way in which you're trying to address 
these questions.
    So, Mr. Addington, welcome.

STATEMENT OF GREG ADDINGTON, EXECUTIVE DIRECTOR, KLAMATH WATER 
             USERS, ASSOCIATION, KLAMATH FALLS, OR

    Mr. Addington. Thank you, Mr. Chairman. Thank you for your 
leadership in holding this hearing today.
    My name is Greg Addington. I'm the Executive Director for 
the Klamath Water Users Association and with me today is Mr. 
Luther Horsley. Luther is a third generation Klamath farmer and 
a member of our Board of Directors. Our members supply water to 
approximately 1,200 family farms and ranches on 170 thousand 
acres served by the Klamath Reclamation Project.
    The Klamath Basin is in crisis yet again. Our on-project 
members may not have enough water to last the season. Some of 
our off-project neighbors have no water now.
    We believe the Klamath Agreements offer the best, most 
durable approach to end what has become a constant cycle of 
crisis. They form a coordinated solution that meets the needs 
of small communities throughout the 16 thousand square mile 
watershed. They are the only proposal derived from consensus 
and the only plan that doesn't seek to advantage one community 
over others.
    We ask the committee to fully examine these agreements and 
to advance legislation that capitalizes on the efforts that so 
many diverse interests have put in to resolving one of the 
West's most intractable water conflicts.
    Mr. Chairman, you know better than most the contentious 
nature of these issues. For many years we argued the science 
with other stakeholders. We tried to have our public relations 
efforts out do theirs.
    We talked to commercial fishermen, tribes and conservation 
groups only from opposite sides of a courtroom. You and other 
members offered constructive ideas but told us that for any 
solution to work it had to come from the Basin. That meant 
working with each other instead of against each other. That's 
what we did.
    Some interests came and went from the table. Others decided 
to draw lines in the sand and not negotiate. But most of us 
hung in there. The results are before you today.
    These agreements benefit fish, wildlife refuges, 
commercial, sport and tribal fisheries and the farms and 
ranches that are the backbone of a nearly $600 million 
agricultural sector. Our members gave up water in some years in 
order to gain increased certainty and predictability in our 
annual operations and to keep our rural communities intact.
    I hear people say these agreements aren't perfect. I 
disagree. I think they're as perfect as 42 diverse parties, who 
historically have not liked each other, could make them. 
However, we understand that Congress must consider our proposed 
solution in light of many factors and limitations. There's 
still work to be done before Congress can enact legislation to 
implement a viable consensus based solution.
    We are willing and eager to do that work with the 
committee, the States, the Federal agencies and those opponents 
of the agreement, who respect all interests and genuinely seek 
compromise.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Addington follows:]

 Statement of Greg Addington, Executive Director, Klamath Water Users 
                     Association, Klamath Falls, OR
     Thank you for the opportunity to be here today, and thank you for 
your leadership in holding this hearing on an issue that is so 
important to so many people. My name is Greg Addington and I am the 
Executive Director for the Klamath Water Users Association (KWUA). With 
me today is Mr. Luther Horsley. Mr. Horsley is a third-generation 
Klamath Project farmer and a member of the KWUA Board of Directors. He 
served as President of KWUA during the difficult negotiations and 
ultimate signing of the two agreements that you will hear about today.
    KWUA is a non-profit organization whose members are primarily 
irrigation districts and similar entities holding contracts with the 
federal Bureau of Reclamation for the diversion, delivery and use of 
water from the Klamath Reclamation Project (Klamath Project). Thus, my 
testimony focuses primarily on the circumstances and interests 
associated with the Klamath Project. KWUA members operate on more than 
170,000 acres sustaining approximately 1,200 farms and ranches that 
depend on the Upper Klamath Lake/ Klamath River system for their water 
supply.
Introduction
    KWUA is a party to the Klamath Basin Restoration Agreement (KBRA) 
and the Klamath Hydroelectric Settlement Agreement (KHSA). 
Additionally, KWUA member districts have been actively engaged in the 
ongoing Klamath River Basin Adjudication process and work daily with 
federal agencies, tribes and other stakeholders in determining water 
supply availability, consistent with the Biological Opinions that 
ensure that the operation of the Klamath Project is in compliance with 
the federal Endangered Species Act (ESA).
    The Klamath River watershed covers nearly 16,000 square miles and 
it often seems like there are about 16,000 interests with their own 
individual opinions about how to solve the difficult problems of the 
Klamath Basin. Every person at this table today agrees that the Klamath 
Basin is in trouble and I believe that everyone here wants to fix that. 
This year's desperate water situation is just the latest installment of 
a continuing, slow-motion disaster that is grinding away at our 
communities and ways of life. All of us are encouraged by Committee's 
willingness to examine the complex water resources problems of the 
Klamath Basin, where federal actions and responsibilities influence 
almost everything we do. Congress needs to be part of the solution.
    And we need a solution urgently. As we meet here today for this 
hearing, farmers and ranchers on thousands of acres in the federal 
Klamath Project face the possibility having their water cut off mid-
season, drying up crops before they can be harvested. Ranchers and 
farmers outside the Project may have no water at all to sustain their 
operations, causing tensions with irrigators within the Project and 
with tribal communities who themselves are struggling to protect 
fishery resources that have sustained them for generations. Federal 
wildlife refuges are enduring another too-dry year. Added to all of 
this are unprecedented increases in energy costs. In sum, 2013 looks 
like a very bleak year for the Klamath Basin. Another year of crisis. 
Another year of severe stress for our economy, communities, natural 
resources and people.
    We believe that the KBRA and the KHSA (Klamath Settlement 
Agreements or `Agreements') together offer the best, most durable 
approach to end this cycle of crisis and decline. They form a 
comprehensive solution that is intended to meet the needs of all the 
communities in the Basin. They constitute the only proposal derived 
from consensus and the only plan that doesn't seek to advantage one 
community or point of view at the expense of others. We ask the 
Committee to fully examine the Klamath Settlement Agreements and to 
advance legislation that capitalizes on the efforts that so many 
diverse interests have put into finding a meaningful resolution to one 
of the West's most intractable water conflicts.
    Mr. Chairman, you know better than most the contentious nature of 
these issues. You have witnessed it firsthand. For many years we 
``argued the science'' with the agencies and other stakeholders. We 
tried to have our public relations efforts outdo theirs. We talked to 
commercial fishermen, tribes and conservation groups only from opposite 
sides of a courtroom, and we often dueled from different sides of the 
political aisle through our elected Representatives at Congressional 
field hearings and in Washington. Nothing got better. You and other 
Members offered constructive ideas, but told us that for any solution 
to work it had to come from the Basin, and that meant doing things 
differently. It meant working with each other, instead of against each 
other. And that's what we did. Some interests came and went from the 
table, others decided to draw a line in the sand and not negotiate, but 
most of us hung in there and did the hard work of finding common ground 
and a common purpose. The result was the Klamath Settlement Agreements.
    The remainder of my testimony will outline the recent and 
contentious history of water resources issues in the Klamath Basin and 
then discuss how Klamath Project water users and our former adversaries 
arrived at the Klamath Settlement Agreements; what water users gave and 
gained to make the Agreements work for us; and identify the elements 
that should be part of any viable solution advanced by Congress. I will 
also outline my view of what continuing the status quo will mean for 
irrigated agriculture in the Basin. But mostly I want to emphasize to 
you how these Agreements, despite what you will hear from interests on 
the extremes, offer a positive and productive path forward that will 
allow us to begin to repair our fractured community.
    Admittedly, my emphasis is on the Klamath Project and we believe 
that the Klamath Settlement Agreements are, for Klamath Project 
interests, superior to other alternatives and their attendant 
uncertainty, risks, costs and conflict. Others will speak to the 
Agreements from their own perspectives. Clearly, the Agreements do not 
solve every problem or address every possible concern. No plan can fix 
everything or make everyone happy. The Parties to the Agreements have 
always been, and continue to be, absolutely willing to consider 
constructive ideas that would expand the benefits of the Agreements and 
broaden the consensus behind them. We offer the Committee our 
assistance in crafting viable legislation to implement a consensus-
based solution for the Basin. And we respectfully request that you act 
soon. The future of our communities is at stake and multiple crises are 
already upon us.
Background and Status Quo
            Klamath Project Development
    Irrigation development in the area now constituting the Klamath 
Project began in the last part of the 19th century. Individuals 
initiated appropriations of water under state laws and began the 
development of irrigation systems as more settlers moved into the 
region. In 1902, Congress enacted the Reclamation Act to encourage and 
facilitate irrigation systems that would expand food production for a 
growing nation and provide water and electric power to promote 
settlement and development of the West. The Klamath Project was 
authorized in 1905, as one of the earliest projects under the 
Reclamation Act. Project lands lie in Klamath County, Oregon, and in 
Modoc and Siskiyou Counties, California. Individuals and later 
irrigation districts entered into contracts with the Bureau of 
Reclamation (Reclamation) for the delivery of water in exchange for 
repayment of project construction costs (Klamath Project costs have 
been repaid) and payment of costs associated with operation and 
maintenance of federal facilities. In the Klamath Project, the 
responsibility for operation and maintenance of federally-constructed 
diversion and delivery facilities has been permanently transferred to 
irrigation districts. Also, districts and individuals constructed and 
own substantial components of the works that divert and deliver Project 
water.
    The agricultural production of Klamath Project lands is a pillar of 
the local economy and the reason for the existence of several towns and 
small communities. Farms and ranches served through the Project produce 
grains, hay, potatoes, onions, mint, horseradish, livestock, dairy, and 
numerous other crops. Overall agriculture in Klamath County and the 
Klamath Project (Oregon and California lands) represents a nearly $600 
million dollar impact to the local and regional economy.
            Operational Changes
    For decades, irrigation water supplies available to the federal 
Klamath Project proved sufficient to meet the needs of our area's 
burgeoning farming and ranching communities. But starting in the 
1990's, regulatory and policy demands began to negatively affect water 
availability in the Klamath Project. In 1988, the shortnose sucker and 
the Lost River sucker, two species found in Upper Klamath Lake, were 
designated as endangered under the Endangered Species Act (ESA). 
Biological opinions (BiOps) issued by the U.S. Fish and Wildlife 
Service (USFWS) in the early 1990s concerning operation of the Klamath 
Project identified Reasonable and Prudent Alternatives (RPAs) to avoid 
jeopardy to suckers. The BiOps included minimum reservoir elevations 
aimed at protecting the listed sucker species. These operating 
elevations were ultimately adopted by Reclamation. At that time, the 
reservoir elevations pertaining to Upper Klamath Lake generally allowed 
the Project to operate for its intended purposes in all but very dry 
years.
    By the mid 1990s, there were demands for Reclamation to 
reprioritize and reallocate water from irrigation to environmental 
uses. In particular, Reclamation was asked to take steps to increase 
both Klamath River flows (as measured at Iron Gate Dam in California) 
and Upper Klamath Lake reservoir elevations above and beyond previously 
adopted ESA lake levels. The result was that new flow requirements and 
lake elevations were set and meeting these criteria became the first 
priority of Klamath Project operations. Water for irrigation and the 
federal wildlife refuges associated with the Klamath Project was made 
available only if and when the flow and lake level requirements were 
met. For a number of years, there were annual debates about who would 
get what, an exercise that one of our settlement partners has aptly 
characterized as ``March Madness.'' Klamath Project irrigators were 
never sure whether, when or how much water they would receive each year 
or from year to year.
            The 2001 Water Crisis and Subsequent Years
    On April 6, 2001, Reclamation announced another change in the 
historic operation of the Project. On that day, the USFWS and the 
National Marine Fisheries Service (NMFS) each issued new BiOps (for the 
two species of suckers and the 1997-listed Klamath River coho salmon, 
respectively) for Klamath Project operations. Achieving the Klamath 
River flows and the Upper Klamath Lake elevations specified in these 
BiOps would result in no 2001 water deliveries from the Klamath system 
to the 170,000 acres in the Klamath Project service area. Reclamation 
immediately adopted the BiOp standards for 2001 Project operations, 
triggering a disaster. The hardship, conflict and controversy 
associated with the 2001 water curtailment were heavily publicized and 
are well known. Our communities remember the pain as if it were 
yesterday.
    Since the ESA listing of these aquatic species as endangered or 
threatened in the Klamath Basin, water shortages or curtailments to 
irrigation water users in the Klamath Project have occurred in 1992, 
1994, 2001 (complete shut off), 2009, 2010, 2012 and 2013. The national 
wildlife refuges that receive water through Klamath Project facilities 
have also experienced shortage in these years and others. The trend is 
not a good one.
    In the meantime, as you know, there have been problems for Basin 
fisheries, including a large die-off of salmon near the mouth of the 
Klamath River in late summer of 2002. While there are different points 
of view on the cause or causes of the die-off, there is no disagreement 
that various fisheries have generally declined, and population numbers 
of some species are very low.
    A new ESA BiOp and related operations plan for the Klamath Project 
have just been released. Although the new BiOp provides a more common-
sense, real-time approach to system management than earlier BiOps, the 
Project cannot, in a year like this, divert sufficient amounts of water 
to meet the needs of our irrigators. This is to some degree a function 
of transition from previous, disconnected BiOps to the new BiOp, but it 
is also indicative of the difficulties and uncertainties we face on an 
ongoing basis. Farmers have to make planting and business decisions in 
the spring, and as a result, 2013 crops are in the ground and 
investments have been made in seed, fuel, fertilizer, labor and other 
inputs.
    If the KBRA were fully implemented today, things would still be 
tough but we would not be facing the strong possibility of a disastrous 
cut-off of water supplies in mid-season. As it stands now, we're doing 
what we can to offset and reduce our water demand to stretch supplies 
through the whole season, hoping to avoid another catastrophe, but the 
fact is that there may not be enough water or adequate tools to manage 
the shortage . . . again.
    Further, irrigators in the watersheds tributaries to Upper Klamath 
Lake are also experiencing hardship this year, as a result of the bad 
water conditions and the effect on their water availability of senior 
water rights as determined in March by the Oregon Water Resources 
Department (the agency responsible for regulating water). There is 
tension within and among irrigation communities, a regrettable 
circumstance that no one enjoys.
    In the past, KWUA has testified before Congress about deficiencies 
and inequities associated with the ESA and other matters, and we have 
supported legislative efforts to address these issues. Our support for 
the KBRA grows from these experiences. KWUA also was the principal 
advocate for review by the National Academy of Sciences, National 
Research Council (NRC), of the scientific basis for regulatory actions 
taken in the Klamath Basin under the ESA. The NRC called for a 
watershed-wide approach to management of the Klamath system, a concept 
widely supported in the local community. This approach is the 
foundation for the KBRA.
How We Got to Settlement
    When Reclamation evaluated the proposed Klamath Project in the 
early 1900s, it had planned to install hydroelectric facilities to 
generate inexpensive power to benefit the Project and to distribute to 
nearby farms and communities. Other Reclamation projects built 
throughout the West incorporated power generation as part of the 
development. However, instead of building its own hydro plants at the 
Klamath Project, Reclamation entered in to a hydroelectric supply 
contract with PacifiCorp's predecessor, the California Oregon Power 
Company (COPCO), in 1917. The company had built one dam on the river 
(COPCO I) and wanted to build more. In exchange for various benefits, 
the company agreed to provide at-cost power to Reclamation's Klamath 
Project. The original contract with COPCO was renegotiated in 1956, and 
extended to cover a 50-year period ending in 2006. In that contract, 
COPCO actually lowered the rate that Reclamation and irrigators had 
paid for power between 1917 and 1956. The 1956 contract with COPCO was, 
in our view, clearly a condition of the company's Federal Energy 
Regulatory Commission (FERC) license to operate in the Klamath River.
    By 2004-2005, PacifiCorp had begun the process for renewal of its 
FERC license, which was to expire in 2006. It also took steps to bring 
Klamath Project (and off-project) power rates up to what the company 
deemed to be ``market levels,'' which are many times higher than the 
agricultural rates negotiated in 1956. In fact, by and large, the 
Klamath Basin is the agricultural market for the company in the region. 
At the same time, increasingly restricted federal water deliveries have 
forced Klamath farmers into more energy-intensive on-farm operations in 
order to mitigate the loss of water supply by increasing the efficiency 
of how they use, reuse and recycle water.
    The KWUA was an intervener in the FERC license proceeding because 
of our interest in power rates and as the ultimate beneficiaries of the 
1956 power contract. Other parties, most of who ended up as signatories 
to the Settlement Agreements, also were interveners in that process for 
other reasons. PacifiCorp facilitated confidential settlement 
discussions as it pertained to their license renewal. This led to the 
discussions that eventually produced the KBRA and KHSA.
    During the FERC process, relationships developed among competing 
interests and discussions began to focus more on the overall watershed 
and the communities within it. We realized that this could well be our 
only realistic opportunity to address issues that had divided us. 
Slowly but surely common ground was formed among many previously 
adversarial parties, particularly among the signatory tribal parties 
and Klamath Project irrigators. Fishermen, conservation groups, federal 
and state agencies were also critical in this process. What finally 
brought these competing interests together, and what has kept them 
together, is the recognition that the Basin's various rural communities 
share many similarities, not the least of which is their ties to the 
Klamath River.
    For KWUA, the priority was to find a practical approach to solving 
both the water supply and power cost issues. Other parties had 
objectives that challenged KWUA's perspective, including for example 
their desire that four Klamath River dams be removed. But at the end of 
the day, all parties took an ``interest-based'' approach, and found 
ways to meet the other parties' real needs as they defined them. This 
was a key to success for all concerned, and we appreciated the respect 
for our interests shown by the other parties and are committed to 
supporting others' interests as well.
    Ultimately, trust was built amongst parties that had never trusted 
each other. KWUA knew that it wasn't enough to just work out a 
settlement with Upper Basin interests and tribes. We knew that it also 
was important to have the Lower Klamath River tribes that catch Klamath 
River fish and coastal fishermen be part of any agreement. The 
contributions of the members of the conservation community who chose to 
be part of a productive process, while at times quite challenging for 
our interests, also were significant to making things work.
Key Elements for the Klamath Project Irrigation Community
    As I discussed above, a key for KWUA and others in these Agreements 
was to maintain an interest-based approach to negotiation. At the same 
time, KWUA made it clear to other parties that its important interests 
included water supply certainty, regulatory assurances related to 
introduction or re-introduction of aquatic species in the Upper Klamath 
Basin, maintenance of the agricultural base and economy in the Klamath 
Project, and low-cost power consistent with the development of the 
Klamath Project. The Klamath Settlement Agreements address these 
interests in the manner discussed below.
            Water Supply Certainty and Planning
    Other parties respected these interests, including recognizing that 
any deal would have to provide a significant degree of water supply 
predictability and certainty. The ability to know what our water supply 
will be, even if it is less than what might be needed, is critically 
important to effective and efficient water management. Farmers, 
ranchers and irrigation districts can be creative and manage water if 
they know what they have to work with. What is untenable is not knowing 
how much water is needed, how much we will get, when we can start using 
it, and if or when it will be shut off.
    The three main sources of uncertainty of irrigation water supply 
are hydrologic variability, known and unknown senior rights, and 
regulatory requirements of laws such as the ESA. The KBRA-in 
interrelated ways-addresses the uncertainty associated with each of 
these variables in order to achieve reliability of irrigation supply. 
(More details on these elements can be found in the chart on the last 
page of this statement, and in Appendix A*, Klamath Agreement Benefits-
Commitments and Risk of Doing Nothing Table.)
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    * All Appendices have been retained in committee file.
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            Klamath Project Diversions
    The KBRA creates a structure under which the irrigators on the 
Klamath Project will know, on March 1, the quantity of water that will 
be available for irrigation in that year. The quantity, agreed to by 
all the parties, will vary from year to year, based on the forecast of 
inflow to the lake. In average to wet years, the Klamath Project can 
divert up to 445,000 acre feet from Klamath Lake and the Klamath River 
during the irrigation season for irrigation and wildlife refuge 
supplies. The quantity declines with less favorable hydrologic 
conditions, and during dry years, diversions are limited to 378,000-
388,000 acre feet during the irrigation season. This approach is a 
significant change from paradigms advocated by others under which water 
management is driven by calendar-based minimum in-stream requirements 
for Upper Klamath Lake and the Klamath River, a paradigm that has not 
benefitted fisheries or refuges and that threatens irrigation shortage, 
and sometimes even threatening mid-season curtailments after crops have 
been planted.
    The agreed-upon limitations on diversions permanently free up water 
that can be managed for fisheries purposes. But, and when coupled with 
refuge delivery commitments, the result will be that the availability 
of Klamath Project water will be insufficient to meet irrigation demand 
in a number of years, with the deficiency ranging up to about 100,000 
acre-feet. The KBRA will address this shortage with the ``On-Project 
Plan,'' a user-controlled program to enhance water supply management in 
order that irrigators in the Project can ``live with'' the diversion 
limitations.
            On-Project Plan
    The Klamath Water and Power Agency (KWAPA), a joint powers or 
intergovernmental agency composed of Project irrigation districts, is 
charged with developing and implementing the On-Project Plan, and 
thereafter will administer the Plan on an annual basis in response to 
the given year's hydrologic conditions. The KBRA provides that KWAPA is 
to consider, in the development of the Plan, conservation easements, 
forbearance agreements, conjunctive use programs, efficiency measures, 
groundwater substitution, and other measures. It also provides terms to 
limit the effects of groundwater use on springs considered important 
for fisheries. (See Appendix B, Summary: On Project Plan)
    After the Plan has been developed and approved, KWAPA will 
implement it over a period of about ten years, subject to the adequacy 
of funding. The KBRA parties express that, ``implementation may 
include, for example, completion of measures to enhance water 
management and efficiency, or entering a long-term or permanent 
agreement with a landowner which would afford KWAPA the right to direct 
the landowner to forebear from use of water from Upper Klamath Lake or 
the Klamath River in specified future circumstances.'' After the 10-
year implementation phase, KWAPA will administer the Plan annually, 
employing the tools that have been developed in the implementation 
phase.
            KBRA Tribal/Irrigator Water Rights Settlements
    The KBRA is structured to settle water rights issues between the 
Klamath Project and three tribes in the Klamath Basin and the United 
States as trustee for tribes in the Basin. As described above, under 
the KBRA water users in the Project will limit the quantity of water 
diverted by the Project from Upper Klamath Lake and the Klamath River. 
In exchange for the reduced Project diversions, the Klamath Tribes, 
Yurok Tribe, and Karuk Tribe (collectively, Party Tribes), and the 
United States as the trustee for Klamath Basin tribes, agree not to 
assert tribal rights so as to interfere with the agreed-upon water 
supply for the Klamath Project. The KBRA's terms are implemented 
through documents filed with the State of Oregon as part of its Klamath 
Basin Adjudication, where claims of the Klamath Tribes and others 
parties are being litigated, and for which the Oregon Water Resources 
Department has just issued its ``order of determination'' reflecting 
its determination of the scope of these rights.
    The KBRA would not result in granting any tribal water rights to 
any tribe or affect the ability of any opponent of tribal claims other 
than Project water users to contest any claims of the Party Tribes. The 
KBRA only deals with: whether and to what extent the Klamath Tribes can 
make a call against, or demand water from, the Klamath Project based on 
the Klamath Tribes' rights in Upper Klamath Lake and the Klamath River, 
whatever those rights may be; and whether the Yurok or Karuk Tribe, or 
the United States as trustee for Basin tribes, based on water rights or 
federal trust obligations, can demand that the Project use less water 
than what is agreed upon. In both cases, the answer is no. No one else 
is precluded from asserting any position about their own water rights 
or opposing any assertion by others.
    There are, in the meantime, various interim protections for the 
Project. Until the water users have implemented their On-Project Plan 
described in the KBRA (anticipated to be roughly 2022), the Party 
Tribes would not be able to assert a demand based on tribal water 
rights against any water use in the Klamath Project. There are also 
various provisions that ensure that, if the agreement is not 
implemented, Klamath Project irrigators and the Party Tribes can simply 
return to their positions as they exist today and assert their 
arguments against one another. (See Appendix C, Water Settlements 
between Basin Tribes and Klamath Project)
            Regulatory Assurances Concerning Water Supply and New 
                    Species
    Although the KBRA does not amend or waive the ESA or other 
regulatory statutes, it deals with the risks to irrigators posed by 
those laws. The Agreement explains that a purpose of the Project water 
diversion limitations agreed to by the irrigators is to ``ensure 
durable and effective compliance'' with the ESA and other laws. The 
non-federal parties (who do not have obligations to enforce regulatory 
laws) have committed to support regulatory approvals based on the 
agreed-upon water quantities, including revised biological opinions. 
The regulatory approvals that the parties support under the ESA also 
include a long-term permit covering a period ``substantially beyond the 
[50 year] term of the Agreement[.]'' There are also interim assurances 
over the period between the present and the date on which critical 
programs are completed.
    The KBRA does not guarantee that the ESA or other laws will not 
result in further water supply limitations. However, certainty for 
irrigators is greatly enhanced by the KBRA, consistent with the 
parties' expressed objective that further limitations on Klamath 
Project diversions would be a ``last and temporary resort.'' The 
parties to the KBRA also commit to take every reasonable and legally-
permissible step to avoid or minimize any adverse impact, in the form 
of new regulation or other legal or funding obligation that might occur 
to users of water or land upstream of Iron Gate Dam, associated with 
introduction or reintroduction of aquatic species to currently 
unoccupied habitats or areas. (See Appendix A)
            Power for Water Management
    Power has always been critical for movement of water in the Klamath 
Project where limited supplies are reused and moved around to maximize 
efficiency. Power rates for irrigators have skyrocketed since 2006 when 
PacifiCorp concluded that it could not renew the 50-year contracts that 
had provided low-cost power to the Klamath Project and to other water 
users in the Upper Klamath Basin. Instead, this mutually beneficial 
arrangement was replaced with a new structure that phased in much 
higher power rates over the last 4-7 years.
    The current cost of power for Klamath Project (and off-project) 
irrigators is, by our calculation, the highest in the Northwest\1\ and 
significantly higher than rates paid by irrigators at comparable 
Reclamation project elsewhere in the West. For Tulelake Irrigation 
District, a KWUA member agency, power costs for the 67 pumps that it 
operates increased by more than 2,700% between 2006 and 2011\2\, 
despite a significant reduction in power consumption during the same 
period because of efficiency investments. Shasta View Irrigation 
District, another KWUA member agency, also reduced its power 
consumption, but nevertheless saw electric power rates climb from less 
than $7.00 per acre in 2005, to nearly $70 per acre in 20122.
---------------------------------------------------------------------------
    \1\ See Appendix E, Agriculture-Irrigation Power Rate Comparison
    \2\ See Appendix D, LTID-SVID Power Rate Increase Charts
---------------------------------------------------------------------------
    These rates, in a project that pumps water multiple times and at 
different levels (on farm, district, and Project-wide drainage), 
seriously disadvantage Klamath Project irrigators in the marketplace.
    The critical importance of reducing and stabilizing power costs is 
recognized by the parties in the KBRA, which states (section 17.1) that 
affordable power is needed to allow efficient use and management of 
water for irrigation, and delivery to national wildlife refuges, to 
facilitate return of water to the Klamath River, implement KBRA 
conservation programs, and maintain sustainable agricultural 
communities. Reducing and stabilizing power rates in the Upper Klamath 
Basin is critically important to the long-term viability of irrigated 
agriculture both on and off the Klamath Project and to other 
objectives.
    In other Reclamation projects, low-cost ``reserved'' or ``project 
use'' power is made available for certain loads, including the pumping 
and conveyance of irrigation water and drainage. The goal of the KBRA 
is bring Klamath Project power rates to a level ``at or below the 
average cost for similarly situated Reclamation irrigation and drainage 
projects in the surrounding area.'' The KBRA would achieve this goal 
with the ``Power for Water Management Program'' consisting of three 
elements.
    First, for the short-term, funding would be provided to stabilize 
total power costs as other components of the program are brought on 
line. Second, power generated at other Bureau of Reclamation facilities 
would address part of the program's objectives. Power can, for example, 
be marketed by the Bonneville Power Authority (BPA) to serve eligible 
loads in the upper Klamath Basin in Oregon, and by the Western Area 
Power Authority (WAPA) to Klamath Project districts in California. 
Under the KBRA and KHSA, Reclamation commits to acquire a contract 
consistent with applicable law and standards of service to serve 
eligible loads, and PacifiCorp agrees to cooperate in delivery of power 
to the loads. Third, the KBRA provides for federal funding for energy 
efficiency, conservation and renewable generation opportunities and 
investment. The activities to be pursued could include installation of 
additional efficiency improvements in water pumping and piping, solar 
photovoltaic development and net metering programs, investment in 
renewable generation on a broader scale, and other practices. (For more 
details, see Appendix F, Power for Water Management Program)
    The KBRA also contemplates the potential development of joint 
projects with the Klamath Tribes and irrigators under the umbrella of 
the renewable energy element. As with other elements, the benefits and 
objectives of this piece are designed to serve both irrigation 
interests inside the Klamath Reclamation Project and the Off-Project 
area in the Upper Klamath Basin.
Other Issues
            Refuges and Lease Lands in the Klamath Reclamation Project
    The KBRA advances the partnership between the Tule Lake and Lower 
Klamath National Wildlife Refuges (Refuges) and the agricultural 
community. The Refuges would become a purpose of the Klamath Project 
and receive a reliable supply of water with first-time-ever delivery 
commitments provided for Lower Klamath National Wildlife Refuge. Local 
family farming operations will continue to farm on specified portions 
of the Refuges working with Refuge managers to meet the energy and 
habitat needs of waterfowl and wildlife. Both functionally and 
historically, these lands exemplify co-existence of agriculture and 
wildlife in the Klamath Reclamation Project. The lands are part of the 
traditional ``reclamation'' project authorized in 1905, and they are 
also within national wildlife refuges and within the boundaries of 
irrigation districts.
    This productive farmland has been leased to growers for 
generations. Unlike other public land developed under the Reclamation 
Project, the lease lands were not homesteaded, and thus provide 
expansive open space as well as substantial benefit for wildlife. This 
unique arrangement is addressed in the KBRA. Under the agreement, the 
non-federal parties: (i) recognize the unique history and circumstances 
of the lease lands, (ii) recognize practices such as ``walking 
wetlands'' and others that enhance waterfowl management while 
maximizing ``lease revenues'' and optimizing agricultural use, (iii) 
seek to further the beneficial partnerships that have developed between 
growers and wildlife refuges. These Parties express their support for 
continued lease land farming managed as described in (ii). The KBRA 
provides support for legislation that would dedicate revenue received 
from the Refuge lease agreements to benefit the Refuge and the Refuge 
water delivery system. (See Appendix G-Lease Lands within the Klamath 
Project)
            Dam Removal Not a Precedent for Other Areas
    The KBRA and KHSA were designed specifically to address the unique 
set of circumstances that are specific to the Klamath system. As such, 
the agreement is not precedent-setting for other regions. Supporters 
and signatory parties to the agreement explicitly recognize and agree 
to this in section 8.1 of the KBRA, which states in part: `` . . . the 
Parties acknowledge that the hydroelectric settlement is based on facts 
and circumstances unique to the Klamath Basin, and they do not intend 
to establish precedent for other basins or hydroelectric generation 
generally.'' In fact, in the Klamath Project alone, Reclamation 
contractors (irrigation districts) depend on, and operate, up to eight 
diversions or other dams for water supply delivery. KWUA views the KBRA 
as a means of protecting these important structures into the future.
            Local Support
    Despite assertions made by some persons, local support for the KBRA 
is strong, particularly among those whose livelihoods are at stake. 
Support for settling long-standing water rights disputes and avoiding 
catastrophes such as the 2001 water shut-off is unwavering. Water 
managers and irrigation district board members, who are hired and 
elected by their peers and represent over 97% of Klamath Reclamation 
Project acres that are dependent upon the Klamath River system, support 
the agreements. The list of parties to the agreements includes 17 
irrigation and water user entities. This does not include additional 
local support such as city governments, Chambers of Commerce, other 
business and economic development organizations, individual family 
farms, processing facilities, farmer-owned cooperatives and other local 
merchants. Finally, support for the KBRA is also strong regionally and 
nationally as is evidenced by the diverse list of signatory and other 
supporting organizations.
Essential Elements
    I often hear people say the KBRA isn't perfect. I disagree. I think 
this agreement is as perfect as 42 diverse parties who have had 
severely divergent perspectives could make it. However, we understand 
that Congress must consider our proposed solution in light of many 
factors and limitations, and there is still work to be done to develop 
legislation to implement a viable consensus-based solution that is in 
the public interest. We and our partners in the Klamath Settlement 
Agreements are willing and eager to do that work with the Committee, 
the States, federal agencies and those opponents of the Agreements who 
genuinely seek compromise.
    For issues related to the Klamath Project, KWUA believes that any 
Klamath Basin legislation will need to address the following elements, 
all of which are within the KBRA:

   Increased certainty and predictability for Klamath Project 
        water supplies
   ``Regulatory Assurances'' so that reintroduced species do 
        not impair agreed upon water diversions and that costs 
        associated with reintroduction do not negatively impact 
        irrigators
   Support and adequate funding to implement programs to reduce 
        demand on the Klamath system, without permanent downsizing of 
        Klamath Project agriculture or negative impacts on small rural 
        communities
   Link River and Keno Dams will continue operation to support 
        and facilitate water deliveries to agriculture
   Implementation of a program to develop renewable energy and 
        acquire a modest block of federal power to serve Upper Klamath 
        Basin irrigation loads at a net cost that is at or below rates 
        in similarly situated Reclamation irrigation and drainage 
        reclamation projects in the west
   Acknowledgement of and support for the unique relationship 
        between wildlife and agriculture
Conclusion
    This hearing is for the purpose of considering water resource 
issues in the Klamath Basin, which is to say the matters that have been 
the source of continuing conflict and hardship for several years. 2013 
will be one of the most challenging years, if not the most challenging 
year in the history of the Klamath Basin. The combined effects of dry 
conditions and the past inflexible water management of the system have 
again this year led to severely and unnecessarily restricted water 
supplies to irrigators on the Klamath Project. Because of the recent 
rulings in the Klamath Basin water rights adjudication, farms outside 
the Klamath Project in Oregon will also feel the sting of water 
regulation as western water law is implemented in the Basin. As each 
year passes, lenders, commodity buyers, input dealers and other vendors 
become increasingly leery about doing business in the Klamath Basin as 
a result of the water uncertainty.
    The 2013 drought and the potential for multiple crises is the very 
best argument for why change is needed - why a negotiated settlement 
with the preceding key elements is needed. Without a new rational plan, 
we can look forward to more of the same every few years--lurching from 
one crisis to the next. The KBRA would transform the management of the 
Klamath system for the better. It will result in foreseeable and 
reliable amounts of surface water in years like this for all irrigators 
dependent upon Upper Klamath Lake, its tributaries and the Klamath 
River-because the system will be managed differently. It will, without 
question, provide significantly more water to the national wildlife 
refuges in the Klamath Project. It will avoid unnecessary demand on our 
groundwater system, and it will provide jobs, stability and economic 
benefit to this entire region.
    The amount of bad information in circulation about the Klamath 
Settlement Agreements is staggering. Here are the facts: The KBRA does 
not infringe on any individual's ``right'' to water or ``take'' 
anything from anyone. The KBRA ends costly litigation between the 
Klamath Tribes and the Project irrigators and will avoid future legal 
battles. We chose negotiation over litigation, others did not. The KBRA 
does not change or alter any individual's right to due process. It is 
built on market-driven approaches and on unprecedented system-wide 
management that address other stressors to fish. No longer would there 
only be a narrow focus on how much water is diverted through the ``A'' 
canal of the Klamath Reclamation Project. The KBRA provides for 
improved management of the lake and river and provides protections 
under any necessary Biological Opinions based on this new watershed-
wide approach to management. The KBRA does in fact provide meaningful 
protection from uncertainty associated with ESA regulations including 
through the development of Conservation Plans for all irrigators in the 
region, if they choose to participate. The KBRA also provides for 
economic mitigation to county governments and is the best possible 
outcome for the national wildlife refuges that we all value.
    Water managers, full-time farmers and ranchers, local businesses 
and other professionals are committed to finding a better way to do 
business. It is these people and organizations that are the strongest 
proponents for the KBRA.
    We hope others can begin to see the positive economic benefits that 
the Agreements can provide to the region. KWUA will not stop pushing 
for real change because we understand what it means to keep things the 
same. Time is of the essence and Congress must have a sense of urgency 
as it considers next steps. The people most affected by these resource 
issues support the consensus approach of the Agreements. Other 
interests must quickly and constructively engage on legislation to 
implement a consensus solution, or get out of the way. We look to the 
leadership of this Committee to start the process that is needed to 
authorize these Agreements before there is nothing left to save.
    Thank you for the opportunity to provide this testimony.

    The Chairman. Thank you very much, Mr. Addington.
    Mr. McCarthy.

