Animas-La Plata Project: Status and Legislative Framework (Letter Report,
11/17/95, GAO/RCED-96-1).

GAO provided information on the status of the Animas-La Plata project,
focusing on the: (1) legislative framework provided for the project by
the 1988 Settlement Act and the Endangered Species Act; (2) consultation
between the Bureau of Reclamation and the Fish and Wildlife Service
under the Endangered Species Act; and (3) project's relationship to the
Navajo Indian Irrigation Project (NIIP).

GAO found that: (1) although the Fish and Wildlife Service believed that
the Animas-La Plata project would jeopardize the Colorado squawfish in
the San Juan River, an alternative plan to save the squawfish was
adopted in 1991 which limited construction of the project to certain
facilities, restricted the amount of water that could be depleted from
the Animas River, and provided for a 7-year study of the Colorado
squawfish and a fish recovery program; (2) construction of the project
depends on successful completion and acceptance of a supplemental
environmental impact statement; (3) the construction of features beyond
those permitted under the alternative plan depend on the outcome of the
fish study; (4) the alternative plan should include guaranteed delivery
of water from the Navajo Dam and Reservoir to provide a better habitat
for the squawfish population; and (5) the Navajo Nation believes that
the Bureau of Reclamation's use of water from the Navajo Dam and
Reservoir threatens their right to the water in the reservoir under the
NIIP.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-96-1
     TITLE:  Animas-La Plata Project: Status and Legislative Framework
      DATE:  11/17/95
   SUBJECT:  Water rights
             Native American rights
             Native American claims
             Indian affairs legislation
             Endangered species
             Environmental impact statements
             Water resources conservation
IDENTIFIER:  Ute Indian Tribe
             Colorado
             New Mexico
             Utah
             Navajo Indian Tribe
             San Juan River
             Navajo Dam and Reservoir
             Navajo Indian Irrigation Project
             Animas River
             La Plata River
             Dept. of the Interior Animas-La Plata Project
             
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Cover
================================================================ COVER


Report to the Honorable
Bill Bradley, U.S.  Senate

November 1995

ANIMAS-LA PLATA PROJECT - STATUS
AND LEGISLATIVE FRAMEWORK

GAO/RCED-96-1

Animas-La Plata Project

(140893)


Abbreviations
=============================================================== ABBREV

  BIA - Bureau of Indian Affairs
  GAO - General Accounting Office
  NIIP - Navajo Indian Irrigation Project

Letter
=============================================================== LETTER


B-260541

November 17, 1995

The Honorable Bill Bradley
United States Senate

Dear Senator Bradley: 

The Department of the Interior's Animas-La Plata project, to be
constructed by Interior's Bureau of Reclamation (Bureau), was
designed to store water and deliver it to arid areas and communities
in southwestern Colorado and northwestern New Mexico, principally by
transferring water from the Animas River to the La Plata River basin. 
Although the project was authorized by the Congress in 1968, more
recent impetus for construction came when the project was made the
cornerstone of a water rights settlement, which was legislatively
implemented by the 1988 Colorado Ute Indian Water Rights Settlement
Act.  Under this act, the project will store and provide water for
the Southern Ute Indian Tribe and the Ute Mountain Ute Indian Tribe;
a portion of the project is to be completed by the year 2000, or the
settlement could be revisited by the tribes.  Before beginning
construction of the project, the Bureau was required under the
Endangered Species Act of 1973, as amended, to consult with
Interior's Fish and Wildlife Service (Service) to determine whether
the project would likely jeopardize the continued existence of any
endangered species. 

As agreed with your office, this report provides information on the
history and status of the Animas-La Plata project (see app.  I); the
legislative framework provided for the project by the 1988 Settlement
Act (see app.  II) and the Endangered Species Act (see app.  III);
the consultation between the Bureau and the Service under the
Endangered Species Act (see app.  IV); and the project's relationship
to another congressionally authorized project, the Navajo Indian
Irrigation Project (NIIP) (see app.  V). 


   SUMMARY
------------------------------------------------------------ Letter :1

In May 1990, the Service issued a draft "biological opinion" stating
that the project, in depleting water from the Animas River and
thereby reducing its flow, would likely jeopardize the endangered
Colorado squawfish in the San Juan River, downstream from the
project.  The Bureau and the Service consulted over the next several
months to develop what is termed a "reasonable and prudent
alternative" to the project (referred to hereinafter as the
"alternative"), which the Service believes would not likely
jeopardize the squawfish.  In October 1991, the Service incorporated
the Bureau's proposed alternative into its final biological opinion. 

