[Senate Report 115-373]
[From the U.S. Government Publishing Office]
Calendar No. 659
115th Congress } { Report
SENATE
2d Session } { 115-373
======================================================================
CLEAN WATER FOR RURAL COMMUNITIES ACT
_______
November 15, 2018.--Ordered to be printed
_______
Ms. Murkowski, from the Committee on Energy and Natural
Resources, submitted the following
R E P O R T
[To accompany S. 685]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 685) to authorize the Dry-Redwater
Regional Water Authority System and the Musselshell-Judith
Rural Water System in the States of Montana and North Dakota,
and for other purposes, having considered the same, reports
favorably thereon with an amendment in the nature of a
substitute and an amendment to the title, and recommends that
the bill, as amended, do pass.
The amendments are as follows:
1. Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Clean Water for Rural Communities
Act''.
SEC. 2. PURPOSE.
The purpose of this Act is to ensure a safe and adequate municipal,
rural, and industrial water supply for the citizens of--
(1) Dawson, Garfield, McCone, Prairie, Richland, Judith
Basin, Wheatland, Golden Valley, Fergus, Yellowstone, and
Musselshell Counties in the State of Montana; and
(2) McKenzie County, North Dakota.
SEC. 3. DEFINITIONS.
In this Act:
(1) Authority.--The term ``Authority'' means--
(A) the Central Montana Regional Water Authority, a
publicly owned nonprofit water authority formed in
accordance with Mont. Code Ann. Sec. 75-6-302 (2007);
and
(B) any nonprofit successor entity to the Authority
described in subparagraph (A).
(2) Musselshell-judith rural water system.--The term
``Musselshell-Judith Rural Water System'' means the
Musselshell-Judith Rural Water System authorized under section
4(a), with a project service area that includes--
(A) Judith Basin, Wheatland, Golden Valley, and
Musselshell Counties in the State;
(B) the portion of Yellowstone County in the State
within 2 miles of State Highway 3 and within 4 miles of
the county line between Golden Valley and Yellowstone
Counties in the State, inclusive of the Town of
Broadview, Montana; and
(C) the portion of Fergus County in the State within
2 miles of U.S. Highway 87 and within 4 miles of the
county line between Fergus and Judith Basin Counties in
the State, inclusive of the Town of Moore, Montana.
(3) Secretary.--The term ``Secretary'' means the Secretary of
the Interior.
(4) State.--The term ``State'' means the State of Montana.
SEC. 4. MUSSELSHELL-JUDITH RURAL WATER SYSTEM.
(a) Authorization.--The Secretary may carry out the planning,
design, and construction of the Musselshell-Judith Rural Water System
in a manner that is substantially in accordance with the feasibility
report entitled ``Musselshell-Judith Rural Water System Feasibility
Report'' (including any and all revisions of the report).
(b) Cooperative Agreement.--The Secretary shall enter into a
cooperative agreement with the Authority to provide Federal assistance
for the planning, design, and construction of the Musselshell-Judith
Rural Water System.
(c) Cost-sharing Requirement.--
(1) Federal share.--
(A) In general.--The Federal share of the costs
relating to the planning, design, and construction of
the Musselshell-Judith Rural Water System shall not
exceed 65 percent of the total cost of the Musselshell-
Judith Rural Water System.
(B) Limitation.--Amounts made available under
subparagraph (A) shall not be returnable or
reimbursable under the reclamation laws.
(2) Use of federal funds.--
(A) General uses.--Subject to subparagraph (B), the
Musselshell-Judith Rural Water System may use Federal
funds made available to carry out this section for--
(i) facilities relating to--
(I) water pumping;
(II) water treatment;
(III) water storage;
(IV) water supply wells;
(V) distribution pipelines; and
(VI) control systems;
(ii) transmission pipelines;
(iii) pumping stations;
(iv) appurtenant buildings, maintenance
equipment, and access roads;
(v) any interconnection facility that
connects a pipeline of the Musselshell-Judith
Rural Water System to a pipeline of a public
water system;
(vi) electrical power transmission and
distribution facilities required for the
operation and maintenance of the Musselshell-
Judith Rural Water System;
(vii) any other facility or service required
for the development of a rural water
distribution system, as determined by the
Secretary; and
(viii) any property or property right
required for the construction or operation of a
facility described in this subsection.