STATEMENT OF JIM MCCARTHY, COMMUNICATIONS DIRECTOR AND SOUTHERN 
   OREGON PROGRAM MANAGER, WATERWATCH OF OREGON, PORTLAND, OR

    Mr. McCarthy. Thank you, Senator.
    Is this on?
    Thank you, Senator. I'm Jim McCarthy, Communications 
Director for WaterWatch of Oregon. Thank you very much and 
everyone else who came here today to discuss water resource 
issues in the Klamath Basin.
    WaterWatch is a State wide, nonprofit conservation group 
dedicated to the protection and restoration of natural flows in 
Oregon's rivers.
    In the short term I would urge Congress to work quickly to 
ensure there's enough water this year to prevent serious harm 
to the region's critical national wildlife refuges and valuable 
salmon runs. Finding water now to sustain these resources will 
avert the ripple effects of greater harm that have resulted 
from Klamath water mismanagement in the past. Just last year 
the lack of water on the refuges sparked a disease outbreak 
that killed some 20 thousand water fowl. In 2002, as we all 
know, low flows in the Klamath River sparked a mass of adult 
kill that eventually forced fishing closures and created an 
economic disaster along the Pacific Coast.
    So please do what you can to avert a repeat of those 
situations.
    When considering long term Klamath solutions 2 facts are 
certain.
    First, the government has promised too much water to too 
many interests.
    Two, the Nation cannot afford to allow the Klamath Basin to 
keep lurching from one water crisis to the next.
    We urge Congress to make a significant investment in the 
Basin to end this long standing problem and to protect the 
Basin's incredible natural resources. Any legislation must meet 
tribal trust responsibilities, support valuable commercial and 
recreational fisheries, secure water supplies for the region's 
national wildlife refuges and make a fair and equitable 
transition to sustainable levels of agriculture.
    WaterWatch supported the 2002 Klamath Amendment in the Farm 
bill passed through the Senate with $175 million in funding, 
thanks to your leadership, Chairman. Klamath communities would 
be far better off now if this measure had become law. In the 
future we hope to support similar legislation and recommend the 
incorporation of the following important solutions.
    To recover up to 100 thousand acre feet of natural water 
storage capacity and reduce irrigation water demand by some 50 
thousand acre feet we recommend phasing out the Federal program 
leasing the sum of 22 thousand acres of publicly owned lake bed 
for commercial agriculture within Tule Lake in Lower Klamath 
National Wildlife Refuges. These significant improvements in 
the Basin's water balance would be achieved without 
transferring one acre of private land to public ownership. It 
would also shift farmland rental business from a government 
program to the private sector boosting the local economy. This 
step could also decrease the costs and private property impacts 
of another key solution for the Basin, a Basin wide, voluntary 
water demand reduction program.
    We also note that the water rights adjudication process in 
Oregon has created new opportunities for addressing the Basin's 
water issues, paving the way for durable, market oriented 
transactions to become a critical part of the solution through 
the work of water trusts and others. Other key solutions 
include implementing water conservation measures and improving 
water management Basin wide. That's very important, again, 
Basin wide. Amending the statuary purposes of the Klamath 
project to include providing the water necessary for fish, 
wildlife and tribal trust needs and a Basin wide 20 year 
program to restore fish, wildlife and water quality ideally 
under the use of the U.S. Fish and Wildlife Service.
    The removal of PacifiCorp's 4 lower dams on the Lower 
Klamath River is also essential to Basin restoration. However, 
we do not believe that this requires Federal legislation and 
oppose holding dam removal hostage to try to leverage 
implementation of the excessively expensive and complex and 
controversial Klamath agreements. WaterWatch supports swift 
return the Federal Energy Regulatory Commission relicensing 
process for these dams.
    I should note that WaterWatch does not support the KBRA and 
does not support linking the KBRA to the Klamath Hydropower 
Agreement.
    WaterWatch has provided some detail on solutions to some of 
the serious problems with these agreements in our written 
testimony. We'd be happy to provide further analysis, if 
requested, by this committee or other interested Members of 
Congress.
    Thank you again, Senator, for the opportunity to testify. 
Thank you for focusing attention on the important water 
challenges of the Klamath River Basin. We hope this hearing 
will serve as catalyst for restarting the kind of dialog 
between Klamath stakeholders and Congress that is sorely needed 
to find true common ground to build for viable, equitable and 
science based solutions.
    WaterWatch stands ready to work with you toward this end. I 
will be happy to answer any questions and look forward to more 
discussion.
    [The prepared statement of Mr. McCarthy follows:]

 Statement of Jim McCarthy, Communication Director and Southern Oregon 
           Program Manager, WaterWatch of Oregon, Ashland, OR
    Thank you for the opportunity to present testimony on behalf of 
WaterWatch of Oregon concerning Water Resource Issues in the Klamath 
River Basin. Founded in 1985, WaterWatch is a non-profit river 
conservation group dedicated to the protection and restoration of 
natural flows in Oregon's rivers. WaterWatch works 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.
    The Klamath River Basin is one of the nation's great ecological 
treasures. Considered a western Everglades, this area in southern 
Oregon and northern California once contained some 350,000 acres of 
shallow lakes and wetlands. Only 75,000 acres of these wetlands exist 
today, and significant portions of these wetlands now lack enough water 
in many years to keep them viable. The upper basin is home to 
remarkably large native trout, and once contained thriving populations 
of spring chinook salmon, steelhead, and Kuptu and Tshuam (Lost River 
and Shortnose suckers). These fish once provided a major source of food 
for Native Americans. The Klamath Basin attracts nearly 80% of the 
birds migrating in the Pacific Flyway and supports the largest seasonal 
concentration of bald eagles in the lower 48 states. As Secretary of 
the Interior Stewart Udall stated in 1962, ``There is probably no more 
important waterfowl area in the country than these refuges in the Upper 
Klamath Basin.''
    While water is vital to maintaining the ecological integrity of the 
Klamath Basin, fishery- dependent economies, and tribal trust 
resources, irrigated agriculture became the dominant use of water in 
the Klamath Basin over the last century. To date, more than 75% of the 
basin's wetlands have been drained and converted to agriculture. 
Damming and diversion of rivers and draining of wetlands have taken an 
enormous toll on the basin's ecology. The hydrology of the basin has 
been radically altered and water quality has been severely degraded. 
These conditions have contributed to the decline of federal Endangered 
Species Act-listed species, the failure of streams and lakes to meet 
water quality and temperature standards, the failure to meet Native 
American hunting and fishing rights, the failure to protect valuable 
commercial and recreational fisheries, and insufficient water to 
maintain the wetlands on the basin's national wildlife refuges.
    The Klamath once was, and still remains, the third most productive 
salmon river in the western United States. For decades, Klamath salmon 
declines impaired salmon harvest opportunities both in-river and along 
the Oregon and California coast. Thousands of fishing dependent jobs, 
tens of millions of pounds of seafood production, and years of world-
class recreational enjoyment have been lost as a direct result of the 
water problems in the Klamath Basin. A devastating 2002 fish kill in 
the lower Klamath River-sparked by low flows-led to a further collapse 
in salmon populations and disastrous fishing closures along hundreds of 
miles of coastline. This marked one of the lowest points in the 
Klamath's recent history. Since a court order was entered in 2006 
enforcing science-based flow management in the Klamath River for 
threatened coho salmon, we have witnessed a dramatic positive 
biological response from the Klamath's non- endangered, commercially-
valuable fall chinook salmon run. Now, fishing-dependent communities in 
Oregon and California are enjoying new economic vitality as a result of 
resurgent Klamath fall chinook. This example underscores the benefits 
of science-based management, and should encourage us to continue to 
follow the best available science in addressing the many facets of the 
Klamath's ongoing water woes and species declines.
    Two facts are absolutely certain in the Klamath debate: 1) The 
government has promised too much water to too many interests; and 2) 
The nation cannot afford to allow the Klamath Basin's fish, wildlife, 
and human communities to continue lurching from one water crisis to the 
next. In order to protect and restore the basin's incredible fish and 
wildlife resources, meet tribal trust responsibilities, obtain secure 
water supplies for the basin's wildlife refuges, and to make a 
transition to a sustainable level of agricultural and fisheries 
production in a fair and equitable manner, it is necessary for the 
federal government to make a significant financial investment in the 
basin.
    WaterWatch has supported federal legislation in the past, such as 
the 2002 Farm Bill's Klamath amendment, passed through the United 
States Senate with the leadership of Senator Wyden. This measure would 
have provided $175 million in funding, and sought to achieve adequate 
stream flows to meet long-term recovery needs for Klamath fish and 
other wildlife through reduced water use and better water management. 
If this measure had passed into law the Klamath Basin's communities 
would be on much better footing to address this year's drought. We hope 
to support similar legislation in the near future, and WaterWatch 
believes that any new legislation should implement the following 
concepts:

          1. Phase-out Commercial Farming on the Basin's National 
        Wildlife Refuges.--The federal government leases over 22,000 
        acres of publicly-owned lakebed within the Tule Lake and Lower 
        Klamath National Wildlife Refuges for commercial agriculture. 
        Phasing-out this lease land program and restoring these 22,000 
        acres of refuge to wildlife habitat would allow recovery of up 
        to 100,000 additional acre-feet of much-needed water storage 
        capacity, reduce irrigation water demand by some 50,000 acre-
        feet, improve habitat, food production, and water quality for 
        fish and wildlife, reduce toxic pesticide use, and reduce 
        refuge dependence upon polluted agricultural runoff as a water 
        supply. This solution could also increase aquifer recharge and 
        reduce pumping costs for well users in the Tule Lake sub-basin, 
        an area plagued by dramatically dropping groundwater levels due 
        to over-reliance on groundwater pumping to compensate for over-
        appropriated surface water supplies. Removing the government 
        from the local farmland rental market would end unfair 
        competition with private landowners, and shift lease revenues 
        from federal government coffers to local farmland owners, 
        boosting the local economy. As refuge habitat, these lands 
        could provide comparable levels of county tax revenue as 
        currently provided by the leaselands program. This significant 
        step towards sustainability could be achieved administratively, 
        at low cost in comparison with other options, and without 
        transferring any private lands to the public domain. Indeed, we 
        believe that dollar-for-dollar, acre-for-acre, there is no more 
        beneficial option available for addressing the Klamath's water 
        woes than ending the damaging commercial use of the basin's 
        National Wildlife Refuges and restoring these areas of 
        publicly- owned lakebed.
          2. Fund and Implement a Voluntary Demand Reduction Program.--
        Water has been severely over allocated in the Klamath Basin. 
        Any meaningful long-term solution will require some downsizing 
        of the Klamath Irrigation Project and the retirement of other 
        water rights throughout the basin. A voluntary program to give 
        one-time financial assistance to agricultural landowners, by 
        buying their lands or water rights at a fair price would be an 
        equitable way to reduce agricultural demand, while giving more 
        security to those who want to stay in business. A federally 
        funded buyout program should be developed and implemented in 
        this regard. The water rights adjudication process in Oregon, 
        where the state completed the Final Orders of Determination in 
        March, 2013, has created new opportunities for demand reduction 
        solutions in the basin. For the first time, the details of who 
        holds Klamath Basin water rights in Oregon - and in what 
        quantities - has been formally recognized, allowing durable 
        market-oriented transactions through the work of water trusts 
        and others to become a critical part of the solution.
          3. Reform Management of the Klamath Project.--The statutory 
        purposes of the Klamath Project should be amended to include 
        providing the water necessary for recovering threatened and 
        endangered species, recovering salmonid and sucker populations 
        to harvestable levels, meeting the needs of other fish and 
        wildlife, meeting tribal trust responsibilities, meeting the 
        needs of the basin's national wildlife refuges, and meeting 
        water quality standards.
          4. Restore Fish and Wildlife Habitats and Meet Water Quality 
        Standards.--Although fish and wildlife habitats have been 
        degraded throughout the Klamath Basin, it remains one of the 
        few major river systems in the United State where substantial 
        restoration is still possible. Reclaiming and restoring 
        wetlands, especially in the publicly-owned Lower Klamath and 
        Tule Lake National Wildlife Refuge areas and around Upper 
        Klamath Lake, are important to obtaining a more natural 
        hydrological regime, improving and increasing fish and wildlife 
        habitat, and improving water quality. Riparian areas need to be 
        protected and restored. Dams and diversions need to be screened 
        and provided with appropriate fish passage facilities, or 
        removed. The water retention and flow regulation capability of 
        upland forested ecosystems need to be restored through 
        reforestation, canopy retention and work to reduce the impact 
        of extensive unpaved road systems. A basin-wide, twenty-year 
        restoration program under the direction of the Fish and 
        Wildlife Service should be established, funded, and 
        implemented.
          5. Implement Water Conservation Measures and Improve Water 
        Management.--There should be a thorough analysis of irrigation 
        needs in the basin. Opportunities for saving water and 
        improving conveyance systems and on-farm efficiencies should be 
        carefully assessed, funded, and implemented within and outside 
        of the Klamath Irrigation Project.
Dam Removal
    Removal of the PacifiCorp's four lower hydropower dams on the 
Klamath River is essential to basin restoration. WaterWatch supports 
the removal of these dams, and urges a swift return to the Federal 
Energy Regulatory Commission relicensing process for these facilities-
now suspended by the Klamath Hydroelectric Settlement Agreement (KHSA). 
Because it is more economically sound to remove the dams than to try 
and relicense them, there is a high degree of likelihood this process 
will end in dam removal, without requiring federal legislation. We do 
not support holding needed dam removal hostage to try to leverage 
passage through Congress of the hopelessly expensive, complex, and 
controversial Klamath Basin Restoration Agreement (KBRA).
Key Problems with the Klamath River Basin Restoration Agreement
    While WaterWatch fully supports Klamath dam removal, WaterWatch 
does not support the KBRA and does not support linking the KBRA to the 
KHSA for the following reasons:

          1. The KBRA attempts to guarantee water deliveries for the 
        Klamath Project Irrigators first, without requiring any water 
        guarantees or minimum stream flow levels for fish (including 
        three fish species listed under the Endangered Species Act). 
        This clearly undermines the Endangered Species Act. The KBRA 
        water guarantees for the Klamath Project Irrigators in wet 
        years would deliver more water to the irrigators than they 
        historically used in wet years, and in dry years would deliver 
        more water to the irrigators than allowed under current 
        Endangered Species Act protections for coho salmon;
          2. The Klamath River flows which are predicted by KBRA 
        proponents to result from the KBRA would be at levels below 
        those needed for salmon, including the river flow levels 
        currently required under the Biological Opinion for coho salmon 
        and the flows recommended for salmon by the best available 
        science;
          3. The KBRA perpetuates and intensifies Klamath water 
        conflicts by failing to downsize the Klamath Irrigation 
        Project, continuing to over-promise water, and by placing undue 
        political pressure upon Endangered Species Act enforcement and 
        implementation;
          4. The Klamath Project Irrigators would receive $92.5 million 
        under the KBRA to develop and implement their own private water 
        plan without appropriate guidelines or public oversight. A 
        significant concern is that much of this money could be used 
        for unsustainable groundwater development rather than 
        meaningful demand reduction;
          5. The KBRA requires all non-federal KBRA parties to support 
        commercial farming on 22,000 acres of Lower Klamath and Tule 
        Lake National Wildlife Refuges for another 50 years, when this 
        practice should be phased out as soon as possible, for the 
        reasons described above. The KBRA creates undo pressure on 
        refuge officials to continue to allow commercial farming under 
        the Comprehensive Conservation Plan now under development;
          6. The KBRA's attempted water allocation to Lower Klamath 
        National Wildlife Refuge may never occur, is insufficient, and 
        puts a heavy burden on the refuge during droughts.
          7. The KBRA would eliminate the best options to secure water 
        for Lower Klamath National Wildlife Refuge. These options 
        include: 1) Phasing out commercial farming on the refuges; 2) 
        Using those lands to store winter water; and 3) Using the 1905 
        priority date water rights associated with the leaselands for 
        refuge habitat purposes;
          8. The KBRA limits the ability of the refuges to increase 
        their water supplies through development of other water sources 
        by purchase, lease, or storage. These provisions conflict with 
        common sense, and with the National Wildlife Systems 
        Improvement Act's requirement that the Secretary of Interior 
        secure needed water supplies for all refuges.
          9. Klamath Project Irrigators would receive $41 million in 
        power subsidies, plus lower cost Bonneville Power 
        Administration power, plus special contracts that allow them to 
        continue to drain important National Wildlife Refuge lands for 
        commercial agriculture; and
          10. The KBRA's price tag is nearly $1 billion, yet it fails 
        to address key problems in the basin and none of this money is 
        for dam removal, which is to be funded separately by 
        PacifiCorp's Oregon and California ratepayers and California 
        state bond monies.
Key Problems With The Klamath Hydroelectric Settlement Agreement (KHSA)
    Though the KHSA could theoretically lead to dam removal, it is not 
an agreement to remove any dams, but to study whether or not the dams 
should be removed. The KHSA is hobbled by the following problems:

          1. Dam removal is unnecessarily linked to the damaging 
        provisions and unrealistic budget of the KBRA and if KBRA 
        legislation does not pass, dam removal would be derailed;
          2. There is no concrete agreement to remove dams, only to go 
        through a new process to determine whether dams should be 
        removed or not. The Department of the Interior initiated this 
        new process, but has been prevented from completing it by the 
        many preconditions of the KBRA and KHSA;
          3. No dam removal would occur before 2020, while PacifiCorp 
        would be allowed to continue operations that degrade water 
        quality and harm salmon, including Endangered Species Act 
        listed coho with minimal operational changes in the interim;
          4. There are a large number preconditions that provide 
        PacifiCorp with many opportunities to abandon dam removal; and
          5. There is no definite date to return to the Federal Energy 
        Regulatory Commission dam relicensing process-now suspended by 
        the KHSA-even if the agreements do not become law.
Further Detail on KBRA/KHSA Problems
    WaterWatch would be happy to provide a more detailed written 
critique on specific problem points of both these agreements, and 
previously introduced legislation, if requested by this committee or 
interested members of Congress.
In Closing
    Thank you again for the opportunity to testify, and thank you for 
focusing attention on the important water challenges of the Klamath 
River Basin. We hope this hearing will serve as a catalyst for 
restarting the kind of dialogue between Klamath stakeholders and 
Congress that is sorely needed to find true common ground and build 
support for viable, equitable, and science-based solutions. WaterWatch 
stands ready to work with you towards this end. I would be happy to 
answer any of your questions and look forward to the roundtable 
discussion.

    The Chairman. Mr. McCarthy, thank you. Very helpful. I will 
tell the group I don't believe I've had very many more 
exasperating experiences than we had a decade ago on that Farm 
bill where Senator Smith and I teamed up and we were able to 
get Senate support for $175 million for the kind of 
collaborative effort that we're still talking about a decade 
ago. So it just kind of reaffirms how much effort has gone into 
this for so long. Why this time has got to be different.
    So I'm not going to gnash my teeth this morning over that 
lost opportunity. The Farm bill, I guess, would be the 2002 
Farm bill. But it sure reaffirms how important it is to thread 
the needle this time and get a solution.
    Mr. Roos-Collins, Conservation Groups, Berkeley, 
California, welcome.
    While we're getting set up, Mr. Johnson, you're with the 
Bonneville Power Administration. We've already commended you 
all for the good work that you've done in terms of the 
announcement today in terms of rate relief. I gather that 
you're here just in case there are questions in discussion. 
You'd rather not offer testimony. Is that right?

STATEMENT OF TIM JOHNSON, ASSISTANT GENERAL COUNSEL FOR POWER, 
         BONNEVILLE POWER ADMINISTRATION, PORTLAND, OR

    Mr. Johnson. Yes, we didn't present testimony.
    The Chairman. Right.
    Mr. Johnson. Other than the statement that gave our 
position and support for what's going on here with the 
collaborative nature.
    The Chairman. Very good. Then our last witness and then 
we'll go right to questions.
    Mr. Collins.

 STATEMENT OF RICHARD ROOS-COLLINS, WATER AND POWER LAW GROUP 
                        PC, BERKELEY, CA

    Mr. Roos-Collins: Chairman Wyden, thank you for your 
leadership, this hearing and the opportunity to testify. I'm 
here for American rivers, California trout, Trout Unlimited, 
Pacific Coast Federation and Fishermen's Associations, 
Institute for Fisheries Resources, Salmon River Restoration 
Council and the Federation of Fly Fishers, all signatories of 
the Klamath Agreements.
    The Klamath Basin plainly has national value. One of the 
earliest Reclamation projects on other farms and ranches, 6 
national wildlife refuges which are among the most productive 
on the Pacific Flyway, 6 national forests, a national wild and 
scenic river, 6 federally recognized tribes and one of the 
largest salmon fisheries in the Lower 48. These extraordinary 
natural resources are the basis for the foundation for these 
communities. There just isn't enough water, however, for all 
uses in most years.
    Current laws regulate uses in a manner that permits 
competition and results in routine shortages rotating between 
farms, fisheries and tribes. Without a long term solution, as 
you stated in your opening comments, the future will be the 
same or worse.
    Diverse stakeholders gathered in 2004 to answer the 
question, can we agree to a better future? Conventional wisdom 
was that these negotiations would certainly fail. In hundreds 
of meetings we made hard compromises on hard issues. More than 
40 of these participating stakeholders signed the Klamath 
Agreements and are represented here today.
    These agreements are the first comprehensive management 
program of these water resources. Parties will implement 
contractual and other voluntary arrangements to allocate water 
to enhance supply reliability for all beneficial uses.
    Farming here already produces more than $560 million a year 
in economic value and including some of the world's best 
potatoes, horseradish, mint and beef. That value will increase 
as a result of a more secure water supply. Refuges will have 
sufficient water supply under these agreements 88 percent of 
the time verses 12 percent today. Salmon and other native 
fishes will recover having declined of 10 percent or less of 
historic condition.
    Mr. Chairman, to answer the question that I heard in your 
opening statement, are we flexible and prepared to work with 
the committee to develop the exact terms of legislation to in 
effect a long term solution?
    Of course, yes. Let's start today.
    The Chairman. Very good.
    Mr. Roos-Collins. Are we willing to meet with opponents and 
others to consider potential amendments to these agreements. 
Yes.
    We are ready to meet with others also willing to compromise 
and discuss specific proposals to enhance the net benefits for 
all affected communities. Like Mr. Whitman, I've been 
encouraged by the testimony today that reflects this spirit of 
cooperation.
    We respectfully request that this committee advance 
legislation to implement a long term solution based on these 
agreements.
    Thank you.
    [The prepared statement of Mr. Roos-Collins follows:]

    Statement of Richard Roos-Collins, Water and Power Law Group PC
    Chairman Wyden, Ranking Member Murkowski, and Members:
    Thank you for this opportunity to testify. I am Richard Roos-
Collins, appearing on behalf of American Rivers, California Trout, 
Trout Unlimited, Pacific Coast Federation of Fishermen's Associations, 
the Institute for Fisheries Resources, Salmon River Restoration 
Council, and the Northern California Council of the Federation of Fly 
Fishers. All are signatories of the Klamath Basin and Hydropower 
Agreements. We respectfully request that this Committee draft and 
favorably report legislation to authorize full implementation of these 
agreements.
    The water resources of the Klamath Basin have significant national 
value and federal interest. The Klamath Reclamation Project, authorized 
in 1905, is one of the oldest in the Reclamation program. Its farmers 
and the upstream ranchers today produce more than $560 million annually 
in economic value,\1\ including some of the world's best potatoes, 
horseradish, mint, and beef. There are six National Wildlife Refuges 
there, the first dedicated by President Teddy Roosevelt in 1908. These 
are among the most productive waterfowl habitats in the Pacific 
Flyway,\2\ supporting 80% of the migratory waterfowl and the largest 
population of bald eagles in the lower 48.\3\ The Forest Service 
administers six National Forests which are more than half of the land 
in the basin, plus the Klamath National Wild and Scenic River. The 
salmon fisheries of this basin are the third largest in the Lower 48\4\ 
and today support commercial fishing which produces $32 million 
annually in economic value.\5\ There are six federally recognized 
tribes which occupy their time-immemorial lands and waters.
    Unfortunately, in most years, there isn't enough water in the 
Klamath River Basin for all legal uses. Over the past century, federal 
and state laws have regulated individual uses in a manner that has not 
prevented significant shortages. These shortages have rotated between 
farming and fisheries. 2013 is a true crisis for Upper Basin ranchers. 
Litigation and political conflict are a constant for the water 
resources in the Klamath Basin.\6\ If we muddle through, the future of 
this basin will be more water shortages, more litigation, and 
associated hardships.
    Diverse stakeholders gathered in 2004 to answer the question: ``Can 
we agree to a better future?'' We held hundreds of meetings across a 
six-year period, in the face of a widespread view that we would 
certainly fail. After hard compromises, more than forty of these 
participating stakeholders signed the Klamath Agreements. Some, who are 
here today to oppose the agreements, left the negotiation table.
    Why did we sign? The Klamath Agreements are the first-ever 
comprehensive program for management of these water resources at a 
basin scale. Implementation will restore sustainable water supply for 
all beneficial uses. The agreements will provide a better future for 
the many communities in this extraordinary basin.
    To achieve that goal, the signatory parties committed to 
unprecedented cooperation to implement fundamental changes in current 
management arrangements over a 50-year term. The parties making these 
commitments, subject to Congressional authorization, include: the 
United States, both states, three of the four participating tribes, 
Reclamation contractors and many upstream ranchers, commercial 
fishermen, PacifiCorp, and other stakeholders.
    The Klamath Reclamation Project will be modernized. The commitments 
and improvements will reduce river diversions, improve irrigation 
techniques, prevent groundwater overdraft, and prepare for drought and 
emergency. Tribes will resolve their trust claims against the Project 
and the United States upon performance of these and other measures. In 
turn, Upper Basin ranchers may voluntarily agree to increase flows for 
the benefit of native fishes in downstream Upper Klamath Lake. In 
consideration, tribes will not make calls against junior water rights. 
The future will be far more secure for these farms and ranches.
    The National Wildlife Refuges in the basin will receive a lifeline. 
For the first time, these refuges will have a reliable water supply. 
The authorized purposes of the Klamath Reclamation Project will be 
expanded to permit this use. Refuges will receive an adequate supply 
88% of the years under the Klamath Agreements, versus 12% today.\7\ 
These measures will enhance habitat in these six refuges. Wildlife 
viewing and hunting, now at 89,000 visits per year, will increase 
substantially-hunting by nearly 50%.\8\
    The salmon fisheries in this basin will be restored to good 
condition. These have 1declined more than 90% over this century,\9\ 
resulting in periodic limitations on commercial catch from Cape Falcon, 
Oregon to Monterey, California under the Pacific Fishery Management 
Council's weak-stock management rules.\10\ Under the Basin Agreement, 
these and other native fisheries will receive enough clean water for 
spawning and rearing, due to reduced diversions by the Klamath 
Reclamation Project and Upper Basin ranchers. That agreement also 
establishes the first comprehensive program to address all non-flow 
stressors from mountains to sea.
    PacifiCorp's power-only dams, which have blocked fish passage to 
more than 420 miles of spawning habitat\11\ since 1918, will be 
removed. The economic value of commercial and ocean sport fishing will 
increase by $185 million over the term of the Klamath Agreements,\12\ 
as these fisheries recover--salmon populations nearly doubling.\13\
    What do the settling parties seek from this Committee and Congress?
    We respectfully request that Congress enact statutory authorities 
to implement certain measures necessary for the comprehensive program. 
For example, National Wildlife Refuges will be authorized as a new 
purpose of the Klamath Reclamation Project. Another authority will 
permit the Interior Secretary, rather than the Federal Energy 
Regulatory Commission, to decide whether removal of PacifiCorp's four 
dams is in the public interest. According to the Public Utilities 
Commissions of California and Oregon (PUCs), dam removal under the 
conditions specified in the Hydropower Agreement will be less costly 
and risky for power customers than relicensing under the Federal Power 
Act.\14\ The PUCs approved PacifiCorp's application for a 12% rate 
surcharge to generate $200 million for dam removal, and no federal 
funds will be used.
    Implementation of the Basin Agreement is proposed to involve just 
under $40 million per year of new federal appropriation over the next 
15 years.\15\ Is that a fiscally prudent investment? The Basin 
Agreement will avoid substantial federal liabilities under tribal trust 
doctrine, resulting from near loss of the fisheries which were 
essential to tribal sustenance, culture, and religion. It will also 
reduce the need for emergency relief resulting from water shortages. In 
the past decade, such relief for farmers or fishermen averaged $17 
million and reached as high as $60 million in a single year.\16\
    Most importantly, the future of farming and fishing communities in 
this basin will be much more secure. Even in the face of water 
shortages, these communities produce economic value each year 
comparable to the entire 15-year budget proposal under the Basin 
Agreement. That value will increase substantially through this proposed 
investment.
    This Committee is rightly known for your pragmatic and bipartisan 
approach to resources management. The Klamath Agreements are an 
unprecedented opportunity for this Committee and Congress to help local 
communities resolve these water shortages and restore the 
sustainability of fishing, farming, and tribal uses in the Klamath 
Basin.
                              attachments*
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    * All attachments have been retained in committee file.
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                                endnotes
          1 U.S. Department of the Interior, Bureau of Reclamation, 
        Economics and Tribal Summary Technical Report (2012), p. 2-26.
          2 U.S. Department of the Interior and U.S. Department of 
        Commerce, Klamath Dam Removal: Overview Report for the 
        Secretary of Interior (2012), pp. 58, 321 - 324; Dave Mauser, 
        U.S. Fish and Wildlife Service, Effects of the Klamath Basin 
        Restoration Agreement on Lower Klamath, Tule Lake, and Upper 
        Klamath National Wildlife Refuges (2012), p. 9.
          3 Overview Report, p. 58.
          4 Overview Report, p. 58.
          5 Economics and Tribal Summary Technical Report, pp. 2-44 - 
        2-46.
          6 Congressional Research Service, Klamath River Basin: 
        Background and Issues (Report 7-5700) (2012), p. 1.
          7 Overview Report, pp. 321-324.
          8 Edward Maillett, U.S. Fish and Wildlife Service, Refuge 
        Recreation Economics: Technical Report for the Secretarial 
        Determination on whether to Remove Four Dams on the Klamath 
        River in California and Oregon (2011), pp. 25-26 (comparing 
        50th percentile scenarios).
          9 Overview Report, pp. 4, 58.
          10 Cynthia Thomson, National Marine Fisheries Service, 
        Commercial Fishing Economics: Technical Report for the 
        Secretarial Determination on whether to Remove Four Dams on the 
        Klamath River in California and Oregon (2012), pp. 7-9.
          11 Overview Report, p. 14.
          12 Economics and Tribal Summary Technical Report, p. ES-4; 
        Commercial Fishing Economics, p. 30.
          13 Overview Report, p. 17.
          14 Oregon Public Utilities Commission, Order No. 10-364 
        (2010), pp. 8-13; California Public Utilities Commission, 
        Decision 11-05-002 (Approving a Rate Increase for PacifiCorp 
        Pursuant to Klamath Hydroelectric Settlement Agreement) (2011), 
        pp. 11-13; Overview Report, p. 42.
          15 CRS, Klamath River Basin, p. 26; Overview Report, p. 218.
          16 CRS, Klamath River Basin, p. 10.