The alternative, as adopted in 1991, limited construction of the
project to certain facilities; restricted the amount of water that
the project could annually deplete from the Animas River; and
provided for a 7-year-long study of the needs of the Colorado
squawfish and a fish recovery program in the San Juan River, both of
which rely on periodic releases of water from the Navajo Dam and
Reservoir.  The dam and reservoir are located upstream on the San
Juan River and store water used by NIIP.  Under the alternative, no
additional construction of or water depletions for the project is
allowed until the fish study (which began in 1991) is complete and
the Service determines that the squawfish would not likely be
jeopardized. 

A 1992 lawsuit filed by several environmental groups delayed the
start of construction.  The complaint in the lawsuit contained 11
causes of action, which were based on alleged violations of several
statutes.  The cause of action based on the Endangered Species
Act--which did not involve the Colorado squawfish--was dismissed as
premature.  In the remaining causes of action, the plaintiffs charged
that the Bureau's 1980 environmental impact statement for the project
was inadequate because it did not address new circumstances and
information, including substantial changes in the project.  In
responding to the lawsuit, the Bureau began preparing a supplemental
environmental impact statement and deferred beginning construction of
the project.  The Bureau plans to issue its supplemental statement in
December 1995. 

While the Bureau and the Service developed an alternative intended to
allow construction of the project to begin, the following issues
could result in construction delays and affect both the
practicability of the alternative and the implementation of the 1988
Settlement Act. 

  Construction of the project depends upon successful completion and
     acceptance of the supplemental environmental impact statement. 
     If the supplemental statement is delayed or challenged, project
     construction could be further delayed.  The Bureau estimates
     that, barring further delays, the first portion of the project
     will be completed in 2002.  Because this is later than the
     agreed date, the Colorado Ute tribes could revisit the water
     rights settlement. 

  Construction of features beyond those that are permitted under the
     alternative depends on the outcome of the fish study.  If the
     Service concludes that the project would likely not jeopardize
     the Colorado squawfish, further depletions could be allowed and
     construction could proceed.  On the other hand, if the Service
     cannot reach this conclusion, the Bureau would not be able to
     undertake further construction under the alternative. 

  According to the Service's final biological opinion, the
     alternative must include guaranteed delivery of water released
     from the Navajo Dam and Reservoir to provide the improvement in
     habitat necessary to maintain and increase the squawfish
     population in the San Juan River.  Such guarantees were given by
     Colorado and New Mexico but not by Utah or the Navajo Nation. 
     This situation may require the agencies to reopen consultation. 

  The Bureau's use of water from the Navajo Dam and Reservoir under
     the alternative is disputed by the Navajo Nation.  The Navajo
     Nation believes that this use threatens the tribe's claim to
     water in the reservoir under the 1962 congressional
     authorization of NIIP and the tribe's other rights to water in
     the San Juan River.  Depending on how this dispute is resolved,
     NIIP, the Animas-La Plata project, or other water use and
     development in the San Juan River basin could be adversely
     affected. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :2

We requested comments on a draft of this report from the Secretary of
the Interior or his designee.  On September 20, 1995, we met with
officials from the Bureau.  We also obtained written comments from
the Bureau and the Service.  Both agencies provided several technical
clarifications to the draft, and the Bureau provided updated
information on its plans for issuing the supplemental environmental
impact statement (in December 1995) and completing construction of
the project's first facilities (no earlier than 2002).  We have
incorporated these changes into the report as appropriate.  The
Bureau's and Service's complete comments and our responses are
included in appendixes VI and VII, respectively. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

To obtain information on the project, we reviewed the Colorado River
Basin Project Act of 1968 (which authorized the Animas-La Plata
project); the Endangered Species Act of 1973, as amended, as well as
its implementing regulations; and the Colorado Ute Indian Water
Rights Settlement Act of 1988.  We also reviewed documents concerning
the project and the interagency consultation process.  We interviewed
more than 150 representatives from federal agencies, Indian tribes,
state and local agencies, and proponents and opponents of the
project.  We also visited the project's site near Durango, Colorado. 
Because of the 1992 lawsuit that led to the Bureau's preparing a
supplemental environmental impact statement, the only alternative to
the project we reviewed was the alternative adopted in 1991.  We
performed our review between January 1993 and October 1995 in
accordance with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :3.1

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 7 days
after the date of this letter.  At that time, we will send copies to
the Secretary of the Interior and other interested parties and make
copies available to others on request.  Please call me at (202)
512-8021 if you or your staff have any questions about this report. 
Major contributors to this report are listed in appendix VIII. 

Sincerely yours,

Barry T.  Hill
Associate Director, Natural
 Resources Management Issues


BACKGROUND ON AND OVERVIEW OF THE
ANIMAS-LA PLATA PROJECT
=========================================================== Appendix I

According to the final biological opinion prepared by the Department
of the Interior's Fish and Wildlife Service (Service), the completed
Animas-La Plata project would annually deplete approximately 155,000
acre-feet\1 of water from the Animas and La Plata rivers, store the
water in two reservoirs, and convey it--through a network of
pipelines and canals--to communities and irrigators located near the
Animas and La Plata rivers in southwestern Colorado and northwestern
New Mexico.  The project would also provide water to the Southern Ute
and Ute Mountain Ute Indian reservations.\2 Interior's Bureau of
Reclamation (Bureau) currently estimates the cost of the completed
project at about $710 million.  Figure I.1 shows the area covered by
the project. 