(B) Limitation.--Federal funds made available to
carry out this section shall not be used for the
operation, maintenance, or replacement of the
Musselshell-Judith Rural Water System.
(C) Title.--Title to the Musselshell-Judith Rural
Water System shall be held by the Authority.
SEC. 5. DRY-REDWATER FEASIBILITY STUDY.
(a) Definitions.--In this section:
(1) Dry-redwater regional water authority.--The term ``Dry-
Redwater Regional Water Authority'' means--
(A) the Dry-Redwater Regional Water Authority, a
publicly owned nonprofit water authority formed in
accordance with Mont. Code Ann. 75-6-302 (2007); and
(B) any nonprofit successor entity to the Authority
described in subparagraph (A).
(2) Dry-redwater regional water authority system.--The term
``Dry-Redwater Regional Water Authority System'' means the
project entitled the ``Dry-Redwater Regional Water Authority
System'', with a project service area that includes--
(A) Garfield and McCone Counties in the State;
(B) the area west of the Yellowstone River in Dawson
and Richland Counties in the State;
(C) T. 15 N. (including the area north of the
Township) in Prairie County in the State; and
(D) the portion of McKenzie County, North Dakota,
that includes all land that is located west of the
Yellowstone River in the State of North Dakota.
(3) Reclamation feasibility standards.--The term
``reclamation feasibility standards'' means the eligibility
criteria and feasibility study requirements described in
section 106 of the Reclamation Rural Water Supply Act of 2006
(43 U.S.C. 2405) (as in effect on September 29, 2016).
(4) Submitted feasibility study.--The term ``submitted
feasibility study'' means the feasibility study entitled ``Dry-
Redwater Regional Water System Feasibility Study'' (including
revisions of the study), which received funding from the Bureau
of Reclamation on September 1, 2010.
(b) Study.--
(1) In general.--The Secretary, in consultation with the Dry-
Redwater Regional Water Authority, may undertake a study,
including a review of the submitted feasibility study, to
determine the feasibility of constructing the Dry-Redwater
Regional Water System.
(2) Requirement.--The study under paragraph (1) shall comply
with the reclamation feasibility standards.
(c) Cooperative Agreement.--If the Secretary determines that the
study under subsection (b) does not comply with the reclamation
feasibility standards, the Secretary may enter into a cooperative
agreement with the Dry-Redwater Regional Water Authority to complete
additional work to ensure that the study complies with the reclamation
feasibility standards.
(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary $5,000,000 to carry out this section.
(e) Termination.--The authority provided by this section shall
expire on the date that is 5 years after the date of enactment of this
Act.
SEC. 6. WATER RIGHTS.
Nothing in this Act--
(1) preempts or affects any State water law; or
(2) affects any authority of a State, as in effect on the
date of enactment of this Act, to manage water resources within
that State.
SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
(a) Authorization.--There is authorized to be appropriated to carry
out the planning, design, and construction of the Musselshell-Judith
Rural Water System, substantially in accordance with the cost estimate
set forth in the feasibility report described in section 4(a),
$56,650,000.
(b) Cost Indexing.--The amount authorized to be appropriated under
subsection (a) may be increased or decreased in accordance with
ordinary fluctuations in development costs incurred after November 1,
2014, as indicated by any available engineering cost indices applicable
to construction activities that are similar to the construction of the
Musselshell-Judith Rural Water System.
2. Amend the title so as to read: ``A bill to authorize the
construction of the Musselshell-Judith Rural Water System and
study of the Dry-Redwater Regional Water Authority System in
the States of Montana and North Dakota, and for other
purposes.''.
PURPOSE
The purpose of S. 685 is to authorize the construction of
the Musselshell-Judith Rural Water System and study of the Dry-
Redwater Regional Water Authority System in the States of
Montana and North Dakota.