    The Chairman. Thank you very much.
    We now have a number of statements that have to be 
submitted for the record.
    The Hoopa Valley Tribal Council.
    The Pacific Coast Federation of Fisherman's Association.
    From Tule Lake, Earl Janoski of the Irrigation District.
    Luke Robison of the Malin and Shasta View Irrigation 
Districts.
    Steve Kandra, the President of the Westside Improvement 
District.
    Also Jared Huffman, who is a Congressman from the area.
    So for the recorder, let's put those into the record at 
this point.
    The Chairman. So here's where we are. On my count we've got 
at least these issues to address: water, agriculture, the 
tribal concerns, fishing matters, energy, and wildlife refuges. 
Those are all part of the mix.
    I want to begin the questions by saying lots of good work 
has clearly gone into the agreements that have been discussed 
this morning. I was struck, particularly by, Mr. Mallams? 
comments and Mr. Nicholson's comments, when they said we have 
not been for the agreements. Yet, Mr. Mallams called the work a 
noble cause, I believe those were your words. Mr. Nicholson 
commended the group as well.
    So we're starting this discussion from that vantage point. 
In reality, in my view, that no matter how each of you feels 
about these agreements, if there was a political consensus we 
wouldn't be here this morning wrestling with this topic. We 
would have gotten a bill out of the Committee and possibly have 
it well launched by this morning.
    So what I'm going to do now is ask some questions designed 
specifically to try to find a way to start bridging the gap and 
see what we can do to get a long-term, Basin-wide, solution. 
Now, you all heard me say at the outset that I thought there 
were 4 goals. A number of you have touched on them.
    Certainty for the irrigators for water.
    Federal Government's role with respect to dam removal.
    PacifiCorp's role with respect to a business decision.
    Making sure the tribes are part of the solution.
    Addressing the fish runs.
    So from the standpoint of having those 4 goals, I think I'd 
like to open this up to the group around the idea that let's 
have some suggestions, at this point, on how we can continue to 
bring the parties together and do it in a way that can shave 
some of the cost to taxpayers. Make it easier for us in a tough 
financial climate to build a consensus.
    So I'm going to throw it open. I should have worn my 
glasses today so I may miss a name or 2. But let's start with 
that.
    Suggestions for how to bring the parties together and 
particularly with a focus toward saving some money.
    Who wants to start?
    Mr. Nicholson.
    Mr. Nicholson. Thank you, Senator Wyden.
    In order to bring the Upper Klamath Basin in, fully in to 
settlement process there has to be a respect for its necessity 
and how it fits in the economy and in the community. Right 
today somewhat in disagreement with what Becky said. You're 
going to see the displacement of a hundred thousand head of 
cattle in the Upper Klamath Basin.
    In order to avoid that we need water assurances like the 
project and other people have gained. Right today we have no 
water assurances.
    Just a little bit of perspective. Klamath County is in the 
top 2 percent of all counties in the whole country for cattle 
production for yearling and cow calf production with the States 
of California and Washington very much dependent upon those 
with across State line transportation. In order to avoid an 
economic catastrophe the Upper Klamath Basin needs water 
assurances and just the same as everybody else has gotten in 
this process.
    Thank you.
    The Chairman. The only thing I'd say is if we restate 
positions that we've stated it's not going to be as fruitful as 
trying to offer suggestions that help us to break new ground.
    There's no question that you're right, Mr. Nicholson, about 
the need for those Ag interests to be able to secure the water. 
You had me at `hello' on that point. What we've got to do is 
try to find a way to break some new ground today.
    So if there are any of you that would like to offer up 
suggestions that move beyond what you've said in your initial 
statement, I think that would be particularly helpful.
    Who'd like to go next?
    Mr. Connor. Mr. Chairman.
    The Chairman. Yes?
    Mr. Connor. With respect to the question you're focused on 
cost I want to provide a little context.
    The Chairman. Good.
    Mr. Connor. Then maybe think a little outside the box here.
    So initially the way the agreements were structured the 
cost estimated between the various activities and actions that 
need to be taken to implement the agreements was about $1 
billion. We, at the Federal level, we are not signatories at 
the KBRA, to I think you know. So in the aftermath of the 
agreements being signed we took that figure and worked with the 
parties and basically tried to reevaluate how we could 
accomplish those items and maybe do it at a lower cost.
    Still trying to focus on ensuring that the progress----
    The Chairman. What's your best ball park now in terms of 
the cost?
    Mr. Connor. Get to the bottom line?
    The Chairman. Yes.
    Mr. Connor. OK. $800 million.
    So we think that through that process of scrutinizing that 
budget, still trying to accomplish the same actions, we've 
shaved $200 million off of that budget. Put it over a 15 year 
period as opposed to a 10-year period.
    Also with respect to that----
    The Chairman. For those of you that want perspective, this 
is one issue that we've spent a lot of time on.
    In fact, we saw successful action in committee on it, with 
respect to the Secure Rural Schools bill, which helps 
communities where there's Federal land and it's been very 
challenging with respect to trying to make sure they had money 
for police and roads and basic services. That $800 million 
figure that Mr. Connor just cited is twice the size of the 
entire Secure Rural Schools program for more than 40 States in 
the country.
    Mr. Connor. Wow.
    So it just puts it in perspective.
    Mr. Connor. Another data point that I would just add is we 
looked at our existing programs that are currently authorized 
amongst the Federal agencies. We think that we are investing 
amongst the different agencies, certainly Reclamation has a 
large share of that, about--between $15 and $20 million per 
year that we think are applicable to those types of activities 
that are contemplated in the KBRA.
    So that's something around $250 million over that 15 year 
period that----
    The Chairman. Does that take down the $800 million down? 
The $800 million less the 250?
    Mr. Connor. I think you could represent--that's what I'm 
looking at it as is what is the new set of resources that we 
would need to accomplish those activities?
    The Chairman. You'd need $800 million, or $800 million less 
250?
    Mr. Connor. Minus 250 is what--we need to scrutinize a 
little bit more. But that's the big picture analysis that we're 
doing. I want to make sure that those----
    The Chairman. You're then talking about $550 million in 
terms of new resources.
    Mr. Connor. That's the ball park figure that we're 
thinking.
    The Chairman. Very good.
    Mr. Laird, just one point. I don't want to belabor just the 
cost question.
    What do you envision the timeline in California to be for 
bond passage so that we can, again, try to flush out some of 
these cost questions?
    Mr. Laird. The bond right now is $11.1 billion. The Klamath 
amount is $250 million of it. It is scheduled to appear on the 
November 2014 statewide ballot.
    The drop dead point for changing the bond or deciding to 
postpone or doing anything is in the middle of August 2014. If 
this is, obviously, central to this hearing today but there's 
$1.7 billion for wetlands restoration in the delta area. 
There's $3 billion for storage, new dams in California. There's 
money to go across the State for other things.
    There is an ongoing debate that is whether or not to reduce 
the bond to make it more palatable to the voters and in 
reducing it do you just go to each line item and reduce it 
proportionately or do you fundamentally change the priorities 
of the bond. That is very much an open question right now.
    So what we are trying to do is listen to this hearing in 
the process and the cost estimates and try to reflect that in 
whatever our negotiating position is on. Quite frankly if it 
pulls really poorly there's always the option of moving it to 
2016 at a time there's a Presidential election and much higher 
turnout. So all those things are in the mix which is why I 
thought it was important to say we are good for a commitment so 
that people don't get lost in the mechanizations of the bond 
and read into that, a feeling, of the commitment.
    But it is looking at all those issues together and deciding 
the best path forward and a best path forward that gets us two-
thirds in each house as well.
    The Chairman. So let's stay with this. This is the topic, 
suggestions for bringing the parties together.
    Ms. Hyde.
    Ms. Hyde. Senator Wyden, I just want to point out that the 
Klamath Reclamation Project irrigators organized into 
Irrigation Districts. Greg sort of laughed at me when I was 
talking about the other day I said, that means we can get a 
hold of you and they can make decisions based on their elected 
boards coming to the table.
    In the off-project we have a fierce and delightful 
independence which is also part of our downfall. We need the 
off-project water community, each family farming ranch to see a 
clear path to how they become a part of this settlement. It's 
kind of a public square issue. So it's a lot less about what we 
might be able to bring to the table to settle these issues and 
a lot more about process.
    So a fair process----
    The Chairman. What's the process that's going to help bring 
people together? As I indicated if we do another round of 
meetings where in effect we restate positions that we've 
already----
    Ms. Hyde. Right.
    The Chairman. Stated multiple times I'm going to feel 
really badly that we haven't used your time as well as we 
might.
    So you've said it's a process issue. What kind of processes 
could be used that haven't been used before?
    Ms. Hyde. I think we're almost on to one. So if I could 
have----
    The Chairman. Are you guys like the Senate? You want to 
yield to Mr. Whitman?
    Ms. Hyde. Yes, I would like to yield to Mr. Whitman.
    The Chairman. Why don't we yield to your good friend, Mr. 
Whitman?
    Mr. Whitman. Thank you, Ms. Hyde. Thank you, Chair Wyden.
    In terms of process I think it's useful to try to slip this 
very complex issue up into some of its key constituent parts. 
So I'm going to focus really on the Upper Basin water use issue 
and not speak right now to dam removal which is really a 
separate issue as is the refuge issue to some degree.
    But in the Upper Basin we have a framework in place for how 
to approach a compromise in the Upper Basin. Essentially what 
that involves is getting a critical mass of the off-project, 
fiercely independent community to sign up to agree to permanent 
riparian restoration in the Upper Basin to improve water 
quality and to allow the restoration of those fisheries in the 
Upper Basin. If we can get that critical mass of fiercely, 
independent land owners I believe that we can get to a 
resolution of the water right issues that provide the sorts of 
assurances that the off-project irrigators are looking for in 
terms of what will happen in dry years in terms of regulation 
of water rights.
    The Chairman. Let's do this.
    Mr. Mallams, what do you think of what Mr. Whitman said? Is 
that going to help spring this loose?
    Mr. Mallams. I think it's a good concept but it's going to 
be a very hard thing to do because we're looking here for a 
part of the process and everything is a long term, permanent 
solution. Restoration is fine. But in the past we've had years 
and years of restoration and not a lot of real, concrete, 
proven results.
    I would rather see to help this process along is to have 
something permanently in place, off stream storage, be in the 
Bureau of Reclamation in their biological opinions that came 
out. They talked we need more water. We need more water.
    Restoration doesn't create more water. Off stream storage 
will create more water when we need the water. It's very 
doable. There's like a dozen spots in our Basin that's doable 
for off stream storage. That's something that's eliminated 
completely in the KBRA the way it's written. Any excess water 
will be environmental water.
    The Chairman. So what do you think of Mr. Mallams point 
with respect to storage because I frankly have always been 
attracted to that idea. Members of Congress aren't real good at 
making more water, but storage issues and similar kinds of 
concepts clearly open up an opportunity.
    What do you think of that concept, Mr. Whitman, to sort of 
take your new idea which picks up on what Ms. Hyde was saying 
with respect to a process and incorporating what Mr. Mallams is 
talking about with respect to storage?
    Mr. Whitman. Chair Wyden, it's very easy to go to storage 
as a magic solution for the water shortage over allocation that 
we have in the Upper Basin. I am perfectly happy to have water 
storage be a part of the conversation. But these are not new 
ideas.
    There has been examination of storage opportunities in the 
Upper Basin over, well, since 2001 in particular. The cost of 
significant new storage in the Upper Basin, at least based on 
the analyses done to date is very expensive. So if you're 
concerned about the cost of this package already I think once 
you start looking at the cost of additional hard storage for 
wintertime flows in the Upper Basin while it's an attractive 
option in theory. In terms of the practice and the cost, I 
think is going to be difficult.
    That said, there are, I think, some opportunities on the 
margin for increase in storage. Some of that work has already 
been done in the Upper Basin in terms of restoration, wetlands 
around the lake and above the lake that effectively provides 
additional storage. So we're willing to have it on the table, 
but caution in terms of the cost.
    The Chairman. Let's just operate under the assumption that 
Mr. Whitman is talking about a process idea that Mr. Mallams 
said in concept; I think the words you used was, attractive.
    You're interested in having storage incorporated. Mr. 
Whitman said, gee, I'm not sure we can figure out a way to do 
this economically. But the point is I think there's something 
to work with here on the process question.
    So let's consider that.
    I went to school on a basketball scholarship and dreamed 
about playing in the pros which was ridiculous because I was 
too small and I made up for it by being slow.
    [Laughter.]
    The Chairman. The point was to try to find a way to put 
some points on the board. Clearly Mr. Whitman is talking 
conceptually about a process that might have some potential.
    Other ideas for bringing the parties together and hopefully 
addressing this question of the price tag?
    Mr. Gentry, welcome.
    Mr. Gentry. It's a risk of sounding like I'm restating 
positions. The framework for what we're talking about here, the 
off-project water settlement, comprehensive, well focused 
restoration that's in the KBRA. It's within that framework.
    There's opportunity for settlement within the framework of 
the KBRA. There's flexibility there. The KBRA does have 
provision for amendment as we took advantage of at the end of 
2012.
    So there is opportunity for flexibility. The parties to 
consider settlement, to address the comprehensive, our need for 
comprehensive, well focused, efficient use of dollars for 
restoration and to address the real core problems that have 
brought about the situation that we're dealing with here.
    It even helps to provide relief in this transition from 
unregulated water use, you know, that's been a result of 
decades of failed Federal and State policies. That's so----
    The Chairman. Let me ask you this. Again, because I so 
admire the good work that you've done. What I want to keep 
focusing on are suggestions and possibilities for the future.
    I gather, Mr. Whitman, you're talking about trading 
improved water quality for a share of water for the off-project 
users. Now, the Tribe has been generally interested, to their 
credit, in this idea. They have the water.
    Is there a way that we can break some new progress here out 
of these concepts for either of you?
    Mr. Whitman. Chair Wyden, I think there is a way. There is 
some precedent for this already in the context of the Klamath 
water right adjudication. We have agreements between the 
Klamath tribes and the Klamath project and also with at least 
several Upper Basin water users.
    So that sort of agreement where a landowner/land manager 
agrees to participate in repairing and restoration, improving 
water quality in return for some certainty in terms of water 
rights I think is the basic model that we need to work in the 
Upper Basin.
    Again, a critical issue here is that we get enough of 
participation from the landowning community in the Upper Basin 
that we can, you know, that the tribes have some assurance that 
conditions actually will improve in terms of water quality, in 
terms of the fisheries in the Upper Basin because ultimately 
it's that resource that's really key, I think, in terms of the 
long term stability of the Upper Basin.
    The Chairman. Do you want to comment on that concept 
specifically, Mr. Gentry?
    Mr. Gentry. Conceptually--well making a call on water is 
the only tool that we have to protect our treaty resources at 
this point. You know, conceptually there's avenues to explore 
that, I mean, if our fisheries are restored and well on the way 
to recovery and we had harvestable levels there could be 
opportunity.
    The Chairman. I'm just going to say conceptually there's 
some possibility here.
    [Laughter.]
    The Chairman. Listen, let's do this. I want to let anybody 
else take a crack at the initial kind of question. Suggestions 
for bringing the parties, together because if we had a 
political consensus we wouldn't be here. So we've still got to 
keep coming back to that.
    Mr. Collins.
    Mr. Roos-Collins. Mr. Chairman, 2 recommendations for the 
go forward process.
    First, please give us some guidance on what's affordable. 
In 2010 we signed agreements, one of which involves Federal 
funding approaching a billion dollars. We heard from you and 
other members that was unaffordable.
    So we took a 20 percent haircut in our proposal. We hear 
today that it's unaffordable.
    I believe you.
    I think that the Interior study which Mr. Besdeck led has 
already shown that the national benefits exceed the cost. But I 
accept that the costs are unaffordable.
    We need some guidance on budget for the Basin agreement 
understanding that the hydropower agreement runs on ratepayers 
and to the extent necessary, California funding. So that's my 
first recommendation.
    My second----
    The Chairman. I mean, obviously if you cut it substantially 
that is going to increase our prospects. If you can cut it a 
quarter. I mean, if you can cut it a third that automatically 
helps to start a different kind of conversation.
    I mean, the political consensus and the costs go hand in 
hand. When you have a political consensus you don't have people 
putting stuff on the ballot and saying they're against this and 
they're against that. What you do with a political consensus is 
you tell people in Congress there's really something to work 
with here.
    I mean, we're passing a lot of measures, like last night's 
14 public lands bills, passed by unanimous consent literally 
100 United States Senators said we're going to support. Some of 
those bills have gone on for years.
    So what this is about is getting that consensus and you cut 
this substantially. You cut it a quarter. You cut it a third. 
You cut it in half and all of a sudden people in the Congress 
say, you know, they're really working very hard to try to bring 
us something that's viable. That's what this is about.
    In terms of where I think you go? Those 4 principles which 
were largely worked out when we had the meeting in Klamath 
Falls town hall meeting and I ran it by both-sides the people 
who largely were for the agreements, and the people who were 
against them. Both said that they could live with it.
    So that's my sense of it.
    So absent any other suggestions for----
    Mr. Roos-Collins. Mr. Chairman.
    The Chairman. Yes.
    Mr. Roos-Collins. If I could add a second specific 
recommendation?
    The Chairman. OK.
    Mr. Roos-Collins. Which is you need to convene this table. 
I mentioned hundreds of meetings across 6 years. The human 
investment in these agreements exceeds hundreds of thousands of 
hours. We can't repeat that.
    A time, the crisis in the Klamath Basin doesn't permit 
that. We need to be on a clock that works for you.
    The Chairman. That's why we're here.
    Let's see if we can continue on the suggestion front for 
breaking some new ground.
    Mr. Fletcher. Actually Mr. Chairman, that's--I was going 
to. Let me amplify that point because that was my point as 
well.
    There aren't going to be any new issues we haven't 
thoroughly thrashed and we haven't kicked around. What is new 
is your enthusiasm for getting past stalemate. It would be 
great to have some type of assistance in working to get past 
stalemate, working to get past positions, not to restate 
positions, but what are you going to do to solve something.
    That expectation and to be firm on that, I think, would 
assist this process greatly.
    The Chairman. I'll bring all the enthusiasm you need.
    Mr. Fletcher. There you go.
    The Chairman. But we're going to have to do again is try to 
see if we can distill out and we heard a little bit of progress 
today on the cost. We heard a little bit of progress on this 
process question and whether there were, you know, ways to pick 
up on Mr. Whitman's, you know, point about trading improved 
water quality for a share of the water for off-project users.
    Mr. Gentry, to his credit said, conceptually there's 
something to work with.
    So we're going to keep trying to pull these kinds of 
concepts out. I think what I'd like to go to next is a question 
for the off-project people, again by way of trying to see about 
some prospects for compromise.
    Now you all, Mr. Mallams and Mr. Nicholson, to your credit 
when I was there, told me that you agree with most of the 
agreement that's been reached to date. Those were your words 
with respect to the agreements reached to date. You agreed with 
most of it.
    Could you lay out for the group what that means? Because I 
think if we can get on the record what most of the agreement 
means to you all, because you've indicated that you support it. 
That's means that we've got, hopefully, a handful of other 
issues we've got to resolve.
    So why don't you take a crack at that, Mr. Mallams, because 
I thought that was constructive when you all said it in Klamath 
Falls. It would, again, give us something to work with this 
morning.
    Mr. Mallams. Thank you.
    I guess what I'd ask is maybe can I have a very large 
eraser to work on a little bit.
    The Chairman. But before you use your eraser. State what 
you are supportive of and what your comment meant that you 
support most of it before you start erasing it because I'd like 
to hear what it means when you say you support most of it. 
Because I thought that was very constructive. It would be good 
to have that on the public record.
    Look, this is not a star chamber proceeding here. Alright? 
We're not grilling you like you're under oath.
    But I think all of you understand that-coming here for a 
hearing like this-words mean something. The whole idea is to 
try to see if we can come up with some new ways to crack this 
open and get this resolved.
    So if you would, Mr. Mallams, like you did in Klamath 
Falls, tell me what it means when you say you're for most of 
the agreement.
    Mr. Mallams. I think the basis of the whole agreement is 
that the parties got together. That's where my biggest optimism 
is. They came to the table and they got together and they have 
relationships that have been built that I think will withstand 
some changes yet to be made.
    Everybody says that this is not a perfect agreement.
    The Chairman. But you don't want to go into the features of 
the agreements so we can have that on the record that you're 
supportive of?
    Mr. Mallams. I'm supportive of the prospect of having the 
same type of program in the Upper Basin that the project has in 
their area, certainty of water to an extent. The difference 
would be the project certainty comes off the back of the Upper 
Basin irrigators. So that needs to be realigned.
    But the prospect or the concept of that certainty of water 
did exist in the 2007 version of the KBRA. That was all taken 
out. We need to go back to that to where----
    The Chairman. So what was in the 2007 version of the KBRA 
that you'd like put back?
    I'm trying to get us to talk more specifically.
    Mr. Mallams. I'd like to defer to Roger Nicholson. He was 
involved intimately and knows that part.
    The Chairman. OK, Roger.
    What was in the KBRA, the 2007 version that you and Mr. 
Mallams would like put back?
    Mr. Nicholson. I think that what was in the KBRA for the 
parties that participated was water surety restoration and 
meeting the needs of the various stakeholders and with 
everybody compromising. I think those are very important 
points.
    But I have to add that there are first, Senator, in our 
Klamath Falls meeting I said I probably could support 50 
percent, not the majority of what was in KBRA. What I can't 
support----
    The Chairman. Tell us the 50 percent you're for because I 
was quite certain and wrote it down that you supported most of 
it. But for purposes of government work if we want to have a 
debate between 50 percent and most, fine.
    Tell me the 50 percent of the KBRA-to the extent you would-
the specific features that you support because it will help us, 
in effect, take those off the table.
    Mr. Nicholson. I would definitely support the 30 thousand 
acre foot as a contribution from the Upper Basin as called for 
in the KBRA document. But I want to point out that under a 
great deal of heat I carried that message forward to the Upper 
Basin, even though we were denied representation, I carried 
that forward. I got approval of our people to support that 30 
thousand acre feet.
    But I wanted to point out when we carried forward and got 
that approval the settlement concepts that were approved by the 
consensus group called for water assurances there would be no 
more further calls on the Upper Basin. We definitely supported 
that concept.
    The Chairman. OK. We will put that down and when you're for 
it, if you could, please tick off the 50 percent that you want 
to say you're for.
    Mr. Nicholson. Say I'm for?
    The Chairman. Yes.
    Mr. Nicholson. Providing surety for water for all the 
various parties and all the various parties giving and taking 
and those provisions within the KBRA that do incorporate that. 
As far as Section 16 which is huge for us, specifically 
restoration is good, but it's vague. If it can be pinned down, 
we could be supportive of a lot of 16, of Section 16.
    The Chairman. Alright. Anything else? That's a couple of 
provisions that you've indicated you feel comfortable with.
    Keep going to the 50 percent.
    Mr. Nicholson. If I would, could I speak of one that I'm 
not comfortable with?
    The Chairman. First, again, I have had a chance on a number 
of occasions to hear what you're not comfortable with. What I'm 
trying to do is see if we can go back and forth to try to find 
some areas for common ground. So why don't we do this?
    I'll make you a deal. You list what you're for and then you 
can list what you're against.
    Mr. Nicholson. I'm for restoration.
    The Chairman. I thought that was the last point.
    Mr. Nicholson. I'm for the provisions of that as far as it 
goes for affordable power.
    I'm for whatever relief the document did offer for, I 
think, habitat conservation programs or whatever that would 
provide some relief from Endangered Species Act.
    Enforcement, I don't know how far they would go. I would go 
further.
    I'm for all of those 3 basic principles. That's what we had 
hoped to gain from the document itself was water assurances, 
affordable power and protection for Endangered Species Act.
    The Chairman. Let's--do you want to add anything about what 
you were not for? Because I said if you----
    Mr. Nicholson. Yes, I would.
    The Chairman. Go ahead.
    Mr. Nicholson. Certainly the new environmental water right 
that was called for under the KBRA. It is our view that that 
project was afforded a water right in adjudication which was to 
reflect historical usages. Adjudications are far and above what 
they've ever used.
    That environmental water right has turned around and become 
an instant nightmare for the Upper Basin people on the basis of 
calls there was 200 thousand acre feet given. The same people 
from the State of Oregon, the exact same people that turned 
around and were at that settlement table created an 
environmental water right. Then went to adjudication and back 
failed in our opinion, back failed to that, exactly the same 
people, back failed to that.
    Presently it's being enforced at the request of one of the 
tribes. It's being enforced. It's being enforced with limited 
licenses which we think is a misuse of limited licenses within 
the State processes.
    It's a nightmare that we warned about. I think it is here. 
Who suffers meeting those obligations? Upper Basin people 
suffer 100 percent of the time.
    The Chairman. I was going to get into the, sort of, legal 
processes relating to adjudication going forward with Mr. 
Whitman, but in effect that was just touched on by Mr. 
Nicholson.
    So why don't you see if you can respond to Mr. Nicholson 
and then describe the legal process relating to adjudication 
going forward.
    Mr. Whitman. Chairman Wyden, let me speak to the legal 
process going forward first.
    The comprehensive water right adjudication in the State of 
Oregon has completed its first phase which is an administrative 
phase. That phase included multiple opportunities for all 
parties to put on their cases as to what their pre-1909 and 
federally reserved water rights are.
    First of all before an independent hearing officer, 
completely independent from the Oregon Water Resources 
Department and then again, before the adjudicator in the Oregon 
Water Resources Department, who was separated from the Water 
Resources Director and the folks working on Klamath Basin 
restoration agreement.
    So that's the administrative process that just completed in 
March of this year.
    The Chairman. How about bonds? What are the requirements 
for posting bonds? People have been asking about that as well.
    Mr. Whitman. Yes. Under Oregon law with the final order 
from the Department, the State is now required to enforce the 
rights that were determined in the adjudication.
    There is a second judicial phase of the adjudication which 
is just starting and which will likely take multiple years.
    In the meantime there is an opportunity to put the final 
order in the administrative phase of the adjudication on hold 
through a stay and briefing on the stay has currently been 
filed in Klamath County State Circuit Court. Essentially what 
Oregon law requires----
    The Chairman. That's, in effect, moving to the timeframe 
for the court proceedings.
    Mr. Whitman. Yes, that's right.
    Oregon law basically requires that in order to get a stay 
that the parties seeking the stay post a bond in the amount of 
damages to the water rights that would essentially be put on 
hold as a result of the stay. The parties are currently arguing 
both about the legal aspects of that and the dollar amount 
involved in that. The court will make a determination in the 
next couple of months on that.
    The Chairman. Let me go to you, Chairman Gentry, with 
respect to some of these issues relating to adjudication. You 
have succeeded in the adjudication process. To your credit, 
when I was in Klamath Falls recently you indicated that you're 
going to honor the agreement with the on-project water users 
that guarantees them certain minimum water deliveries.
    Given those senior water rights that you have, I think it 
would be helpful to have you explain why you're willing to do 
that.
    Mr. Gentry. This is something that was certainly 
deliberated amongst our members and our folks for quite a 
while. We agreed very strategically to, in a real specific set 
of circumstances and conditions, to apply our water rights in a 
manner that would help us achieve our long term goals for 
restoration.
    The Chairman. OK.
    So, as of today have you offered to enter into an agreement 
with the off-project water users like the one that you have 
with the on-project users?
    Mr. Gentry. In previous discussions because of 
confidentiality agreements, I'm not sure I'm at liberty to 
really discuss the details, what we've discussed in previous 
discussions to talk about it.
    The Chairman. But generally, I mean, I'm sort of a lawyer 
in name only.
    Mr. Gentry. OK.
    The Chairman. So, let's kind of operate with those limits.
    Generally have you offered to enter into an agreement in 
the past with the off-project users?
    Mr. Gentry. I'm going to have to confer with--because I'm 
recent to the council and I don't know some of the exact 
discussions.
    The Chairman. But, OK, then let me ask a different way. I 
know that this can be asked.
    Are you all still trying to get an agreement with the off-
project users?
    Mr. Gentry. Yes, yes, we're, yes, we definitely were.
    The Chairman. Good, that's encouraging.
    What assurances and if you'd like to bring--is that the 
lawyer in the back there? OK.
    What assurances and benefits would the tribe need in order 
to get an agreement with the off-project users?
    Mr. Gentry. We would need continued support for the 
elements of the KBRA that we negotiated. Removing the dams is 
important to us. We'd need those assurances.
    The Chairman. So, in effect, you're saying that the off-
project people would just have to support the KBRA in its 
present form?
    Mr. Gentry. Yes. I mean currently that's what our members 
voted for and that's what we, and I as a representative of the 
Klamath tribe, have authority to discuss. You know, as I 
pointed out the KBRA does have that flexibility. We will 
entertain----
    The Chairman. I have the drift in terms of your position. I 
got that.
    Let me do a couple of other things as we try to move 
through it.
    Some questions for you, Commissioner Connor. When we had 
the hearing on drought in this committee, you told us that it 
was your high expectation that water will not be shut off to 
the Klamath project this summer. Just so we can have it on the 
record, is that still your view?
    Mr. Connor. That is still my view.
    The caveat when we had the earlier proceedings was whether 
we were going to get a new biological in covering project 
operations. We did secure that new biological opinion. It's a 
joint opinion from NOAA fisheries and the Fish and Wildlife 
Service, the first of its kind in its allowing project 
operations to continue at a reduced level, but they will 
continue and not be shut off.
    The Chairman. OK.
    What is DOI doing to help the off-project users? I hope you 
can see a little bit of the symmetry in all this. You know, 
we're trying to see if we can nail down to the greatest extent 
possible ways in which we can try to help all the farmers in 
the Basin.
    It's almost along the lines of, you know, Mr. Brockbank, of 
what we were talking about yesterday and discussed with 
Congressman Walden. You know, our delegation wants to help all 
the farmers in the Basin. So we've heard some encouraging news 
with respect to the on-project folks that their water will not 
be shut off. What are you all doing as of now to help the off-
project users?
    Mr. Connor. Quite frankly today our authorities are fairly 
limited on what we can do for off-project folks. I think some 
of the steps we're taking with rate relief for on-project water 
users could be, with authority----
    The Chairman. I know your authority may be limited. But 
tell us how you might creatively use those limited authorities 
to help the off-project users, given how serious this situation 
is and Mr. Mallams and Mr. Nicholson have talked about.
    Mr. Connor. I still think we're looking at, with respect to 
the shut offs and the lack of access to pasture land, there's 
limited opportunities. I still think we're evaluating things 
from the Fish and Wildlife Service's perspective that may be 
available as far as use of lands.
    The Chairman. Tell us what may be available. Again we're 
kind of trying to tease out all the possibilities so that we 
can get them on the table.
    Mr. Connor. It's pretty limited. I think we've looked at 
BLM lands where there's some cattle could be moved there or 
Forest Service. I don't know that we're finding the good 
opportunities there. I think we're still looking at the service 
lands.
    The Chairman. OK.
    Now with respect to the refuge, what's the situation there 
and what are the possibilities for dealing with the refuge and 
the concern there?
    Mr. Connor. The refuge has no guaranteed water this year 
because of the hydrologic conditions. We will still look for 
opportunities there. The lease lands within the refuge have 
access to some project level supply so we'll get some water 
there.
    We will continue to look operationally if there is some 
available water. That's what we've historically done over the 
last couple years. It will be limited. The refuge will suffer. 
It's in one of its driest conditions over the last 70 years.
    The Chairman. OK.
    Ms. Hyde, given the realities that you've heard this debate 
bring once again this morning, what do you think the next steps 
are for trying to bring people together? You indicated to me 
when I was in Klamath Falls. You said it again this morning 
that you want to be somebody who helps to bring people 
together. I think given your family's history, and I noted your 
comments trying to make peace for your 9-year-old to have that 
kind of role model . . . 
    Ms. Hyde. Yes.
    The Chairman. What do you think you can do to help us break 
some new ground and move ahead?
    Ms. Hyde. I think we have a historic opportunity right now 
to move ahead. I think I'm encouraged. There's meetings with 
Mr. Nicholson and myself and folks in the Klamath tribes even 
today with--that I think John Besdeck from Interior will be in.
    I'm encouraged by that. But I do not want that to become 
some sort of an isolated----
    The Chairman. What are the ideas you're discussing in these 
meetings that you're most encouraged about?
    Ms. Hyde. I think what I'm most encouraged about is first 
of all, that there's attention. One of the other problems we've 
had in the off-project is we have fallen into the back waters 
behind biological opinions, the ongoing crisis elsewhere. So 
maybe we haven't gotten the same level of attention that other 
parts of the Basin have. Not out of ill intent, anyone's ill 
intent, but just out of the reality of limited resources to 
deal with stuff.
    So I think what's happened is it's become extremely clear 
that we are, kind of, a target zone that needs to be dealt 
with. So I'm encouraged that we have a lot of principles that I 
think we can agree on. I know that, for example, Mr. Nicholson 
has provided some very good ideas to settlement approaches in 
the past that are some of the basis----
    The Chairman. What are his settlement ideas that he's 
proposed in the past that would be attractive to you this 
morning?
    Ms. Hyde. I think the number, the water use retirement that 
he mentioned is something that has pretty, you know, at that 
level of 30 thousand acre feet, has a pretty good consensus 
across different factions in the off-project. I think the fact 
that we're coming together and have the full attention of you, 
of the Governor, of Interior and also this very serious 
situation of, you know, potentially many animals going without 
feed this summer. I think it's very right for us to address.
    I think that I'm encouraged by the riparian restoration 
component of this because it's not that onerous for us as land 
owners, as Roger has mentioned. They've done amazing work in 
the Wood River Valley on fencing and well, how do you say it? 
Help me.
    Fish screens, thank you.
    Chairman Wyden. It's always a good sign when one side says 
to the other, how do you say it?
    Ms. Hyde. How do you say it? I know.
    The Chairman. Have you worked out how you want to describe 
it?
    Ms. Hyde. Fish screens.
    The Chairman. Fish screens, yes.
    Ms. Hyde. Yes.
    But anyway, I mean, I think some of these things that we 
have allowed to divide us don't need to because they're based 
on best management practices that those of us who are in 
ranching and are awake today, understand need to happen along 
our streams. They dove tail very well in with things like 
general conservation plans where we do the best that we can 
under the Endangered Species Act to protect ourselves under the 
law, to the best of our ability. Those things are built in also 
to this riparian restoration type thing.
    So I'm just encouraged though, and I'm--but again back to 
how do we reach everyone? Because Roger doesn't reach everyone 
in the off-project and neither does my group.
    So my concern is is that there are very concerned families 
out there today and we're getting messages from them back from 
home, you know. Shutting down Whiskey Creek. We're, you know, 
we've got people saying I won't make it through the summer.
    People are very scared. How do we bring them into the--how 
do we bring those families in and let their fiercely 
independent selves represent their private property rights, 
their water rights in a fair process that gets us to a 
settlement?
    It is absolutely doable. We have worked for years with the 
Klamath tribes. The fact that they have shown the good will 
that they have to the Klamath project, to settle, just is 
another reason why I believe that they fully intend to work 
fairly with us within the water balance and the KBRA. I hate to 
say it.
    The Chairman. We're going to bring those folks at home who 
are hurting, just as you've described, into the discussion. I 
can have as many town hall meetings as people think are 
helpful.
    What we're going to have to do is find some additional 
kinds of steps. We've been able to get a few out already in the 
last couple of hours in order to really bring people into that 
discussion and stay in the discussion until we get this done. 
That's what I'm committed to doing.
    I want to give some people on some issues that we haven't 
had a chance to get into.
    I want to ask you, Mr. Brockbank, on the dam removal 
question. My understanding is the company is making what 
amounts to a business decision here. That this is not some kind 
of ideological kind of judgment, but a business decision that 
is in the best interest of the company and the rate payers for 
the long-term.
    Can you just walk everybody through how it is that you all 
reached that point?
    Mr. Brockbank. Sure, Senator.
    As you probably know the colleagues around the table 
certainly know, for several years we set out to relicense this 
project. But in the spirit of collaboration after many years 
with lots of input from 2 different Administrations and 
Governors of Oregon and California, it became apparent that the 
policy decision and the policy preference of these government 
parties that regulate our project, they wanted to see dam 
removal. To their credit they said, how can you, as in a 
regulated utility, get comfortable from a business perspective 
with dam removal?
    So we laid out several criteria that were important to us, 
fundamentally, making sure that the decisions that were made 
would protect our rate paying customers from unforeseen costs 
and risks. We were able to do that through the Klamath 
Hydroelectric Settlement Agreement. We're quite comfortable. We 
believe it's preferable to the alternative.
    The Chairman. Alright.
    Mr. Addington, we really haven't brought you in to the 
question part of this. I think it would be helpful to have on 
the record why you all, with the water users, decided that 
negotiation and the settlement and the previous, you know, 
agreements we've been discussing today was the way to go on 
these issues.
    Mr. Addington. Thank you, Mr. Chairman.
    You know, as been noted and noted by yourself, 2001 our 
water supply was shut off completely due to the, excuse me, the 
Endangered Species Act. We were angry about that. There were 
many hard feelings and hard feelings with people in this room.
    We went through many efforts to try to change that. We 
litigated. We came back to people like yourself and pounded on 
your desk and demanded that something be done to solve our 
problem. Then we watched as the tribes and the conservation 
groups and the other parties did the same thing independently.
    We didn't see progress being made. We tried public 
relations. We tried a number of things to get our water, to get 
what our need was, independently.
    I think at some point you start looking around. We were, 
you know, we were back here testifying for reform of the 
Endangered Species Act. We thought that was the solution to our 
problem.
    You know, that did not occur. Then we started thinking, big 
picture. You have an adjudication. So water supply is not just 
about Endangered Species Act, it's about water rights. It's 
about who has a priority date.
    So to sum it up we sat down in a room and we looked around 
that room and there is every party in there that has anything 
to do with our ability to get water. We said, now's our chance 
to try to work something out. We have to be a lot more 
practical.
    I give a lot of credit to my board of directors, who lived 
through some terrible times and who made the decision to be 
more practical about it.
    The Chairman. So here's where we are, folks.
    We're going to have a vote in just a couple of minutes, in 
fact a series of votes on immigration. I want to just reflect a 
little bit on where we are.
    At a minimum, apart from the fact that I've again seen a 
lot of good will around here, I can find 4 positive 
developments in terms of where we've been in the last 2 and a 
half hours.
    PacifiCorp helping to lower rate payer costs. That is 
helpful.
    The California commitment on the funding question.
    Mr. Whitman's discussion about the opportunity to trade 
water quality for a share of the water.
    Mr. Connor on telling us we can find, in effect, reduced 
costs and that he's looked at some ways to lower this $250 
million, essentially, from where things were originally 
projected. Based on the question I was asked earlier about what 
it would take to help move things along, nobody seemed to jump 
up in violent protest at the idea of maybe a quarter or a third 
of the cost being further reduced. We can do that.
    Here's the point. A lot of you have said Ron, I'd really 
like you to crack heads. Just bring us all in and crack heads 
until everybody just sort of screams no mas.
    That certainly is part of the legislative discussion. We 
are going to have these discussions. We're going to be 
accelerating them. They're beginning immediately.
    Ms. Hyde noted that there were some additional ones that I 
wasn't even aware of.
    I'm going to bring in the Oregon delegation just as you all 
have asked for.
    I said I'd talk with Congressman Walden specifically last 
night, Mr. Brockbank, with respect to this rate payer issue 
because the Congressman has a great interest in this. This is 
his District. He has correctly said, we don't have a solution 
until we address the needs of the entire Basin.
    So we're going to continue in that kind of way.
    But we've got to and I didn't mean to give everybody a bad 
time. I guess I probably started by inflicting some of that on 
Mr. Nicholson when he gave his first position with respect to 
needing water as off-project users because I understand that. 
I'm there. You've got me. It's not a debatable kind of 
proposition.
    But we cannot accelerate what we need to do to get a 
solution if we just rehash all the stuff we've already said. 
It's why, when I believe it was Mr. McCarthy brought up the 
Farm bill in 2002, I could have basically done a filibuster of 
how incredibly exacerbating it was that we had a chance for 
$175 million, not to be prescribed from Washington, DC, but to 
bring parties together and do everything that all of you are 
talking about.
    Mr. Mallams, you mentioned the part about storage. Mr. 
Whitman and you were having a very constructive discussion 
about what could be done and what couldn't be done. I think it 
was fair to say we were all intoxicated more than 10 years ago 
about the possibilities for water storage. The idea was to use 
that money and get going.
    But the point is that's been done. That's been done. Where 
I come to this now is, as I talked about with all of you in 
Klamath Falls.
    With Chairman Gentry.
    Ms. Hyde, the night before the town hall meetings.
    Mr. Mallams, Mr. Nicholson, after the meeting.
    I think a lot of good work has been done already. I just 
want that understood. A lot of good work has been done.
    If we had achieved political consensus, however, no matter 
how you feel about that, we wouldn't be here this morning. So 
we've got more to do. I want to commend all of you for making 
the long trek here. I think we've made some tangible progress 
this morning.
    We obviously have a lot more to do. But a couple of you 
were wondering about my enthusiasm for this cause. I hope you 
can see on the enthusiasm scorecard, my rating would probably 
be off the chart. I mean, this has gone on long enough.
    Just as you all have said, and as Mr. Nicholson and Mr. 
Mallams have said, there are a lot of families hurting right 
now. They are probably watching some of this being streamed 
live and saying who is going to stand up for me. Who is going 
to try to really bring people together and get this done?
    I think all of us, with the good--will, particularly of 
Senator Merkley, Congressman Walden.
    Senator Murkowski had a lot to do here this morning, but 
she wanted to put in an hour because she understands that this 
is a proxy. This is a proxy for some of the huge water issues 
in our country.
    So if you all will continue to stay at it despite whatever 
position you've taken in the past, this Committee is going to 
help bring people together and get a solution to this.
    So I thank you for it. The meetings, the follow up 
meetings, as you all know, are going to begin virtually 
immediately.
    With that, the Committee on Energy and Natural Resources is 
adjourned.
    [Whereupon, at 12:07 p.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

    Responses of Gregg Addington to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. For better or worse, resource management in the Klamath 
Basin is substantially a product of federal actions and policies over 
the last 150 years, and the federal government must play a significant 
role in implementing a path going forward. Our region--like other parts 
of the American West--contains vast tracts of government-owned land, 
generally open to all Americans, and land and water resources 
management has been defined by federal policies to a significant 
extent. Specific reasons why I believe there is and will remain a 
federal responsibility in the Basin include:

   The Federal Government, through the U.S. Forest Service and 
        (to a lesser degree) Bureau of Land Management, owns and 
        manages much of the land resource throughout the Klamath River 
        watershed.
   The Federal Government entered into a treaty with the 
        Klamath Tribes in 1864 making certain concessions and 
        commitments that do not expire. The Federal Government 
        established two other Indian reservations by executive order, 
        and overall there are six federally recognized tribes in the 
        Basin. There are fishing and/or water rights for fish 
        recognized for some of these tribes in some locations. Under 
        Federal law, parts of the Klamath Tribes' reservation were 
        allotted to tribal members for agriculture and are now used by 
        both tribal and non-tribal persons for that purpose.
   The Federal Government authorized the Klamath Reclamation 
        Project in 1905, under the authority of the Reclamation Act of 
        1902. Federal policies actively encouraged settlement in the 
        area and the development of irrigated agriculture. Water is 
        managed by irrigation districts and other public and private 
        entities that hold repayment contracts with the United States. 
        The Upper Basin's communities rely on the agricultural 
        development and economy supported by this activity.
   The Federal Power Agency (predecessor of the Federal Energy 
        Regulatory Commission) granted a license to PacifiCorp's 
        predecessor, the California/Oregon Power Company to operate a 
        hydroelectric project in the Klamath River. The hydroelectric 
        project consists of multiple dams and appurtenant facilities, 
        over which FERC has jurisdiction.
   Congress and/or Presidents created six national wildlife 
        refuges in the Upper Basin that co-exist and are, for the most 
        part, managed in conjunction with surrounding agricultural 
        operations.
   The Klamath River Basin Compact was ratified by the states 
        of Oregon and California in 1957 and the 85th Congress of the 
        United States consented to the compact in Public Law 85-222, 
        which was signed by the President on August 30, 1957. 
        Generally, the Compact sought to address then-current issues 
        concerning water rights and priorities between certain uses and 
        concerning further exports of water from the Basin.
   In 1964 Congress enacted The Kuchel Act (Public Law 88 567) 
        that disallowed homesteading of the ``lease lands'' (lands that 
        had been conveyed to the United States by Oregon and California 
        and that were originally intended for homesteads) within 
        refuges in the Klamath Reclamation Project area in order to 
        ``stabilize ownership'' of land within the Klamath Project and 
        to ``preserve intact the necessary existing habitat for 
        migratory waterfowl.'' The Kuchel Act provided that certain 
        public lands within refuge boundaries would, consistent with 
        proper waterfowl management, continue to be leased for 
        agriculture. Additionally the Act generally provided that all 
        of the lands within four refuges were to be ``administered for 
        the major purpose of waterfowl management but with full 
        consideration to the optimum agricultural use that is 
        consistent therewith.'' The Kuchel Act and its history 
        represent a unique, successful, federal-nonfederal partnership, 
        but unfortunately one that is poorly understood.
   Congress has designated a stretch of the Klamath River under 
        the Federal Wild and Scenic Rivers Act.
   Federal laws and regulations such as the ESA and Clean Water 
        Act have broad implications for the use of land, water and 
        hydroelectric resource in the Basin. The implementation of 
        these laws alone constitutes a major federal presence in the 
        Basin.

    The above federal actions are sources of conflict. Over time, 
acting under independent policy initiatives, the federal government has 
promised too many things to too many interests, undercutting 
implementation of some policies with the implementation of others. The 
resulting conflicts among resource users regularly generates a crisis 
of some kind in the Basin, and the federal government is called upon to 
help manage or mitigate the adverse effects of its policy decisions--
often by providing funded disaster relief to one community or another. 
It would seem to be a prudent use of time and resources to try to fix 
problems for the long-term, thereby ultimately saving the taxpayer a 
significant amount of money over time. Achieving a comprehensive 
solution to the Basin's problems is impractical without federal 
authorization, participation and financial support.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. Best Case--The best case scenario for the Basin for the 
future would be rapid approval and implementation of a consensus-based, 
legally binding, durable and enforceable settlement agreement that 
establishes what each group of affected stakeholders can expect for the 
long-term, particularly related to water resources. The KBRA is such an 
agreement.
    From the standpoint of Klamath Project irrigators, the KBRA 
includes provisions for an On-Project Plan (OPP), which provides an 
opportunity for these family farmers and ranchers to move from a 
``reactive'' mode, focused on addressing regulatory concerns, to a 
strategic mode that provides a defensible road map for accommodating 
variations in Klamath River water supply. This will support and promote 
viable agriculture (on and off Project) in the Basin, which in turn 
will boost the local economy and the environment. The OPP is intended 
to provide or facilitate the utilization of predictable and reliable 
water supplies, albeit with limitations (which should be manageable) on 
the total amount of Klamath River water available, particularly in the 
drier years.
    It is essential that there be a clear path for allocating water 
equitably that is not constantly influenced by the changing regulatory 
dynamics or personnel and priorities of the day. This is not to say 
there won't be some conflict and ongoing dialogue about how best to do 
things. But it would mean significantly better predictability and 
security, for everyone, and would create processes whereby disagreement 
could be managed effectively and efficiently.
    Worst Case--As far as I am concerned, the worst case scenario is 
that we continue doing what we are doing today, which amounts to death 
by a thousand cuts and a progressive downward spiral for the Basin's 
small rural communities.
    Certainly irrigated agriculture cannot assume it will fare well 
without a significant change of course in the Basin, but most likely 
neither will any other interest including refuges and listed species. 
Today the Klamath Reclamation Project faces annual uncertainty and 
shortages of varying magnitude. With the onset of the Klamath Basin 
Adjudication's Final Order of Determination, the Upper Basin ``Off-
Project'' agricultural community is also facing severe hardship for the 
first time.
    The Klamath Project annual operations are historically and 
currently characterized by insecurity. As things stand, irrigators may 
not know what their water supply will be until April (or even much 
later, as has been the case in years since 2001), and uncertainty can 
persist through the season. This makes planning for the growing season 
very difficult. Further, if there is a water shortage, it is not 
allocated according to any particular plan or logic (other than 
contractual priorities that the Bureau of Reclamation has identified, 
which foster internal conflict). Additionally, for decades, local water 
users have spent significant time and financial resources monitoring 
and challenging annual Klamath Project operations plans influenced by 
agency biological opinions, as have others.
    The status quo--rooted in regulatory uncertainty--remains, with 
potentially greater risk to Project water users. Irrigation districts 
and their water users will be left with (a) addressing ESA issues year 
to year, likely through conflict and litigation (initiated by 
themselves or others), as they have in the past; and (b) exposure to 
greater uncertainty with respect to future effect of tribal rights, a 
point driven home by recent developments in the Klamath Basin 
Adjudication.
    Under the status quo, or worst case scenario, detractors of 
irrigated agriculture will continue to hound Congress about permanent 
downsizing (i.e. fewer family farmers) as the solution. Extremist 
groups from outside the Basin will continue to demand that National 
Wildlife Refuges receive a priority on water over agriculture, even 
though this is not consistent with state water law. Ultimately everyone 
will lose.
    Question 3. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. In my view, other practical methods to make better use of 
water supplies have not been identified. Some have tried to make a case 
for other alternatives, but they are less than compelling arguments 
given the situation in the Basin. The assumption by some appears to be 
that if you just say there are alternatives, then that will simply 
suffice. Who supports these ``alternatives''? Is the necessary 
political support from other key stakeholders, states, and the federal 
agencies in place to make these options a practical reality? I will 
address a couple of specific alternatives below:
    Storage--New water storage could increase the water available for 
diversion during the irrigation season by creating additional supplies 
under a new (junior) water right. Klamath Water Users Association 
strongly supports new water storage, as do I personally. However, we 
have become realistic, and there is no basis to believe that our 
current problems can or will be addressed through new water storage. 
Although increasing the ability to store water appears to be a 
straightforward proposition, developing storage today is complicated by 
significantly high planning and construction costs; challenges with 
state and federal regulatory laws; lengthy, expensive, litigious and 
uncertain state and federal permitting processes; lack of sufficient 
local, state and federal funding; and a lack of water to store.
    The competing interests for water in the Basin--irrigation (on- 
and-off Project), the National Wildlife Refuges, instream use for 
tribal resources, specifically rights for the benefit of the Klamath 
Tribes identified in the Order of Determination in the Klamath Basin 
Adjudication, instream use for endangered Lost River and Short nose 
suckers and threatened coho salmon-- have created a situation where 
there appears to be no extra water to store except in the wettest of 
years. Additionally, building storage without addressing other issues 
that affect water availability would solve nothing and cost billions.
    Several reports have been prepared regarding potential storage 
projects within the Upper Klamath Basin. Two key reports were compiled 
by Reclamation:

   Bureau of Reclamation (Reclamation). 2011. Initial 
        Alternatives Information Report, Upper Klamath Basin Offstream 
        Storage Investigation. Available at: http://www.usbr.gov/mp/
        kbao/projects/
        Upper__Klamath__Basin__Offstream__StorageInvestigation.pdf
   Bureau of Reclamation (Reclamation). 2010. Appraisal Report-
        Long Lake Valley Offstream Storage, Klamath Project, Oregon and 
        California, Upper Klamath Basin Offstream Storage (UKBOS) Study
    Many additional reports and information have been compiled and 
reviewed for storage projects and facilities within and near the 
Klamath Reclamation Project. Most of these reports and projects have 
been summarized in the two reports identified above.
    One of the most popular and common storage projects talked about in 
the Basin is Long Lake Valley (LLV). As previously described, appraisal 
level studies were completed by Reclamation for LLV Reservoir in 2010. 
These studies recommended a potential reservoir capable of storing 
350,000 acre-feet of water. The LLV Reservoir was identified as a 
third-tier (low) priority item with additional barriers. Reclamation 
acknowledged that an alternative scenario may be a potentially viable 
storage option; however, this scenario would not provide additional 
supplies to meet agricultural demand. The preliminary benefit/cost 
ratios identified by Reclamation were ``very poor'', ranging from 
0.01:1 to 0.04 to 1, and Reclamation did not recommend that the LLV 
alternative move forward to feasibility-level studies.
    In addition, the water right permit filed by Reclamation for 
storage at LLV Reservoir was recently dismissed by the Oregon Water 
Resources Department due to the limited likelihood that this storage 
project would proceed. The appraisal report did not discuss how the 
state process of adjudicating water in the Basin would likely further 
limit the amount of water legally available to be stored.
    In addition to LLV Reservoir, dozens of other potential storage 
projects have been investigated by Reclamation and others. One of those 
studies--completed over 50 years ago--suggested that the proposed 
Boundary Dam, on the Lost River, could provide additional water supply 
and power benefits to Klamath Project irrigators. This study was 
included as an attachment to testimony provided by Klamath County 
Commissioner Tom Mallams for the recent Senate Energy and Natural 
Resources Committee hearing. Unfortunately, this report was completed 
in 1962, a decade before significant federal environmental laws--
including the ESA, CWA and NEPA--were enacted. Thus, the feasibility of 
building a new dam now--five decades later--in an era of intense 
regulatory oversight and expense, in a watershed that hosts ESA-
protected Lost River suckers--was not conducted, which casts 
significant doubt on the applicability of that report in the modern 
era.
    Dredging Upper Klamath Lake--Many studies have been conducted for 
dredging Upper Klamath Lake (UKL). Environmental implications for the 
endangered Lost River sucker and shortnose sucker, water quality 
impacts, and significant costs are most commonly identified as 
complicating factors associated with implementation of this option. A 
Storage Investigation recently conducted by the Klamath Water and Power 
Agency determined this storage option as ``not currently viable''.
    Still, some argue this is a simple solution to the problem. For 
example, Klamath County Commissioner Tom Mallams included as an 
attachment to his testimony to the Senate Energy and Natural Resource 
Committee, a thesis from a Washington State University graduate student 
regarding dredging of Upper Klamath Lake. Mr. Mallams suggests this as 
a viable water supply enhancement alternative, along with cutting 
Juniper trees in the region.
    While this student paper provides an interesting theoretical 
discussion about the potential economic benefits of a massive dredging 
project, several key engineering, regulatory and other technical 
questions remain unanswered. Some of these critical issues include:

   Enormity and questionable yield of the proposal--The student 
        paper assesses scenarios where 250,000--350,000 acre-feet of 
        sediment would be dredged from the bottom of the lake. This is 
        an enormous project--equal to between 400 and 565 MILLION cubic 
        yards. A typical dump truck can carry about 8 cubic yards, 
        which means that 50-70 MILLION dump truck loads would be 
        required to develop new, lake bottom storage that would 
        essentially be ``dead storage'' (i.e. below the existing outlet 
        of Link River Dam, which controls the existing storage in UKL).
   Questionable disposal location of spoils--Where would these 
        tens of millions of truck loads of dredged material be 
        deposited? The study assumes that the ``sparsely populated'' 
        areas north and west of UKL would work for this purpose. These 
        lands are owned by the Forest Service, for the most part, and 
        the study assumes that those lands will be available--100,000 
        acres--to place several feet of lake-bottom sediments. Also, no 
        discussion is made of the potential obstacles such a proposal--
        on federal lands--would face. Environmental organizations in 
        the past 20 years successfully stopped a proposed ski resort in 
        this same location, based in large part of perceived impacts to 
        species protected by the ESA. Assuming that 100,000 acres of 
        U.S. Forest Service land would be available at no cost and with 
        little or no obstacles is wishful thinking.
   High project cost--The paper estimates the cost for this 
        scenario is in the range of $1 billion (environmental 
        mitigation and realistic spoil disposal costs not included), 
        far more than the price tag associated with the KBRA and with 
        no additional key components to water supply security such as 
        addressing tribal rights, ESA and state water right 
        adjudication outcomes, or other issues addressed by the KBRA.
   Environmental compliance challenges and costs--While the 
        paper discussed the impacts of the ESA on management of UKL, no 
        discussion or detailed analysis addresses the incredible costs 
        and challenges associated with complying with the National 
        Environmental Policy Act (NEPA), satisfying Clean Water Act 
        permitting requirements, and securing an ESA ``take'' permit 
        for this project. The U.S. Fish and Wildlife Service, Klamath 
        Tribes, State of Oregon, and environmental organizations would 
        likely be very apprehensive about the potential impact that 50 
        dredges would inflict on lakebed habitat that supports two 
        endangered fish species. The likelihood and costs associated 
        with securing federal permits for this very ambitious project 
        are not assessed in the student's paper.
   Questionable storage benefits--A limiting factor to Klamath 
        Project water supply has been the need to maintain surface lake 
        elevations for two ESA listed species in Upper Klamath Lake. 
        Similarly, in the Order of Determination in the Klamath Basin 
        Adjudication adopted this year, tribal water rights are 
        recognized based on surface elevations in Upper Klamath Lake; 
        in other words there are water rights to the maintenance of 
        lake levels, which could constrain irrigation water 
        availability. The stated reasons for these minimum elevations 
        include access to spawning and other habitat. Dredging would 
        make the lake deeper but would not obviously remove the need to 
        maintain surface elevations, and would not alter any rights the 
        Klamath Tribes have to the maintenance of water surface 
        elevations. In other words there could still be restrictions on 
        lake elevations and the additional storage would be of no 
        benefit. If a billion dollars is spent to dredge Upper Klamath 
        Lake and create more storage, it would seem like it ought to 
        solve a problem. It may simply create more water in storage 
        that could not be used.