   Figure I.1:  Area of the
   Animas-La Plata Project

   (See figure in printed
   edition.)

Source:  GAO's presentation of information from the Bureau. 

A water project serving southwestern Colorado and northwestern New
Mexico--an area with low precipitation and abundant sunshine--has
been contemplated since the early 1900s.  The Animas River originates
in the snowy San Juan Mountains in Colorado; its annual stream flows
are about 13 times larger than the annual flows of the La Plata River
lying to the west.  Because most of the area's irrigable acreage lies
near the less abundant La Plata River, area farmers and
municipalities have long searched for ways to divert water from the
Animas River. 

In 1938, the Bureau began studying the feasibility of transferring
water from the Animas River to the La Plata River basin.  In 1966,
the Bureau prepared a feasibility report for the project, which was
subsequently authorized through the Colorado River Basin Project Act
of 1968. 

In 1976, the United States filed a lawsuit on behalf of the Southern
Ute and Ute Mountain Ute Indian tribes to identify and obtain (i.e.,
"quantify") their rights to water flowing in several rivers on or
near their reservations, including the Animas and La Plata rivers. 
The State Engineer of Colorado, projecting the impact of the Ute
Indians' claims on non-Indian water users, determined that the
tribes' claims could have a severe impact on these users.  For
example, he believed that during years of water shortage, the tribes
could have rights to virtually all the available water in numerous
streams and rivers in the San Juan River basin. 

Because land ownership on the Southern Ute Reservation was mixed,
with non-Indians owning and farming land along the La Plata River,
these legal proceedings created a great deal of tension between the
Southern Utes and local non-Indians.  To avoid an expensive and
disruptive outcome, the tribes, local communities, non-Indian
irrigators, state of Colorado, and federal government negotiated a
settlement of the tribes' claims.  In 1988, the Colorado Ute Indian
Water Rights Settlement Act (P.L.  100-585) made the Animas-La Plata
project the cornerstone of this negotiated settlement of the Utes'
water rights claims.\3 (App.  II provides information on the 1988
Settlement Act.)

In 1979, the Service had issued a biological opinion concerning the
potential effects of the proposed Animas-La Plata project on the
endangered Colorado squawfish.  (App.  III provides information on
requirements under the Endangered Species Act and on the Colorado
squawfish.) At that time, on the basis of the capture of a single
juvenile Colorado squawfish in the San Juan River, the Service
concluded because of its "already tenuous hold on survival, its
possible loss should have little impact on .  .  .  the species
itself." However, the Service recommended that the Bureau thoroughly
survey the native fish populations of the San Juan River and
determine the environmental needs of the squawfish.  Surveys of
fisheries conducted from 1987 to 1989 discovered more Colorado
squawfish than had previously been known and revealed potential
effects of the project that had not been considered in the Service's
1979 biological opinion. 

In 1990, the Service issued a draft biological opinion that the
Animas-La Plata project, as proposed, would jeopardize the continued
existence of the endangered Colorado squawfish.  Responding to the
1990 draft opinion, the Bureau and the Service consulted to develop a
"reasonable and prudent alternative" for the project (referred to
hereinafter as the "alternative") that allowed construction of
certain facilities of the project.  (App.  IV provides information on
the alternative.)

In 1992, several environmental groups filed a lawsuit that delayed
the start of the project's construction by challenging the validity
of the Bureau's 1980 environmental impact statement for the
project.\4 In responding to the lawsuit, the Bureau began preparing a
supplemental environmental impact statement and deferred beginning
construction of the project.  The Bureau expects to issue the
supplemental statement in December 1995 and, after the issuance of
the Record of Decision, begin construction. 

In July 1994, the Department of the Interior's Inspector General
issued a report addressing the Animas-La Plata project.\5 The
Inspector General reported that the project had a negative
benefit-cost ratio, in part because the Bureau overstated the
anticipated benefits resulting from uses of the water for irrigation. 
The Inspector General recommended that the Bureau reevaluate the
economic costs and benefits of the project; inform the Congress of
the results of this reevaluation; and, if warranted, seek
congressional approval to reformulate the project (limiting its size
and scope).  Responding to these recommendations, the Bureau noted
that it was updating its economic analysis for the project.  The
Bureau completed this update in June 1995.  The analysis showed that
while the project had a positive benefit-cost ratio under the
economic evaluation procedures used when it was authorized by the
Congress in 1968, it has a negative benefit-cost ratio under
contemporary economic evaluation procedures. 