BACKGROUND AND NEED
The Rural Water Supply Act (43 U.S.C. 2405) was enacted in
2006 to authorize the Secretary of the Interior (Secretary),
acting through the Bureau of Reclamation (BOR or Bureau), to
work with rural communities and tribes to assess potable water
supply needs, identify options to address those needs through
investigations and studies, and recommend if a project should
be authorized for construction. Further Congressional
authorization is required for BOR to participate in or provide
funding for the design and construction of a rural water
project.
Project sponsors have been working through the Bureau's
rural water program to assess the feasibility of the Dry-
Redwater and Musselshell-Judith Rural Water Projects. The
Musselshell-Judith Rural Water System is designed to provide
drinking water to about 6,500 residents through the Central
Montana Regional Water Authority. The population served by this
project currently relies on low quality groundwater, drought-
sensitive surface supplies and, in some cases, hauled water.
Water quality is also poor in the service area and
concentrations of total dissolved solids, sulfates, iron, and
manganese exceed secondary drinking water standards.
The proposed Musselshell-Judith project would include a
well field, four new buried water storage tanks, a pumping
station, and distribution system. Over $3 million in Federal,
State, and local funds have been spent on studies and planning,
and in January 10, 2017, the Bureau of Reclamation Commissioner
notified the Office of Management and Budget that the final
feasibility report found the project to be feasible and met the
criteria set forth in the Rural Water Supply Act.
The Dry-Red Water Authority System would treat and deliver
water to communities in Eastern Montana and North Dakota.
Currently, individual municipal water systems, reliant on
groundwater that is high in sodium, sulfates, and fluoride,
serve residents in these communities and often do not meet
primary drinking water standards without expensive treatment.
At least one of these systems is also out of compliance with
the Clean Water Act due to high levels of sodium and dissolved
solids.
The Dry-Redwater Regional Water Authority submitted a
feasibility study to BOR for the Dry-Redwater Regional Water
Authority System in 2012, but the Bureau found that the
proposal did not meet economic feasibility requirements. That
project would deliver water from the Fort Peck Reservoir and
require construction of storage tanks, pump stations, and
pipelines.
The Dry-Redwater Regional Water Authority has been working
to revise initial plans for the system since that time, but a
project meeting BOR's feasibility criteria has not been
reviewed or approved at this time. Because the Rural Water
Supply Act has expired, further authorization is necessary for
BOR to continue working with the Dry-Redwater Regional Water
Authority to find a feasible project.
LEGISLATIVE HISTORY
Senators Daines introduced S. 685 on March 21, 2017. The
Subcommittee on Water and Power held a hearing on S. 685 on
June 14, 2017.
Representative Gianforte introduced companion legislation,
H.R. 5073, in the House of Representatives on February 20,
2017, which was referred to the Natural Resources Committee.
In the 114th Congress, Senator Daines introduced similar
legislation, S. 1552, on June 11, 2015. The Subcommittee on
Water and Power held a hearing on the bill on June 18, 2015.
The measure was also included in Title III of S. 2902,
legislation introduced by Senators Flake, Barrasso, Daines,
Heller, McCain, and Risch on May 9, 2016. The Subcommittee on
Water and Power held a hearing on S. 2902 on June 18, 2016. The
Committee on Energy and Natural Resources met in open business
session on July 13, 2016, and ordered S. 2902 favorably
reported as amended.
Representative Zinke introduced companion legislation, H.R.
3867, in the House of Representatives on October 29, 2015,
which was referred to the Natural Resources Committee.
The Senate Committee on Energy and Natural Resources met in
an open business session on October 2, 2018, and ordered S. 685
favorably reported, as amended.
COMMITTEE RECOMMENDATION
The Senate Committee on Energy and Natural Resources, in
open business session on October 2, 2018, by a majority voice
vote of a quorum present, recommends that the Senate pass S.
685, if amended as described herein. Senator Lee asked to be
recorded as voting no.
COMMITTEE AMENDMENTS
During its consideration of S. 685, the Committee adopted
an amendment in the nature of a substitute and an amendment to
the title. The substitute amendment lowered the federal cost
share for the design and construction of the Musselshell-Judith
project from 75 percent to 65 percent and changed the
authorization of appropriations from ``such sums as are
necessary'' to $56,650,000. The amendment also deleted the
design and construction authorization for the Dry-Redwater
Project and replaced it with an authorization to complete a
feasibility study, and an authorization for appropriations for
that action. The substitute amendment also made conforming and
technical changes and is further described in the section-by-
section analysis. The amendment to the title reflects the
change in the authorization of the Dry-Redwater Project made by
the substitute amendment.