    None of the previously motioned ``alternatives'' provides any 
analysis about how building more storage would affect the Klamath Basin 
Adjudication outcomes that are currently causing water to be curtailed 
to off-project irrigators. These alternatives do not address ESA 
issues, nor do they speak to the stipulated settlement that the Klamath 
Project has with the Klamath Tribes that provides assurance related to 
water supply. These so-called ``alternatives'' also do not address 
other critically important issues that affect water supply such as 
federal tribal trust obligations or extreme drought years.
    Other often mentioned alternatives include repeal of the ESA and 
Clean Water Act. The family farms and ranches in the Klamath Basin 
don't have the luxury of pretending that such actions will occur and 
solve our problems. We must--and will--continue to work with our 
federal elected officials and urge that they find ways to modernize the 
ESA and CWA. However, in our view, sweeping changes to the ESA will not 
be made in Washington, D.C. any time soon. Saying one doesn't like the 
ESA or the CWA is a sentiment, not a strategy. Sentiment should not be 
the basis for formulating public policy and it cannot be the basis for 
the day-to-day economic decisions of farmers and ranchers. We have 
chosen to deal with the ESA on its own terms, not pretend that it is 
going away. The critical water challenges we face here in the Klamath 
River watershed remain, and we need to be looking at real solutions 
that help solve those problems--now.
    Question 4. Is there a point in the future at which you would no 
longer support this process going forward if Congress has yet to act?
    Answer. The agreements themselves do not automatically terminate at 
a given point in time. They exist as binding agreements on parties. We 
support the agreements and have seen benefit from being part of the 
process that it took to develop them. Realistically, although our 
coalition remains strong, it is strained due to the lack of progress in 
Washington. There are time-sensitive activities in the agreements, and 
we will not be able to find ``work-arounds'' indefinitely. At some time 
in the future, if Congress does not act, things will likely break down 
and parties will revert to defending their own interests at the expense 
of others. I can't define for certain when that would happen. A major 
concern is that it will become ``too late'' without any advance notice.
    Question 5. What is the likely outcome of the recent call on water 
made by the federal government and the tribes? For instance, how would 
it affect project irrigation allocations for the remainder of the water 
year? How might it affect off-project irrigators and ranchers?
    Answer. In brief, the water right calls made this year for 
enforcement of senior water rights have adversely affected surface 
water supplies in ``off-project'' areas. The Project calls are expected 
to have a positive affect for irrigation allocations on lands in the 
Klamath Project that are served with water from the Klamath River and/
or Lake, although the magnitude of that benefit has not yet been 
determined.
    The water right calls are based on senior rights recognized in the 
Oregon Water Resources Department's ``Order of Determination'' issued 
in March of 2013. The calls implement the ``first in time is first in 
right' principle of western water law. It is most widely known and 
reported that the Bureau of Indian Affairs and the Klamath Tribes have 
made ``calls'' based on instream water rights that the Order recognizes 
for the benefit of the Klamath Tribes. In addition, many of the 
irrigation districts in the Project, particularly those that divert 
water from the Klamath system, also exercised their senior water rights 
under state law by making ``calls'' and the Bureau of Reclamation made 
essentially the same calls based on its interests in Project water. 
Many hundreds of thousands of dollars (at least) have been invested to 
protect and prove these rights against others who opposed them. We 
believe that water that enters the system as a result of water rights 
enforcement should be available for senior appropriators, in this case, 
Project irrigators. The challenge is in properly accounting for any 
additional inflow as a result of a call. It is our understanding that 
the U.S. Geological Survey will be using information from their gauging 
stations to analyze the inflow and determine what this quantity of 
water is.
    We believe that increased water to the system must be added to the 
Project allocation, which this year is likely 30 percent less than what 
is needed. The Project call that has been made is for live flow and we 
expect that a specific call of this nature can be enforced when inflows 
are below Project demand. We believe that the Klamath Project water 
right is senior to approximately 82,000 acres in the Upper Basin, out 
of an estimated 150,000 total irrigated acres in the Upper Basin off-
project area.
    Certainly the exercising of water right calls for the first time 
ever in the Upper Basin is having a negative effect on water users with 
junior water right priority dates. It is clear that all parties 
involved should do all we can to avoid or minimize this kind of impact.
    The outcome of the Adjudication should not have surprised anyone 
after 38 years of processes and proceedings in the administrative 
phase, including Administrative Law Judges' proposed order that 
occurred over a period concluding nearly 18 months ago, and a final 
order from the state this March. Nevertheless, some parties were 
surprised by the outcome, notably the opponents of the KBRA-KHSA, 
including leadership from Upper Basin off-project groups. These 
individuals have vehemently rejected the settlement approach and 
instead demanded that state water right adjudication be the mechanism 
that dictates how to share water. Many of the family farmers and 
ranchers who are now experiencing adjudication-related water 
curtailments heeded the advice of these leaders.
    KWUA supports a comprehensive settlement agreement that improves 
predictability and certainty for all irrigators, including those ``off-
project''. We always have. This does not mean that everyone does not 
continue to have some risk associated with water supply. For example, 
the most junior right holders may always have some amount of risk no 
matter what kind of arrangements are reached, but that risk can be 
dramatically reduced so as to be much less than it is today. We believe 
the Klamath Settlement agreements provide the best, and frankly the 
only, mechanism to permanently improve a currently intolerable 
situation related to agricultural water supplies.
    Question 6. Please summarize the proposed ESA listing and recent 
decision regarding the Upper Klamath Chinook salmon. What was the 
reasoning for this decision by NMFS? Do you agree or disagree?
    Answer. In their petition to NMFS, the Center for Biological 
Diversity, Oregon Wild, the Environmental Protection Information 
Center, and The Larch Company alleged:

   That new genetic evidence indicates spring-run Chinook 
        warrant distinction as separate Evolutionally Significant Units 
        (ESUs) from that of fall-run Chinook populations. Petitioners 
        reported that in the Central Valley, spring and fall-run have 
        already been designated as separate ESUs thus ``setting 
        precedent'' for designation in the Klamath-Trinity basins;
   That the spring-run Chinook in the Upper Klamath and Trinity 
        Rivers ESU meet criteria (discreteness and significance) to be 
        considered a Distinct Population Segment (DPS);
   That spring-run Chinook populations are important to the 
        overall viability of the Upper Klamath and Trinity Rivers 
        Chinook salmon ESUs to such an extent that poor conditions of 
        the spring-runs warrants listing the entire fall/spring-run 
        populations under the ESA.

    After a significant review period, NMFS concluded that a listing 
was not warranted. As for NMFS's reasoning, I would refer you to its 
federal register notice which contains significant detail. However, to 
summarize, NMFS concluded that after considering the best scientific 
and commercial data available, the petitioned action (to list) was not 
warranted. In reaching this conclusion, NMFS determined that spring-run 
and fall-run Chinook salmon in the Upper Klamath and Trinity River 
Basin (UKTR) constitute a single Evolutionary Significant Unit (ESU). 
Further, based on a comprehensive review of the best data available and 
consistent with a 1998 status review and listing determination for the 
UKTR Chinook salmon ESU, the overall extinction risk of the ESU was 
considered to be low over the next 100 years.
    I believe these considerations and others were the basis for the 
finding that the listing was not warranted.
    Question 7. In your view, how did the settlement agreements affect 
the recently released 2013 biological opinion? Was this influence (if 
there was any) positive or negative?
    Answer. I believe that the effect of the settlement agreements on 
the recently released biological opinion was an improved level of 
cooperation and communication amongst federal agencies and 
stakeholders, which resulted in an improved biological opinion. This 
cooperation enabled the fishery agencies to develop a single 
coordinated opinion from two regulatory agencies for three listed 
species in the Basin. The settlement agreements relied on an atmosphere 
in which parties with different interests or missions found ways to 
work with one another respectfully and constructively. This extended to 
federal agencies, and we perceive that it carried over into an improved 
working environment amongst the agencies involved in the development of 
the biological opinion. Aside from that, we believe the settlement 
agreements are distinct and unrelated to the new biological opinion for 
operations of the Klamath Project.
                                 ______
                                 
     Responses of Troy Fletcher to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The federal government has a trust responsibility in the 
Klamath River Basin to the Yurok Tribe. This responsibility includes, 
but is not limited to, protecting the Yurok Tribe's senior water and 
fishing rights. Any activity within the Klamath River Basin has the 
potential to affect the health of the Klamath River and its fisheries 
resources. Any water diversions, habitat degradation, other land or 
water management actions are of interest to the federal government and 
the Yurok Tribe. The Congress and the Courts have acted to protect the 
Tribe's senior interests in the Klamath River Basin (see Hoopa Yurok 
Settlement Act 1988).
    We also agree with the information provided by other witnesses who 
have provided more detail as to the federal government responsibilities 
(other than its trust responsibility) in the Klamath River Basin.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. The best case scenario would be one where the Klamath River 
and the fisheries and other resources that depend upon it are healthy 
and thriving. One where interests of up-stream communities could co-
exist with those of the Yurok Tribe and the conditions necessary to 
improve the health of the Klamath River for benefit of everyone in the 
Basin. The Yurok Tribe believes that the best path forward to achieve 
this is through the Klamath Agreements. A best case scenario would also 
be one where the entrenched opponents on all sides of various issues 
come to the table once again and work to join those parties that have 
provided a vision forward.
    The worst case scenario is the status quo. We know what the status 
quo means; uncertainty for all the Klamath Basin communities. It means 
a continuing decline of the health of the Klamath River and the 
resources that depend upon it. It means more crises throughout all the 
Basin communities.
    Question 3. What is the current status of tribal fisheries? Has 
there been improvement in these fisheries in recent years?
    Answer. The status of the species the Tribe depends upon varies by 
species and year. The Basin's fishery has declined from different 
species/runs returning in abundance through-out the year, to occasional 
years when there is an abundance of one species (fall chinook) for 
about 4 weeks out of year. The Yurok Tribe has only been able to have a 
moderate or better fall chinook commercial fishery in five of the past 
30 years. By any measure that opportunity is woefully inadequate. All 
the other species of fish that the Tribe depends upon are in trouble.
    Historically, there was an abundance of spring, fall, and late-fall 
chinook salmon; coho salmon, summer and winter-run steelhead; lamprey; 
eulachon, green sturgeon; and cutthroat trout. The run timing of these 
species was so diverse that Yurok People could harvest anadromous fish 
migrating through the lower reservation throughout most of the year.

    Currently:

   Spring chinook salmon have been blocked from most of their 
        historic spawning grounds by dams that have no fish passage. 
        One of the primary goals of the Klamath Hydroelectric 
        Settlement Agreement and the Klamath Basin Restoration 
        Agreement, is to return spring chinook to their historic cold 
        water habitat above the Klamath River dams.
    Most of the current spring chinook production in the basin is 
driven by Trinity River Hatchery production. The only remnant wild runs 
left are in the Salmon and South Fork Trinity Rivers (SFTR); abundance 
of these rivers has been at extremely low levels several most recent 
years. For example, in 1964 the SFTR had more than 11,000 spawners 
return, during several recent years abundance has fluctuated between 
less than 100 to a couple hundred spawners.
   Coho salmon are listed as threatened under the Federal and 
        state Endangered Species Acts (ESA). The abundance of coho 
        salmon is on an alarming trajectory toward extinction if 
        circumstances don't change.
   Eulachon (also known as Candlefish) have nearly been 
        extirpated from the Basin and have been listed as 
        ``threatened'' under the Federal ESA. Currently fishing for 
        these fish does not occur due to their extremely low abundance; 
        during several recent years no eulachon have been observed in 
        the river.
   There is not an abundance estimate for green sturgeon, 
        however given the degraded condition of the mainstem Klamath 
        River and the extended period of time that sturgeon spend in 
        the river, there is much concern regarding their status.
   There is also not an abundance estimate for lamprey 
        (commonly referred to as eels). Anecdotal information indicates 
        a substantial decline in their abundance. For example, Tribal 
        members fishing with a simple eel hook at the mouth of the 
        river historically harvested well over 100 lamprey in one trip 
        to the river. Currently 15 lampreys in a trip is exceptional, 
        with much fewer being the norm.
   An abundance estimate for steelhead is also lacking, however 
        there is much concern regarding the status of summer-run 
        steelhead.

    Question 4. Has there been any discussion of further paring down 
the agreements? Has there been any discussion of nonfederal parties, 
including nonprofits, states, or local entities, taking on any of the 
actions that are currently envisioned as federal responsibilities?
    Answer. At the request of Rep. Walden and others, the original cost 
estimate of $1 billion for KBRA expenditures was reduced in 2010 by 
$200 million (to $798 million), and the implementation period was 
extended from ten years to 15. In fact, the Congress is now being asked 
for only $300 million in new authority over the 15-year period, or $20 
million annually. As Commissioner Connor has testified, and the 
Congressional Research Service reported, the Government currently 
spends $17-20 million annually on Klamath programs. If these funds were 
expended instead to implement the KBRA, the Congress and the Department 
of the Interior would contribute to restoration of the Basin, including 
its fishery, and permanent resolution of long-standing competition for 
its resources, including water. In addition, CRS has estimated that the 
Department expends $17 million annually to address recurring resource 
crises in the Basin. These expenditures could be avoided through 
reliance instead on the balanced, flexible provisions of the KBRA. The 
modest additional expenditures contemplated by the KBRA represent an 
appropriate Federal commitment to the long-term health of the Basin and 
its resource-dependent populations in Oregon and California. And, even 
the $300 million figure could be further reduced if Secretary Jewell 
and other Cabinet officials could be persuaded to make an even greater 
effort to expand the list of existing government programs that could be 
re-programmed to support the KBRA. It would be reasonable for Chairman 
Wyden to make a direct appeal along these lines to Secretaries Jewell 
and Vilsack and OMB Director Burwell and encourage them to try harder 
and use their discretion, to re-direct funds accordingly.
    Question 5. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. There are other agricultural diversions within the Basin, 
especially within the Scott and Shasta Rivers, which have a substantial 
impact upon fish habitat and associated fish populations. The effect of 
these diversions upon the quantity of water in the main-stem Klamath 
River is less extreme, but not trivial.
    The ESA and State Fish and Game code are existing authorities that 
could be used to minimize the negative effects of these diversions upon 
fish populations.
    The Yurok Tribe supports that no less than 50,000 acre-feet shall 
be released annually from the Trinity and made available to Humboldt 
County and downstream users as was provided for in the 1955 Act 
regarding the Trinity River.
    It is critical that water from the Trinity River be made available 
during dry water years when in-river run size of Fall Chinook is 
projected to be large. The Yurok Tribe and others have a serious 
concern that water from the Trinity River is necessary to protect ESA 
and other species of fish as they enter the Klamath River this fall. 
Projected Fall Chinook run size returning to the Klamath River will be 
the second largest. At the same time there the Klamath Basin is in a 
dry water year. This combination of factors is a concern to the Yurok 
Tribe that there is a risk of another fish kill in the Klamath River 
similar to 2002. Everyone associated with the Klamath Basin should 
share that concern.
    Question 6. In your opinion, what were the most surprising findings 
in DOI's dam removal studies? What were the most controversial parts?
    Answer. For the most part, the dam removal studies supported the 
hypotheses that our biologists held regarding their effect to the river 
and to fish production. For example, we believed, based on the 
scientific evidence we had before the studies, that dam removal would 
be of immense benefit to fish production and long-term viability 
because of the expanded geographic range and access to areas of cold 
water during the warm summer period. This was supported by the peer-
reviewed Chinook and coho salmon production computer modeling that was 
done.
    We also believed that the impacts from sediment would be moderate 
to severe in the short term, but the effects would be short-lived. This 
was also supported by the peer-reviewed scientific analysis done for 
DOI.
    Perhaps the most surprising finding was the finding that the 
sediments did not contain significant amounts of any toxic substance. 
Given the legacy upstream (lumber mills, etc. in the Klamath Falls 
area), it was plausible that toxic substances of various types might be 
found in the reservoir sediments. Thankfully, despite a rigorous 
sampling protocol, no significant amounts of toxic materials were found 
in the reservoir sediments, which greatly simplifies the removal 
process.
    Another surprise was that the Chinook models showed a very 
significant response in production from opening areas under and above 
the existing hydropower reservoirs, while at the same time, providing 
flows under KBRA conditions. While a positive response was expected, 
the Chinook modeling showed that it was possible that the increase in 
Chinook salmon production from the Klamath might be greater than anyone 
expected (80 percent increase in Klamath/Trinity basin Chinook salmon 
production with dam removal and KBRA flows for the period 2021-2061 
when compared with the no action alternative) This same study concluded 
that there was a 97 percent chance of improvement of Chinook salmon 
production under the dam removal with KBRA flows scenario compared to 
the no-action. This study was important because it indicates that not 
only will the fish benefit from dam removal and KBRA implementation, 
but the benefit is likely to be very significant.
    Question 7. Is there a point in the future at which you would no 
longer support this process going forward if Congress has yet to act?
    Answer. The Yurok Tribe stands by the Klamath Agreements. The 
relationships that the Yurok Tribe and others have created will 
continue. At the same time, as the health of the Klamath River and the 
resources that depend upon it decline, the Yurok Tribe will take 
whatever actions necessary to restore and protect the Klamath River.
                                 ______
                                 
    Responses of Leaf G. Hillman to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The federal government has a legal and moral responsibility 
to resolve the Klamath Crisis which it played a fundamental role in 
creating.
    The federal government owns and manages about half of the Klamath 
Basin's 15,000 square miles. For the past 150 years, the federal 
government has allowed and encouraged large scale resource extraction 
industries such as gold mining and timber harvesting. The federal 
government led and financed the development of irrigated agriculture 
and provided incentives such as homesteads to non-native settlers to 
the area. Irrigation projects led to a dramatic alteration of native 
wetlands, river channels, and natural lakes forever affecting water 
quality and fisheries. Over the course of the last 100 years, the 
federal government permitted the construction of a series of dams that 
comprise the Klamath Hydroelectric project that further damage water 
quality and fisheries.
    At the same time, the federal government permitted and encouraged 
the displacement of the Klamath Basin's native tribes with policies of 
forced relocation and the seizure of tribal lands.
    Today, because of a 150 year track record of poor policy decisions 
by the federal government, the Klamath Basin's diverse communities live 
in a state of perpetual crisis. Put simply, the federal government made 
too many promises to too many people. The Klamath's natural systems 
have been asked to do too much. The result is an over allocation of 
water and an ecosystem that has been degraded to its breaking point. 
This point is evidenced by regular fish kills and blooms of toxic 
algae. In recent decades, this has led neighboring communities to 
engage in political and legal fights for their own survival with no 
clear winner.
    We assert that the federal government has a moral as well as a 
legal obligation to address the problems that it played a fundamental 
role in creating.
    In recent years, the Klamath's diverse communities came to realize 
that we all share a common destiny. This realization led community 
leaders to map out a strategy to balance water use, restore fisheries 
resources and water quality, but to do so in a manner that allowed both 
fishing and agricultural communities to thrive. This strategy is 
embodied by the Klamath Basin Restoration Agreement and Klamath 
Hydroelectric Settlement Agreement.
    We assert that enactment of the Klamath Agreements would be a 
meaningful step towards meeting federal obligations and 
responsibilities to Klamath communities as well as all Americans who 
share in ownership of this national treasure.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. The best case scenario for the Klamath Basin is the 
enactment of the Klamath Agreements. This would balance water use 
between the environment and agriculture, dramatically enhance sport, 
tribal, and commercial fisheries, and improve living conditions for 
Klamath River tribes. The Agreements would stabilize local and regional 
economies by reducing the uncertainties currently associated with 
fisheries and agricultural enterprises in the region.
    The worst case scenario is that Klamath communities continue down 
the current path of seasonal crises of ever increasing intensity. Many 
Klamath Basin businesses and families are already one drought or fish 
kill away from economic ruin. Extinctions of rare and endemic species 
will lead to the irreplaceable loss of our shared natural heritage and 
biodiversity. Similarly, the cultural diversity of area tribes will be 
at risk as cultural practices dependent on access to specific species 
of plants and animals could be lost.
    Question 3. What is the current status of tribal fisheries? Has 
there been improvement in these fisheries in recent years?
    Answer. The Karuk Tribe harvests salmon with traditional dip nets 
at one location. Our fishery is gear limited and time and work 
intensive. Last year and again this year, runs of fall run Chinook are 
strong as compared to runs in recent decades. However, it should be 
noted that the magnitude of fish runs naturally fluctuate with ocean 
cycles that in large part explain the recent large runs of fish. We 
also note that even these years of relative abundance are low as 
compared to historic runs of fish.
    What has not improved is the diversity of fish runs. Karuk are 
dependent not only on fall run Chinook, but spring run Chinook, coho 
salmon, summer and winter runs of steelhead, green sturgeon, and 
Pacific lamprey. Runs of these species continue to decline. Spring run 
Chinook and coho salmon can no longer be fished at all due to low 
abundance. This means we have very limited fishing opportunities as we 
can only fish for one seasonal run of fish. So whereas Karuk once 
fished nearly continuously throughout the year, today we are limited to 
about three or four weeks of fishing a year.
    Question 4. Has there been any discussion of further paring down 
the agreements? Has there been any discussion of nonfederal parties, 
including nonprofits, states, or local entities, taking on any of the 
actions that are currently envisioned as federal responsibilities?
    Answer. Yes. However, Parties to the Klamath Agreements have been 
hesitant to engage in additional efforts to cut the KBRA budget without 
some guidance from congress or the administration regarding the size of 
the cuts deemed necessary. The KBRA is carefully constructed to address 
the needs of as many stakeholders as possible. Cuts to one program 
could threaten a specific Party's commitment the agreements.
    At the urging the Administration as well as members of Congress, we 
did reduce the original budget proposed in the 2010 agreements by 
nearly 20 percent. It is also of note that in cooperation with federal 
negotiators, the non-federal parties have estimated that at least $261 
million in the 2011 budget proposal is covered under base funding for 
existing programs.
    The Karuk Tribe is willing to consider further reductions in the 
budget proposal. We are mindful that the nation's economic recovery is 
fragile and of the general need to reduce federal spending. We do hope 
that efforts to reduce the KBRA budget remain committed to the 
Agreement's core principals and that cost cutting measures will be 
shared equitably among parties.
    In regards to non-federal contributions, we note that the KHSA is 
exclusively non-federal dollars and that many elements of KBRA programs 
are funded by Oregon and California. In all, Parties estimate that the 
non-federal funding for the Agreements is $549 million over 15 years. 
We are eager and willing to explore partnerships with non-governmental 
organizations to further reduce federal costs.
    Question 5. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. This is largely a subjective question. From our perspective 
and that of the fishery, we believe that there are existing authorities 
and statutes that allow federal agencies to increase flows in the 
Klamath River and its tributaries. We note that these actions would not 
address the water needs of agricultural communities and would 
undoubtedly lead to years of litigation between Parties. We are unaware 
of alternatives to the Klamath Agreements that would make better use of 
water supplies in a manner that a large majority of stakeholders would 
agree to.
    Question 6. In your opinion, what were the most surprising findings 
in DOI's dam removal studies? What were the most controversial parts?
    Answer. Among the most surprising, and encouraging, findings was 
that the studies concluded that the most probable cost of dam removal 
was $292 million-$158 million less than the $450 million cost cap 
contained in the KHSA. This suggests that the cost-cap negotiated in 
the KHSA is adequate to cover dam removal costs and that California's 
contribution may be more affordable and therefore politically tenable 
than originally contemplated. Similarly surprising was the willingness-
to-pay estimates developed from the nonuse valuation studies used in 
the economic analysis. The discounted present value estimates from the 
Klamath River Basin Restoration Nonuse Value Survey concluded that the 
public was willing to pay $84 billion to see the Klamath Basin 
restored. This demonstrates that the public is well aware of Klamath 
Basin issues and that it cares deeply about this iconic American 
landscape.
    Question 7. Is there a point in the future at which you would no 
longer support this process going forward if Congress has yet to act?
    Answer. Yes. Tribal support, similar to that of other governments 
at the table, can change as new leaders are elected. It is possible 
that a future council may view the Klamath Agreements less favorably 
than the current Tribal Council. Also, we cannot wait indefinitely for 
congressional action while water quality and fisheries continue to 
suffer. If congressional action is delayed to the point that we cannot 
meet the timelines established in the KHSA for dam removal, we will 
forced to consider pursuing dam removal through other means. Similarly, 
we will be forced to pursue other means to improve Klamath River flows.
    Given the magnitude of the current crisis and the broad base of 
support for the Agreements, we think the time is uniquely ripe for 
congress to act. If this opportunity is lost, it's difficult to believe 
that our opportunities for congressional action will improve in the 
near future.
                                 ______
                                 
         Responses on behalf of Hoopa Valley Tribe to Questions
                         From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The federal responsibility in the Klamath basin should be 
guided by the following principles and facts:

          a) The Klamath River is an interstate stream; the United 
        States has interests in and responsibilities on behalf of 
        Indian tribes and other federal programs in both Oregon and 
        California. A settlement of disputes over federal interests in 
        Oregon should not come at the expense of federal interests and 
        other rights in California.
          b) Any action by Congress to reconcile tribal, non-Indian 
        development and fishery/environmental needs must be carried out 
        subject to the federal Indian trust responsibility that 
        requires all federal agency heads to exercise their discretion 
        in program management in a way that provides full protection to 
        tribal fishery and other trust assets. This fiduciary standard 
        requires that decisions be based on the best available 
        scientific information. For example, in the case of anadromous 
        fishery needs in the Klamath River, the best available 
        information, and thus the starting point for any decision 
        making is the peer-reviewed Klamath River Basin Instream Flow 
        Study conducted by Hardy et al. (2006). That study was prepared 
        at the request of the federal government in consultation with 
        tribal trust beneficiaries. Substitution of guess work or 
        assumptions that rely on future congressional actions for which 
        there is no present policy or funding support are not credible 
        scientifically and are not acceptable.
          c) No legislative proposal to address Klamath basin water 
        issues will include a modification of the federal trust 
        relationship to which an Indian tribe has not consented. The 
        Indian tribes of the Klamath/Trinity Basin have rights that 
        arise from aboriginal law, treaties, executive orders and 
        statutes. Each tribe has its own relationship with the United 
        States based on those documents. The United States has 
        recognized rights in some tribes but has refused to recognize 
        fishing and water rights claims of other tribes.
          d) Any tribe that agrees to waive its rights in exchange for 
        a settlement benefit must do so on the record and recognize 
        that the waivers will be subject to enforcement by the federal 
        trustee and non-waiving tribes, among others. For example, 
        where one tribe has agreed to restrict its harvest in 
        expectation of future settlement benefits it cannot shift its 
        fishing effort to stocks to which a non-waiving tribe is 
        entitled. Any settlement of Klamath basin water issues must 
        recognize senior tribal rights, involve consensual settlement 
        terms and not make guarantees to junior interests at the 
        expense of non-consenting senior right holders.
          e) No legislative proposal will be based on the substitution 
        theory of Indian trust resources set out in Three Affiliated 
        Tribes of the Fort Berthold Reservation v. United States, 182 
        Ct. Cl. 543, 390 F. 2d 686 (1968).
          f) The Klamath basin's ecology, hydrology, fish stocks and 
        environmental health are interrelated; they are not susceptible 
        of being artificially segregated and isolated by political 
        boundaries or political decisions. The legal and geographic 
        reality is that the Klamath River and its largest tributary, 
        the Trinity River, are part of a single integrated Klamath 
        Basin watershed and must be managed in an integrated and 
        coordinated manner. One of the main reasons why the Klamath 
        Basin Restoration Agreement (KBRA) has not advanced is because 
        it rejects or ignores this reality. Today, the Klamath River 
        water users in Oregon are relying on Trinity River water to 
        offset potentially devastating impacts from uncoordinated 
        basin-wide water management that is occurring in the Upper 
        Klamath River.
          g) Operate in compliance with Indian treaties and trust 
        obligations that are set forth in law, including the mandate 
        that the lower Klamath River be managed consistent with the Law 
        of the Trinity River, (the statutes, permits, judicial 
        decisions, agreements, and administrative decisions that govern 
        the use of Trinity water, including Pub. L. 104-143, section 
        3(b)). The Tribe has submitted a proposal to accomplish this in 
        our Joint Directorate Proposal that is described in the 
        response to question 2, below and as designed in our work on 
        Pub. L. 99-552.
          --The actions of the federal government historically have 
        resulted in ``giving away the river'' multiple times to 
        numerous conflicting interests. For example, first the federal 
        government reserved rights to water and fish in the river to 
        the tribes in Oregon and California. Subsequently it developed 
        irrigation projects (Klamath Irrigation Project and Central 
        Valley Project) that appropriated Klamath River basin water. 
        Then it created wildlife refuges and opened land to 
        homesteaders for private irrigation development. It also 
        licensed hydroelectric generation. The grants by the United 
        States substantially exceed the water supply available to meet 
        the needs of those who relied on the United States' grants. The 
        federal government has the responsibility to mitigate the 
        consequences of its actions, but in doing so, it may not favor 
        junior rights over senior rights unless there is a mutually 
        agreeable means and terms for doing so.
          h) The law is well-established that federal agencies are 
        bound by their trust responsibility to Indian tribes to limit 
        their discretionary actions in managing federal resources in a 
        way that does not impair the tribal property rights that the 
        United States holds in trust.
          i) The law is well established for licensing hydroelectric 
        projects. Whatever merits the Klamath Hydro Settlement 
        Agreement (KHSA) may have had as an alternative to the FERC 
        licensing process, the indefinite delay in implementing the 
        KHSA because of inaction on legislation to authorize the KBRA 
        results in a damaging status quo for the environment and tribal 
        trust resources affected by the PacifiCorp project.

    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?

    Answer. The best case for the basin would be based on the 
principles that:

          a) all needed Klamath/Trinity Basin water supplies would 
        remain in the Klamath basin to serve Klamath basin needs prior 
        to any diversion being made to California's Central Valley and 
        that the Bureau of Reclamation's management of the Klamath 
        River and Central Valley/Bay Delta plans be done in a manner 
        that is consistent with the Law of the Trinity River. Today, 
        the Klamath and Trinity water supplies are being managed as 
        isolated water sources, creating conflict between Oregon and 
        California, as well as within each State. These actions have 
        resulted in crisis water management that is inefficient, costly 
        and often unsuccessful in protecting either environmental or 
        economic values. One river system's over allocated water supply 
        issues cannot be solved by stealing water from another.
            To address these problems, the Tribe has provided the 
        Department of the Interior its Joint Directorate Proposal that 
        would integrate a Klamath/Trinity Basin-wide management 
        structure coordinating the management responsibilities of 
        tribal/State/federal governments. The Tribe worked to establish 
        a similar structure in 1986 when Pub. L. 99 552 was enacted. 
        Unfortunately, Pub. L. 99-552 expired in 2006 and was not 
        reauthorized. The advantage of the Pub. L 99 552 and Joint 
        Directorate approach is that the Klamath/Trinity Basin would be 
        managed as an integrated whole consistent with the Law of the 
        Trinity River in a way that provides opportunities to design 
        and implement planned water allocation schedules that are based 
        on real time scientific requirements for water to supply 
        fishery, environmental, and other beneficial uses. This 
        proposal includes mandatory modeling requirements of available 
        Trinity water for the Bay Delta Plan and other diversions to 
        the Central valley Project (CVP).

            This process would also be designed to produce science-
        based and financially feasible options for irrigation users for 
        short and long term deliveries based on varying water year 
        classifications.
            The Joint Directorate would also provide a meaningful 
        process for looking at the fiscal realities of present-day 
        federal budgetary concerns. In contrast, the KBRA negotiators 
        developed a settlement concept plan that is heavily dependent 
        on federal appropriations. The Hoopa Valley Tribe tried to warn 
        the settlement parties about this in the negotiations but our 
        concerns were dismissed. Unfortunately, the federal 
        government's representatives at the KBRA/KHSA negotiations did 
        not provide any guidance that would have helped to facilitate 
        the development of a plan based on federal fiscal realities. 
        This conduct has led to Senators Wyden and Merkley having to 
        identify in their July 3 letter convening the Klamath basin 
        task force the major task of reducing federal costs of a 
        Klamath settlement.
          b) water management decisions in Oregon would be made with 
        full regard for Klamath/Trinity basin needs in California and 
        vice versa.

          c)establishment of a joint directorate/Pub. L. 99-552 process 
        for Klamath basin water management that includes water and 
        resource management structures for federal, state and tribal 
        management agencies, coupled with transparent scientific review 
        and public and stakeholder input.

    The worst case for the basin would be if current settlement terms 
were to become enacted, which: (1) are not brought into alignment with 
the realities that Chairman Wyden identified at the June 20 hearing, 
including the political and financial obstacles that stand in the way 
of the KBRA, and (2) do not promote Klamath/Trinity Basin integrated 
management.
    The KBRA was signed in February, 2010. Since then, we have faced 
annual fisheries crises in the Klamath River. In 2012 and 2013, fish-
kill conditions in the Lower Klamath River called for preventive 
measures by the Bureau of Reclamation. Yet, Commissioner Connor stated 
at the June 20 hearing that, under the KBRA, more water would have been 
delivered to Upper Klamath than was provided in those years. Where 
would that water come from? Promises of more water to irrigation in 
Oregon and calls for less funding for fishery protection create the 
appearance of a political shell game that no one can win. It also 
leaves residents of the Klamath/Trinity basin lurching from water 
crisis to water crisis. Chaos is no substitute for well thought out, 
scientifically based resource management. Certainly, month-by-month 
short term crisis management of the Klamath/Trinity Basin is far from 
being a solution for tribes, States, stakeholders, and the Federal 
Government.
    Under the fiscal realities described by Chairman Wyden, should the 
reinstatement of the obligation of Klamath water users to contribute to 
restoration be reconsidered? Water development and withdrawals of water 
supplies from any water system have their impacts and mitigation 
responsibilities. Taxpayer subsidy of these obligations appears to be 
an unsustainable policy.
    Klamath legislation was not introduced in the 111th Congress. 
Legislation was introduced in the 112th Congress, but died. We are now 
into the 113th Congress and Chairman Wyden has concluded that the KBRA 
cannot be enacted in this political climate. The federal government's 
water management decisions in 2013, as in years past, leave the Bureau 
of Reclamation with no water from the Klamath Project facilities for 
fishery protection in the lower Klamath River. Central Valley Project 
contractors filed letters of opposition to using Trinity Division water 
for fishery protection because of Klamath management. See letter to 
Bureau of Reclamation Mid-Pacific Regional Director David Murillo from 
the San Luis & Delta Mendota Water Authority (May 31, 2013). Conditions 
are ripe for a catastrophic fish kill this year. This is not only the 
worst case scenario; it is on the verge of becoming the worst case 
reality that can reoccur annually under the KBRA plan.
    The Law of the Trinity River cannot be fulfilled by obligating 
Trinity water to Central Valley and Bay Delta in amounts that are 
required to preserve and propagate Trinity and lower Klamath River 
fisheries. Yet, the Administration continues to deliver Trinity water 
to Central California and Klamath River water to southern Oregon in 
disregard of those obligations. By far, the worst case scenario for 
future Klamath/Trinity Basin management would be to enact short term, 
unrealistic plans that degrade water and fishery/environmental 
management to a year by year and month by month seasonal approach.
    Question 3. What is the current status of tribal fisheries? Has 
there been improvement in these fisheries in recent years?
    Answer. The Hoopa Tribal Fishery historically provided sustenance 
to the Hupa people 12 months of the year. The annual cycling of a 
diversity of species and run timing provided a dietary wealth to the 
indigenous people. Today, the fishery is typified by moderate runs of 
fall Chinook, followed by a much lesser abundance of spring-run 
Chinook. In early spring, the Hupa People traditionally would access 
strong runs of green sturgeon and Pacific lamprey, both of which remain 
severely depressed since the completion of the Trinity Division of the 
Central Valley Project (1963). Coho salmon, which dominated Hoopa 
harvest in the fall, remain listed as ``threatened'' under ESA. 
Finally, natural populations of winter and fall steelhead remain at 
depressed levels of abundance and are largely replaced by hatchery 
production.
    The Tribe has fought for decades to overcome the devastating 
impacts of federal actions that have been destructive to our fishery. 
Restoration works when it is based on sound science and faithful 
adherence to prescriptions for fishery restoration.
    Thus far, however, restoration of Coho salmon is not occurring. The 
Southern Oregon/Northern California Coastal (SONCC) Coho salmon were 
listed as a threatened species under the Endangered Species Act (ESA) 
in 1997. A public review draft recovery plan was published by the 
National Marine Fisheries Service in January 2012, but has not yet been 
completed. Klamath River Coho salmon stocks are at extreme risk of 
extinction.
    The fact that Coho salmon are a threatened species continues to 
cause adverse effects for the Hoopa Valley Reservation. Activities that 
potentially affect water quality or quantity must be evaluated to 
determine if they would adversely affect Coho salmon. Where a 
construction project, or timber harvest is planned, for example, and it 
is likely that the activity could adversely affect Coho salmon, the 
lengthy consultation process leading to preparation of a Biological 
Opinion is triggered. The consultation process, which is made necessary 
only by the depressed status of Coho salmon stock, severely impedes our 
Reservation economy.
    Discussions have continued for decades with Federal managers 
regarding Klamath Project and Central Valley Project management of 
Trinity River Division water supplies, designing integrated hatchery/
natural stock fishery management plans, and statutory mandates for fish 
restoration activities that have produced less than optimal forward 
movement.
    But, improvements are being made, including:

   A scientifically-based hatchery review that is presently 
        being negotiated with federal managers for integration into the 
        Trinity and Iron Gate fish hatcheries;
   After years of underfunding, the previous Reclamation Mid-
        Pacific Regional Director, Don Glaser, took major steps to 
        carry out federal fish restoration in the Trinity River by 
        providing nearly full funding for the Trinity River Restoration 
        Record of Decision (2000);
   Pub. L. 99-552 provided for Klamath/Trinity Basin management 
        actions that included the Klamath River Task Force and the 
        beginning of a communication and coordination framework for 
        Klamath and Trinity River activities. These positive steps led 
        to legislation in 1984, 1992, 1996, and 1998 designed to build 
        a coordinated management framework for the Klamath and Trinity 
        Rivers that is still providing benefit today. The unfortunate 
        lack of reauthorization of Pub. L. 99 552 in 1996 has left 
        management and coordination voids that have not been filled by 
        integrated federal agency management in their Klamath, Trinity 
        and CVP offices.
    Question 4. Has there been any discussion of further paring down 
the agreements? Has there been any discussion of nonfederal parties, 
including nonprofits, states, or local entities, taking on any of the 
actions that are currently envisioned as federal responsibilities?
    Answer. Although the Hoopa Valley Tribe's vested rights under 
federal law in the Klamath basin are beyond dispute, the Tribe has been 
excluded from discussion about the KBRA since 2010 because it is not a 
party to the agreement. The Tribe declined to sign the agreement 
because it identified many of the problems that Chairman Wyden now 
acknowledges prevent the KBRA from proceeding. Rather than punish the 
Tribe for its insight, the KBRA parties should invite the Tribe back 
into the discussion. We appreciate Chairman Wyden speaking on our 
behalf in that regard.
    As discussed above, it is unfortunate that federal representatives 
who participated in the negotiations were not forthcoming about the 
United States' financial situation while the KBRA was being developed. 
It is just as unfortunate that ``paring down'' is the only option that 
is available, especially since the intent seems to be to pare at the 
expense of fishery restoration plans. The United States' financial 
problems are not likely to vanish soon, therefore a paring down effort 
will continue at least over the next decade or more. We would prefer to 
participate in the design of a plan that is based on realistic funding 
levels and reliable water supplies. As the federal representatives in 
the KBRA negotiations stood silent, the KBRA parties developed funding 
proposals that in many cases masked hard choices those federal 
officials needed to make about scarce water supplies. We fear that the 
federal representatives may do the same in the paring down process; 
that is, they will stand by while others make representations that 
fishery restoration can be done on the cheap and with less water. The 
fact is that paring down of water deliveries is going to be a critical 
component of any revised from of a KBRA.
    Question 5. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. The extensive irrigation development in the high desert 
area surrounding Upper Klamath Lake is no longer sustainable. The KBRA 
and KHSA fail to respond to this reality or to act with the realization 
that climate shift is making more acute the problem of too much water 
being promised to too many users.
    The KBRA does not have a water quality plan and has an ill defined 
strategy for cleanup of nutrient pollution in the Upper Klamath Basin. 
The need for marsh and lake ecosystem functioning is not acknowledged. 
Yet, to improve water quality in the Lower Klamath River and address 
the current crises caused by toxic algae and fish disease, the 
ecological function performed by the Lower Klamath Lake area must be 
restored.
    The Klamath Basin water supplies include, of course, the Trinity 
River. Yet the contributions to the Lower Klamath River from the Upper 
Basin cannot effectively be replaced by an injection of emergency water 
from the Trinity River. Although emergency measures of that kind were 
performed in 2002 and 2013, and are planned for 2014, those late summer 
releases will not help restore fish populations in the Upper Klamath 
River and are damaging to the tribal fishery on the Trinity. A basin 
wide approach which controls both diversions from the Upper Klamath and 
diversions from the Upper Trinity to the Central Valley project must be 
used.
    Question 6. In your opinion, what were the most surprising findings 
in DOI's dam removal studies? What were the most controversial parts?
    Answer. The Environmental Impact Statement for Klamath facilities 
removal prepared by the Interior Department was disappointing. The EIS 
contained an incomplete evaluation of alternatives, failed to evaluate 
the impacts of the KBRA, and ultimately failed to meet the purposes of 
NEPA to facilitate informed decision making and public participation. 
For example, the description of the no action alternative was 
inaccurate and misleading because it presumed that the FERC licensing 
process for the hydroelectric dams would remain stalled, 
notwithstanding the requirements of law. The EIS failed to evaluate the 
effects of the KBRA's guaranteed minimum irrigation diversions. 
Throughout the EIS, the effect of the KBRA water diversion 
``limitation'' was inaccurately described. Not only is 100,000 acre 
feet not reduced from current demand through the KBRA, but the KBRA 
water diversion results fall well below the ESA requirements 
established in Biological Opinions. Buried in the EIS is Appendix F 
``Exceedence Flows for No Action and Dam Removal Alternatives Based 
Upon Index Sequential Hydrology.'' Appendix F makes clear that the EIS 
proposed action (which includes KBRA flows) produces river flows well 
below the Hardy, et al. (2006) recommendations for in stream fisheries 
needs in all exceedence water year types except extremely wet 
hydrological conditions.
    The EIS alternative analysis was also inadequate because it failed 
to evaluate a no KBRA alternative. Further, it failed to evaluate a 
federal takeover alternative pursuant to the Federal Power Act. In 
addition, it failed to evaluate--or even consider--a water quality 
improvement strategy that would lead to compliance with the water 
quality standards of the Hoopa Valley Tribe and the State of 
California.
    One of the most controversial parts of the EIS was its failure to 
disclose that execution and implementation of the KBRA would result in 
an historic termination of the United States' trust relationship with 
the Klamath Basin Indian tribes who have not consented to provisions 
subordinating their reserved water and fishing rights. In the KBRA, the 
United States purports to provide assurances, without the consent or 
approval of the Hoopa Valley Tribe, that the United States will not 
assert the Hoopa Valley Tribe's tribal water, fishing, or trust rights 
in a manner that will interfere with the Klamath Reclamation Project's 
priority right to divert 330,000 acre feet or more of water from the 
Klamath River. Those assurances would effectively terminate most of the 
United States' fiduciary obligations to the Hoopa Valley Tribe. 
Although this issue has been a highly publicized area of controversy, 
the EIS fails to mention it.
    One of the most striking parts of the Secretary's analysis is that 
it is based on the unrealistic and un-fundable KBRA plan. Frankly, 
there is no reason for federal managers and scientists to develop 
``scientific'' analysis on plans that could never be implemented as 
written. Again, the responsibility for this defect in the KBRA is 
attributable to the federal managers of the KBRA/KHSA negotiation 
process.
    In addition, the KBRA ignores Trinity legal obligations. 
Arbitrarily disconnecting the Trinity River, the largest tributary of 
the Klamath River and producer of half of Klamath origin fish, from the 
needs of the Klamath makes no sense and leaves management options for 
the Klamath/Trinity basin with far fewer tools to address problems than 
are available.
    Also, the Secretary's dam removal plan ignores the Administration's 
own policy and legal positions on the nature of tribal trust 
obligations. The Secretary's plan treats all tribes as if all have 
rights from a single legal source. As discussed above in Response 1(c), 
this is not the case. Even the Department's own written legal positions 
are inconsistent with positions it takes in the dam removal study. 
Efforts to have the administrative record clarified regarding the 
United States' formal positions on Klamath/Trinity Basin tribal trust 
obligations were summarily dismissed.
    Among the most controversial Indian policy provisions of the KBRA 
and the related KHSA is that the Secretary has linked tribal trust 
obligations regarding water management to the dam removal plan when 
there never has been a legal connection between the two. The 
Secretary's policy choice to benefit the Klamath Reclamation Project by 
supporting congressional authorization to waive or abandon federal 
trust obligations to any tribe that does not consent to the KBRA has 
also created significant tribal concern around Indian Country. This 
unilateral and adversarial change in the federal trust relationship is 
in sharp contrast to presidential policy (Executive Order 13175, as 
reaffirmed by President Obama on November 5, 2009). The Affiliated 
Tribes of Northwest Indians (ATNI Resolution #09 63 and ATNI Resolution 
#12 64) and the National Congress of American Indians (NCAI Resolution 
#PSP 09 051 (2009) and NCAI Resolution #SAC 12 017) have already 
reacted against this backsliding from the progressive and positive 
Indian policies that we have experienced over the past 50 years.
    Today, even though the problems associated with the KBRA are 
manifest, the KBRA remains connected to the KHSA. It is unfortunate 
that Federal Government officials spent thousands of dollars and 
several years pursuing a Klamath basis solution that they either knew 
or failed to understand was not able to be implemented. Under any other 
circumstance, the Secretary would have had direct legal obligations to 
deal with the problems associated with operation and relicensing of the 
Klamath River hydro dams pursuant to the Indian provisions of the 
Federal Power Act. Instead, the Administration is using the federal 
trust relationship as a bargaining chip against the tribal trust 
beneficiary.
    Question 7. Is there a point in the future at which you would no 
longer support this process going forward if Congress has yet to act?
    Answer. For the reasons stated in these responses, the KBRA cannot 
be implemented in its present form. The Hoopa Valley Tribe has 
constructive and creative proposals that it has repeatedly brought to 
the KBRA discussions. Now that there appears to be a fresh appreciation 
for the difficulties with the KBRA that have long since been identified 
by the Tribe, maybe a new and successful approach can be taken. The 
Tribe stands ready to participate in any such effort.
    Certainly, the problems in the Klamath River must be fixed. Klamath 
River water is over-allocated. Likewise, the Trinity water is over-
allocated. The Secretary has existing authority and responsibilities to 
make the necessary adjustments to Klamath Reclamation Project and CVP 
water operations as well as Delta Planning models to preserve the 
integrity of the Trinity River Restoration Program, Trinity Dam cool 
water pool, and meet Trinity River and Lower Klamath River needs and 
rights. It also has the authority to bring the Trinity and Iron Gate 
Fish Hatcheries in line with modern day mixed stock fisheries.
    The Secretary, however, has no authority to satisfy the Klamath 
Project demands for water at the expense of tribal trust obligations 
and fishery and environmental responsibilities. We oppose the linkage 
of the KBRA with the KHSA and will oppose legislation that would 
maintain that linkage.
    In summary, the Tribe has offered a comprehensive and sustainable 
long term approach to Klamath Basin-wide management with the Joint 
Directorate and use of concepts previously provided for in Pub. L. 99 
552.In the meantime, the urgent need is for the Secretary to implement 
measures in the next several weeks to protect the lower Klamath fishery 
from a catastrophic die off in 2013 and beyond.
                                 ______
                                 
      Responses of Becky Hyde to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The federal government plays a significant role in the 
rural Klamath Basins' economy from our headwaters to the ocean. Because 
agriculture along with timber are the two pillars of our communities 
economy today, decisions made by the federal government have a direct 
tie to our regions financial stability, or lack of stability. For 
agriculture water certainty, regulatory certainty and competitive power 
remain the three drivers of stability. All three are dependent on 
careful decision making by the federal government, and recognition of 
the federal governments unique role and controlling interest in our 
economy.
    Reserved water rights and the Klamath Tribes' priority to instream 
flows in the tributaries to Upper Klamath Lake are affecting the 
certainty of agriculture water in the off project tributary 
agricultural communities above the lake. During the current drought, a 
minimum of 95,000 surface water irrigated acres, which primarily 
produce grass necessary to support the basins' livestock industry, are 
going dry or face water shut-offs because there is no settlement with 
the Klamath Tribes, and their trustee, the federal government. 
Settlement in the off project lands has been put on hold for years as 
crisis on other fronts-- where the federal government has 
responsibility namely around biological opinions relating to the 
federal governments Endangered Species Act-- have taken time and 
resources to deal with. These issues bubbled up to the surface when the 
Klamath Reclamation Project had irrigation water shut off in 2001. The 
off project communities lagged behind in creating a completed water 
settlement and so their lands along with the refuges, another 
responsibility of the federal government, are going dry today. The 
Klamath Basin Restoration Agreement (KBRA) includes a section 16 that 
was created with the intent is to settle the outstanding issues in the 
off project tributaries. Other sections in the (KBRA) would address 
federal responsibilities around the Endangered Species Act, Clean Water 
Act and competitive agricultural power rates similar to other rural 
agricultural communities in the West.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. The best case scenario for the Klamath Basin is to live 
with a reasoned water balance, which provides water that sustains an 
agricultural economy, while providing water and habitat restoration to 
sustain a healthy fishery; and, adequate water to provide for the 
health of the regions national wildlife refuges. Years of negotiation 
have gone into developing a strategy for balancing the water to meet 
the important outcomes above.
    The worst case scenario is what the off-project community and the 
refuges are experiencing this summer. No basin wide drought plan in 
place to grapple with the unique ``drought year types'' and no long-
term water balance in place for the basin. This worst case scenario has 
basically played itself out in a continuing rotating crisis throughout 
the basin. In 2001 it effected the Project Farmers, in 2002 it effected 
the Tribal communities with massive lower river fish die offs. The 
ocean fishing community has been effected as well. When true solutions 
are not implemented, like the water balance in the KBRA, we can expect 
more crisis circumstances playing out from the headwaters to the ocean, 
with the result being continued harm to the region's economy.
    Question 3. Has there been any discussion of further paring down 
the agreements? Has there been any discussion of nonfederal parties, 
including nonprofits, states, or local entities, taking on any of the 
actions that are currently envisioned as federal responsibilities?
    Answer. Parties to the KBRA did pare the agreements down by 18 
percent in 2010 in response to feedback about the KBRA budget. It's 
Upper Klamath Water Users belief that more cuts can be made to the 
overall KBRA through careful consideration in the various line items. 
However, this is at its heart an Indian Water Rights Settlement, 
dealing with federal issues that have built up over decades. We cannot 
simply kick the can down the road, and not solve the base problems. If 
the goals can be met with less dollars, that will be acceptable.
    It seems that with the renewed federal interest by political 
leaders, other private dollars may be drawn to the solution. There's a 
strong interest in the basin from the non-profit community, and I see 
this gaining strength and momentum into the future. The state of Oregon 
for example has committed to the basin through the Oregon Watershed 
Enhancement Boards, (SIP) program. We should not rule out any partners 
that can bring health to the Klamath Basin. Working toward a reasoned 
solution helps guide private dollars. Nobody wants to invest in a train 
wreck. Investment in building a future for one of the nations national 
treasures, the Klamath Basin, based on a reasoned plan, is much more 
compelling. The federal government sets a tone for how the basin is 
viewed by its own willingness to engage.
    Question 4. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. The water balance in the KBRA is designed to address in a 
reasoned way the water supplies in the Klamath Basin. Years of work 
have gone into the basic structure under the water balance.
    Question 5. Is there a point in the future at which you would no 
longer support this process going forward if Congress has yet to act?
    Answer. If Congress fails to act on agreements to move the basin 
forward out of rotating crisis, that is not in our hands. We will 
continue to support reasoned agreements that bring the basin out of 
crisis and are thankful that leaders who can move this through Congress 
are engaged.
    Question 6. What is the likely outcome of the recent call on water 
made by the federal government and the tribes? For instance, how would 
it affect project irrigation allocations for the remainder of the water 
year? How might it affect off-project irrigators and ranchers?
    Answer. The outcome of the recent call on the water to the off 
project by the federal government and the Tribes is that it's likely 
that a minimum of 95,000 irrigated surface water acres will go dry. 
Much of the off project has already been shut off, and is drying out. 
The Project irrigators are best suited to speakabout the impacts this 
year has on them. The off project is seeing families need to move 
livestock, or sell animals early to deal with the impacts of the calls. 
This potentially does millions of dollars worth of harm to the off 
project community.
    Question 7. You mentioned the need to bring these `fiercely 
independent' off project families to the negotiation table and to get 
them involved in this process. What do you think are some ways in 
particular we could get them involved?
    Answer. We have some ideas at Upper Klamath Water Users about how 
our delightful and fiercely independent families in the off project can 
be better drawn toward a settlement that brings power, regulatory and 
water security to families irrigating in the off project.
    I think the single most important factor that will bring families 
to the table and get them involved in the process is if they believe 
that our state and federal government are seriously engaging these 
issues with an eye toward helping create water security, competitive 
power rates and regulatory security. The families need to know that 
they are engaging in a process that is moving toward an actual 
settlement for their family. I believe the task force with solid across 
the board convening from our elected officials is a good step forward 
and helps send that message.
    I also think education around how a settlement can be achieved in 
the off project is important. A water settlement with the Klamath 
Tribes will be achieved if a critical mass of individual farm and ranch 
families representing their own private property rights and their own 
water rights settle. So, one family does not create a settlement, but 
many families together do. This structure is different than the Klamath 
Project irrigators who have established irrigation district boards that 
make the decisions, and were able to sign off on settlement many years 
ago. Settlement with the off project is different, families maintain 
control and independence, but will need to join together with other 
families to create a critical mass and therefore a water settlement. 
How to settle needs to be clear. The process needs to be transparent, 
and inclusive.
    There are various established groups in the off project that have 
been at settlement tables on and off for years representing clusters of 
landowners, and there are some families that as individuals have worked 
to create settlement outside of an established group. None of these 
groups have ever represented all of the off project irrigators. None of 
these factions at this point even represent the majority of families, 
as far as we can tell by looking at the data. The off project has been 
roughly divided on these issues in the past with families either 
affiliating more closely with a settlement approach or a litigation 
approach with their time and dollars. Both approaches have been seen by 
individuals as a serious path forward. Some families actually belong to 
more than one group. Some families don't belong to any group. This has 
created division and misunderstanding in the off project. At the end of 
the day families have just tried to do the best they can to bring 
stability to their farms and ranches.
    I think we bring more people to the negotiation table, and get more 
families involved when the groups that have been most involved in the 
past put aside their bickering and get to work. Every family in the off 
project should feel like they own a part of this settlement, and it's 
in their best interest to participate. Regardless of what has happened 
in the past-we should look forward to how we put the components 
together to create a stable and healthy agricultural community. I've 
talked to many families across the spectrum of groups over the last 
several weeks since the hearing that Senator Wyden held. I believe 
families in the off project want to get along with one another and be 
comfortable as neighbors, and they want a settlement. Ranching 
communities typically look out for one another, and the division has 
been dispiriting for everyone. I have not heard any family say that 
they don't want a settlement.
    I also think it's critical that families and the interested 
community at large understand what the alternative to settlement looks 
like. We have a taste of it today, as we live with the early results of 
the 35 plus year adjudication process playing itself out. Having your 
water shut off and watching land even with very good water rights dry 
up, is a painful testament to where we find ourselves today. If 
families choose to continue on the litigation path what are the odds of 
success? If we continue to fight, when will we see the fruits of our 
labor? Will it bring greater or less security to the community? Will it 
address other outstanding issues like the need for competitive power, 
and the regulatory issues that face us?
    The bickering in the off project has simply created confusion both 
for landowners who are affected and need to make decisions, and also 
for the community at large. Being transparent to each family about what 
is happening as we move forward is critical, and yet not simple. How 
can we best keep hundreds of landowners informed as we move forward? 
All levels of government can help be a part of this transparency. 
Neighbors can help one another by reaching out and trying to understand 
the views on each side of the fence that has divided us. The concept of 
what a settlement need to look like must circulate freely in the 
community.
    The Klamath Tribes have said repeatedly that they would like to 
have a settlement with the off project operating under section 16 of 
the KBRA. They have printed in the newspaper the basic framework of 
what that settlement might look like. This is great time to get the off 
project together, through whatever means we can to help create this 
settlement.
                                 ______
                                 
        Responses of John Laird to Questions From Lisa Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. At the turn of the 20th century, the federal government, 
under the guise of the Reclamation Act, turned the wetlands of the 
Klamath Basin into a series of dikes and canals for farming purposes. 
It then encouraged WWI veterans and others to come to the region, 
offering them free Klamath project parcels to farm. At that time, there 
was a cultural ethos about going west to create greater opportunity and 
populate the more barren corners of the nation and the federal 
government actively cultivated this in the Klamath. This federally 
incentivized migration created a new demand for electricity that drove 
the development of the hydroelectric facilities Pacific Corp now 
operates, including those dams considered for removal under the Klamath 
Basin Settlement Agreements.
    The first dam of the four at issue here was built in 1918, the last 
in 1962 under federal license issued by the Federal Regulatory Energy 
Commission (FERC). Subsequently, in 1966 a massive fish-kill was 
recorded by the press, though Basin tribes chronicle a loss in their 
harvest even earlier than this. Today the algae behind Copco I is so 
severe it affects recreational users, prompting multiple federal 
agencies to get involved in restoration and water quality efforts. 
Pacific Corp's license having now lapsed, FERC finds itself once again 
charged with relicensing these dams. Yet this time, it faces the 
negative consequences of historic federal decisions, and the attendant 
outcry from other water users in the Basin who seek retrofits and 
upgrades that have the potential to be extremely expensive-an expense 
that will be borne by ratepayers per federal law.
    The federal government is also trustee for six recognized Basin 
tribes and continues to have a fiduciary duty to promote their 
sovereign rights as weighed and considered against the backdrop of the 
public trust. This responsibility is underscored by a continual drought 
crisis that impacts tribes, farmers and fisherman alike--resulting in 
nearly constant demand for federal relief from all sectors. This 
federal responsibility is also framed by a modern understanding of how 
these historically inter-connected Basin uses implicate the environment 
and sustainable management practices. Finally, though not least in 
importance, an emerging body of scientific evidence contends that these 
issues will only be exacerbated by climate change over the coming 
century, an issue which will place the federal government in a key 
emergency management role.
    In short, the federal government continues to operate the Klamath 
Project, manage and control the wildlife refuges, and exercise broad 
public and tribal trust responsibilities which require significant work 
and investment to ensure the continued viabil ity and health of the 
Basin's diverse population with or without the dams. It also remains 
responsible for ensuring compliance with a host of federal laws, not 
the least of which is the Endangered Species Act, which set the stage 
for these Agreements in 2001 when legally-driven water shut-offs caused 
massive losses in the farming and iiTigated communities, and the 
attendant rewatering in 2002 resulted in devastating fish kills. In 
short, the federal government unwittingly laid the foundation for the 
crisis in the Basin decades ago, and continues to control and determine 
how the various interests are prioritized and protected. While 
hindsight is of course 20/20 and no one party entirely shoulders the 
responsibility for restoration of the Basin, there continues to be a 
significant federal presence and control in this Basin that warrants it 
being asked to lead the way given its historic role and its vast reach.
    Question 2. In your opinion, what is the `` best case'' scenario 
for the basin in the future? What is the ``worst case'' scenario?
    Answer. Given the strife that has plagued the Basin, and the work 
it took to reach this compromise, as well as the diversity of the 
coalition, the best scenario at this point would be for Congress to 
ratify the Klamath Settlement Agreements and support the coalition. The 
worst case scenario would be to have the present coalition resort to 
adversarial positions that would most likely result in long term 
litigation at the expense of the environment, farmers, local 
communities, state fisheries, tribal sovereignty, in the hopes that 
untested legal theories will generate the same or similar good results.
    Question 3. What is the s tatus of the California State Water Bond 
which is intended to fu nd a large part of dam removal? How would dam 
removal be funded without the California water bond?
    Answer. The bond is scheduled to be on the November 2014 ballot. It 
presently includes funds for dam removal. If it does not include funds 
for dam removal when it actually goes before the voters, or if the bond 
does not pass, California will examine other potential sources of 
restoration funding for rivers and streams and water quality generally.
    Question 4. Has there been any d iscussion of further pa ring down 
the agreements? Has there been a ny d iscussion of non federal parties, 
including non profits, states, or local entities, taking on a ny of the 
actions that are currently envisioned as federal responsibilities?
    The responsibilities in the Agreements were assigned based on the 
issues plaguing the Basin and the realistic ability for them to be 
resolved--all parties received benefits which continue to motivate them 
to commit to the overall bargain and remain one committed Coalition, as 
opposed to individually interested parties. Unhinging the careful 
balance struck by the Agreements could threaten the entirety of the 
deal. It is true that each party could contemplate hypothetical 
approaches that would serve their unique needs better, and which 
standing alone would seem less complex, but this is unlikely to result 
in a practical outcome as successful as that which was achieved through 
the Agreements. It is difficult to conceive of a piecemeal approach to 
these Agreements that could achieve the same benefits.
    That said, we do recognize that Congress has ultimately authority 
to approve these Agreements and ensure the most effective use of public 
dollars. Accordingly, we remain willing and able to discuss alternative 
approaches in implementing the Agreements. Since there is a wide-
reaching federal obligation in the Basin presently, the concept behind 
funding the obligations in the KBRA particularly, was simply to 
leverage the $532 million infusion of funds already likely to be 
programmed by Congress for the Basin in the next 15 years, and 
repurpose those funds to meet real time needs as agreed upon by the 
diverse Coalition, with as fey. additional federal dollars as possible, 
and far fewer dollars than would be required in emergency spending if 
problems become worse or remain unresolved in perpetuity. In fact, if 
Congress were to fund the basin as it has been, and is likely to be for 
the next two decades without these Agreements being ratified, the 
number of federal dollars spent would far exceed the amount of new 
federal appropriations the parties are seeking, and would only increase 
over time with no end point in sight. We look forward to analyzing 
these funding questions more closely and working with Congress to 
achieve the results envisioned by the Agreements.
    Question 5. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KIISA; 
and 2) available and feasible under existing authorities?
    No. In my view there is not another practical solution to legally 
improving water quality and supply in the Basin in the same timeframe, 
with the same level of community buy-in, or with such limited public 
investment Any individual could conceivably imagine an approach that 
would better serve his or her personal interests at the expense of 
other users, but in terms of a collective agreement, there is no better 
approach than this settlement.
    Question 6. In your opinion, what were the most surprising findings 
in DOl's dam removal studies? What were the most controversial parts?
    Answer. There were no great surprises, as California has already 
undertaken dam removal in an effort to improve water quality for 
endangered fish. That said, there were two useful pieces of information 
which support a positive determination and which suggest proceeding to 
dam removal is in the interest of the public. First, the sediment that 
is behind the dams is not toxic. Second, when that sediment is 
released, if timed per the report's recommendation, major species will 
be in tributaries and thus will not face the types of impacts they 
otherwise might. It was also good to find that the creation of nearly 
5,000 jobs and a $700 million interstate economy could result from the 
implementation of the Agreements. Finally, it was good to see that the 
actual removal will likely cost less than originally intended, and is 
in fact as feasible if not more so than keeping the dams in place.
    Question 7. In your view, how did the settlement agreements affect 
the recently released 2013 biological opinion? Was this influence (if 
there was any) pos itive or negative?
    Answer. The biological opinions are distinct and not part of the 
Agreements and the Agreements cannot legally change the federal 
requirement to issue those opinions for purposes of species protection. 
They are independent determinations the federal government must provide 
in order to incidentally take endangered species through operations of 
the Klamath Project, and are based on the best avai lable science as to 
what level of flows are required to protect endangered fish. They will 
continue to be required and apply to the Klamath Project operations 
with or without the Agreements and the flow recommendations and other 
management requirements of those opinions will govern how the 
Agreements are implemented.
                                 ______
                                 
    Responses of Michael Kobseff to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. Aside from commitments related to the Klamath Irrigation 
Project, the federal government's primary responsibilities and 
priorities in the Klamath Basin should be:

          I. The honest and practical administration of the Federal 
        Power Act and connected environmental and administrative laws; 
        and
          II. The effective and responsible management of federal 
        forest lands to restore forest health and mitigate negative 
        impacts to water supplies.

    The KHSA and KBRA have been constructed upon flagrant violations of 
the Federal Power Act and the Clean Water Act. The parties who have 
entered into these agreements have contracted around federal law and 
unilaterally created a 14 year extension of the license for the Klamath 
Hydroelectric Project with the acquiescence of the Federal Energy 
Regulatory Commission.
    The normal processes under the Federal Power Act and Clean Water 
Act should resume, and the Klamath Project should be relicensed with 
the protection, mitigation, and enhancement measures that have already 
been prescribed by the resource agencies. If PacifiCorp is no longer 
interested in operating the project, it should be transferred to a new 
joint powers authority that will operate the project for maximum 
benefit to fisheries and water quality while maintaining hydroelectric 
production and reasonable rates for power customers.
    Management of the three million acres of National Forest System 
lands in the Klamath River watershed is another ongoing tragedy. Not 
only has the Northwest Forest Plan precipitated economic collapse and 
ongoing distress, but the management prescriptions currently being 
applied to federal forests are detrimental to water supplies, water 
quality, and fisheries. The substantially overgrown conditions on much 
of the National Forest lands are continuing the trend of ever larger 
and more intense wildfires, while increased evapotranspiration reduces 
quantities of water that were once available in the Klamath River 
system to support native fisheries. Proactive management of National 
Forest System lands must resume.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. The ``best case'' scenario would be an acknowledgement that 
upper basin water supplies are unrelated to the lower four dams on the 
Klamath River. The focus of the upper basin should be on development of 
new water storage, compliance with water quality standards, and the 
completion of the judicial phase of the Oregon water rights 
adjudication.
    The ``worst case'' scenario would be to proceed with implementation 
of the KBRA and KHSA based solely on the aspirations and self-interest 
of the proponents and without scientific or financial groundings. There 
are substantial uncertainties related to the ultimate effects of the 
KBRA and KHSA on water quality and fisheries and the costs to 
PacifiCorp ratepayers and state and federal taxpayers. If the massive 
dam removal experiment is not successful, additional mitigation burdens 
will fall on the landowners and water users on the major Klamath River 
tributaries, particularly on the Shasta River and Scott River in 
Siskiyou County.
    Question 3. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. The removal of the PacifiCorp dams is detrimental to water 
supplies in the middle and lower reaches of the Klamath River and does 
nothing to benefit water supplies in the Upper Basin. In the current 
dry water year, PacifiCorp has offered to reoperate its dams to provide 
additional fish flows at critical times. This operational flexibility 
and source of water will be lost with dam removal.
    In the 1970s and 1980s, small dams were employed in parts of the 
upper watersheds to retain early season runoff and supplement summer 
water supplies. These dams have fallen into disrepair and are no longer 
effective. The dams should be returned to their former operating 
condition.
    As noted above, improved management of National Forest System lands 
will also increase the availability of water for consumptive uses and 
instream flows.
    Question 4. In your opinion, what were the most surprising findings 
in DOI's dam removal studies? What were the most controversial parts?
    Answer. As outlined in the written testimony submitted by Siskiyou 
County, there have been numerous and ongoing breaches of scientific and 
scholarly integrity throughout DOI's process, which has been driven by 
the self-interest of the proponents of the KBRA and KHSA and the 
predetermined conclusion by former Secretary Ken Salazar that dam 
removal is the one and only approach to improving water quality and 
fisheries on the Klamath River.
    Cost-Benefit Analysis--From a financial perspective, the most 
egregious finding from DOI was the overall cost-benefit analysis, which 
only determined that dam removal was beneficial by concocting a 
hypothetical ``non-use'' valuation through a nationwide public survey. 
Without this non-use valuation, the cost-benefit analysis for the KHSA 
and KBRA result is negative.
    Threatened Coho--The final EIS/EIR misstates the findings of the 
expert scientific panel on Coho salmon. The panel pointed out that much 
of the scientific data necessary for analysis is missing. It stated 
that initial dam removal activities would kill 100 percent of Coho 
populations in the Klamath River. Then any population increases would 
be ``small'' for at least a decade. After that, increases could be 
``moderate,'' but only if the KBRA is ``fully and effectively 
implemented.'' The panel concluded that there was a ``high 
uncertainty'' that this kind of implementation would happen, leading to 
a ``low likelihood'' of even moderate population responses by Coho from 
dam removal.
    Steelhead Trout--The expert panel did state that steelhead 
populations ``could'' increase due to access to new spawning and 
rearing habitat. However, they had insufficient data to estimate 
populations.
    Chinook Salmon--The Iron Gate Fish hatchery would be closed eight 
years after dam removal, but the EIS/EIR fails to analyze impacts on 
the downstream and ocean fishery. The expert Chinook salmon panel 
stated that they expected a possible increase of just 10 percent in the 
average number of Chinook spawners, but the EIS/EIR mysteriously claims 
an 81.4 percent increase. The panel also stated that increases in 
spring Chinook were ``even more remote'' than for fall Chinook. Based 
upon the wildly overstated projections, the EIS/EIR outrageously 
projects increased harvest levels of about 50 percent.
    Other Fish--he Resident Fish expert report forecasts an increase in 
redband trout, which is a major predator to juvenile salmon and 
steelhead. Because of increased sand/silt in the river bottom, the 
expert panel report states that Pacific lamprey habitat capacity could 
increase by 14 percent. The EIS/EIR seizes on this to assume that 
lamprey production will also increase by 14 percent. The study fails to 
fully analyze effects of competitive interactions among fish or to 
analyze impacts on 16 resident native fish.
    Sediment--Information in the EIS/EIR indicates that 8,430,000 cubic 
yards or 3,540,600 tons of sediment could be released in the first year 
after dam removal. However, sediment deposition is not expected to 
exceed two feet. In their analysis, the coho/steelhead panel assumed 
only 200-300,000 tons and the Chinook panel 300-400,000 tons of 
sediment. The expert panel noted that the impacts of high sediment will 
last two years. Coho have a three-year life span, so there are rotating 
``cohorts'' or age-similar groups that cycle through every three years. 
Two of the three cohorts will be decimated by two years of sediment 
flows.
    Water Quantity--The Coho expert panel notes that there will be 
``potentially lower flows during the fall'' caused by dam removal which 
``may reduce the ability of threatened Coho to migrate through the 
mainstem in order to reach spawning areas in tributaries.''
    Water Quality--The Coho expert panel indicated that while dam 
removal may lower average daily temperatures, the ``highest 
temperatures experienced by fish will increase.'' (Salmon experience 
distress when temperatures exceed 20 C.)
    The Klamath dams currently provide bioremediation for the high 
nutrient content of the water as it passes though the reservoirs. The 
water slows and the river self-cleanses much of the algae produced in 
the volcanic and phosphorus-rich Upper Basin. The dead cells drop to 
the bottom, which is why the sediment behind the dams has such a heavy 
organic component.
    Nutrient loading is currently a substantial limiting factor to 
anadromous fish in the Klamath River. It stimulates algae growth that 
can deprive water of oxygen and it provides habitat for the worms that 
are hosts to fish-killing parasites that have fatally infected a major 
percentage of the juvenile fish leaving the system. The Coho panel 
report states that all the models recognize that ``total nutrient 
concentrations in the Klamath River downstream of Iron Gate Dam would 
increase.'' It recognizes that there will be ``long-term increases'' in 
harmful algae and that this will have a ``significant impact,'' making 
problems worse. Both the Coho and Chinook panels noted that dam removal 
could spread fish-borne disease upstream.
    The Chinook panel admits that reductions in nutrient loading and 
water temperatures would be dependent on major upstream actions, such 
as converting 40 percent of Upper Basin irrigated farms (44,479 acres) 
to wetlands.
    Floods--Currently, the Klamath dams reduce high peak flood flows 
and delay them for about nine hours. The EIS/EIR seriously understates 
the increased risk of flood due to dam removal by modeling 100-year 
events using daily average flows rather than peak flows. It then 
presumes no substantial increase in flood risk because its projected 
average flows are comparable to current FEMA peak flows. In actuality, 
this means that post-dam-removal flood levels would be substantially 
higher than current flood levels. In addition, sediment deposit may 
raise the bed of the river as high as two additional feet. The EIS/EIR 
fails to assess the costs of removing the 30-some residences and 
structures in the floodplain, and does not assess the costs of the 
increased risk of inundation to bridges and other structures. Having 
eliminated the liability of PacifiCorp and the federal and state 
governments through the KHSA, addressing the impact of these exposures 
is deferred to the future Dam Removal Entity.
    Tributaries--The expert Coho fish panel analysis is predicated upon 
the fact that in the tributaries the KBRA will accomplish: 13 miles of 
floodplain rehabilitation; 198 river miles of large woody debris 
placement; 153 river miles of cattle exclusion; 21,800 acres of 
acquisitions or conservation easements; improvement of 73 fish passage 
sites; planting of 346 riparian acres; securing of minimum instream 
flows for fish (including purchase of water rights); 1,330 miles of 
road decommissioning; and treatment of 240 sediment sources. It also 
presumes the conversion of 40 percent of Upper Basin irrigated farms 
(44,479 acres) to wetlands. The EIS/EIR fails to analyze the impacts or 
costs of these actions.
    Real Estate Evaluation--The year 2005 was the first year that 
property values started to be affected by rumors of dam removal, yet 
base year valuation for the study was 2008--years after some of the 
damage had already been done. Structural and site improvements were 
specifically excluded from the impact analysis and the parcels to be 
valued were hand-picked through the scope of work. Impacts assumed that 
the reservoirs had been fully restored in vegetation, which would in 
actuality take many years. This substantially understated impacts. As 
borne out by the recent Condit dam removal, homeowners could also be 
required to deepen their wells. City of Yreka's Water Supply--Engineers 
for the City of Yreka have determined that the cathodic intake process 
for the city's water supply will be negatively impacted. Also, plans to 
relocate supply pipes from below reservoir waters to suspension from a 
bridge create new security risks and create increased maintenance 
issues.
    County Infrastructure--Dam removal will require tons of heavy waste 
being transported to disposal sites. The roads and bridges in the area 
have not been designed to bear such weight. In addition, the EIS/EIR 
characterizes main roads (such as Copco Road) as paved and in good 
condition, when 80 percent of the road is in very poor to failed 
condition. The EIS/EIR admits that at Copco 2 ``[t]he existing access 
roads would require substantial upgrades to handle the hauling of the 
excavated concrete and provide access for a large, crawler-mounted 
crane.'' The EIS/EIR acknowledges that ``[c]onstruction equipment could 
damage existing roads'' and that three bridges along the route ``could 
be incapable of supporting and withstanding the weight of heavy 
deconstruction and hauling vehicles.'' Yet the EIS/EIR defers further 
cost analysis of these very substantial and expensive ipacts ``until 
later.''
    The EIS/EIR indicates that 1,241,500 cubic yards of earth and 
126,000 cubic yards of concrete will be disposed on or near site on 
lands currently designated open space or conservation. 7,200 tons of 
metal and 4,500 tons of rebar will be disposed offsite-some of which 
will go to the Yreka or Klamath Falls landfill. The EIS/EIR is silent 
as to the environmental effects or impacts on landfill capacity.
    Other Impacts--The EIS/EIR makes no effort to calculate the loss of 
county tax revenues from facilities removal, property devaluation and 
farmland conversion, nor does it assess impacts to the integrity of the 
fundamental tax base to support County services.
    There is no analysis of impacts to exposed Shasta Indian cultural 
resources.
    Question 5. In your view, how did the settlement agreements affect 
the recently released 2013 biological opinion? Was this influence (if 
there was any) positive or negative.
    Answer. The only aspects of the settlement agreements that are 
supported by Siskiyou County are the interim measures that are being 
implemented to improve water quality and Klamath River fisheries. These 
interim measures are recognized in the 2013 biological opinion and, in 
conjunction with the conservation measures included in the opinion, 
provide the basis for the non-jeopardy determination for Lost River and 
shortnose suckers and Coho salmon. This conclusion by the National 
Marine Fisheries Service and U.S. Fish and Wildlife Service 
demonstrates that operation of the Klamath Irrigation Project can be 
reconciled with the demands of the Endangered Species Act along with 
the ongoing operation of all existing facilities on the mainstem of the 
Klamath River.
                                 ______
                                 
                                      Board of Supervisors,
                     County of Humboldt, Eureka, CA, July 11, 2013.
Hon. Ron Wyden,
Chair, Energy and Natural Resources Committee 304 Dirksen Senate 
        Building Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy and Natural Resources Committee 304 Dirksen 
        Senate Building Washington, DC.
    Dear Chair Wyden and Ranking Member Murkowski,
    Thank you for the opportunity to provide these clarifying responses 
to your questions regarding water resources issues in the Klamath 
Basin.
    In broad terms, the two main concerns heard at the hearing were 
that the cost of the agreements was too high and that there were too 
many parties not yet on board. These opposing concerns posit a 
conundrum, as bringing more parties to the table likely requires 
providing more benefits to those parties, which likely adds to the cost 
of the agreements. While this is perhaps a valid concern, we do not 
believe it must be the case, as the cost of bringing other parties to 
the table must be weighed against the cost of doing nothing.
    The core decision here is whether the federal government should 
continue an ongoing and endless cycle of unplanned disaster relief and 
bailouts to maintain an ongoing crisis situation, or whether the 
government should instead invest in this basin to fix the underlying 
problems so as to bring sustainability and predictability to the basin. 
As demonstrated in the attached answers, when the cost of these 
agreements is balanced against those ongoing costs, it becomes clear 
that these agreements truly pay for themselves over their 15-year 
timeline, with less than $300 million in new federal spending 
leveraging some $549 million from non-federal sources.
    The County of Humboldt greatly appreciates your keen interest and 
enthusiasm for working to resolve these long-standing water resource 
issues in the Klamath Basin, and we look forward to working with you 
and the Committee to improve these agreements where possible so as to 
move forward towards implementation.

            Sincerely,
                                              Mark Lovelace
                                           3rd District Supervisor.

    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The federal government has many enumerated responsibilities 
in the Klamath basin, including protecting and controlling the waters 
of the United States, managing fisheries, wildlife refuges, tribal 
trust resources and public lands and authority over the basin's 
hydropower project. These ongoing responsibilities, and their 
associated ongoing spending of some $17.4 million per year, exist here 
in the Klamath Basin regardless of the presence of the Klamath 
Agreements. If these agreements fail, the federal government is still 
obligated to these responsibilities and their commensurate spending on 
into the future.
    In addition, the federal government also has a moral responsibility 
to provide relief for communities struck by natural disasters such as 
drought or catastrophic fish kills. Since 2001, the federal government 
has spent at least $181.4 million on emergency drought relief and 
disaster assistance in this basin, for an average of over $17 million 
per year. Combined with the ongoing spending that is regularly and 
routinely spent on programs in the basin, this amounts to over $34.4 
million per year, or more than $500 million over a 15-year period, just 
to manage an ongoing crisis situation that leaves no one happy, with no 
stability for either the farmers or the downstream fisheries, and with 
no end goal in sight.
    Effectively, the Klamath Basin is on public assistance, having 
suffered through decades of conflict, chaos and crisis, with the 
federal government having to pick up the pieces through ongoing 
subsidies. Instead, the federal government's responsibility should be 
to invest wisely to get this basin back to a more stable condition so 
that it can get off public assistance and move towards self-
sufficiency.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. Any of the individual interests in the Klamath Basin might 
well be able to project a ``best case'' scenario that meets their own, 
individual needs better than the Klamath Agreements. However, it must 
be assumed that increasing the benefits to any one party would almost 
certainly come at the expense of other parties.
    For the basin as a whole, the best case is an outcome that involves 
the many, disparate parties working together to collaboratively resolve 
these longstanding issues in a manner which creates the broadest-
possible agreement among the most parties. There is no value in 
considering hypothetical ``perfect'' outcomes which are either not 
possible or which are so unlikely as to be not worth pursuing. History 
would thus suggest that the agreements, as they exist, might well be 
the best-possible outcome that is realistically attainable. All that is 
needed is for Congress to act.
    The worst case scenario would be to see the various interests 
abandon years of negotiation to retreat back to their own corners and 
pursue only their own interests through litigation and conflict, rather 
than working together as a coalition to pursue the greater interest of 
the whole basin.
    Question 3. Has there been any discussion of further paring down 
the agreements? Has there been any discussion of nonfederal parties, 
including nonprofits, states, or local entities, taking on any of the 
actions that are currently envisioned as federal responsibilities?
    Answer. The parties are willing to consider further changes to 
reduce the cost of these agreements, so long as those changes are 
consistent with the purposes of the agreements. These agreements are a 
result of many years of negotiation between the diverse parties, 
including input from a number of parties who participated in 
discussions but who ultimately chose not to sign the final agreements. 
The parties have already worked to create what they believe are the 
broadest-possible agreements that provide the greatest benefit to the 
most parties.
    In 2011, the parties worked to find ways to reduce the cost of 
these agreements, ultimately managing to reduce their cost by 18 
percent, down to $798 million. The parties also agreed to extend the 
budget for the agreements over a 15 year timeline, rather than the 
original 10 years, reducing the amount of annual spending.
    As noted in the response to question 1 (above), the pattern of 
historic spending over the last 10 years or more in the Klamath Basin 
would indicate that, without these agreements, the federal government 
should nonetheless expect to spend well over $500 million dollars in 
this basin over the next 15 years. The difference between implementing 
these agreements and doing nothing is thus less than $300 million. That 
funding, in turn, leverages up to $450 million from PacifiCorps 
ratepayers and the State of California for dam removal, along with 
additional funding from non-federal parties for other KBRA-related 
activities, for a total non-federal match of some $549 million over 15 
years.
    Essentially, the federal contribution for this project has the 
potential to pay for itself by redirecting existing program funds, by 
ending the cycle of emergency spending and by leveraging non-federal 
funding at a rate of nearly 2-to-1 for dam-removal and KBRA-related 
activities.
    Question 4. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. Many of the parties, whether members of the coalition or 
those who chose not to participate or to sign the agreements, might 
individually be able to propose methods that better serve their own 
individual interests, but it is difficult to imagine other methods of 
allocating finite water resources that better meet the needs of the 
entire basin and which do not come with additional cost or at the 
expense of one or more of the other interests in the basin.
    Right now in the upper basin we are witnessing what happens if the 
allocation of water is left up to ``existing authorities''. In such 
scenarios, there will be winners and there will be losers. The only way 
to resolve these types of water disputes amicably is through 
negotiation, which is what led to the development of the Klamath 
Agreements. Those non-signatory parties who are currently facing water 
shut-offs would best be advised to come to the table and join with 
these agreements so as to be a part of this basin-wide solution.
    Question 5. In your opinion, what were the most surprising findings 
in DOI's dam removal studies? What were the most controversial parts?
    Answer. Though the Klamath Agreements are built on a mountain of 
data, the parties recognized the need for additional study before dam 
removal could go forward, to identify and mitigate potential impacts, 
to better predict costs and to improve the information base for 
decision making so as to determine the best way to proceed.
    Because of the pre-existing body of peer-reviewed science, these 
studies by the Department of the Interior did not produce any 
particularly surprising findings. Rather, the studies support and 
reinforce the assumptions that have gone into these agreements, 
confirming and validating the approach proposed by the parties.
    Additionally, the studies found that the costs of dam removal are 
quite reasonable, with the most probable cost identified as $292 
million; a reduction of $158 million from the $450 million upper-limit 
originally projected in the KHSA. These studies confirm that dam 
removal is in fact less expensive and more cost-effective than 
relicensing these dams, making dam removal the preferred approach for 
both PacifiCorp and its ratepayers.
    Question 6. In your view, how did the settlement agreements affect 
the recently released 2013 biological opinion? Was this influence (if 
there was any) positive or negative.
    Answer. The KBRA and KHSA are agreements only between the signatory 
parties, and as such they did not, and cannot, supersede or otherwise 
interfere with existing regulatory authorities such as the 2013 
biological opinion (BiOp) issued under the Endangered Species Act. 
Should Congress authorize and implement these agreements through 
enabling legislation, the KBRA would still rely upon future biological 
opinions to guide operations. In short, the KBRA/KHSA are responsive to 
biological opinions; not the other way around.
    The only indirect affect the agreements had on the BiOp was through 
an improved working relationship between the various interests, 
agencies and contractors, again validating the effectiveness of the 
collaborative, negotiated approach of the Klamath Coalition.
                                 ______
                                 
      Responses of Tom Mallams to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin
    Answer. In a ``normal'' situation, I would say the Federal 
Government would help in areas where State and local Government is not 
able to provide necessary functions, (with consent of local governing 
body). Currently, I feel the Federal Government has completely over 
stepped it's authority with unreasonable, unproven and heavy handed 
regulations, literally crippling our local and regional economies. With 
no economic ``balance'' being part of the equation, within State and 
Federal regulations, our ability to survive as individual communities 
and as a State is becoming more and more doubtful. The wise, beneficial 
use of Oregon's natural resources is essential to our very survival. 
The devastation caused by loss of timber harvests along with the 
current attack on irrigated agriculture will ultimately destroy any 
chance of reversing our downward economic plight. Another ``case in 
point'' is the Klamath Reclamation Project. The approximate 200,000 
acres of irrigated farm ground was developed with the help of the 
Federal Government. The Federal Government was NOT intended to have 
control forever. The entire Project operation was to be turned over to 
the local irrigation districts with zero debt. This has not happened. 
In fact, the Bureau of Reclamation, (BOR), continues to add more 
unproven debt upon the local irrigation districts, thus keeping the 
Project under Federal control.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. The ``best case'' scenario is for the local parties 
actually sitting down and resolving the water allocation issues outside 
of the adjudication, KBRA and dam removal. The dam removal and current 
KBRA aspect will NEVER have the support of the citizens and Congress. 
Any settlement by the local parties will be destined to fail if the 
current KBRA and dam removal are attached in any way.
    A possible starting point or model could be the 2005 settlement 
concept reached with the Klamath Tribe and the upper basin irrigators. 
This was signed in Congressman Greg Walden's office in Washington D.C. 
by the duly elected Tribal Chairman and representatives from the upper 
basin irrigators. The actual ``KBRA Framework'', 2007 draft is another 
possible starting point. This was signed by all the KBRA stakeholders 
in January of 2007.
    The ``best case'' scenario would also include the BOR turning 
control of the Klamath Reclamation Project over to the local irrigation 
districts as was intended from the beginning. The actual structure to 
do this already exists. The ``worst case'' scenario is doing nothing.
    Question 3. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. Only Mother Nature can create additional water and or 
snowpack. Continued conservation practices can help, but realize that 
literally millions of dollars have already been spent on conservation 
practices, many being done at landowner sacrifice and expense. Also, in 
the upper basin, over 100,000 irrigated acres have been taken out of 
agricultural production in approximately the last 25 years. Some of 
this land has been put into wetlands which historically consume more 
than four times as much water, per acre, as irrigated agriculture 
ground.
    The permanent solution should include deep cold off-stream storage. 
There are about a dozen possible sites within the Klamath Basin that 
would accomplish this. Adding up all the millions of dollars spent on 
the KBRA, dam removal and other numerous studies, the obvious solution 
could have been in place years ago. (Storage in shallow wetlands is not 
a viable option) The KHSA and KBRA literally eliminate any future 
possibility of meaningful off-stream storage, (section 20.5).
    Selective dredging of Upper Klamath Lake is another option. This 
has been done in other areas with remarkable success. Modern dredging 
equipment and techniques can clean and cool the water by deepening the 
lake bottom while also increasing the storage capacity. Attached to my 
testimony on June 20th, 2013, is one study showing how the dredging 
option can create a self-funding project.
    Question 4. In your opinion, what were the most surprising findings 
in DOI's dam removal studies? What were the most controversial parts?
    Answer. The DOI's dam removal study was nothing more than a 
predetermined outcome, with bought and paid for ``best available 
science'', attempting to justify it. I and Siskiyou County could go 
into a lot more detail showing this to be the case.
    A couple of short items:

          a. Depending on only the positive aspects of numerous other 
        studies and totally ignoring the negatives,(BOR whistle blower 
        Chief Scientific Integrity Officer Paul Houser and eight 
        whistle blower BOR fish biologists in the Klamath office).
          b. Using the ``Stillwater Science'' report which was funded 
        by American Rivers, and was proven to be grossly false.
          c. Hiring River Design to do sediment modeling on the 
        movement downstream of 22 million cubic yards of sediment 
        behind the Klamath Dams, after their failed modeling of 
        sediment movement with removal of two dams on the Rogue River 
        in Southern Oregon already completed.

