[Congressional Record Volume 140, Number 68 (Thursday, May 26, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 26, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                MANCOS HYDROPOWER LEGISLATION INTRODUCED

                                 ______


                           HON. SCOTT McINNIS

                              of colorado

                    in the house of representatives

                         Thursday, May 26, 1994

  Mr. McINNIS. Mr. Speaker, today I am introducing the Mancos 
hydropower legislation to authorize the Bureau of Reclamation of the 
Department of the Interior to issue a lease-of-power privilege to the 
Mancos Water Conservancy District in Colorado.
  This noncontroversial measure has also been introduced in the Senate 
by Colorado Senators Hank Brown  and Ben Nighthorse Campbell and we 
believe it should have the approval by both Houses as soon as possible.
  Over the last 3 years, the Colorado congressional delegation has 
worked with the Department of the Interior and the Mancos Water 
Conservancy District to resolve a dilemma which has challenged the 
future of this project.
  Faced with increased costs of operation and maintenance and increased 
demand--with the cooperation and support of the Bureau of Reclamation--
the Mancos Water Conservancy District applied for a lease-of-power 
privilege to construct a small hydroelectric facility at the Mancos 
Project.
  However, the original legislation was not clear as to the ability of 
the Department of the Interior to contract with the Mancos District to 
issue such a right for hydroelectric power development.
  Therefore, all the parties concerned, including the Colorado 
congressional delegation, the Bureau of Reclamation, and the Mancos 
District; have come together to the Congress to petition for this 
clarification of the power of the Department of the Interior to issue 
this lease-of-power privilege.
  This is an excellent program. It demonstrates how local authorities, 
faced with costs for necessary renovations, and also faced with future 
increases in demands; can design a solution that not only meets those 
needs, but benefits all the parties involved. Not only will enactment 
of this legislation result in no cost whatsoever to the Federal 
Government, it actually would result in increased income to the Federal 
Government in the form of the fees which would be paid for the leases.
  Mr. Speaker, I submit the following report for the Record.

   History, Development, and Requirements of the Mancos Project and 
                      Proposed Hydropower Project

       The Mancos Project is an off-river storage project 
     authorized in 1939 by the Water Conservation and Utilization 
     Act [``WCUA''], 53 Stat. 418 (16 U.S.C. 590y-590z-11). The 
     Project consists of 4.8 miles of canal and one dam, the 
     Jackson Gulch Reservoir. Water from the reservoir serves ca. 
     13,750 acres of agriculture, urban and suburban areas. The 
     federal government utilizes storage rights within the 
     reservoir for Mesa Verde National Park.


                          economic conditions

       The District has a repayment responsibility for the dam of 
     $900,000. and the original repayment contract required the 
     District to pay the Department of Interior an additional, 
     annual operation-and-maintenance fee set by the Secretary. In 
     January 1993, the District assumed operations and maintenance 
     of the project from the Bureau of Reclamation.
       The District presently has an annual income from the 
     Project of $76,000, which is allocated for the following 
     expenses: $15,000 for insurance, $20,000 management salary, 
     $18,000 debt retirement, $9,000 administrative expenses, and 
     $14,000 operations and maintenance.


                     physical plant and conditions

       Project features and equipment, now 45 years old, are in 
     increasing need of repair. The 1.1 miles of concrete flumes 
     have suffered from natures' wear and tear including rocks 
     falling, ground moving, and freeze-thaw cycles. The District 
     anticipates that those flumes will have to be completely 
     replaced by the District in the next 15-20 years with an 
     anticipated, present-day cost of $1.5 million. The 3.3 miles 
     of earthen canal are eroding to the point that, within the 
     next 5-10 years, erosion control, repairs, and up-to-date 
     equipment will be necessary at present-estimated costs of 
     $30,000 to $100,000. The Project headquarters built in 1942 
     as temporary structures to house the men who built the dam, 
     were remodeled in 1948 to serve as the manager's residence, 
     machine shop and warehouses. In 1990, the electrical and 
     water system were redone and upgraded with the residence to 
     bring them to safety standards. The machine shop, and storage 
     units have not been upgraded due to lack of funds throughout 
     the years. However, in 1994, due to budget restraints, the 
     only repair planned within the limited budget of the District 
     is to the inlet canal stilling the basin at an approximate 
     cost of $5,000.