SECTION-BY-SECTION ANALYSIS
Sec. 1. Short title
Section 1 sets forth the short title.
Sec. 2. Purpose
Section 2 states the bill's purpose.
Sec. 3. Definitions
Section 3 defines key terms.
Sec. 4. Musselshell-Judith Rural Water System
Subsection (a) authorizes the Secretary to plan, design and
construct the Musselshell-Judith Rural Water System in
substantial accordance with the Musselshell-Judith Rural Water
System Feasibility Report.
Subsection (b) directs the Secretary to enter into a
cooperative agreement with the Central Montana Regional Water
Authority to provide Federal assistance in furtherance of
subsection (a).
Subsection (c) limits the Federal cost share to 65 percent
of the total project cost and makes clear that such Federal
cost share funds shall not be returnable or reimbursable. The
subsection further outlines the allowable uses for Federal
funds, prohibits Federal funding for the operation,
maintenance, and replacement of the Musselshell-Judith Rural
Water System, and specifies that title to the Musselshell-
Judith Rural Water System shall be held by the Central Montana
Regional Water Authority.
Sec. 5. Dry-Redwater feasibility study
Subsection (a) defines key terms for the section.
Subsection (b) authorizes the Secretary, in consultation
with the Dry-Redwater Regional Water Authority, to study the
feasibility of constructing the Dry-Redwater Regional Water
System. This subsection further states that the study must
comply with reclamation feasibility standards.
Subsection (c) authorizes the Secretary to enter into a
cooperative agreement with the Dry-Redwater Regional Water
Authority to complete additional work to ensure that the study
complies with reclamation feasibility standards.
Subsection (d) authorizes $5 million to carry out this
section.
Subsection (e) terminates the authority provided under this
section five years after the date of enactment.
Sec. 6. Water rights
Section 6 states that nothing in the Act preempts state
water law or affects a State's authority to manage its water
resources.
Sec. 7. Authorization of appropriations
Section 7 authorizes $56,650,000 to be appropriated for the
planning, design and construction of the Musselshell-Judith
Rural Water System and authorizes the indexing of the
authorized amount based on cost fluctuations after November 1,
2014.
COST AND BUDGETARY CONSIDERATIONS
The following estimate of the costs of this measure has
been provided by the Congressional Budget Office:
Summary: S. 685 would authorize the Bureau of Reclamation
(BOR) to study, plan, and construct projects to secure water
supplies in rural areas in Montana and North Dakota. Using
information from BOR, CBO estimates that implementing the bill
would cost $52 million over the 2019-2023 period, assuming
appropriation of the authorized and necessary amounts.
Enacting S. 685 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting S. 685 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
S. 685 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary effect of S. 685 is shown in the following table. The
costs of the legislation fall within budget function 300
(natural resources and environment).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------------
2019 2020 2021 2022 2023 2019-2023
----------------------------------------------------------------------------------------------------------------
INCREASES IN SPENDING SUBJECT TO APPROPRIATION
Musselshell-Judith Rural Water System:
Estimated Authorization Level............................ 5 12 12 13 13 55
Estimated Outlays........................................ 3 8 11 12 13 47
Dry-Redwater Feasibility Study:
Estimated Authorization Level............................ 2 2 1 0 0 5
Estimated Outlays........................................ 1 2 1 1 0 5
Total:
Estimated Authorization Level........................ 7 14 13 13 13 60
1Estimated Outlays................................... 4 10 12 13 13 52
----------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that S.
685 will be enacted in 2019. The bill would authorize the
appropriation of specific amounts but does not specify in which
year the appropriation should be provided. CBO has estimated
how much would need to be provided each year based on
historical patterns. Estimated outlays are based on historical
spending patterns for similar programs. CBO estimates that
implementing the bill would cost $52 million over the 2019-2023
period, assuming appropriation of the authorized and necessary
amounts.