    Question 5. What is the likely outcome of the recent call on water 
made by the federal government and the tribes? For instance, how would 
it affect project irrigation allocations for the remainder of the water 
year? How might it affect off-project irrigators and ranchers?
    Answer. The Project allocation of water will very likely be at risk 
before this water season is over. The so called agreements do not 
provide any meaningful protection for irrigators, citizens in general 
and the wildlife that are even historically given preference over human 
needs.
    One of the critical impact differences between Project and off-
project irrigators is that when water is denied within the Federal 
Project, there are mechanisms in place to supply economic offsets for 
that loss. In off-project, there no such mechanisms of any type 
whatsoever.
    In the upper basin (off-project), the recent calls, (and continuing 
calls), will have a massive, permanent negative impact on the economic 
viability of the entire Klamath Basin. The calls this first year will 
in many cases, be a permanent shut-off of water. The amount of water 
demanded to be left in-stream will be literally unattainable in many 
years. An agricultural business cannot survive with its necessary life 
blood of water only being available periodically. The economic impact 
to Klamath County has been estimated at approximately $500 million.
    The eventual economic impact will be additionally multiplied by the 
fact that Oregon Water Resources Department has admitted they will also 
begin regulating,( shutting off),wells in the Klamath Basin. This is 
being justified by non-proven ``modeling'' of our entire basin claiming 
all wells are connected to surface water, thus subject to calls just as 
surface water is. This is tied to the ``Scenic Water Way'' designation.
    Question 6. In your view, how did the settlement agreements affect 
the recently released 2013 biological opinion? Was this influence (if 
there was any) positive or negative.
    Answer. Interestingly, the first 25 pages or so of the new joint 
Biological Opinion actually stressed the lack of sufficient water 
storage capacity in the Klamath Basin. The logical conclusion would be 
constructing deep, cold water storage projects within the Klamath Basin 
to increase storage capacity. This is in direct conflict with the KBRA, 
which requires all excess water be designated as environmental water, 
which has a non-consumptive use requirement.
    In closing, water in the State of Oregon has always been a State 
Rights issue. Water has always been a private property right. Now, the 
control of the water within the State of Oregon has been handed over to 
the Federal Government, thru the BIA and DOI.
                                 ______
                                 
     Responses of Jim McCarthy to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The topline federal responsibilities in the Klamath Basin 
related to water resource issues are to meet tribal trust 
responsibilities, recover species listed under the federal Endangered 
Species Act, support and protect commercial and recreational fisheries, 
secure adequate water supplies for the region's national wildlife 
refuges, and foster a productive and sustainable agricultural economy. 
All of these responsibilities have not been met, and cannot be 
achieved, without bringing the agricultural demand for water back into 
balance with actual basin supplies. For this reason, it is essential 
for the federal government to make a considerable investment in a 
basin-wide, voluntary water demand reduction program to make a fair and 
equitable transition to sustainable levels of agriculture. Completion 
of the Klamath Basin water rights adjudication in Oregon provides 
valuable new opportunities for this work.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. The best case scenario for the basin would involve prompt 
removal of the lower four mainstem Klamath dams, combined with a 
federally-led effort described on pages 2 and 3 in our submitted 
testimony, to achieve a vibrant and viable Klamath Basin for all 
communities involved. The worst case scenario would involve 
continuation of the current status quo, which has resulted in 
significant degradation of the region's national wildlife refuges, 
water quality, and fish and wildlife populations, uncertainty regarding 
the long-term prospects for fisheries recovery, an ongoing failure to 
meet tribal trust responsibility, ongoing water supply instability for 
the agricultural community, and significant social and economic costs 
resulting from the region's chronic and increasing competition for 
water. A poor scenario would also result from adoption of a water 
budget for the basin like that included in the Klamath Basin 
Restoration Agreement. Simply put, the amounts of water set aside for 
irrigation in the Agreement make it impossible to meet other legitimate 
water needs in the basin. This will perpetuate the cycle we see now 
where the basic water needs of legitimate interests are not met in many 
water year types and the federal government continues to make 
substantial annual payments to irrigators most years for temporary 
(one-season) demand reduction.
    Question 3. Do you agree or disagree with the cost estimates in 
DOI's dam removal study ($290 million)? Why or why not? In your 
opinion, what is the likelihood of cost overruns? Who should bear the 
responsibility for cost overruns during dam removal should they occur? 
(e.g., federal government, states, PacifiCorp)
    Answer. DOI's estimate is significantly higher than the four 
previous estimates complied by FERC in its 2007 Final Environmental 
Impact Statement, which ranged from $79.9 million to $102.4 million in 
2006 dollars (see table 4-4, page 4-6). Given the range of available 
estimates, there may be a relatively low risk of significant overruns 
above $290 million. We believe that all costs of dam removal should be 
borne by PacifiCorp and its ratepayers, as this is in accordance with 
the law as well as basic fairness *- PacifiCorp and all its customers 
have benefited from the power generated by these dams. The Oregon and 
California PUCs have already approved ratepayer surcharges for dam 
removal, and PacifiCorp has thus far collected some $54 million of a 
total of $200 million intended to pay for this purpose.
    Question 4. In your opinion, who is most likely to be the Dam 
Removal Entity?
    Answer. The U.S. Bureau of Reclamation would appear to be the most 
likely dam removal entity under the current Klamath agreements, 
although this is an entirely speculative assumption.
    Question 5. In your view, what might have been the outcome of FERC 
relicensing proceedings (i.e., absent the KHSA)? Similarly, where would 
things stand at this point in time, and would it be preferable to where 
the process currently stands under the KHSA?
    Answer. Because it is more economically sound to remove 
PacifiCorp's four lower mainstem Klamath dams than to try to relicense 
them, there is a high degree of likelihood the FERC process would end 
in removal for economic reasons. It is difficult to speculate where the 
FERC process would stand at this point, but it may be instructive to 
look to PacifiCorp's recent removal of Condit Dam on the White Salmon 
River in Washington as an example. The Klamath dams face similar 
economic viability problems as Condit faced. Condit's removal was also 
the largest dam removal undertaken in the United States at the time, 
just as the Klamath dams are likely to be the largest dam removal 
undertaken in the country if it proceeds within the next several years. 
At Condit, PacifiCorp filed for a new license with FERC in December 
1991, and FERC issued an EIS in October 1996. By October 1999, 
PacifiCorp had applied to FERC to remove the dams in late 2006. After 
some delays, actual dam removal occurred in October 2011. For the 
Klamath dams, PacifiCorp filed for a new license in February 2004, and 
FERC issued an EIS in November 2007. If the Klamath dams had continued 
through the FERC process instead of being suspended by the Klamath 
agreements, it seems probable that PacifiCorp could have applied to 
FERC for removal as early as 2010, and would now be proceeding towards 
a removal sometime between 2017 and 2021.
    Question 6. In your opinion, what were the most surprising findings 
in DOI's dam removal studies? What were the most controversial parts?
    Answer. In our view, the most surprising and controversial part of 
the DOI studies in the April 2013 EIS was the failure to analyze a 
scenario where the Klamath dams are removed without implementation of 
the Klamath settlement agreements. Not only was this a clear violation 
of the NEPA requirement to analyze all reasonable alternatives, but it 
denied decision makers and the public an important tool for evaluating 
the extraordinarily costly Klamath settlement agreements. We believe 
that this omitted alternative analysis would have shown that dam 
removal without KBRA/KHSA would provide the greatest benefits at the 
lowest cost.
                                 ______
                                 
    Responses of Roger Nicholson to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The federal government should assist in finding an 
equitable solution to power and water issues in the Klamath Basin, as 
the federal government played a role through federal agencies, a 
Federal Project, and Treaty rights in creating the issues. The federal 
government will ultimately need to agree with any proposed settlements 
and possible assist in federal funding of settlement components.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. The best case scenario would be for the Klamath Basin to 
reunite as one community, with each faction remaining economically 
whole and able to continue with their way of life. This pertains to the 
Upper Basin Irrigators, Project waterusers and the Klamath Tribes.
    In contrast, the worst case scenario would be a fractured community 
that does not have the economic stability and certainty to make long 
term lifestyle and management decisions.
    Question 3. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. Other available and feasible methods not covered in the 
KBRA and KHSA would be to distribute Upper Basin water more equitably 
among the parties. Each entity should give a little, including the 
Klamath Project, Klamath Tribes and Upper Basin irrigators. By one 
group carrying the burden of the entire water shortage, the KBRA does 
not provide for an equitable solution.
    Question 4. What is the likely outcome of the recent call on water 
made by the federal government and the Tribes? For instance, how would 
it affect project irrigation allocations for the remainder of the water 
year? How might it affect off project irrigators and ranchers?
    Answer. Off Project irrigators and ranchers are affected by no 
longer have viable pastures and hay ground. Once not irrigated for a 
season or more, the hay ground and pastures will potentially need to be 
reseeded. The cattle will need to be sold early and without a strong 
local market. Both of these things will reduce the viability of the 
cattle industry in the Upper Klamath Basin, as the producers will earn 
reduced revenues and increased expenses. Additionally, the cow-calf 
producers will be selling some or all of their breeding stock which 
many have worked years to breed and cultivate quality genetics.
    Due to the decrease in irrigation, the property values will 
diminish and therefore Klamath County will receive less tax revenue. 
The decrease in property tax revenue and gross income will have a 
devastating impact on the local economy. If the call continues over 
multiple seasons, then the local community will dwindle and the 
infrastructure for the cattle industry (i.e. veterinary clinics, 
equipment dealerships, and feed stores) will be permanently lost.
    Question 5. If the order is upheld and the state shuts off 
deliveries, what are your preliminary expectations for impact on crops 
(i.e., number of acres not irrigated and associated revenue loss)? For 
water deliveries (i.e., number of acre-feet not available)?
    Answer. 96,000-100,000 acres of pasture and hay ground are 
estimated to be lost the first year. The associated property value lost 
is estimated by the Klamath County Assessor to be $199-258 million. The 
estimated revenue lost from this ground is estimated by the Klamath 
County Assessor to be $398-516 million annually.
    Question 6. Similarly, has or might the recent call on basin water 
supplies affect your position on the agreements? Please explain why or 
why not.
    Answer. No, because our position is, as it has always been, to 
support an equitable settlement for the Klamath Basin.
    Question 7. Please summarize the proposed ESA listing and recent 
decision regarding the Upper Klamath Chinook salmon. What was the 
reasoning for this decision NMFS? Do you agree or disagree?
    Answer. Any listing for a threatened or endangered fish within the 
Klamath River system further complicates the water allocation. And 
therefore, must be considered when looking at making an equitable 
settlement including water allocation for the Upper Klamath Basin.
    Question 8. Please explain the primary modifications and new 
actions contemplated in the 2013 biological opinion.
    Answer. No response.
    Question 9. In your view, how did the settlement agreements affect 
the recently released 2013 biological opinion? Was this influence (if 
there was any) positive or negative.
    Answer. It is too early to tell how the Project operations 
associated with the biological opinion will function and whether this 
is a positive or negative impact on the overall water budget for the 
Upper Basin. There is definitely concern regarding the limited license 
water which is being provided to downstream obligations during the 
irrigation season. As this has added an additional draw on Upper Basin 
water, resulting in less available Project and Tribal water and an 
increased call on Upper Basin irrigators.
                                 ______
                                 
 Responses of Richard Roos-Collins to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The United States has primary responsibilities for the 
sustainable management of the Klamath Basin's water and other natural 
resources.
    The United States owns more than half of the basin lands. The 
Interior Department administers the Klamath Irrigation Project, six 
National Wildlife Refuges, and the Klamath National Wild and Scenic 
River. The Agriculture Department administers six National Forests. The 
United States has responsibilities to manage these reservations to 
achieve the public-interest purposes established in organic statutes. 
The United States also has trust responsibilities to protect the 
culture, welfare, and economy of the six federally recognized tribes in 
the basin. Further, the United States has responsibilities to regulate 
natural resources under the Clean Water Act, Endangered Species Act, 
and other federal statutes. These responsibilities extend beyond the 
boundaries of the federal reservations to include non-federal 
activities that affect these resources.
    The Klamath Basin Restoration Agreement (KBRA) and Klamath Basin 
Hydropower Agreement (KHSA) were drafted with the full participation of 
federal negotiators in order to fulfill all of these responsibilities. 
We also acknowledge that the States of Oregon and California have other 
primary responsibilities for sustainable management of these water 
resources.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. The best case scenario is that these water resources will 
be managed systematically under voluntary agreements to assure water 
supply reliability. The KBRA calls for two implementing agreements to 
be reached: one to settle tribal trust claims against the Klamath 
Irrigation Project; and the other, the Off-Project Water Settlement 
(OPWAS), for ranchers in the Upper Klamath Basin. Water users will 
agree to flow diversion or release schedules; seniors will forebear to 
make otherwise permissible calls against juniors under the Oregon Water 
Rights Adjudication and other water-rights law; and regulators will 
confirm that these flow schedules comply with the Endangered Species 
Act and other regulatory laws. This water supply reliability will allow 
farming communities, tribes and other fishermen, and others to make 
capital investments and other decisions that enhance the economy and 
welfare dependent on these resources. In addition, the KBRA provides 
for investigation of the feasibility of additional wetlands storage of 
about 100,000 acre-feet, potentially enhancing inter-year water 
availability.
    The worst case scenario is that these water resources will continue 
to be managed through a perpetual cycle of administrative rulings and 
other litigation, impairing the welfare of basin communities. Per 
practice throughout western states, the Oregon Adjudication established 
a strict order of priority, authorizing senior water rights to cut off 
junior altogether in 2013 or similar years. That has significantly 
reduced water supply reliability for junior users in the Upper Klamath 
Basin, impairing investment or even the feasibility of continued 
operations. Absent authorization for the Klamath Agreements, it is 
possible that similar litigation may occur in the lower basin in the 
future, under authority of California law. Further, regulatory laws are 
not effectively integrated with the water rights system, resulting in 
an amorphous cloud on all titles. The Oregon Adjudication and 
counterpart procedures in California do not provide a clear or 
systematic answer to the question: which water users have what 
responsibility to release flow for attainment of water quality 
standards, conservation of endangered fish and wildlife species, or 
compliance with other public trust obligations?
    Question 3. Has there been any discussion of further paring down 
the agreements? Has there been any discussion of nonfederal parties, 
including nonprofits, states, or local entities, taking on any of the 
actions that are currently envisioned as federal responsibilities?
    Answer. Parties to the Klamath Agreements have begun to re-examine 
our budget proposal for the KBRA, in response to Senator Wyden's June 
20 statement that a significant reduction may be necessary given 
present budget rules and realities. The non-federal parties had 
undertaken a similar effort in 2011. At that time, we reconsidered the 
budget proposal in the 2010 agreements, reducing that by 18 percent. We 
also agreed to extend the budget term from 10 to 15 years. And we 
intended our budget proposal to be covered, in part, by redirecting 
existing federal funding in the Klamath Basin.
    The parties have never presumed to offer our budget proposal on a 
take-it-or-leave-it basis. Our bottom line is that the authorized 
budget must be sufficient for timely implementation of the measures 
necessary to assure reliable water supply and the sustainability of the 
basin communities.
    Let me give one example which illustrates our thinking about your 
question. The KBRA includes an Off-Project Water Program designed to 
lease or purchase water rights from willing ranchers in the Upper 
Klamath Basin. This has the goal of 30,000 acre-feet/year of new inflow 
into Upper Klamath Lake to conserve listed species there. At the June 
20 hearing, Senator Wyden emphasized that this measure is vitally 
important to the welfare of the Upper Klamath Basin. The line items for 
this measure in the 2011 budget proposal totaled $46 million over 
fifteen years. That was based on our best estimate of market value of 
the associated water rights. Given two years of additional experience, 
the Conservation and Fishing Groups are prepared to reconsider what 
funding is necessary for implementation on the scale and schedule 
necessary for effectiveness. This applies to each measure in the KBRA.
    You also ask about non-federal contributions. Most of the measures 
in the KBRA will be performed cooperatively by federal and non-federal 
parties. For example, the Fisheries Program will be a joint effort of 
the California and Oregon Departments of Fish and Wildlife, tribes, and 
the National Marine Fisheries Service (NMFS) and U.S. Fish and Wildlife 
Service (FWS). Other measures will be performed entirely by non-
governmental organizations. Further, the KBRA requires efforts to 
secure non-federal funding to assist with the implementation of all 
programs. The Conservation and Fishing Groups are actively seeking such 
funding, both public and private. Turning to the KHSA, PacifiCorp's 
ratepayers and the State of California will fund dam removal at a total 
cost of $450 million. Altogether, the non-federal funding for the 
Klamath Agreements is estimated to total $549 million over 15 years.
    Question 4. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. We are not aware of any measures that meet the question's 
goal and criteria. Our answer is driven by the first criteria. The 
Water Programs under the KBRA rely on local districts, farmers, and 
ranchers to select those measures which improve irrigation efficiencies 
or otherwise reduce diversions by specified amounts necessary for 
conservation of fish in Upper Klamath Lake and downstream. These 
programs will support assurances that the resulting flows will meet 
tribal trust and regulatory obligations for fish conservation over 
time. In sum, the KBRA already provides for flexibility in selection 
and implementation of cost-effective measures which will achieve water 
supply reliability.
    Question 5. In your opinion, what were the most surprising findings 
in DOI's dam removal studies? What were the most controversial parts?
    Answer. The most surprising finding is that dam removal is likely 
to cost $292 million. In 2010 the KHSA had budgeted up to $450 million. 
That was a conservative estimate reflecting (a) the unprecedented scale 
and complexity of removing facilities in the remote river canyon and 
(b) preliminary analysis of the risks of unintended adverse impacts, 
such as discharge of accumulated sediments. Through its extensive 
engineering and other studies, the Interior Department has now given us 
a higher confidence that the costs and risks are well within the non-
federal budget specified by the KHSA. The studies have also confirmed 
that removal of these power-only dams will not impact water supply or 
flood control.
    The Interior Department's studies did not resolve, or worsen, the 
controversy in Siskiyou and Klamath Counties on the question whether 
dam removal should occur. That controversy began well before the KHSA 
was signed in 2010 and continues to this day. We continue to be 
perplexed by the philosophical view, held by some opponents, that 
PacifiCorp should not be allowed to pick among lawful options how to 
manage its own property, and specifically should not be allowed to 
proceed with removal of power-only dams even after the Oregon and 
California Public Utilities Commissions expressly concluded that the 
KHSA is better for ratepayers than relicensing. The KHSA commits to 
further development of measures to mitigate any adverse impacts on the 
water supply pipeline for Yreka, other public roads and facilities, and 
property tax revenues. We support measures to address any loss in 
property values for Copco Reservoir homeowners. We are hopeful that the 
Task Force convened by Senators Wyden and Merkley, Representative 
Walden, and Governor Kitzhaber will permit this discussion to advance 
to closure.
    Question 6. Is there a point in the future at which you would no 
longer support this process going forward if Congress has yet to act?
    Answer. The KHSA is designed to result in dam removal, and the KBRA 
is designed to result in implementation of the Water Resources and 
other programs, by 2020. That target date is deliberate and reflects 
our best judgment of a tipping point--when the Klamath Basin must 
either turn towards sustainability or will be committed to systemic 
shortage and litigation for the foreseeable future. We acknowledge 
that, at some point, 2020 will not be possible to meet if Congress has 
not authorized implementation of the Klamath Agreements. If we reach 
that point, we will attempt to achieve the benefits of the agreements 
through continued collaboration. We do not foresee a point when we 
would voluntarily abandon these agreements and return to the past cycle 
of litigation before regulatory agencies and courts, which simply do 
not have the authorities to achieve a comprehensive solution.
    Question 7. Please summarize the proposed ESA listing and recent 
decision regarding the Upper Klamath Chinook salmon. What was the 
reasoning for this decision by NMFS? Do you agree or disagree?
    Answer. In January 2011, Oregon Wild and other groups who oppose 
the KBRA petitioned NMFS to list the fall-run and spring-run of Upper 
Klamath-Trinity River chinook under the Endangered Species Act. In 
April 2012, NMFS denied the petition. It found that the fall-run 
chinook population, while greatly reduced from historical numbers, is 
among the strongest and most stable on the West Coast. It found that 
the spring-run chinook, which was once the predominant run above 
PacifiCorp's dams, is no longer sufficiently distinct from fall-run to 
be classed as a separate sub-species. Conservation and Fishing Groups 
believe that both decisions are based on sound science and may not be 
the final word given further genetic analysis. More generally, we note 
that NMFS took into account the anticipated benefits of implementing 
the Klamath Agreements. We agree with that reasoning. Full 
implementation will restore migration, and spawning and rearing habitat 
for fall-run and spring-run chinook, in more than 420 stream-miles of 
river and stream in the Upper Basin. That will contribute materially to 
recovery of these fish.
    Question 8. Please explain the primary modifications and new 
actions contemplated in the 2013 biological opinion.
    Answer. The 2013 Biological Opinion for the Klamath Irrigation 
Project covers both suckers and coho salmon listed under the Endangered 
Species Act. It replaces separate opinions for each species previously 
issued by FWS and NMFS, respectively. The new opinion establishes 
consistent water-year classifications, unified methods to predict water 
availability early in each water year, and a collaborative process to 
manage flows on a real-time basis to meet fish and irrigation needs, 
including response to water shortages and emergencies. We note, 
however, that this new Biological Opinion cannot achieve many of the 
KBRA's benefits, including correction of the zero-sum competition 
between water rights or adequate flows for the National Wildlife 
Refuges.
    Question 9. In your view, how did the settlement agreements affect 
the recently released 2013 biological opinion? Was this influence (if 
there was any) positive or negative.
    Answer. The 2013 Biological Opinion was issued under the ordinary 
authority of the Endangered Species Act to cover the U.S. Bureau of 
Reclamation's continued operation of the Klamath Irrigation Project. It 
was not directly affected by the KBRA, which is not yet authorized. 
Further, once authorized, the KBRA will provide for long-term Habitat 
Conservation Plans for contractors and upper Basin ranchers, while 
continuing to rely on future Biological Opinions for operation of the 
federal project. That said, the Klamath Agreements indirectly affected 
the 2013 Biological Opinion in several positive ways. The close working 
relationships developed in successful negotiations permitted NMFS, FWS, 
and the contractors to agree on innovative approaches for short-term 
project operation, and the scientific record developed by the Interior 
Department in its dam removal studies is a key scientific basis for 
those approaches.
                                 ______
                                 
   Responses of Dean S. Brockbank to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The federal government has a prominent role in the Klamath 
Basin through its responsibility in overseeing federal interests and 
applying federal laws that are of paramount importance in affecting the 
resource-dependent economy of th e basin. These responsibilities have 
played a prominent role in the area's resource allocation conflicts. 
The federal responsibility starts with its control over the waters of 
the United States, including: management and oversight of water 
quality; management of hydroelectric power; management of fisheries and 
listed species; management of six wildlife refuges and thousands of 
acres of federal and public lands; management of the trust resources 
for six federally recognized tribes; and, management and control of a 
U.S. Bureau of Reclamation project. Going forward operation 
ofReclamation's Klamath Project, coordination with PacifiCorp's 
federally-licensed hydroelectric project, implementation of the 
Endangered Species Act, and management of fisheries and federal lands 
are all central to the issues and conflicts in the basin. The Klamath 
Agreements represent a consensus achieved by a majority of basin 
interests that are traditionally opposed to one another. Only the 
federal government has the span of control necessary to implement the 
agreements fully and fairly to help solve the region's problems.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future?What is the ``worst case'' scenario?
    Answer. The best case scenario involves parties with divergent 
interests setting aside decades of litigation and animosity and 
deciding to compromise and reach settlement on issues that take into 
account and provide for a range of competing stakeholder interests. 
Congress can accomplish this objective by approving a long- term 
Klamath solution.
    The worst case scenario involves an abandonment of the desire to 
compromise and reach accord on complex issues and a return to reliance 
on litigation and division, and an insistence on narrow interests at 
the expense of broader solutions. This outcome will result if Congress 
fails to act.
    Question 3. Do you agree or disagree with the cost estimates in 
DOl's dam removal study ($290 million)? Why or why not? In your 
opinion, what is the likelihood of cost overruns? Who should bear the 
responsibility for cost overruns during dam removal should they occur?
    Answer. The company has not seriously analyzed removing its Klamath 
hydroelectric dams on its own so it has not approached the level of 
analysis conducted by the federal agencies.From our view, the estimate 
seems reasonable but we would consider it just that, a reasonable 
estimate. It is not possible to know for sure at this point what full 
removal of the four hydroelectric dams on the Klamath woul d entail or 
cost as the conditions of permitting and other regulatory requirements 
are not yet known.The agreement is designed to provide for up to $450 
million for dam removal costs from non-federal sources. The company's 
view, which is consistent with the terms of the KHSA, is that the 
agreement should expire and not move forward without additional 
direction from Congress, if it becomes clear the cost is likely to 
exceed the $450 million cost cap set to be provided by PacifiCorp's 
customers and the State of California.
    Question 4. In your opinion, who is most likely to be the Dam 
Removal Entity?
    Answer. The selection of the Dam Removal Entity will be up to the 
Secretary of the Interior. In our view, the federal government is among 
the relatively few entities capable of such a task or with the 
experience and span of control necessary to appoint and supervise a 
non-federal Dam Removal Entity.
    Question 5. In your view, what might have been the outcome ofFERC 
relicensing proceedings (i.e., absent the KHSA)? Similarly, where would 
things stand at this point in time, and would it be preferable to where 
the process currently stands under the KHSA?
    Answer. It is difficult to predict the outcome of the FERC 
relicensing proceeding absent the KHSA. In fact, it is that uncertainty 
for PacifiCorp and the other Settlement Parties that led to the KHSA. 
While FERC had compl eted its Environmental Impact Statement and seemed 
prepared to issue a new license to PacifiCorp, neither the State of 
Oregon nor the State of California has issued water quality 
certifications under section 401 of the Clean Water Act, which they 
must do for FERC to act. Without the KHSA, PacifiCorp at this time 
would likely be embroiled in contentious proceedings before the 
California State Water ResourcesControl Board and the Oregon Department 
of Environmental Quality related to the 401 certification process. 
Litigation relating to these proceedings could continue potentially for 
a couple of decades. FERC will not issue a new license until the401 
certifications are issued, so PacifiCorp would be operating under FERC 
annual licenses, as it is now. The principal difference is that 
PacifiCorp, in collaboration with other settlement parties, is 
currently focusing on implementing a broadly supported settlement that 
includes an immediate and extensi ve program of interim environmental 
measures that are now benefiting the natural resources of the Klamath 
basin. Absent the KHSA, PacifiCorp would have no obligation to 
implement these interim environmental measures under the FERC annual 
license alone. Under the KHSA, PacifiCorp and the other settlement 
parties benefit by not having to spend resources on litigation, and the 
natural resources of the Klamath basin gain as a result of 
environmental improvements being put in place now.
    Question 6. In your opinion, what were the most surprising findings 
in DOl's dam removal studies? What were the most controversial paiis?
    Answer. Among the most surprising findings was that the studies 
showed that the most probable cost of dam removal was $292 million-$158 
million less than the $450 million cost cap contained in the KHSA. Also 
surprising was the willingness-to-pay estimates developed from the 
nonuse valuation studies used in the economic analysis. The discounted 
present value estimates from the Klamath River Basin Restoration Nonuse 
Value Survey concluded that the public was willing to pay $84 billion 
to see the Klamath Basin restored.
    One controversial part of the studies was that the Department of 
the Interior mailed over 10,000 surveys and more than $20,000 in cash 
to households across the United States to determine a ``willingness to 
pay'' for the benefits associated with a ``comprehensive restoration 
program for the Klamath River Basin.''
                                 ______
                                 
   Responses of Michael L. Connor to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the Federal 
Government in the Klamath Basin?
    Answer. The Federal government has multiple and diverse 
responsibilities in the Klamath Basin. The Federal government has 
responsibility to protect tribal trust resources in the Basin, 
including, specifically, tribal fisheries. The Federal agencies also 
manage water, land, fisheries, wildlife, and natural resources 
associated with Federal interests. Agencies involved in the Klamath 
Basin include Reclamation, the Bureau of Land Management, Forest 
Service, Fish and Wildlife Service, National Marine Fisheries Service, 
Environmental Protection Agency, and National Park Service. The Federal 
government has many areas of responsibility in the Klamath Basin in 
relation to enforcing laws enacted by Congress, such as the Clean Water 
Act, Endangered Species Act, National Wild and Scenic Rivers Act, 
National Environmental Policy Act and the Kuchel Act. The Federal 
government also provides services to local governments and the public 
through the operation of programs to help farmers, such as by the 
Natural Resources Conservation Service (NRCS), programs to gather 
scientific information and data to understand and better manage natural 
resources, such as by the U.S. Geological Survey. Lastly, the Federal 
Energy Regulatory Commission has a licensing responsibility to ensure 
responsible development and operation of privately-owned hydropower 
facilities in the Basin.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case'' scenario?
    Answer. The best case scenario is implementation of a long-term, 
durable, sustainable solution that is driven through collaboration by 
those who are most directly affected at the local level. This is the 
best and perhaps only opportunity to avoid the year-to-year crises that 
are endemic to this Basin. Under such an approach, there is a mutual 
commitment to a shared resource, the economy is strengthened, jobs are 
created, and those who are most directly affected have a say in how the 
resource is managed. The Klamath Hydropower Settlement Agreement (KHSA) 
and Klamath Basin Restoration Agreement (KBRA) were crafted to achieve 
this best case scenario by addressing ongoing impacts and risks to the 
Basin's resources while strengthening communities that rely on these 
resources by charting a path of collaboration and cooperation. If both 
agreements are implemented, the local communities and entities in the 
Basin that rely directly on Klamath River water would benefit 
considerably over the status quo that constantly threaten the 
livelihood of farmers, fishermen and Tribes. These agreements would 
benefit these communities by creating a better approach to balancing 
the available water in the Klamath Basin. This means more certainty for 
irrigation water and affordable power rates for farmers, as well as 
improved stream flows, habitat, and water quality for salmon and trout 
fisheries beneficial to tribal, commercial, and recreational 
communities. This means alleviating water quality problems within and 
downstream of the Hydroelectric Reach (e.g. algal bloom toxins) that 
affect fisheries and threaten human health. And it means more certainty 
of water for our wildlife refuges, which are a critical link along the 
Pacific Flyway. Badly needed restoration work would be completed to 
improve water quality and fish habitat; voluntary water reduction 
programs would make more water available to salmon and other fish 
species. In addition, the costs associated with KHSA dam removal and 
implementation of the KBRA is capped at a fixed amount so electricity 
ratepayers know future costs in advance. As stated by the Public 
Utilities Commissions of both Oregon and California, without these 
agreements, the costs of relicensing could be much higher for 
PacifiCorp's ratepayers in Oregon and California.
    The worst case scenario is the continuation of the current 
management by water crises in the Basin. The Klamath Basin has endured 
conflicts among several communities, rampant and costly litigation, 
depressed salmon runs, fish kills, and the potential for several fish 
species to go extinct. In the Upper Klamath Basin, the Klamath Tribes 
have had no salmon fishery for nearly 100 years; and they have not had 
the culturally important sucker fishery for over 25 years. Many 
families-fishing and farming-could be one dry year away from losing 
everything they have worked for. Having to endure future drought years 
without a plan on how to manage these crises could lead to even greater 
divisions within the Basin. The Department's analysis shows that 
climate change in the form of warmer water temperature and earlier 
runoff could exacerbate a bad situation in the Klamath Basin with 
negative impacts to tribes, fisheries, agriculture, and wildlife 
refuges.
    Question 3. What is your planned course of action if there is no 
Congressional action on legislation by December 2014, the new 
termination deadline? If there is no congressional action, are there 
any new actions under existing authorities that could be carried out?
    Answer. The parties that signed the KBRA would have to ``meet and 
confer'' about the appropriate next steps. In such an instance, we 
would be hopeful that there will continue to be broad support for a 
solution to these ongoing problems in the Klamath Basin. We are 
currently using our existing authorities to address the myriad needs 
for water in the Klamath Basin to the maximum extent possible but these 
authorities alone are insufficient to support the type of solution 
needed to move beyond the on-going crises created by an over-allocated 
watershed.
    Question 4. Has there been any discussion of further paring down 
the agreements? Has there been any discussion of nonfederal parties, 
including nonprofits, states, or local entities, taking on any of the 
actions that are currently envisioned as federal responsibilities?
    Answer. Following the June 20 hearing, members of the newly created 
Klamath River Basin task force-consisting of representatives from 
Oregon and California state agencies, Indian tribes, farming and 
ranching communities, conservation groups, salmon fishing community and 
electric power producers-are meeting to discuss efforts to pare down 
the costs of the agreements. Previously, the Department led an effort 
in 2010 to reduce KBRA costs while also ensuring the same level of 
benefits to the Klamath Basin and its communities. Several efficiencies 
were found which yielded a nearly 20 percent cost reduction from the 
original KBRA budget. The funding scheduled was also distributed across 
a 15-year program rather than a 10-year period, reducing costs on an 
annual basis.
    Under the current agreements, the non-federal funding for 
implementing parts of the KBRA and the KHSA have also been identified. 
California and Oregon will fund the KBRA counties program, the state 
regulatory activities, and certain of the fisheries activities that 
would not be funded by Federal agencies. The KHSA, which includes 
potential removal of the Klamath dams, would be funded entirely by non-
federal sources. The non-federal cost of dam removal is capped at $450 
million, per the KHSA, and the most current estimates indicate that it 
will likely fall well under that. The first $200 million is paid 
through a surcharge added to the electricity bills of PacifiCorp's 
Oregon and California customers. These surcharges would be collected 
until 2020, when the dams would potentially be removed.
    If the cost of dam removal exceeds $200 million, the State of 
California has committed to provide up to $250 million for the project. 
Under the agreement, the United States is not liable or responsible for 
costs of dam removal, whether such costs are identified prior to the 
Secretarial Determination or arise at any time thereafter, including 
during physical activities to accomplish dam removal. If the Secretary 
determines that Interior or one of its agencies or bureaus is the Dam 
Removal Entity (DRE), neither that decision nor performance of that 
role will be the basis for holding the United States or any of its 
agencies liable or responsible for any of the DRE's costs of Facilities 
Removal (Section 4:10 KHSA). If dam removal costs were to exceed $450 
million, the parties would meet and confer to determine appropriate 
next steps. In addition, PacifiCorp, the owner of the Klamath dams, is 
funding a series of interim measures that are being undertaken to 
support and improve the resource prior to the potential removal of the 
four dams at a cost of approximately $79M. These non-federal activities 
total up to $529M (dam removal plus interim measures) and average 
approximately $59 million per year through 2020. The states and local 
governments have been unable to commit to any further contribution.
    Question 5. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. The Department of the Interior believes that the only 
solution that will work long-term in the Klamath Basin will be one that 
addresses the core issue of water supply in light of the needs of 
fisheries, agriculture, refuges, and Tribes. The Department of the 
Interior has studied this issue extensively over the last few years. 
The Department weighed numerous proposals and formally evaluated a 
number of alternatives in the Klamath Dams Environmental Impact 
Statement (EIS) that would help achieve long term solutions in the 
Klamath. According to the EIS, facilities removal paired with 
implementation of the KBRA provides a greater opportunity for advancing 
salmonid fisheries when compared to the other alternatives, makes the 
best use of the water supplies in the Klamath Basin for agriculture and 
refuges, and resolves more societal hardships and conflicts that result 
from over-allocation of scarce natural resources.
    Question 6. In your view, how did the settlement agreements affect 
the recently released 2013 biological opinion?
    Answer. While the settlement agreements are completely separate 
from the Biological Opinion, the settlement process has produced an 
improved spirit of cooperation. Prior to settlement, a number of key 
stakeholders were at odds with one another. The settlement process has 
brought parties together, including federal agencies, and has allowed 
for more effective communication.
    Question 7. You said that your authority is limited in its ability 
to help off project water users. What would you need in order to 
further your ability to help them? What's holding you back from 
achieving this?
    Answer. Reclamation's substantive authority is limited to the 
operation and maintenance of the Klamath Project and activities that 
benefit fish and wildlife affected by the Project. While Reclamation 
potentially has the authority to study how power and water availability 
might affect a resolution to the Klamath Basin Adjudication, this does 
not allow for the development of water or power resources outside of 
the Klamath Project. Reclamation would need new Congressional 
authorization as well as funding to take actions that would offset 
impacts to off-project ranching or farming operations.
    Question 8. How is removal of the Klamath dams different than 
removal of the Elwha dams? How does this project compare to other 
large-scale dam removals? Please give a brief summary of some of the 
federal government and private sector's major experiences with dam 
removal, and lessons learned to date.
    Answer. One of the unique aspects of the Klamath dams compared to 
Elwha, Condit, Marmot, and several others in the western U.S. is the 
position of the Klamath Hydroelectric Project's dams in the watershed. 
Previous dam removals have had primarily forested lands upstream with 
little human development. In contrast, the Klamath Dams are downstream 
of significant human-affected landscapes including agricultural, 
ranching, industrial, and urban areas. As a result, the Klamath Dams 
receive incoming waters with worse water quality than other large 
western dams that have been removed recently, and in turn the Klamath 
Dams exacerbate those water quality problems within and downstream of 
the reservoirs.
    Most notable of these problems are: (1) altered water temperature 
cycle of the Klamath River which delays fry emergence in the spring and 
causes potentially lethal temperatures as well as delayed spawning for 
adult salmon in the fall, (2) toxic algal blooms in Copco 1 and Iron 
Gate reservoirs that result in conditions posing threats to public 
health, pets and wildlife contacting water in the reservoirs and 
downstream, and (3) increased fish disease in the river below Iron Gate 
Dam. These problems have proven to be difficult to resolve with 
reservoir operational changes alone and contribute to the difficulties 
of meeting Endangered Species Act and Clean Water Act requirements for 
relicensing. As a result of these factors, improvement of water quality 
is a more important consideration for evaluating the potential removal 
of the Klamath River dams than most other recent dam removals in the 
west.
    Similarities among recent western dam removals include the fact 
that most of the dams removed to date have been privately owned 
hydroelectric plants (like the Klamath dams) rather than public 
facilities. Decisions to remove these dams have been primarily based on 
economic considerations when dam removal is compared with retrofitting 
facilities in order to obtain a long-term FERC license. The Elwha dams 
were privately held until the 1990s when they were sold to the National 
Park Service in the initial phases of the dam removal process. Neither 
Elwhanor Condit (Washington State) dams had fish passage, and passage 
at Marmot Dam and Savage Rapids Dam (Oregon) was inadequate and would 
have needed significant and expensive upgrading.
    The Klamath River dams, like the Elwha, Condit, Marmot, and Savage 
Rapids dams, were built for hydroelectric power operations and were not 
designed or operated to control downstream flooding.
    The most important environmental issues related to dam removal are 
the short-term and long-term impacts from the downstream transport of 
reservoir bottom sediments. The four Klamath dams have trapped about 13 
million cubic yards of sediment. That estimate is predicted to grow to 
15 million cubic yards by 2020. This bottom sediment is mostly fine-
grained (i.e. small-diameter) silts derived from decaying algae and 
agricultural runoff. In terms of the size of the dam removal projects, 
the volume of trapped sediment place the Klamath dams behind Elwha (34 
million cubic yards of mostly coarse sand, gravel and cobbles) and 
ahead of Condit (1.3 million cubic yards of a mixture of silts, sands, 
and gravels), and Marmot (950,000 cubic yards of coarse sand, gravel, 
and cobbles). The proportion of bottom sediment actually eroded and 
exported downstream (or predicted to be exported), varies among dams: 
Elwha (greater than 50%), Klamath (about 57%), and Marmot (about 21%).
    The Klamath Dams' sediment particles are smaller in size than those 
behind other major dams removed in the west. The size of the sediment 
particles is important in determining the rate and timing of erosion 
and the ultimate downstream disposition of sediment during and after 
dam removal. Computer modeling was used to predict the extent, timing, 
and rate of erosion of the bottom sediments behind the Klamath dams to 
optimize when dams should be removed to be most protective of sensitive 
fish species in the basin (e.g. coho salmon).
    The removal of the Klamath Dams would open up over 400 miles of new 
habitat for fish in the upper basin. Recent dam removal experience has 
shown that fish have rapidly colonized the newly created habitat both 
below and upstream of other removed dams after the initial sediment 
pulses have diminished; however, this has been poorly monitored or 
documented in most places except in the Elwha.
    In contrast to the critical infrastructures downstream of the Elwha 
dams (a drinking water plant and fish hatchery), impacts to critical 
downstream infrastructures on the Klamath are anticipated to be limited 
to the City of Yreka drinking water supply pipeline, which could be 
mitigated for, and several individual properties immediately downstream 
of Iron Gate dam.
    Question 9. What is the status of the replacement power envisioned 
under the agreements? Have any initial steps been taken to secure this 
power, including conversations with BPA? If congressional authorization 
is necessary, please explain the reason and how much this would cost 
under the agreements. Also, please explain any potential complications 
associated with this power.
    Answer. Senators Wyden and Merkley, Congressman Walden, and 
Governor Kitzhaber have formed the Klamath Basin Task Force and asked 
for recommendations on providing affordable and certain power supplies 
for the Klamath Reclamation Project and the Upper Klamath Basin 
irrigators. The workgroup formed to address this issue consists of the 
Department of the Interior, Bureau of Reclamation, Bonneville Power 
Administration, PacifiCorp, the Klamath Water Users Association, and 
the Klamath Water and Power Agency. Recommendations from this 
workgroup, including detailed steps needed to secure and deliver 
preference power to the Oregon portion of the Klamath Project, are 
expected in late September. Although Reclamation is already authorized 
to acquire federal power for the Klamath Project, Congressional 
authorization would be required to secure federal power for irrigation 
for areas outside of the Klamath Project.
                                 ______
                                 