                           the mancos valley

       The Mancos Valley has a low-to-middle income population 
     economic base. Present water rates are within the means of 
     consumers but a rate increase, necessary to conduct requisite 
     maintenance, repairs, and renovations would be prohibitively 
     expensive for the population served. After careful analysis 
     of this situation, the Board concluded that, without income 
     to be generated from this hydroelectric project, the District 
     would not be able to maintain the project.


                       the hydroelectric solution

       Several years ago, anticipating the dilemma of finding 
     funding for necessary maintainance, renovation, and 
     improvement; without sufficient rate increases, the Board 
     began investigating developing hydroelectric power. The 
     locations in the area which were studied were a) Ames 
     Hydroelectric Plant, which is still operating after 90 years, 
     and two, younger projects: Lemon Dam and Pine River Dam. In 
     1990, after being advised by the Bureau of Reclamation that 
     the federal government could not economically construct such 
     a facility, the Board commissioned a feasibility study on a 
     hydro-power project on Jackson Gulch Reservoir. Preliminary 
     results were that a small hydro-power plant would be feasible 
     and would accomplish the District's revenue goals.
       The planned project would require a) construction of a 
     small building (ca. 14' by 16') on an existing spillway wall 
     and b) installation of a 260 kw turbine and generator within 
     the building. The turbine and generator would be operated on 
     existing releases of irrigation water. There would be no 
     changes in water releases, release patterns, water storage, 
     or project operation from current operation of Jackson Gulch 
     Dam and Reservoir. Projected revenue from the Project is 
     $30,000. per year, with a debt service of 18 years.
       In April 1990, the District began the process of applying 
     for a lease-or-power privilege from the Bureau of 
     Reclamation; in reliance by the parties (both the District 
     and the regional office of the Bureau of Reclamation) that 
     the WCUA authorized a lease-of-power privilege as in other 
     project authorization laws. The underlying assumption was 
     based on a 1986 Memorandum by the Commissioners of the Bureau 
     to the Regional Directors. Lease terms, including amendments 
     to the District's repayment contract, were negotiated with 
     the Bureau of Reclamation regional office. Financing had been 
     arranged for construction and contracting for the sale of 
     power was underway.


                        environmental protection

       Both the United States Fish and Wildlife Service and the 
     Colorado Division of Wildlife have conducted a preliminary 
     environmental review of the proposed hydroelectric project 
     and believe that the project is not likely to adversely 
     impact any federally listed endangered or candidate species.


                    issue one--authority under wcua

       On November 12, 1993, the Office of the Solicitor of the 
     Department of Interior opined that the WCUA did not authorize 
     such a lease. That opinion was that the Act limits all right, 
     title, and interest in any facilities constructed and 
     revenues resulting from hydroelectric development of the 
     project exclusively in the United States; anticipating that 
     any hydroelectric project authorized by the WCUA would be 
     constructed by the Bureau, and that the revenues generated by 
     the hydroelectric facility would be ``sufficient to cover the 
     appropriate share of the annual operation and maintenance 
     cost of the project and such fixed charges, including 
     interest, as the Secretary deems proper.'' (Section 9, Water 
     Conservation and Utilization Act, 16 U.S.C. 590z-7). However, 
     the Bureau of Reclamation has never found hydropower 
     development feasible and the District is now solely 
     responsible for maintenance and repairs for the project.


                 issue two--federal agency jurisdiction

       A second complication arose as a jurisdictional dispute 
     between the Bureau of Reclamation and the Federal Energy 
     Regulatory Commission [``FERC''] as to which, or both, had 
     regulatory authority. In 1986, FERC had issued a license for 
     a non-federal hydropower development on the project to a 
     private developer. (That license was surrendered by the 
     developer in 1988.) The current position of the Department of 
     Interior, expressed in the Solicitor's Opinion of November 
     12, 1993, and based on interpretation of intervening case 
     law; is that the WCUA excluded FERC jurisdiction over 
     hydropower development on WCUA projects. Although a 
     Memorandum of Understanding entered into by the Department of 
     Interior and FERC on November 16, 1992, attempted to resolve 
     some the jurisdictional dispute, this legislation is 
     necessary to eliminate any questions that might exist or 
     arise regarding identification of the proper federal agency 
     with jurisdiction over this project.
       This legislation would amend the WCUA to authorize the 
     Mancos Water Conservancy District to (a) enter into a lease-
     of-power privilege with the Bureau of Reclamation on the 
     Mancos Project and (b) utilize the revenues generated for 
     operation and maintenance of the Mancos Project and (c) other 
     purposes consistent with other such lease-of-power privileges 
     to similar entities. The development of such hydropower would 
     be without cost to the United States and would protect the 
     government's interests in the reservoir by empowering the 
     District to adequately maintain the Mancos Project without 
     federal subsidy. The government would receive a fee to be 
     paid to the reclamation fund for the lease-of-power 
     privileges comparable to fees received for similar 
     hydroelectric leases.

                          ____________________