S. 685 would authorize BOR to construct the Musselshell-
Judith Rural Water Project in central Montana. The project
would include planning, designing, and constructing groundwater
wells and distribution facilities to deliver water to rural
communities. The federal share (65 percent) of costs to
construct the project would total about $57 million; the
project could be completed in about six years. Including
adjustments for anticipated inflation as authorized by the
bill, CBO estimates that the federal cost to implement those
provisions would total $47 million over the 2019-2023 period;
the remainder of the federal costs would occur after 2023.
The bill also would authorize BOR to study the feasibility
of constructing the Dry-Redwater Rural Water Project in
Montana. The project would provide water treatment and
distribution facilities to deliver water to existing storage
tanks in rural communities in eastern Montana and in
northwestern North Dakota. CBO estimates that completing the
study would cost $5 million over the 2019-2023 period, assuming
the appropriation of the specified amount.
Pay-As-You-Go considerations: None.
Increase in long-term direct spending and deficits: CBO
estimates that enacting S. 685 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2029.
S. 685 contains no intergovernmental or private-sector
mandates as defined in UMRA.
Estimate prepared by: Federal costs: Aurora Swanson;
Mandates: Zachary Byrum.
Estimate reviewed by: Kim P. Cawley, Chief, Natural and
Physical Resources Cost Estimates Unit; H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
REGULATORY IMPACT EVALUATION
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 685. The bill is not a regulatory measure in
the sense of imposing Government-established standards or
significant economic responsibilities on private individuals
and businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of S. 685, as ordered reported.
CONGRESSIONALLY DIRECTED SPENDING
S. 685, as ordered reported, authorizes $56,650,000 to be
appropriated for the planning, design, and construction of the
Musselshell-Judith Rural Water System in the State of Montana.
EXECUTIVE COMMUNICATIONS
The testimony provided by the Department of the Interior at
the June 14, 2017, hearing on S. 685 follows:
Statement of Scott Cameron, Acting Assistant Secretary--Water and
Science, U.S. Department of the Interior
Chairman Flake, Ranking Member King, and members of the
Subcommittee, I am Scott Cameron, Acting Assistant Secretary
for Water and Science at the Department of the Interior. Thank
you for the opportunity to provide the views of the Department
of the Interior (Department) on S. 685, the Clean Water for
Rural Communities Act, which would authorize construction of
the Dry-Redwater Regional Water Authority System and the
Musselshell-Judith Rural Water System in the States of Montana
and North Dakota.
In the 114th Congress, Reclamation provided testimony on S.
2902 and S. 1552, which contained language identical to S. 685.
My testimony today will update Reclamation's previous
statements on these projects to include recent events; however,
the Department's position overall on funding has not changed
from these earlier testimonies.
Like the sponsors of this legislation, the Department
supports the goals of encouraging a vibrant rural economy and
ensuring safe, reliable sources of drinking water in Montana
and North Dakota. Rural water projects help build strong,
secure communities and are important to supporting the
livelihood of local economies. Public Law 109-451, which
expired September 30, 2016, authorized Reclamation to establish
a Rural Water Supply Program to help rural communities and
Tribes in the western United States analyze and develop options
for meeting water supply needs through the completion of
appraisal investigations and feasibility studies.
While the Department acknowledges the important functions
rural water projects offer to communities across the West, we
have concerns with S. 685 as currently written. We request the
opportunity to work with the Committee to adequately address
our concerns, as identified below.
The legislation authorizes construction of two separate
projects and my statement will speak to each of those projects
separately.
Dry-Redwater
Section 4(a)(1) of S. 685 applies to the planning, design,
and construction of the regional Dry-Redwater Rural Water
Authority System in eastern Montana and a small service area in
northwest North Dakota, and would authorize the Federal
Government to provide up to 75 percent of the System's overall
construction cost. Reclamation estimates that this
authorization would amount to Federal appropriations of at
least $200 million dollars. The Department last testified
before this Subcommittee on legislation related to the Dry-
Redwater Project in May of 2016, and prior to that, in June
2015, May 2011, and July of 2009. Since 2016, two things have
occurred; the Dry-Redwater Regional Water Authority (Authority)
changed their project plans from that provided in the initial
study by adding the cities of Sidney and Glendive, Montana, to
the Authority's service area which changed the population
served from 15,000 to over 26,500; and secondly, Reclamation's
authority to continue work on rural water appraisal and
feasibilities studies under P.L. 109-451 expired. Reclamation
did not receive a feasibility study that was evaluated and
determined to be economically feasible for the new project
envisioned by the Authority.