    Responses of Richard Whitman to Questions From Senator Murkowski
    Question 1. In your view, what is the responsibility of the federal 
government in the Klamath Basin?
    Answer. The federal government is responsible for at least four 
sets of interests that are particular to the Klamath Basin. First, in 
the 1800s, the federal government entered into a series of treaties 
with Native American tribes with interests in the basin. Some of these 
treaties expressly recognized that the tribes were reserving rights to 
fish, hunt and gather. Other tribes retained, or were granted, lands in 
reservations. These agreements between the United States and sovereign 
tribes mean that the tribes retain rights to the water necessary for 
those uses to continue. The federal government has a trust 
responsibility to preserve these rights.
    Second, beginning at the turn of the last century, in 1905, the 
federal government authorized the Klamath Reclamation Project. Since 
that date, the Bureau of Reclamation and other federal agencies have 
actively promoted the development of irrigated farmland through federal 
investments and contracts with districts, individuals and private 
businesses. Irrigated agriculture is a continuing mainstay of the 
economy of this area of Southern Oregon and Northern California. When 
irrigation must be curtailed or stopped in order to protect fisheries, 
as occurred in2001 and as is occurring to some degree this year, 
substantial economic harm can occur in farming communities that were 
built on the premise of reliable water supplies.
    Third, the federal government is a co-manager of salmon fisheries 
that depend on the Klamath Basin. Both Oregon and California coastal 
communities rely on these fisheries as a key source of income. When 
those fisheries must be closed or curtailed due to water management 
problems on inland waters, as occurred in2002, there can be substantial 
economic harm along the coasts of both states, as well as to tribal 
fisheries on the Klamath River. In addition, through the licensing of 
hydroelectric dams on the Klamath River, without providing for fish 
passage, the federal government has allowed the substantial 
diminishment of these fisheries.
    Fourth, the federal government is the predominant land owner in 
much of the Klamath Basin. The lands it manages include wildlife 
refuges managed by the U.S. Fish and Wildlife Service, several national 
forests, lands administered by the Bureau of Land Management, and a 
portion of Crater Lake National Park.The federal government's 
responsibilities in each of these arenas often conflict as a result of 
there being too little water to fully satisfy demands for fisheries, 
irrigation, refuges and other uses. As an example, the upper Klamath 
Basin, water shortages this year have led to curtailment of irrigation 
uses, water use in Crater Lake national park, and on lands managed for 
wildlife, all in order to provide more water for fisheries.
    The states of Oregon and California share some responsibility for 
this over-allocation of water resources. In Oregon, the state recently 
completed the first phase of a comprehensive adjudication of federal 
and pre-1909 water rights (following periodic court challenges from the 
federal government) in the Klamath basin. The completion of this phase 
of the adjudication now makes it possible for the state to regulate 
water use according to the prior appropriation doctrine. Up until this 
time, upstream users of water were seldom affected by shortages, while 
downstream users including the Klamath Irrigation Project and 
fisheries, suffered in drought years. Over-allocation of water has 
caused the Klamath Basin to careen from crisis to crisis, first 
affecting the Klamath Irrigation Project (which was shut down in 2001), 
then affecting lower basin tribal and non-tribal fisheries (including 
coastal fisheries) in 2002 and 2004, and finally affecting upper basin 
off-project irrigators this year (with a near-complete shut-off of 
water for irrigation beginning in mid-June).
    Under the current legal framework, including the water rights 
adjudication, resources are allocated in ways in the Klamath Basin that 
give no one interest what it needs for long-term economic and social 
stability. Given its central role in creating this situation, the 
federal government has the responsibility to lead the other interests 
in the basin to a comprehensive long-term negotiated resolution of 
these conflicting demands in a resolution that brings stability to the 
region's economy, that meets its obligations to federally-recognized 
tribes, and that meets its other national responsibilities for land, 
water, and other resource management.
    Question 2. In your opinion, what is the ``best case'' scenario for 
the basin in the future? What is the ``worst case scenario?
    Answer. The best case scenario is one where water resources are 
shared more equitably between competing interests in years when water 
is scarce, one where fisheries are restored and become available to 
tribal and non-tribal interests for utilization, one where the Klamath 
Tribes have a land base restored that provides an economic future, one 
where irrigators have a greater level of predictability in knowing when 
and how much water will be available, and one where lands and waters 
are managed to provide for the needs of wildlife benefitting all 
Americans.
    The Klamath Basin Restoration Agreement (KBRA) provides a 
foundation for many of these outcomes. However, there are some aspects 
of a comprehensive settlement that have not been completed - notably a 
water right settlement between the Klamath Tribes and upper basin off-
project irrigators.
    The worst case outcome is a full reversion to management through 
litigation in Oregon and in California, involving Central Valley water 
as well as the Klamath, with incalculable costs and high levels of 
unpredictability for all interests. For now, the KBRA has stabilized 
conflicts between most of the competing interests, but that stability 
could unravel quickly if Congress fails to provide necessary 
authorizations for federal agencies, or fails to appropriate funds 
required to implement the actions needed to restore the basin to 
environmental and economic health.
    Question 3. Has there been any discussion of further paring down 
the agreements? Has there been any discussion of nonfederal parties, 
including nonprofits, states, or local entities, taking on any of the 
actions that are currently envisioned as federal responsibilities?
    Answer. Yes, in answer to both questions. The KBRA parties 
completed a significant review of programs and program costs in 2011. 
That review reduced the costs of KBRA implementation by 18 percent.\1\ 
At that time, the States of Oregon and California also agreed to take 
responsibility for funding programs to mitigate the local economic 
effects of dam removal.
---------------------------------------------------------------------------
    \1\ Klamath Basin Restoration Agreement Revised Cost Estimates, 
Klamath Basin Coordinating Council, June 17, 2011, at page 4.
---------------------------------------------------------------------------
    More recently, the parties to KBRA have discussed deferring some 
elements of the agreements until a later time when there is a higher 
level of certainty regarding some aspects of restoration such as water 
quality. In addition, both the States of Oregon and California already 
have committed to continuing and expandingcurrent activities in the 
basin, and non-governmental entities are actively exploring non-federal 
funding for some actions. Most recently, the National Fish and Wildlife 
Foundation (NFWF) committed ten million dollars to funding restoration 
work in the upper Klamath basin. Annual expenditures from non-federal 
sources (state and non-governmental) to restore the Klamath over the 
next seven years are expected to exceed federal expenditures over the 
same period.\2\
---------------------------------------------------------------------------
    \2\ Klamath Basin Restoration Agreement Revised Cost Estimates, 
Klamath Basin Coordinating Council, June 17, 2011, at pages4-5.
---------------------------------------------------------------------------
    Question 4. Are there other methods to make better use of water 
supplies in the Klamath that are 1) not covered in the KBRA and KHSA; 
and 2) available and feasible under existing authorities?
    Answer. The hydrology of the Klamath basin is highly dependent on 
temperature and precipitation, particularly in the winter and early 
spring. If, as predicted, temperatures rise during this time period, 
the proportion of precipitation falling as snow is expected to drop and 
runoff will shift to earlier in the year while low flow periods will 
lengthen. These trends, along with existing competing demands for 
water, have led to continuing interest in increasing the amount of 
water storage in the basin.
    The Bureau of Reclamation recently completed an initial 
investigation of 36 water storage options to identify the most 
promising storage opportunities.\3\ The investigation supported 
advancing only two options to appraisal studies at this time: (1) an 
aquifer storage and recovery (ASR) groundwater option at Gerber 
Reservoir and (2) a hybrid option involving ASR (groundwater) at Clear 
Lake and surface storage at a new Boundary Dam and Reservoir. However, 
even these two options were not found to have strong economic viability 
at this point.\4\
---------------------------------------------------------------------------
    \3\ Initial Alternatives Information Report, Upper Klamath Basin, 
Offstream Storage Investigations, Oregon and California, U.S. Bureau of 
Reclamation, May 2011.
    \4\ Id.
---------------------------------------------------------------------------
    It is likely that increased use of ground water, and improved 
efficiency of water use are less expensive alternatives for improving 
the use of water supplies. The USGS and the Oregon Water Resources 
Department (OWRD) recently completed an analysis of the level of long-
term ground water use possible in the basin on a sustainable basis.\5\ 
In recent years, increased use of groundwater in both the Klamath 
Irrigation Project and for off-project water users effectively has been 
used as a storage source for dry years. However, it appears this source 
is fully-allocated in Oregon, and OWRD has stopped issuing new 
groundwater rights. Another problem with increased reliance on ground 
water is the high electric costs associated with this use, costs that 
have increased substantially since the expiration of the contract 
between project irrigators and PacifiCorp.
---------------------------------------------------------------------------
    \5\ U.S. GEOLOGICAL SURVEY. Scientific Investigations Report 2007-
5050. Version 1.1, April 2010, Ground-Water Hydrology of the Upper 
Klamath Basin, Oregon and California. Prepared in cooperation with the 
Oregon Water Resources Department. By Marshall W. Gannett, Kenneth E. 
Lite Jr., Jonathan L. La Marche, Bruce J. Fisher, and Danial J. 
Polette.
---------------------------------------------------------------------------
    Increased water use efficiency could effectively stretch existing 
water supplies between competing uses. Oregon has a conserved water 
statute that allows water right holders to retain most conserved water, 
while dedicating the remainder to instream uses. This mechanism 
generally requires public funding, at least in part, to make water 
conservation worthwhile for water right holders.
    Question 5. In your opinion, what were the most surprising findings 
in DOI's dam removal studies? What were the most controversial parts?
    Answer. The most surprising findings were the projected costs of 
dam removal. The studies found that the most likely cost of dam removal 
was $292 million ($242 if portions of structures are left in place). 
This cost is significantly lower that earlierestimates, and has raised 
the possibility of some additional non-federal funding being devoted to 
actions other than dam removal. The extent of employment increases 
resulting from improved river conditions and increased reliability of 
water supplies for irrigation was also higher than expected.
    The amount and characteristics of sediment currently entrained 
behind the dams continues to be controversial even though the studies 
completed by the Department of the Interior have shown that adverse 
impacts to fisheries would be short-term, and that concerns about other 
impacts being significant are unwarranted.
    Question 6. Is there a point in the future at which you would no 
longer support this process going forward if Congress has yet to act?
    Answer. No. Regardless of Congressional action or inaction, the 
interests in the Klamath basin will need to continue coordinating 
management of water, fisheries and economic matters. The close 
coordination between federal agencies, irrigators and the Tribes in 
developing the biological opinion for the Klamath Irrigation Project is 
one example of how the relationships that have been built over the past 
ten years are already benefitting the region.
    Question 7. What is the likely outcome of the recent call on water 
made by the federal government and the tribes? For instance, how would 
it affect project irrigation allocations for the remainder of the water 
year? How might it affect off-project irrigators and ranchers?
    Answer. The calls for water regulation by the Klamath Tribes, the 
federal government, and irrigators within the Klamath irrigation 
project are resulting in all surface water diversions in the upper 
Klamath basin, including irrigation around Klamath Lake, being shut 
off. Minor exceptions have been granted for human consumption and water 
for stock. The Klamath Irrigation Project made calls for regulation of 
water diversions junior to 1905, and this call is affecting many water 
users diverting from small streams that feed into Klamath Lake as well 
as diversions from the lakeitself. The Tribes' call, made jointly with 
the Bureau of Indian Affairs, is affecting water use in the main 
tributaries above Upper Klamath Lake: the Wood River, the Williamson 
River, the Sprague River, and the Sycan River.
    The water calls have not affected the Klamath Irrigation Project. 
Water diversions for the Klamath Project are set primarily by the 
recent biological opinion issued by the U.S. Fish and Wildlife Service 
and the National Marine Fisheries Service (as long as such diversions 
are within the water rights recently confirmed in the Klamath 
Adjudication). Under the biological opinion, water use within the 
Klamath Project has been curtailed through land idling and increased 
use of groundwater.
    Question 8. In your view, how did the settlement agreements affect 
the recently released 2013 biological opinion? Was this influence (if 
there was any) positive or negative?
    Answer. The fundamental effect of the KBRA in terms of operations 
of the Klamath Irrigation Project is that the KBRA parties, including 
the Bureau of Reclamation, agreed to limit project diversions 
(including the refuges) to no more than 378 thousand acre feet of water 
in dry years (years when inflow into Upper Klamath Lake is projected to 
be less than 287 thousand acre-feet for the March to October 
period).\6\ In effect, this constrained the Bureau's (and the U.S. Fish 
and Wildlife Service's) proposed action to this maximum quantity of 
water diversion in dry years.
---------------------------------------------------------------------------
    \6\ KBRA, at E-25.
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    The recent biological opinion further limited project diversions in 
very dry years, based on inflow projections into Upper Klamath Lake. In 
this year, the biological opinion limits project supply to 289,000 
acre-feet, below the levels agreed to in KBRA.\7\ As a result, at least 
for this year, it does not appear that the KBRA's limitations on water 
diversions are the controlling factor in water use by the Klamath 
Irrigation Project.
---------------------------------------------------------------------------
    \7\ Klamath Project 2013 Operations Plan, at 2, U.S. Bureau of 
Reclamation, June 1, 2013.
---------------------------------------------------------------------------
    More generally, the diversion limitations in KBRA reflect an 
approach that balances water needs in the upper and lower portions of 
the Klamath basin based on a range of water year types. The recent 
Biological Opinion appears to be based on a refinement of that basic 
balancing of water needs for upper and lower basin needs, including 
those of the Klamath Irrigation Project.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

        Statement for the Record Bonneville Power Administration
    The U.S Department of the Interior's Bureau of Reclamation 
(Reclamation) has approached the Bonneville Power Administration (BPA) 
with a request to provide Federal power service to the Klamath Basin 
Irrigation Project's load. This request was made to the Administrator 
by letter received on August 27,2009, requesting a contract(s) for the 
purchase and delivery of power to serve existing Reclamation load 
within the Klamath Project in Oregon. The letter noted the load was 
approximately 10 average megawatts and currently is served by 
PacifiCorp. The Klamath Basin Project load has historically been served 
by PacifiCorp. Reclamation also requested transmission service to an 
interconnection point between BPA and PacifiCorp and stated Reclamation 
would work directly with PacifiCorp to arrange for lower voltage 
service over its distribution system. Costs would be recovered from 
Reclamation's Klamath Project beneficiaries.
    BPA markets and disposes Federal power to Federal agencies in the 
Pacific Northwest, including Reclamation. BPA recognizes existing 
service to Reclamation for Reclamation project loads as a qualified 
customer and as meeting our standards of service for those projects. To 
accommodate the requested service, Reclamation would have to 
demonstrate an ability to purchase and Lise Federal power sold for 
Klamath Project loads by developing a plan of service which would 
include the following: I) demonstrate that PacifiCorp relinquishes its 
service obligation for the Klamath Project loads; 2) identify and 
provide details of specific loads, location, metering information, and 
transmission; 3) detailed information on acceptable arrangements for 
billing, collection, and payment for services provided. Acceptable 
information would allow an offer of a standard Regional Dialogue 
(current) BPA power sales contract for service to the Klamath Project.
    BPA's response letter of November 9, 2009 pointed out additional 
considerations in order for BPA to accommodate Reclamation's requested 
service to the Klamath project, including:

          1. BPA's Tiered Rates Methodology which provides Priority 
        Firm (PF) service at Tier 1 and Tier 2 rates. Tier 1 rates are 
        based on costs of the existing Federal system and Tier 2 rates 
        are based on costs of additional resources or purchases needed 
        to serve.
          2. The size of the new load can affect the timing of service 
        charged at Tier 1 rates if the load is 10 average megawatts or 
        greater. lf greater than 10 average megawatts in a rate period, 
        service at the Tier 1 rate may be phased in over more than one 
        rate period and other PF rates may apply to a portion of the 
        service.
          3. BPA would need a notice from Reclamation for a binding 
        commitment to purchase power so that the power purchases may be 
        included in load planning for BPA rates. Notice by July l of a 
        forecast year (or notice 3 years in advance of the new rates 
        being applicable if the load is 10 average megawatts or 
        greater) would allow service at the Tierl rate for the next 
        rate period based on Reclamation's BPA Regional Dialogue 
        contract including a Contract High Water Mark.\1\ Execution of 
        a Regional Dialogue contract itself would constitute binding 
        notice.
---------------------------------------------------------------------------
    \1\ Contract High Water Mark is a calculated amount of power 
expressed in average megawatts that is used to determine the service 
priced at BPA's Tier 1 Priority Firm Power Rate under its Tiered Rates 
Methodology.
---------------------------------------------------------------------------
          4. Service from BPA at an interim rate would be available but 
        the rate would reflect any additional incremental purchase 
        power costs that BPA incurs to provide the power service prior 
        to service being available at the Tier] rate. BPA has an 
        Unanticipated Load Service\2\ rate for interim service under 
        its Priority Firm Power \3\rates.
---------------------------------------------------------------------------
    \2\ Unanticipated Load Service is an amount of power that BPA 
provides to a qualified customer during a rate period that was not 
included in the load forecasts used for setting rates for that rate 
period. The load may be new load or load that was acquired by a 
customer during a rate period of which BPA did not have notice to 
include in its forecasts.
    \3\ Priority Firm Power rates arc rates established by BPA under 
section 7(b) of the Northwest Power Act of 1980 and available to BPA's 
preference and federal agency customers.

    Over the past four years BPA has engaged in discussion with 
Reclamation, PacifiCorp and irrigation water users of the Klamath 
project about the timing and implementation of BPA Federal power 
service to Reclamation. In these discussions, BPA has made Reclamation, 
---------------------------------------------------------------------------
PacifiCorp and others aware of the following points:

          1. BPA has the authority, but not the obligation, to serve 
        Federal agency loads in its marketing area, the Pacific 
        Northwest, by providing firm power under contract pursuant to 
        section 5(b)(3) of the Pacific Northwest Power Planning and 
        Conservation Act of 1980, P.L. 96-501.
          2. Service to Federal agency load is at the discretion of the 
        Administrator and is provided at a priority firm power rate 
        under section 7 of the Pacific Northwest Power Planning and 
        Conservation Act of 1980, P.L. 96-501.
          3. A Federal agency customer has to be qualified to take the 
        power under BPA Standards for Service adopted pursuant to 
        section 5(b)(4) of the Pacific Northwest Power Planning and 
        Conservation Act of 1980, P.L. 96-501. A Federal agency must be 
        ready, willing, and able to take the power provided for use in 
        load, meaning the agency must be able to accept delivery and 
        distribute the power to load and must have the technological 
        capability to allow accurate metering and billing. An agency 
        needs to have use of or access to distribution for end use but 
        does not need to own the distribution.
          4. Reclamation is currently a customer of BPA for several 
        other end-use irrigation project loads that use nonfederal 
        distribution or transmission to provide delivery of service, 
        such as the ROZA project and the Minidoka project. While 
        Reclamation is not currently a customer for the Klamath 
        project, BPA has determined that Reclamation is a qualified 
        customer.
          5. BPA cannot provide firm power service to Reclamation for 
        the Klamath Project loads which are outside of the Pacific 
        Northwest. Consistent with statutes, BPA could only provide 
        power that is sold on a surplus, recallable basis to out-of-
        region Klamath Project loads under the Pacific Northwest 
        Consumer Power Preference Act, P.L. 88-552 and section 9(c) of 
        the Pacific Northwest Power Planning and Conservat.ion Act of 
        1980, P.L. 96-501. BPA surplus power is provided only when and 
        as available and is not guaranteed service.
          6. For many years BPA has had an administrative policy that 
        it does not compete with its ntility customers for retail loads 
        served by those customers. PacifiCorp is the current serving 
        utility and before BPA provides service for Reclamation Klamath 
        Project loads, PacifiCorp must relinquish its service to those 
        loads, including conclusion of any Oregon Public Ut.ility 
        Commission (OPUC) approval process or finding needed by 
        PacifiCorp for this action.

    To further the completion of the service to Reclamation for Klamath 
Project load, BPA would need to have Reclamation provide the following 
information and confirmations as preparation for BPA to execute 
contracts with Reclamation for power and transmission services to this 
load:

          1. Reclamation must provide information identifying the exact 
        loads, pumps and equipment and the metering locations which 
        comprise the Klamath Project load to be served. Arrangements 
        must be made for EPA-approved metering of these loads. The 
        costs of metering and communications equipment necessary to 
        aggregate and electronically access essentially real-time 
        simultaneous demands of the Klamath Project loads are the 
        responsibility of Reclamation. In addition, a plan of service 
        which identifies distribution usc, transmission line service 
        and point(s) of delivery from BPA to the PacifiCorp system must 
        be created.
          2. Reclamation must confirm that the Klamath Hydroelectric 
        Settlement Agreement (KHSA) is effective and implemented and 
        all contingencies have been met. The KHSA provides PacifiCorp's 
        agreement that the identified Klamath Project loads will be 
        served by Federal power. Any OPUC approval or review must be 
        completed. BPA will not duplicate service to these loads.
          3. Transmission service for Federal power must be arranged. 
        Reclamation must arrange Network Transmission (NT) service with 
        BPA's Transmission Services suitable to deliver Federal power 
        to an agreeable interconnection point on PacifiCorp's 
        transmission system in southern Oregon. In 2010 BPA was able to 
        assist Reclamation in obtaining a NT Service Agreement. 
        Notwithstanding this agreement, Reclamation is aware that it 
        cannot make a Transmission Service Request under the agreement 
        until after Reclamation and BPA have executed a formal power 
        sales agreement, at which time Reclamation can designate BPA's 
        Federal power as its Network Resource to serve Klamath Project 
        load.
          4. Once there is a signed Regional Dialogue contract in 
        place, BPA Power Services would arrange transfer service across 
        PacifiCorp's transmission system in southern Oregon to a Point 
        of Delivery on PacifiCorp's transmission system near the 
        Klamath Project loads. In order to schedule Reclamation loads, 
        BPA will need Reclamation to have a tool for aggregating all 
        the meter data from the irrigation loads.
          5. Details needed for completing negotiation of a BPA power 
        service contract under BPA's Regional Dialogue Policy and 
        standard contract templates, would need to be provided.
          6. Including binding notice of when power service would 
        commence, identification of applicable rates and services, 
        billing and metering processing, contact persons, and other 
        elections of applicable terms.

    Once these steps have been taken and information provided, BPA 
would undertake a public process on the execution of a contract for 
service to Reclamation. BPA's Regional Dialogue policy allows for the 
addition of new load service to both public agencies and Federal 
agencies. BPA anticipates the ability to execute a standard form firm 
power sales contract with Reclamation for service at BPA priority firm 
power rates. The rate applicable for service to Project load will 
depend upon the timing of the completion of these steps and 
Reclamation's notice of a binding commitment to purchase power. 
Although BPA might consider execution of a contract as early as 
possible, BPA Regional Dialogue Policy does not allow execution of 
contingent power sales contracts and execution of a contingent contract 
would raise an additional issue for public review and modification of 
current BPA power sales policy. Therefore BPA prefers to have 
Reclamation, PacifiCorp and other parties complete the necessary steps 
for the requested Federal service prior to the Administrator's final 
execution of a Regional Dialogue power sales contract and transmission 
agreements with Reclamation for service to the Klamath Project load.
    Thank you for your consideration.
                                 ______
                                 
   Statement for Pacific Coast Federation of Fishermen's Associations
    The water crisis in the Upper Klamath Basin has major regional 
impacts, including throughout much of the West Coast commercial ocean 
salmon fisheries. The depressed fall-run chinook salmon stocks of the 
Klamath are in the very center of the West Coast's ``Lower 48'' ocean 
salmon commercial fishery, and thus intermingle in the ocean with all 
other salmon stocks all the way from Monterey, CA to central Washington 
(see APPENDIX 1 attached*). Yet in spite of a helpful upward spike in 
escapement numbers for 2012, these Klamath-origin fall chinook stocks 
still remain very weak.
---------------------------------------------------------------------------
    * All appendicies have been retained in committee file.
---------------------------------------------------------------------------
    One of the most important and most urgent actions that can be done 
to restore the battered West Coast ocean commercial salmon fisheries in 
the ``Lower 48'' is to restore the valuable and once-great salmon runs 
of the Klamath River, once the third largest runs in the U.S. outside 
of Alaska.
    On February 18, 2010, after nearly 100 years of increasingly bitter 
Klamath Basin ``water wars,'' including many lawsuits, and after 
several disastrous Klamath-driven 2005, 2006 and 2007 partial or 
complete shutdowns of ocean commercial salmon fisheries over more than 
700 miles of coastline, some 43 major stakeholder groups and government 
agencies (including two Governors, one a Republican and one a Democrat) 
came together to announce that they had finally reached a ``Klamath 
Settlement'' that gave real hope for stabilizing and restoring that key 
West Coast salmon-producing basin-- and ultimately restoring thousands 
of lost jobs.
    Yet the ``Klamath Basin Economic Restoration Act'' (S. 1851 and 
H.R. 3398), a bill which would have fully implemented that key 
Settlement, was more or less ignored by the just ended 112th Congress, 
and the bill never even got a hearing.
    Now, more than three years after the Settlement was signed, and for 
purely ideological reasons that fly in the face of all the facts, 
certain members the U.S. House of Representatives continue to delay 
House approval, trying to block it in Congress.
    For the West Coast salmon-dependent communities of California, 
Oregon and southern Washington, continued Congressional inaction on 
solving the Klamath's salmon decline problems is simply not acceptable.
    Failure to pass the necessary legislation to implement the landmark 
Klamath Settlement Agreements puts the entire mixed-stock ocean 
commercial fisheries of those three states--worth several hundred 
million dollars a year--at continued risk of future Klamath-driven 
coastwide closures.
Why the Klamath Matters to Commercial Fishermen
    The Klamath Basin was historically the third-largest salmon 
producing river system in the U.S. outside of Alaska, with its large 
original salmon populations only surpassed by the Columbia and 
Sacramento-San Joaquin Rivers. Before European development, the Klamath 
produced an estimated average of 880,000 returning adults salmonids 
each year. Today, however, more than 90 percent of its salmon habitat 
has been destroyed or blocked by aging dams.
    Lost salmon habitat means declining populations. In years like 
2006, in which the fall-run chinook (the only healthy Klamath salmon 
run still left) could not even meet its 35,000 ``minimum spawner 
floor,'' (the minimum ocean escapement that allows any harvest), these 
declines have meant widespread or total ``weak stock management'' ocean 
salmon season closures over most of the northern California and Oregon 
coastline, triggering severe restrictions even well into southern 
Washington.
    That 2006 closure alone cost the West Coast fishing industry more 
than $100 million in economic losses, and required $60.4 million in 
Congressional disaster assistance. Only slightly less depressed seasons 
also occurred in 2005 and 2007 for the same reasons, also costing our 
industry many tens of millions of dollars that has never been 
compensated, and putting many coastal fishing jobs at risk.
    And unless something is dramatically changed in the Klamath Basin, 
such as the Congressional approval and implementation of the Klamath 
Settlement Agreements, this perpetual boom-bust cycle of economic 
losses and Congressional disaster assistance will occur every few 
years, with no end in sight. Thousands of fishery jobs and dozens of 
coastal communities will remain at risk.
Removing Fish-Killing Dams
    Today the heaviest impact on Klamath salmon production by far comes 
from a series of four small hydropower power dams originally all built 
since 1918 without fish passage (a lack which would be illegal today), 
along the Klamath River near the California-Oregon border. These dams 
are owned by PacifiCorp (aka Pacific Power), a privately owned but 
publicly regulated utility company providing power to about 560,000 
Oregon and 40,000 California customers.
    But these are not large dams, nor are they particularly valuable as 
power producers. The four dams combined have in fact generated less 
than 82 MW of electrical power on average (less than 2 percent of 
PacifiCorp's total power portfolio) over the last 50-year Federal 
Energy Regulatory Commission (FERC) license. By comparison, a single 
modern power plant could reliably generate more than 1,000 MW of power. 
Even off-the-shelf wind turbines can now generate up to 6 MW each. Just 
very modest energy conservation investments could also very cost- 
effectively make up the difference.
    It would thus take relatively little additional investment to 
replace the mere 82 MW these four dams combined actually generate, with 
many such opportunities in PacifiCorp's massive six- state power grid. 
In fact, PacifiCorp is already committed to bringing at least 1,400 MW 
of brand new renewable (i.e., non-carbon) electrical power online by 
2015 (See APPENDIX 2 attached* for citations). This is more than 17 
times the total power losses from Klamath dam removal. The Company 
actually expects to considerably exceed that goal.
    Reservoirs behind the dams also create or greatly contribute to 
serious river water quality problems, including slowing down and 
warming the water above tolerance levels for cold-water salmon, 
concentrating nutrients, curtailing natural gravel recruitment, and 
encouraging the explosive growth of toxic blue-green algae as well as 
encouraging the growth of fish pathogens downriver such as Ceratomyxa 
shasta and Parvicapsula minibicornis. Toxic algae blooms and massive 
outbreaks of these fish pathogens are both now endemic to the Klamath 
Basin--all because of decreasing water quality traced largely to the 
dams.
    However, that 50-year FERC license to operate these four dams 
expired in April 2006, and is only being extended annually while an 
ultimate decision on whether to relicense them is pending. But fixing 
these dams up to modern relicensing standards would likely cost more 
than they are now worth, especially for such a small amount of power, 
and especially under the terms of the portion of the Settlement dealing 
with the dams, which is the ``Klamath Hydropower Settlement Agreement 
(KHSA).''
    Under the KHSA, therefore, PacifiCorp has agreed that these four 
economically obsolete hydropower dams would be completely taken down in 
2020-- and full salmon passage restored. This would restore access for 
salmon to more than 420 stream-miles that were previously blocked, 
nearly doubling the river's valuable salmon runs.
More Water For Klamath Salmon
    The other major constraining factor for lower river salmon 
production is sheer lack of water for fish. In the upper basin, about 
220,000 acres of farmland is now irrigated as part of the federal 
Bureau of Reclamation Klamath Irrigation Project. The Bureau's water 
right claim is currently for effectively unlimited amounts of water, so 
long as they can use it for irrigation. Prior to recent federal 
Endangered Species Act (ESA) constraints, the Klamath Irrigation 
Project typically diverted up to 435,000 acre-feet of water from Upper 
Klamath Lake for this purpose, with its higher diversions in the driest 
water years-- thus exacerbating the impacts of all droughts on lower 
river salmon.
    At least another 110,000 acres of irrigated lands also exist that 
are hydrologically above the federal irrigation Project, along the 
Williamson and Sprague Rivers which feed Upper Klamath Lake. These 
lands either divert water directly from the flows to Upper Klamath Lake 
or irrigate from groundwater pumping, some of which could be reducing 
nearby stream flows by curtailing inflows from aquifer springs.
    A big source of water conflicts in the upper Klamath basin revolves 
around ESA protections both for resident fish in Upper Klamath Lake and 
for ESA-listed Klamath coho salmon below the dams. Water over-
allocation led to a major confrontation between the federal ESA and 
state- based water rights during the near-record drought of 2001. That 
year many Klamath Project farmers who were dependent upon federal 
Project water deliveries found themselves losing much of their 
anticipated water deliveries (and their crops), causing serious 
economic losses to these Project-dependent farmers and resulting in a 
sharp political backlash.
    Yet in a politically-driven effort to restore full irrigation 
deliveries in the upper basin, in spite of continued drought, in 2002 
the Bush Administration then severely cut back water to the lower basin 
just as the adult salmon runs were returning to spawn, causing the 
premature death of more than 70,000 adult spawners before they could 
lay their eggs-- said to be the largest adult fish kill in U.S. 
history.
    These and similar back-to-back water, farming and fisheries crises 
in 2001, 2002, 2005, 2006, 2007 and 2010 resulted in rotating economic 
disasters throughout the Klamath basin, punctuated by nearly constant 
litigation and political gridlock. These back-to-back crises also 
required large amounts in federal disaster aid between the years 2001 
and 2010--about $17 million in federal disaster aid per year average, 
and in one year (2006) as much as $60.4 million. Similar rotating 
economic disasters--and consequent need for ever more federal disaster 
assistance-- would likely recur in the future unless the systemic 
problems in the Klamath basin are ultimately fixed. The ``cost of doing 
nothing'' in the Klamath is very high.
    This past decade of disasters amply demonstrates the desperate need 
for change in the Klamath basin for both farmers and fishermen alike. 
The two parallel Klamath Settlement Agreements represent that much 
needed change.
    The Klamath Settlement Agreements were the result of nearly 10 
years of hard fought efforts by all the basin's major stakeholder 
groups, including PCFFA representing the interests of ocean salmon 
fisheries, to finally resolve these problems and to restore the 
Klamath's once-great salmon runs.
    The Klamath Settlement is a bi-partisan, bottom-up, stakeholder-
driven and both biological and economic restoration plan. It is also 
precisely the sort of long-term, locally-based restoration plan we were 
told by previous Congress's was needed.
    This once-in-a-lifetime economic restoration opportunity should not 
be sabotaged by Congressional foot-dragging. The Klamath Basin will 
most certainly return to the chaos and conflicts of the past if these 
conflicts are not ultimately resolved through this Settlement. There is 
no other viable alternative even remotely on the table.
How Klamath Restoration Benefits Commercial Fishermen And Coastal and 
        Farming Communities
    For more than 90 years now, the four PacifiCorp-owned dams have 
blocked access to more than 420 stream-miles of once fully occupied 
salmonid habitat above the dams--habitat which fishery biologists 
estimate could still support as many as 111,000 additional salmonids.
    In other words, the salmon runs of the Klamath would nearly double 
as a result of full implementation of both the habitat restoration and 
dam removal components of the Klamath Settlement, restoring hundreds of 
lost fishery-dependent jobs. Because the Settlement also provides more 
water certainty, many more jobs would also be restored to upper basin 
farming communities as well. Estimates under the recently completed 
NEPA analysis indicated that full implementation of the Klamath 
Settlement Agreements would mean about 4,600 additional jobs to the 
basin and region (see APPENDIX 3 attached*). And most of those jobs in 
both the farming and fisheries sectors would be permanent. In these 
depressed rural economies this is no small economic benefit.
    Once approved by Congress, the Klamath Settlement Agreements would, 
among other benefits to salmon fisheries: (1) permanently restore 
between 130,000 and 230,000 acre-feet of water back to the Klamath 
River to benefit salmon, the total amount each year depending on 
rainfall; (2) help ``drought proof'' the lower river and its salmon 
runs as much as humanly possible, including implementing the 
Settlement's first ever ``Drought Plan'' for the river; (3) restore 
access for salmon to more than 420 stream-miles of previously occupied 
habitat now blocked by the four obsolete Klamath dams; (4) greatly 
improve Klamath River water quality, gravel recruitment and other 
ecological functions necessary for maximizing salmon production; (5) 
greatly diminish the incidence of various fish pathogens and diseases 
that are exacerbated by current poor in-river water quality conditions; 
(6) provide the Klamath and Tulelake National wildlife refuges a 
guaranteed annual water supply for the first time, and; (7) authorize a 
highly cost-effective and coordinated 50-year salmon habitat 
restoration program to help fully restore the basin's damaged salmon 
habitat over time.
    A thorough scientific and economic NEPA analysis has already been 
done on the likely impacts of the Klamath Settlement, including dam 
removal, and those results are very encouraging. None of the various 
``scare stories'' about toxic sediments, impacts on flood control or 
irrigation impacts have been shown to have any merit. More than 50 
studies were completed for this NEPA analysis, and the analysis was 
subjected to highly unusual triple levels of independent peer review, 
assuring that all potential biases have been eliminated. No complaints 
of such bias have ever been upheld, nor found to have any merit.
                                 ______
                                 
   Statement of Jill K. Duffy, Former Humboldt County Supervisor 5th 
                          District, Orick, CA
    As the former Humboldt County Supervisor-Fifth District (2003-
2010),I participated in and represented the County of Humboldt through 
the five-year negotiation that resulted in ``the Klamath Agreements''. 
Humboldt County, along with other local governments, state and federal 
agencies,tribes, irrigators,fishermen, conservation groups, and 
PacifiCorp, were among the nearly 30 parties that actively participated 
in the negotiation process leading to the develop- ment of the Klamath 
Hydroelectric Settlement Agreement and the Klamath Basin Restoration 
Agreement.
    I respectfully request your support of the KBRA because it 
represents an unprecedented opportunity to resolve longstanding 
disputes involving dams, water diversions, and salmon runs in the 
Klamath Basin. Together,the KBRA and KHSA will create a comprehensive 
framework and mechanisms to achieve major watershed restoration through 
improved river flow regimes, habitat rehabilitation,improved water 
quality,and fisheries restoration and re-introduction, long-term 
sustainability and monitoring that will allow for adaptive management 
to adjust during the next 50 years. The KBRA also will resolve a number 
of water conflicts that have embroiled the basin in controversies and 
lawsuits for decades. In light of the recent Oregon water adjudication 
determinations,upper basin water users and the six Klamath Basin 
national wildlife refuges need the water sharing provisions contained 
in the KBRA to sustain their livelihoods and productivity.
    The fact that the KBRA reflects compromise is a sign of its 
strength. The settlement process brought together stakeholders and we 
worked together- despite our differences--to find practical solutions 
that benefit the basin as a whole.
    I thank you for your efforts to facilitate the Klamath hearing 
before the Energy and Natural Resources Committee, and respectfully 
request the Committee favorably report legislation to authorize 
implementation of the agreements.
                                 ______
                                 