The Department is concerned about language in the
legislation authorizing a project for construction without a
complete Feasibility Study. Specifically, the potential strain
on Reclamation's budget that could come about from this
authorization, the cost share requirement proposed in the bill,
and the proposed use of power from the Pick-Sloan Missouri
Basin Program (P-SMBP) for non-irrigation purposes are a
problematic issues.
In 2012, the Authority submitted a Feasibility Study to
Reclamation for review. Upon initial review of the Feasibility
Study, Reclamation was unable to identify a technically viable
water supply alternative that presented a National Economic
Development (NED) plan with net positive benefits to the
nation. Reclamation informed the Authority that the Feasibility
Study could not be supported as being financially or
economically feasible under the requirements of Reclamation's
Rural Water Supply Program. Consequently, there are significant
review findings and recommendations that must be addressed to
bring the Feasibility Study up to Reclamation's standards.
Since project costs have not been fully developed by the
Sponsor and reviewed by Reclamation, there is also the
potential for this project to be financially unsustainable for
the project sponsors.
Because of the importance of this issue, a Reclamation
Design, Cost Estimating, and Construction (DEC) review further
evaluated the Feasibility Study in 2012 in order to provide an
independent analysis. The estimated cost to address the DEC
Report Findings and Recommendations in 2012 was in excess of
$5.5 million. Neither Reclamation nor the Authority had
sufficient funding to revise the Feasibility Study to address
the DEC Report Findings. The authority for Reclamation to
further review the feasibility study expired in 2016. In order
to maintain their original service area and related project
benefits, the Authority ruled out a scaled down approach.
As a result of this decision, Reclamation entered into a
Memorandum of Understanding (MOU) with the Authority on April
27, 2015, with the objective of completing a summary report
that documented the current status of the draft Feasibility
Study and identified the additional level of effort needed to
revise the Feasibility Study technically in order to meet the
requirements of Reclamation's Rural Water Supply Program.
However, before a final summary report could be completed,
Reclamation's authority under the program expired and
Reclamation was required to generate a Feasibility Study
Concluding Report (Concluding Report) since the Feasibility
Study was not completed. The Concluding Report was completed in
September 2016 and provided an overview of the Feasibility
Study up to the point of concluding it, and identified the
reasons for ending the Feasibility Study. The Concluding Report
provided findings that primarily due to the economics of the
proposed alternative and the incomplete level of the
Feasibility Study, Reclamation is not in a position to support
the project as financially viable or able to verify that the
total project cost estimate is economically sound.
The Department is also concerned about the non-Federal cost
share for the System. As stated above, S. 685 contemplates that
the United States would fund 75 percent of the cost of
constructing the System for the benefit of Montana citizens of
Dawson, Garfield, McCone, Prairie, Richland Counties, and North
Dakota citizens of McKenzie County. While this has been the
cost share level proposed in other rural water projects enacted
into law, it represents the maximum Federal cost share
previously allowed under Title I of the Rural Water Supply Act
of 2006 (P.L. 109-451, now expired), which included a
requirement for a Feasibility Report that comprised an analysis
of the sponsor's capability-to-pay and identified an
appropriate contribution by the local sponsors.
Section 5 of S. 685 authorizes the delivery of 1.5
megawatts of P-SMBP pumping power to be used and delivered
between May 1 and October 31 for the benefit of this System at
the firm power rate. Section 5(b)(2)(A) of the bill requires
that the System be operated on a ``not-for-profit basis'' in
order to be eligible to receive power under those terms.