    Statement of Earl Danosky, General Manager, Tulelake Irrigation 
                         District, Tulelake, CA
    On behalf of the Tulelake Irrigation District (TID), I thank you 
for your leadership in conducting this important oversight hearing. 
This testimony has been prepared to provide the perspective of TID, 
which has a long track record of addressing the water resources 
challenges facing the Klamath River watershed.
    Our testimony focuses primarily on TID's support for the Klamath 
Settlement Agreements (Agreements). TID supports the Agreements because 
they stabilize power costs and improve water supply reliability for 
Klamath Reclamation Project (Klamath Project) irrigators like those 
served by TID. Our district has been engaged in Klamath Basin water 
management issues for decades. Just ten years ago, we were battling 
with competing interests in the Klamath Basin in the court rooms, 
newspapers, and scientific journals. We have learned that no amount of 
fighting over the years has created more rain. Collaboration and 
cooperation to us is a better path to success than litigation and 
confrontation. Now, we have joined many of these same interests to 
truly seek ``peace on the river''.
    We commend the Committee's leadership in providing this oversight 
hearing. The timing of this is critical, given that we are facing yet 
another water crisis in the Upper Klamath Basin this year.
    The Settlement Agreements represent years of intense negotiations 
between the federal government, two states, three tribes, a power 
utility, and agricultural, conservation and fishing interests. The 
Agreements are complete, and represent the one true, comprehensive plan 
that can be implemented now, with Congressional support. We cannot 
afford to have a repeat of this year anytime soon.
Personal and Professional Background
    I have worked at TID for the past 41 years and have been the 
Manager since 1979. I have firsthand knowledge of the operations of TID 
and the Klamath Project. My responsibilities include overseeing all 
irrigation and drainage functions of TID, supervising all of its 
employees, and reporting to and advising TID's Board of Directors. I am 
also the custodian of TID's records.
About Tulelake Irrigation District
    TID is a California irrigation district formed and existing under 
California Irrigation District Law. Under California law, TID was 
established by and represents landowners and water users in Siskiyou 
and Modoc Counties, California. TID operates and maintains numerous 
facilities for the delivery of water and drainage of lands within TID.
    Located within the Upper Klamath Basin, TID's northern boundary is 
contiguous to the border between California and Oregon and extends from 
the Oregon-California state line south about 14 miles to the lava beds. 
TID includes lands in both Modoc and Siskiyou Counties and is bounded 
on the west by High Rim and Barn Top Mountains and extends east about 
12 miles. The exterior boundary includes 96,000 acres. Tule Lake and 
the Tule Lake National Wildlife Refuge (TLNWR) lie within the 
boundaries of TID.
    The irrigable acreage of TID is approximately 64,000 acres, of 
which approximately 18,000 acres are Federal Lease Lands owned by the 
United States; with most of this acreage leased to private growers for 
crop production.
    TID relies on water diverted in Oregon from the Klamath River 
system. The majority of acres served by TID, in excess of 40,000 acres, 
are lands that were homesteaded. Land that had been owned by California 
was granted to the United States for disposition under the reclamation 
and homesteading laws by state legislation adopted in 1905 and 
homesteaders settled these lands. Homesteading of the current Federal 
Lease Lands was precluded by the 1964 Kuchel Act. In addition to the 
Federal Lease Lands, the Public Lands include certain areas utilized by 
the U.S. Fish and Wildlife Service in farming and other uses.
    TID charges landowners for the operation and maintenance of Klamath 
Project facilities. Landowners are required to pay their annual 
assessments whether or not they receive water.
Crops Grown in TID
    Crops produced in TID in recent years have included potatoes, 
grains (such as wheat, barley, oats, rye), alfalfa, pasture, grasses, 
horseradish, onions, mint, peas, sugar beets, garlic, asparagus, 
carrots, strawberries, trees, vegetables, fruits and field crops. The 
total value of agricultural production within the District, including 
the lease lands, was $85 million in 2012.
TID Infrastructure
    The TID system includes 243 miles of canals and laterals, 334 miles 
of drains, and 26 miles of dikes. The TID system also includes 36 
pumping plants with 65 pump units. There is an ongoing process at 
improving the overall efficiency of the TID water delivery system, 
which includes 53 automated gates and 17 sites with full telemetry.
    TID owns 10 wells that were constructed in 2001 as a means of 
mitigating for that year's disastrous water curtailment. There are also 
wells owned by some landowners. The TID and private wells cannot serve 
all the demand in TID. Also, use of wells greatly increases operation 
costs. There has also been a lowering of groundwater levels in the 
Klamath Project area, as groundwater is increasingly relied upon by 
irrigators to replace the once-steady surface water supplies that have 
been re-directed in the past decade to meet fish requirements 
recommended by federal agencies. In 2010, the city of Merrill ran out 
of water due to lowered groundwater levels.
Lease Lands
    A portion of the land served by TID is known as the ``lease 
lands.'' Lease lands are owned by the United States but farmed and 
irrigated by individual water users. TID delivers water to the lease 
lands through the TID system. The lease lands are lands that were ceded 
to the United States for reclamation purposes. Other ceded lands were 
homesteaded. The lease lands remained in federal ownership. The lease 
lands are within both TID and the Tule Lake National Wildlife Refuge 
(TLNWR).
Impacts of Water Supply Uncertainty
    In some past years, there has been inadequate water supply from the 
Klamath system to meet demand within the Klamath Project that relies on 
Klamath water. In recent years the available supply was inadequate in 
1992, 1994, 2000, 2001, 2008, 2009, 2010, and 2012, and will be 
inadequate in 2013. The shortages vary in magnitude.
    In addition to adverse effects on the water users TID serves, water 
shortages also have adverse effects on TID itself. For example, in 2001 
when there was extremely little water available, dikes and canal banks 
formed stress fractures and cracked with no water in the system. Also, 
no seasonal employees were hired that year. TID also receives reduced 
revenue from the lease lands if water supplies are short. Landowners 
have difficulty paying their assessments also, which creates a variety 
of problems.
    The gross ``lease revenues'' (or rent) for the lease lands in TID 
are related to water availability. In 2001, water was essentially 
unavailable and the land was leased for $1 per acre. In 2010, water 
availability was very limited and the gross lease revenues were less 
than $1 million. In 2011, the gross lease revenues were $3.4 million 
and in 2012 the gross lease revenues were $3.8 million. The net lease 
revenue is usually about $.5 million less than the gross lease revenue. 
Under the TID contract, TID is entitled to receive 10 percent of the 
net lease revenues. Local counties receive 25 percent of the net lease 
revenues. The value of crop production on the lease lands within TID 
was $27.7 million in 2011 and $24.5 million in 2012.
Historic Low-Cost of Klamath Irrigation Project Power
    The Bureau of Reclamation's Klamath Irrigation Project is unique 
and has had a longstanding relationship with PacifiCorp's Hydroelectric 
Project. Early plans for the Klamath Project contemplated the 
development of power by the Bureau of Reclamation for use in the 
Klamath Project. In 1917, PacifiCorp's predecessor entered an agreement 
by which it constructed Link River Dam and agreed to sell power at low 
cost to irrigators and Reclamation in lieu of Reclamation developing 
power on the river. In the 1950s, when PacifiCorp's predecessor sought 
a Federal Energy Regulatory Commission (FERC) license for PacifiCorp's 
hydroelectric project including the planned J.C. Boyle facility, 
Reclamation initially voiced objection that the license would preclude 
development of low-cost federal power to benefit the Klamath Project. 
This concern was resolved through a license term requiring extension of 
the 1917 contract including its power terms, for at least the term of 
the FERC license. (PacifiCorp's predecessor entered a similar contract 
to provide low-cost power to Off-Project irrigators in Oregon.) The 
long relationship was reflected and codified in the Klamath River Basin 
Compact enacted by California and Oregon, and ratified by Congress, in 
1957, which provides that it is the objective of the states, in 
connection with the development of hydroelectric resources on the 
Klamath River ``to secure . . .  the lowest power rates which may be 
reasonable for irrigation and drainage pumping, including pumping from 
wells.''
    The FERC license issued to PacifiCorp in the 1950s has expired, but 
is automatically renewed for one-year terms pursuant to the Federal 
Power Act. The historic power contract is not part of the annual 
renewals. In the meantime, the FERC relicensing process has been 
affected by settlement agreements that have been developed including 
the Klamath Basin Restoration Agreement (KBRA) and companion Klamath 
Hydroelectric Settlement Agreement (KHSA).
    In other Reclamation Projects, low costs ``reserved'' or ``project 
use'' power is made available for certain loads. Also, many irrigators 
in the PacifiCorp Northwest have access to Bonneville Power 
Administration (BPA) power or similar alternatives through PUDs or 
similar entities. These types of arrangements were neither necessary 
nor pursued in the history of the Klamath Project due to the long-
standing relationship with the hydroelectric project.
    The plumbing of the Klamath Project is also unique; low cost power 
is a part of its infrastructure. A significant portion of the power 
goes to recirculate water (achieving efficiencies), to provide water to 
national wildlife refuges, to pump water back into the Klamath River 
for use by fish, and to operate pressurized sprinkler systems that use 
less water than flood irrigation. These pumping operations are 
essential for water efficiency and successful pursuit of other 
components of the Power for Water Management Program.
Dramatic Rising Power Rates and Related Impacts
    TID has been severely impacted by the increase in power rates that 
have occurred since the FERC license expired. Between 2006 and 2011, 
our annual power costs associated with our pumping infrastructure 
dramatically increased. Due to conservation efforts, our power usage 
has decreased by about 50 percent since the period prior to 2006, yet 
our total cost of power has increased from $42,620 in 2005, to $625,897 
in 2011. This drastic increase in total cost is due to an increase of 
over 2700 percent in the unit price of power.
    That would be similar to a homeowner's average power bill going 
from $43 per month to $1,252 per month in a six-year period.
    Already, TID, faced with considerable power cost increases, has 
undertaken changes in water management practices that could reduce 
historic water efficiencies. Dramatically increased power costs also 
threaten the viability of some operations, including the critical role 
of ``D'' Plant, which moves water from Tule Lake to the Lower Klamath 
National Wildlife Refuge. The annual pumping costs associated with 
``D'' Plant alone have increased from $28,129 in 2005 to $211,355 in 
2011 with roughly a 70 percent reduction in power usage. These rising 
costs have forced TID to take measures to minimize ``D'' Plant 
operation, which has resulted in less water moving into Lower Klamath 
NWR in recent years.
KBRA Solution to the Klamath Project Water Challenge
    The KBRA contains provisions for local irrigation districts, 
including TID, to develop and implement an ``On-Project Plan'' (OPP). 
The purpose of the OPP is to align water supply and demand in areas of 
the Klamath Project that rely on the Klamath system (Lake and River) 
for water supply. This would be accomplished by Project districts, for 
the first time ever, having a known block of water available each year. 
The plan will also take into account water delivery obligations for 
National Wildlife Refuges. The overriding principals/goals of the OPP 
are that the plan be developed by irrigators and that no irrigator or 
district in the Project suffers involuntary water shortages, as has 
happened in the past. The OPP will likely employ a variety of tools in 
order to address variability in available water supply so that 
irrigators in the Project can ``live with'' the available water supply 
including any limits on that supply in the future.
    The KBRA describes certain agreed upon ``Diversion Limits'' for 
water diverted from Upper Klamath Lake and the Klamath River for the 
Klamath Project and refuges. The OPP is needed to ensure a reliable 
water supply for the sustainability of agriculture in the Klamath 
Basin. Beyond the scope of the KBRA, the challenges of meeting water 
needs during dry years for agriculture, endangered and special status 
species, and wildlife refuges in the Klamath Basin have become 
monumental and are unlikely to change.
    While ``water banks'' (which consist primarily of additional 
groundwater pumping) have partially addressed the imbalance of supply 
and demand in the Basin, there is no simple answer for achieving 
balance and mitigating the disastrous impacts that water shortages 
impart on our local economy and infrastructure. Instead of relying on 
Federal agencies to develop a plan to deal with variable water supply, 
it makes sense that the irrigation community develops its own plan.
KBRA Solution to the Klamath Project Power Challenge
    Stabilizing power costs is an important component of the KBRA. The 
KBRA programs include the Power for Water Management Program, which 
also relates conservation elements of the KBRA. The KBRA power program 
also addresses similar interests of irrigators in the Upper Klamath 
Basin who operate outside the Klamath Project (Off-Project irrigators).
    Section 17 of the KBRA, complemented by Section 5 of the KHSA, 
states the Power for Water Management Program as related to the Klamath 
Project and Off-Project agriculture. The Program consists of three 
elements developed around a delivered power cost target ``at or below 
the average cost for similarly situated Reclamation irrigation and 
drainage projects in the surrounding area.'' The composition and cost 
of those programs are interrelated.
    First, for the short-term, funding is provided to stabilize total 
power costs as other components of the program are brought on line.
    Second, power generated at other Bureau of Reclamation facilities 
would address the program objectives in part. Power can, for example, 
be marketed by the BPA to serve eligible loads in the upper Klamath 
Basin in Oregon. Under the KBRA and KHSA, Reclamation commits to 
acquire a contract consistent with applicable law and standards of 
service to serve eligible loads, PacifiCorp agrees to cooperate in 
delivery of power to the loads, and all parties support this 
undertaking. The KBRA provides for funding of $1 million over four 
years for technical work and analysis necessary for contracting and 
development of transmission and delivery arrangements. The availability 
of some federally generated power should incrementally assist in 
meeting low power cost objectives, and would be supplemented by the 
renewables element of the overall Power for Water Management Program, 
which is discussed below.
    Third, funding would be provided for energy efficient/conservation 
and renewable generation opportunities and investment. The activities 
to be pursued could include installation of efficiency measures, such 
as additional improvements in water pumping and piping efficiency, 
solar photovoltaic development and net metering programs, investment in 
renewable generation on a broader scale, and other practices. 
Settlement parties, with expert assistance provided by the State of 
Oregon and the Bureau of Reclamation, worked diligently to evaluate 
alternatives that would leverage expenditures through tax credits and 
available regulatory programs. The KBRA also contemplates the potential 
development of joint projects with the Klamath Tribes and irrigators 
under the umbrella of the renewable energy element. As with other 
elements, the benefits and objectives of this element are designed to 
serve both irrigation interests inside the Klamath Project and the Off-
Project area in the Upper Klamath Basin.
Conclusions
    Developing a collaborative settlement to the Klamath River 
watershed challenges was initiated by the Bush Administration, and 
strongly supported by former Interior Secretary Salazar when President 
Obama was handed the issue. Now, we need similar bipartisan support in 
Congress to lead to eventual implementation.
    It defies common sense why some critics of the Settlement 
Agreements believe we should tear them up and start over. We hope that 
these critics are prepared to offer alternative, realistic solutions--
now.
    It is time for Congress to start moving authorization of the 
Agreements.
    Thank you for this opportunity to present testimony to you.
                                 ______
                                 
Statement of Luke Robison, Manager, Malin and Shasta View Irrigation 
        Districts, Malin, OR
    On behalf of the Malin Irrigation District (Malin ID) and the 
Shasta View District (Shasta View ID), I appreciate the opportunity to 
present written testimony for the record of this very important 
oversight hearing. My name is Luke Robison, and I am the manager of 
both districts. I also serve as an alternate director on the board of 
the Klamath Water Users Association.
    My district is proud to be one of the parties signed on in support 
of the Klamath Settlement Agreements, including the Klamath Basin 
Restoration Agreement (KBRA). Admittedly, the KBRA is not the perfect 
answer to the challenges facing the Klamath River watershed. However, 
we believe the KBRA is the most viable solution to a complex set of 
issues that face the people of the Klamath Basin.
    In the past ten years, local water users--both within the Klamath 
Project and those who farm in upstream areas north of Upper Klamath 
Lake--have taken proactive steps to protect and enhance water supplies, 
enhance the environment, and stabilize the agricultural economy. The 
impacts of the 2001 decision to withhold irrigation supplies 
underscored the vital linkage that exists between irrigated farmland 
and wildlife. Water that would normally flow through Klamath Project 
farmland habitat was directed instead towards increasing instream water 
levels for three species protected under the Endangered Species Act 
(ESA). The vitality of over 400 other wildlife species was threatened 
when they were subjected to the same fate as local farmers: no water, 
dry watercourses, drastically altered vegetation, parched land and 
dust.
    Our pioneering heritage is based upon common sense and harmony with 
our environment and our community. The simple fact is that there was no 
common sense or harmony in 2001 during the water shut off, or after the 
2002 die-off of fish near the mouth of the Klamath River. It took a lot 
of tenacity for the major stakeholder from all areas of our watershed 
to put hard feelings aside and agree to work together to find a better 
way of life for all interests who rely on the river. Thus, the KBRA was 
born.
    I applaud the Committee for conducting this important hearing at 
such a critical time. Once again, we are facing yet another water 
crisis in the Upper Klamath Basin this year.
    The KBRA can help prevent a repeat of this year's crisis. However, 
Congressional action is required to fully enable it and the Klamath 
Hydropower Agreement. This is both reasonable and appropriate since the 
federal government has played a central role in virtually every major 
water management decision in this basin and the locally-crafted 
consensus approach embodied by the accords came about at the urging of 
Congress.
Shasta View and Malin Irrigation Districts: Background
    Shasta View ID and Malin ID derive their water from the Klamath 
Irrigation Project, which draws its source water from Upper Klamath 
Lake, the Klamath River, and the Lost River systems. Shasta View ID 
serves 5,000 acres, while Malin ID serves 3,400 acres near the 
community of Malin, Oregon. Key crops grown include potatoes, alfalfa, 
garlic, sunflowers, mint, strawberries, and grain. Shasta View ID has 
an underground pressurized water delivery system, while Malin water is 
delivered primarily by gravity, through an open channel delivery 
network.
Recent Changes in Klamath Project Water Management
    For most of the last century, Klamath Project irrigation supplies 
proved sufficient to meet the needs of our district's farm families. 
Although there were years where Mother Nature and Klamath Project 
storage capacity proved insufficient to meet full irrigation demands, 
the local community managed to stretch thin supplies and make things 
work. That all changed in the early 1990s, when steadily more 
restrictive government agency decisions made to meet Endangered Species 
Act (ESA) goals began to steadily chip away at the stored water supply 
originally developed for irrigation.
    Two sucker species were listed (1988) as endangered and coho salmon 
were listed (1997) as threatened under the ESA. Since then, biological 
opinions rendered by the U.S. Fish and Wildlife Service (for the 
suckers) and NOAA Fisheries (for the coho), have emphasized the 
reallocation of Project water as the sole means of avoiding 
jeopardizing these fish. Klamath Project ``operations plans'' based on 
these biological opinions also factor in tribal trust obligations, 
although the nature and extent of such obligations is undefined.
    The net result of increasing restrictions on other Klamath Project 
water users was fully realized on April 6, 2001, when Reclamation 
announced its water allocation for the Project after U.S. Fish and 
Wildlife Service and NOAA Fisheries officials finalized the biological 
opinions (BOs) for project operations in a critically dry year. Based 
on those regulatory actions, Reclamation announced that--for the first 
time in Project's 95-year history--no water would be available from 
Upper Klamath Lake to supply Project irrigators.
    The resulting impacts to our local community were immediate and 
far-reaching. Even with a later release of a small percentage of needed 
water over a 30-day period in July and August 2001, thousands of acres 
of valuable farmland were left without water. In addition to harming 
those property owners, managers, and workers, also imparted an economic 
``ripple'' effect through the broader community. The wildlife benefits 
provided by those farms--particularly the food provided for area 
waterfowl--were also lost with the water.
    The local farming community took years to recover from the April 6, 
2001 decision, and severe business losses echoed the hardship endured 
by farmers and farm employees. As farmers and laborers attempted to 
deal with the loss of jobs, a year's income, and in some cases the land 
itself, referrals for mental health counseling increased dramatically.
    Because of the heated controversy over the federal government's 
decision to eliminate water deliveries to the Klamath Project in 2001, 
the National Academy of Science (NAS) was asked by the Department of 
the Interior and Department of Commerce to ``evaluate the strength of 
scientific support for the biological assessments and biological 
opinions on the three listed species, and to identify requirements for 
recovery of the species''. Although the NAS Klamath committee agreed 
with many of the agencies' decisions, after extensive review, they 
ultimately concluded that there was insufficient scientific support for 
the argument of high lake levels for suckers (Upper Klamath Lake) and 
high Klamath River releases from Iron Gate Dam for coho. Notably, the 
peer review committee members were unanimous in their conclusions on 
both biological opinions.
    Nevertheless, increased downstream releases into the Klamath River 
and elevated lake levels in Upper Klamath Lake in the past 13 years 
have formed the foundation of recent Klamath River management by the 
federal government.
Impacts Due to Water Supply Uncertainty and Rising Power Costs
    The 2001 Klamath Basin water crisis dramatically affected the Malin 
community, resulting in the closure of the town's only gas station and 
auto repair shop. The hardware store reported $150,000 in lost sales, 
and a local restaurant also suffered, and eventually closed.
    Before 2001, the Klamath Basin had 30,000 acres in potatoes. Now, 
the acres planted in potatoes are only 11,000. The number of potato 
packing sheds dropped from 23 to 9. Of those, three are in Malin.
    It is nearly impossible to describe 2001 and the harsh impacts that 
resulted from the immediate loss of farm income. Some farmers went 
broke, while others were forced to retire. Farm jobs were lost. Dust 
blew across the fields and through our community all summer and once-
productive farmland was overtaken by weeds.
    Things were not much better in 2010, when sixty-two landowners in 
the Shasta View ID went without Upper Klamath Lake surface water and 
voluntarily participated in a land idling program that paid landowners 
not to irrigate. Many fields and farmlands went dry as a result, and 
the farmland that did not have access to groundwater produced no crops 
that year. Several of our potato growers, under contract to supply 
potato chip manufacturers, had to find other lands in neighboring 
communities to grow, or risk losing their contracts.
    A significant amount of the acres grown in both districts are 
permanent crops. With the current uncertain water delivery status, this 
can be risky and costly at times, since money must be invested prior to 
knowing what our water supply will be. It can sometimes take up to 
three years before a permanent crop actually returns invested money 
back to the family farm.
    Delayed delivery of water to our row crops can also be detrimental 
to our growers, due to the location of our districts, near the tail-end 
of the Klamath Project delivery system. By the time water gets to one 
of my district farmers, his crops have already taken a hit from lack of 
water. He and his neighbors deserve a return to the reliable water 
supplies that originally drew them to our area.
    Potatoes grown for chips are a major crop in the two district 
service areas. Without reliable water in the September- November time 
frame, these crops cannot be harvested. Walker Brothers Farms is a 
family owned, large employer in this area. That business would not be 
able to continue without water.
    In addition to water supply uncertainty in recent years, Shasta 
View and Malin Irrigation Districts have seen unprecedented power rate 
increases in the past six years, due to the expiration of a long-term 
power agreement with Pacific Power that local farmers and ranchers 
enjoyed for the previous 50 years. In 2005, Shasta View Irrigation 
District, which provides piped, pressurized water to our farms, spent 
$35,000 on power costs. This year, we budgeted $500,000 to cover those 
costs. Malin Irrigation District pumps its water out of the Klamath 
Project canal system into a gravity-fed canal system. From there, 
individual farmers pump the water from the canal on to their fields. In 
2005, Malin ID spent approximately $13,000 on pumping costs. This year, 
we budgeted $112,000 for the same line item. These costs are passed on 
to the farmers, who also have to pay for their own individual on-
property pumping costs.
    Farmers in both districts are paying well over 10 times what they 
were paying in 2005. This is a very serious challenge that is shared by 
other Klamath Project irrigators in Oregon and California.
The Solution: Klamath Basin Settlement Agreements
    The Klamath Settlement Agreements will help stabilize power costs 
and improve water supply certainty for both Malin and Shasta View 
Irrigation Districts.
    The KBRA contains provisions for local irrigation districts, 
including TID, to develop and implement an ``On-Project Plan'' (OPP). 
The purpose of the OPP is to align water supply and demand in areas of 
the Klamath Reclamation Project that rely on the Klamath system (Lake 
and River) for water supply.
    I am actively involved with the development of the OPP and I am 
confident that it will improve water supply predictability. Under the 
KBRA and OPP, by early March, every farmer should know what the 
Project's water allotment from the Klamath system will be, which is a 
great improvement in certainty for water users. In almost every year, a 
determination of how much water will be made available will be made in 
early March by applying criteria in the KBRA. Studies estimate that 
surface water alone should meet the Project irrigation demand in at 
least 50 percent of the years. For those drier years, the OPP will 
align supply and demand, through physical facilities, voluntary 
arrangements, or both.
    The OPP provides an opportunity for Klamath Project irrigators to 
move from a ``reactive'' mode, focused on addressing regulatory 
concerns, to a strategic mode that provides a defensible road map for 
accommodating variations in Klamath River water supply. This will 
support and promote viable Project agriculture in the Basin, which in 
turn will boost the local economy and the environment. The OPP is 
intended to provide predictable and reliable water supplies, albeit 
with limitations (which should be manageable) on the total amount of 
Klamath River water available, particularly in the drier years.
    Stabilizing power costs is also an important component of the KBRA, 
which includes provisions for the Power for Water Management Program. 
The KBRA power program addresses similar interests of irrigators in the 
Upper Klamath Basin who operate outside the Klamath Reclamation Project 
(Off-Project irrigators). The Program consists of three elements 
developed around a delivered power cost target ``at or below the 
average cost for similarly situated Reclamation irrigation and drainage 
projects in the surrounding area.'' The composition and cost of those 
programs are interrelated.
Conclusions
    If the KBRA is not implemented, the status quo--rooted in 
regulatory uncertainty--remains, with potentially greater risk to 
Shasta View and Malin ID water users. The irrigation districts and 
their water users will be left with (a) addressing ESA issues year to 
year, likely through conflict and litigation, as they have in the past; 
and (b) exposure to greater uncertainty with respect to future effect 
of tribal rights and claims; and (c) potentially crippling power bills.
    We specifically ask that Congress join us in finding the most 
viable means to fund, authorize, and otherwise support solutions that 
decisively overcome the decisions of the past that created today's 
crisis, and help us enact what we believe to be the fairest, most cost-
effective, and fastest path to sharing the basin's water resources. The 
Settlement Agreements represent years of intense negotiations between 
the federal government, two states, three tribes, a power utility, and 
agricultural, conservation and fishing interests. The Agreements are 
complete, and represent the one true, comprehensive plan that can be 
implemented now, with Congressional support. We cannot afford to have a 
repeat of this year anytime soon.
    In short, I ask for this Committee's assistance in crafting 
legislation to enact the Klamath Settlement Agreements.
    Again, I would like to thank the Committee for taking the time to 
hear testimony on this topic, which is vitally important for every 
resident of the Klamath River watershed.
                                 ______
                                 
 Statement of Steve Kandra, President, Westside Improvement District, 
                              Tulelake, CA
    On behalf of the Westside Improvement District (Westside), I 
appreciate the opportunity to present written testimony for the record 
of this very important oversight hearing. My name is Steve Kandra, and 
I am now and have been since 1985, the President of Westside. I am 
intimately familiar with the operations of Westside and, generally, 
with the Klamath Irrigation Project (Klamath Project). My 
responsibilities include overseeing all irrigation and drainage 
functions of Westside, record-keeping, and reporting to and advising 
Westside's Board of Directors.
    We commend the Committee's leadership in providing this oversight 
hearing. The timing of this is critical, given that we are facing yet 
another water crisis in the Upper Klamath Basin this year. 
Unfortunately, the situation in the Klamath has again reached crisis in 
2013. The State of Oregon declared a drought in the Upper Klamath 
because of an unusually low snow pack in the mountains that nourish the 
basin. With recent completion of the 38-year process that determined 
water rights in the basin's headwaters, those with junior water rights 
are virtually certain to see their water shut off this summer. The 
threat of community conflict this summer, even violence, is sadly very 
real.
    For these reasons and many more, Westside supports the Klamath 
Settlement Agreements (Agreements). Three years ago, weary from decades 
of seemingly endless litigation and rotating crises, an unlikely 
coalition of farmers, fisherman, tribes, and environmentalists, along 
with private dam-owner PacifiCorp and government representatives, 
signed the Klamath Settlement Agreements in 2010. These Agreements, 
supported by the majority of basin interests who depend upon surface 
water, offer balanced solutions for realizing better water certainty 
and water sharing across all interests, restoring imperiled fish and 
wildlife, and sustaining a strong natural resource-based economy in the 
region. The parties to these accords put aside their own ideology and 
vision of the perfect outcome to embrace a collaborative path they 
believe is in the best long-term interest of the entire basin.
    The Agreements can help prevent a repeat of this year's crisis; 
however, Congressional action is required to fully enable them. This is 
both reasonable and appropriate since the federal government has played 
a central role in virtually every major water management decision in 
this basin and the locally-crafted consensus approach embodied by the 
accords came about at the urging of Congress.
Westside Improvement District: Background
    Westside--created in 1934--is a California improvement district 
organized and existing under the California Water Code.--The District 
is located in Siskiyou County, California, and is adjacent to Tulelake 
National Wildlife Refuge. Westside receives water from facilities 
operated and maintained by Tulelake Irrigation District, which convey 
irrigation water for beneficial use to water users on approximately 
1,190 acres of high-value agricultural land within the boundaries of 
Westside. Westside's farmers grow alfalfa, wheat, mint, sunflowers, 
potatoes (Russets and chippers) and onions.
    All of the lands presently within Westside were part of lake bottom 
ceded to the United States by the State of California in 1905 for the 
construction of the Klamath Irrigation Project. On October 20, 1936 
these lands were conveyed to the Colonial Realty Company (Colonial) by 
patent as part of a land exchange between Colonial and the United 
States. Colonial thereafter sold this land to farmers.
    Once the Klamath Project construction had begun, Westside 
landowners began filing water right applications for delivery of water 
from the Klamath Project. Today, Tulelake Irrigation District (TID) 
delivers water to lands within the Westside that are also within TID 
under what are know as Warrant Act contracts.
Westside Improvement District Environmental Initiatives
    My district has a well-established record for finding ways to 
enhance the symbiotic relationship that exists between the environment 
we work in and the land that supports the food we produce. In Westside, 
18 percent of the District is dedicated to long term wildlife 
enhancement projects. The farmlands within the District experience 
significant Pacific Flyway waterfowl usage during Spring and Fall 
migrations.
    In 2004, Westside Improvement District landowners partnered up with 
USFWS, Reclamation, TID, and others to design and construct a water 
treatment marsh that treats the drainage return flows from the District 
to improve water quality in Tule Lake. The treatment marsh became 
functional in 2012.
    Landowners also participate in ``walking wetlands'' program in 
cooperation with the Klamath Basin National Wildlife Refuges. In order 
to reduce pesticide use on the National Wildlife Refuge and reduce 
risks to Refuge fish and wildlife, the U.S. Fish and Wildlife Service 
in cooperation with the Bureau of Reclamation and local farmers created 
an Integrated Pesticide Management (IPM) Plan in 1997. In developing 
the plan, it was felt that periodic flooding of agricultural lands 
would be a key IPM technique for suppressing plant parasitic nematodes 
as well as a host of other soils diseases and pests. This is a 
management plan that rotates blocks of farmland with flooded wetlands.
    In participating in the Refuge's wetland/cropland program, growers 
have found that following wetland cycles, no soil fumigants are 
required at a savings of up to $200/acre. In addition, yields of some 
crops have increased up to 25 percent. The value of these benefits is 
apparent in recent lease rentals which are nearly twice those of 
adjacent conventionally farmed fields. In addition, several Refuge 
farmers have discovered that the soil pest and disease control function 
of wetlands is sufficient to allow for organic crop production. Based 
on increasing demand for organic acreage on the refuge, this program 
continues to expand.
    One of the primary reasons for implementing an integrated program 
of wetlands and croplands was to enhance wildlife values with an 
emphasis on waterfowl and the diversity and abundance of other wetland 
wildlife species.
    As a result of cooperative wetland restoration and enhancement 
programs, waterfowl use of Tule Lake NWR has increased to levels not 
seen in over 25 years.
Westside Water Supplies: Before and After 2001
    Westside receives its water from the Klamath River system and the 
Lost River/Tule Lake, which are all regulated for endangered fish 
species by U.S. Fish and Wildlife Service (USFWS) and National Marine 
Fisheries Service (NMFS). The inclusion of two endangered sucker fish 
species and the threatened coho salmon on the Endangered Species Act 
list fundamentally changed how our water was managed, starting in the 
late 1990's.
    Prior to 2001, Westside landowners always received all the water 
they could beneficially use (with minor exceptions in the drought years 
of 1992 and 1994). Westside farmers would, again, in 2001 have received 
all the water they could have beneficially used if Reclamation had been 
able to operate under historical practices as originally intended. In 
February 2001, Reclamation issued a biological assessment with respect 
to the operation of the Klamath Project, proposing to deliver water to 
Klamath Project irrigators and wildlife refuges, in accordance with 
historical practice. Reclamation, however, directed irrigation water 
users not to take water until USFWS and NMFS had completed their 
biological opinions.
    On April 6, 2001, the NMFS and USFWS issued their biological 
opinions with respect to the operation of the Klamath Project on coho 
salmon and suckers, respectively. Each found that the proposed action 
of water delivery was likely to jeopardize the continued existence of 
the species. Throughout the 2001 irrigation season, Upper Klamath Lake 
contained large quantities of water that should have been released to 
Klamath Project water users. Constrained by the biological opinions, 
however, Reclamation always kept the Upper Klamath Lake level between 
4,143.3 and 4,139.5 feet above sea level, rather than drawing it down 
to 4,137 feet above sea level or lower as in prior years. Further, 
Reclamation released flows down the Klamath River as required by the 
NMFS biological opinion much larger than the historical practice. Had 
Reclamation managed Lake levels and downstream flows according to 
historic practices, Klamath Project water users would have received 
sufficient water to grow their crops.
    Because of the heated controversy over the federal government's 
decision to eliminate water deliveries to the Klamath Project in 2001, 
the National Academy of Science (NAS) was asked by the Department of 
the Interior and Department of Commerce to ``evaluate the strength of 
scientific support for the biological assessments and biological 
opinions on the three listed species, and to identify requirements for 
recovery of the species''. Although the NAS Klamath committee agreed 
with many of the agencies' decisions, after extensive review, they 
ultimately concluded that there was insufficient scientific support for 
the argument of high lake levels for suckers (Upper Klamath Lake) and 
high Klamath River releases from Iron Gate Dam for coho. Notably, the 
peer review committee members were unanimous in their conclusions on 
both biological opinions.
    Nevertheless, increased downstream releases into the Klamath River 
and elevated lake levels in Upper Klamath Lake in the past 13 years 
have formed the foundation of recent Klamath River management by the 
federal government.
    In the years following 2001 and currently, Klamath Project annual 
operations are characterized by uncertainty. As things stand, 
irrigators may not know what their water supply will be until April (or 
June, as was the case this year), and uncertainty can persist through 
the season. This makes planning for the growing season very difficult. 
Further, if there is a water shortage, it is not allocated according to 
any particular plan or logic (other than contractual priorities that 
the Bureau of Reclamation has identified). Finally, for over a decade, 
local water users have spent significant time and financial resources 
monitoring and challenging annual Klamath Project operations plans 
influenced by agency biological opinions.
Importance of Affordable Power
    Westside Improvement District could also be viewed as a 
``drainage'' district, since the farmlands have been reclaimed from 
Tule Lake and are protected by 4 miles of levees and 6 miles of drains. 
The cost of energy for drainage pumping is a significant portion of 
operations costs for the District, having increased nearly 2,000 
percent since 2006. This is a critical matter, since we need to pump to 
avoid flooding, and it is becoming increasingly expensive to do so.
How the Klamath Settlement Agreements Help Westside Farmers
    The Settlement Agreements will help stabilize power costs and 
improve water supply certainty for Westside Improvement District.
    The Klamath Basin Restoration Agreement (KBRA) contains provisions 
for local irrigation districts, including TID, to develop and implement 
an ``On-Project Plan'' (OPP). The purpose of the OPP is to align water 
supply and demand in areas of the Klamath Reclamation Project that rely 
on the Klamath system (Lake and River) for water supply.
    I am confident that the OPP will improve water supply 
predictability. Under the KBRA and OPP, by early March, every farmer 
should know what the Project's water allotment from the Klamath system 
will be, which is a great improvement in certainty for water users. In 
almost every year, a determination of how much water will be made 
available will be made in early March by applying criteria in the KBRA. 
Studies estimate that surface water alone should meet the Project 
irrigation demand in at least 50 percent of the years. For those drier 
years, the OPP will align supply and demand, through physical 
facilities, voluntary arrangements, or both.
    The OPP provides an opportunity for Klamath Project irrigators to 
move from a ``reactive'' mode, focused on addressing regulatory 
concerns, to a strategic mode that provides a defensible road map for 
accommodating variations in Klamath River water supply. This will 
support and promote viable Project agriculture in the Basin, which in 
turn will boost the local economy and the environment. The OPP is 
intended to provide predictable and reliable water supplies, albeit 
with limitations (which should be manageable) on the total amount of 
Klamath River water available, particularly in the drier years.
    Stabilizing power costs is also an important component of the KBRA. 
Programs proposed in the KBRA include the Power for Water Management 
Program, which also relates conservation elements of the KBRA. The KBRA 
power program addresses similar interests of irrigators in the Upper 
Klamath Basin who operate outside the Klamath Reclamation Project (Off-
Project irrigators). The Program consists of three elements developed 
around a delivered power cost target ``at or below the average cost for 
similarly situated Reclamation irrigation and drainage projects in the 
surrounding area.'' The composition and cost of those programs are 
interrelated.
Conclusions
    Our farms provide high value, high productivity crops that 
contribute to our local economy and the overall health of the nation. 
Benefits provided by irrigated agriculture--consisting of the direct 
crop production, agricultural services, and the food processing and 
packaging sectors--is one of the largest job providers and economic 
engines in the West. A recent study released by Dr. Darryl Olsen of the 
Pacific Northwest Project determined that Western irrigated agriculture 
creates a total annual national economic benefit valued at $128 billion 
in 2010 dollars.
    Our farms also provide significant wildlife values that must be 
protected. We need to find constructive and meaningful ways to 
proactively address the Endangered Species Act and the Clean Water Act. 
And, we need affordable energy for drainage vital to prevent flooding.
    We specifically ask that Congress join us in finding the most 
viable means to fund, authorize, and otherwise support solutions that 
decisively overcome the decisions of the past that created today's 
crisis, and help us enact what we believe to be the fairest, most cost-
effective, and fastest path to sharing the basin's water resources. The 
Settlement Agreements represent years of intense negotiations between 
the federal government, two states, three tribes, a power utility, and 
agricultural, conservation and fishing interests. The Agreements are 
complete, and represent the one true, comprehensive plan that can 
implemented now, with Congressional support. We cannot afford to have a 
repeat of this year anytime soon.
    In short, I ask for this Committee's assistance in crafting 
legislation to enact the Klamath Settlement Agreements.
    Again, I would like to thank Chairman Wyden, Ranking Member 
Murkowski, and the entire Committee for taking the time to hear 
testimony on this issue which is vitally important to every resident of 
the Klamath River watershed.
                                 ______
                                 
                               Hoopa Valley Tribal Council,
                                          Hoopa, CA, June 18, 2013.
Hon. Michael L. Connor,
Commissioner of Reclamation, United States Department of the Interior, 
        Washington, DC.
    Dear Comissioner Connor:
    The referenced letter recently came to our attention and raises a 
number of issues that bear on the protections required in reclamation 
law, federal Indian law, and the 2000 Trinity River Mainstem Fishery 
Restoration Record of Decision (ROD). The positions taken in the letter 
bear directly and adversely on the Hoopa Valley Tribe's rights and 
interests in the Klamath/Trinity River fishery. The letter confirms our 
long-held suspicion that the Central Valley contractors will never 
accept the Law of the Trinity River (the statutes, permits, 
regulations, judicial decisions, agreements and administrative 
decisions that govern the use of Trinity River water.) unless the 
Secretary acts decisively to dismiss their contentions and use her 
authority to require the contractors' to comply with these authorities.
    We intend to confer with you about this subject in our meeting on 
June 20. In the meantime we request that the Department provide an 
opportunity for a Government-to-Government consultation about the 
preparation of any response the Bureau intends to make to the San Luis 
& Delta Mendota Water Authority and the water and power contractors who 
joined in their May 31 letter.
    We note that on page 6, the May 31 letter states that the Bureau 
had assured the contractors in 2012 that they would be made whole in 
the event Trinity Division water was used in late summer in excess of 
the ROD flow releases to protect fish in the lower Klamath River. If 
such an assurance was made, it appears to us to have been unlawful 
because it would upend the priority for protection of in-basin uses 
over out-of-basin diversions.
            Sincerely,
                                    Leonard E. Masten, Jr.,
                                                          Chairman.
                                 ______
                                 
                              U.S. House of Representative,
                     Committee on Natural Resourses, June 19, 2013.
Hon. Ron Wyden,
Chairman, Senate Committee on Energy and Natural Resources, 304 Dirksen 
        Senate Building, Washington, DC.
    Dear Chairman Wyden,
    I am writing to express my support for your June 201 h hearing on 
``Water Resources Issues in the Klamath River Basin'' and to recognize 
what an important milestone a Congressional hearing on these issues is 
for residents of the Klamath Basin.
    Diverse agricultural, tribal, and environmental interests have been 
at the forefront of water conflicts in the Klamath Basin for decades. 
Events since 2001 however, including water shortages for agricultural 
uses and a devastating fish kill, brought tensions between these groups 
to a head. Seeking to end decades of conflict in this region, more than 
forty signatories--including Indian tribes, the dam owner itself, 
PacifiCorp, the states of California and Oregon, downstream interests, 
Humboldt County, and upstream irrigators--negotiated and signed the 
Klamath Basin Restoration Agreement (KBRA) and the Klamath 
Hydroelectric Settlement (KHSA) in 2010.
    The parties to the KBRA and KHSA are already implementing the 
actions that are possible under existing authorities. However, as you 
know, Congressional action is required to move forward with a number of 
the important actions included in the KBRA and KHSA.
    Removing the four dams enumerated in the KHSA and restoring a 
healthy, thriving Klamath River should be a goal of this Congress, and 
I am conunitted to supporting that goal in any way I can. Thank you 
again for your initiative in bringing these diverse parties to a 
Congressional hearing to articulate the critical situation in the 
Klamath Basin and the need for further Congressional action on these 
issues.
            Sincerely,
                                             Jared Huffman,
                                                Member of Congress.

                                    

      
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