Reclamation is not certain of the impact the bill's
requirements could have on Western Area Power Administration's
existing contractual power obligations. In addition to those
concerns mentioned above, we have yet to verify whether or not
water rights issues associated with the System have been
adequately addressed.
Reclamation's authority to continue work on rural water
appraisal and feasibilities studies has expired. At this time,
there is no general programmatic authority for continued work
by Reclamation on rural water appraisal and feasibility
studies. Reclamation's review of Dry-Redwater Authority's
proposed system was conducted under the authority of the Rural
Water Supply Act of 2006 (Title I of Public Law 109-451) and
this authority expired on September 30, 2016. Reclamation
generated a Concluding Report which provided an overview of the
Feasibility Study up to the point of concluding it and
identified the reasons for ending the study.
If legislative authority is granted, we suggest System
sponsors work with Reclamation to evaluate the System for scale
and economic viability in an effort to refine the National
Economic Development accounting such that the ratio of total
benefits exceeds costs. The System should meet appropriate
guidelines and be updated to include new infrastructure
required to accommodate the large increase in population
served. S. 685 allows the Authority to acquire property and
existing systems. Details of these systems should be fully
identified and incorporated into the new evaluation and the
evaluation should incorporate recommendations from the DEC
review or, if necessary, require a new DEC review be conducted.
It should address all federal environmental compliance
activities. There are substantial costs believed to be in the
millions of dollars associated with these efforts that are
outside of any costs projections previously considered. We also
recommend that they work with the Western Area Power
Administration and their contractors on the issues related to
the System's pumping power needs.
Musselshell-Judith
Section 4(a)(2) of S. 685 would authorize the planning,
design, and construction of the Musselshell-Judith Rural Water
System in central Montana and would authorize appropriations of
75 percent of total project costs. Since the total estimated
construction cost of the project is $87,102,000, Reclamation
estimates that the total Federal contribution of 75 percent
would equate to $65,327,000 (2014 dollars). While a 75 percent
cost share level has been proposed in other rural water
projects enacted into law, this represents the maximum Federal
cost share previously allowed under the Rural Water Supply Act
of 2006.
In 2015, the Central Montana Rural Water Authority's
(Authority) Musselshell-Judith Rural Water System Feasibility
Study (Feasibility Study) was submitted to Reclamation for
technical review under Public Law 109-451. The Department found
the proposed project to be feasible and to meet the broad
criteria of the program, however, the Department is concerned
about our ability to fund even currently authorized rural water
projects, and does not want to unreasonably raise expectations
that new authorized projects would receive the desired federal
funding.
Common Both Water Systems
Section 7(b) of S. 685 addresses the cost indexing for the
authorization of appropriations. As previously testified,
Reclamation is not aware of a specific rationale for the
differing indexing dates prescribed in the legislation. For the
Dry-Redwater System, appropriations are to be indexed to
January 1, 2008. For the Musselshell-Judith, the appropriations
are to be indexed to November 1, 2014.
Authorized rural water projects compete with a number of
priorities within Reclamation's Budget, including aging
infrastructure, Indian water rights settlements, environmental
compliance, restoration actions, developing sustainable water
supply strategies, and other priorities intended to address
future water and energy related challenges.
The Department has concerns about adding to the backlog of
Reclamation's authorized rural water projects seeking Federal
construction funding. Discretionary rural water funding has
enabled Reclamation to make progress in promoting certainty,
sustainability, and resiliency in support of basic drinking
water needs of rural western communities. However,
Reclamation's ability to make Federal investments that match
on-the-ground capabilities has its limitations. Of
Reclamation's six currently authorized rural water projects
under construction or funded at some level today, all of the
projects pre-date Title I of the Rural Water Supply Act of 2006
(now expired). Authorizing additional rural water projects may
delay rural water projects that are already under construction.
Conclusion
The Department recognizes that the people who would be
served by S. 685 have legitimate needs for better quality
drinking water. We are concerned, given the past history and
future prospects of funding for the rural water program, not to
raise unreasonable expectations for future federal funding
should this bill become law.
That concludes my written statement. I am pleased to answer
questions at the appropriate time.
CHANGES IN EXISTING LAW
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee notes that no
changes in existing law are made by the bill as ordered
reported.