Interior had previously recognized that the full project has a
negative benefit-cost ratio, noting in October 1987 letters addressed
to the Chairman, Senate Committee on Energy and Natural Resources,
and to the Chairman, House Committee on Interior and Insular Affairs,
that ".  .  .  the Animas-La Plata Project is not economically
feasible .  .  .  ." At that time, Interior supported going forward
with the project because it would settle the tribes' claims to water
rights and because nonfederal partners were to share in the project's
costs. 


--------------------
\1 An acre-foot is the volume of water that would cover 1 acre to a
depth of 1 foot. 

\2 The project would also provide water to the Navajo Nation, which
has not agreed to receive this water. 

\3 The Ute Mountain Ute Indian Tribe also has the right to receive
water from the Dolores Project, another Bureau project in Colorado. 

\4 Four Corners Action Coalition, et al.  v.  Dennis Underwood, et
al.  Civil Action No.  92-Z-341, U.S.  District Court for the
District of Colorado.  Complaint filed April 23, 1992. 

\5 Development Status of the Dolores and the Animas-La Plata
Projects, Bureau of Reclamation, 94-I-884 (July 1994). 


THE COLORADO UTE INDIAN WATER
RIGHTS SETTLEMENT ACT
========================================================== Appendix II

The Colorado Ute Indian Water Rights Settlement Act (P.L.  100-585)
provided more recent impetus for constructing the Animas-La Plata
project.  The act expanded the project's purposes to include the
storage and delivery of water for the two Ute tribes.  It settled the
Ute tribes' claims by guaranteeing them the use of water from the
project and providing $49.5 million in federal funds for tribal
development.  The act was based on two agreements signed earlier:  an
agreement on cost-sharing for the Animas-La Plata project and a final
settlement agreement on the Colorado Ute Indians' water rights.  In
effect, these two agreements split the project into two phases. 

Under the first phase, the project will store the tribes' water in
Ridges Basin Reservoir and will physically convey the water the
non-Indian users receive for various purposes.  It will be primarily
federally financed and is expected to cost about $550 million.  This
phase was originally scheduled for completion by 2000; the Bureau now
estimates, barring further delays, that the Ridges Basin Dam will be
completed in 2002.  If certain features of the project's first
phase\1 are not built by the year 2000, according to the final
settlement agreement,

     "then by January 1, 2005, the Tribe,\2 in consultation with the
     United States as trustee, must elect either:  (a) to retain the
     project reserved water right; or (b) to commence litigation or
     renegotiation of its pending reserved water rights claims on the
     Animas and La Plata Rivers.  If the Tribe, in consultation with
     the United States as trustee, has not elected to commence
     litigation or renegotiation of its pending claims .  .  .  then: 
     (a) the Tribe shall be deemed to have elected to retain its
     project reserved water right; (b) the settlement of the Tribe's
     pending reserved and appropriative water rights claims on the
     Animas and La Plata Rivers .  .  .  shall become final; and (c)
     the Tribe shall not be entitled to claim any additional reserved
     water rights either on the Animas River or on the La Plata
     River."

The second phase, in which the project will physically convey water
to the Ute Indian reservations, will be financed by the nonfederal
project partners and is expected to cost about $160 million.  It is
to be constructed when deemed practicable by one or more of these
partners.\3 The federal government will pay the Indian tribes' share
of the project's costs until the water is first used.  Water that the
tribes receive for irrigation and for municipal and industrial use is
to be stored in Ridges Basin Reservoir until the project's second
phase is completed. 


--------------------
\1 These facilities are the Ridges Basin Dam and Reservoir, the Long
Hollow Tunnel, and the Dry Side Canal. 

\2 In this context, the word "Tribe" refers to either the Southern
Ute Indian Tribe or the Ute Mountain Ute Indian Tribe. 

\3 The nonfederal parties who signed the cost-share agreement are the
Southern Ute Indian Tribe, the Ute Mountain Ute Indian Tribe,
Colorado, Montezuma County, the Animas-La Plata Water Conservancy
District, the New Mexico Interstate Stream Commission, and the San
Juan Water Commission. 


THE ENDANGERED SPECIES ACT AND THE
COLORADO SQUAWFISH
========================================================= Appendix III

The Endangered Species Act of 1973, as amended (16 U.S.C.  1531 et
seq.), was enacted to protect fish, wildlife, and plant species whose
survival is in jeopardy.  The Secretary of the Interior, through the
Fish and Wildlife Service, is responsible for making such
designations for land and freshwater species, such as the endangered
Colorado squawfish.\1 Under section 7 of the Endangered Species Act,
federal agencies--if they determine that their actions may affect any
designated species--are required to consult with the Service before
beginning construction on proposed projects to determine whether a
project would likely "jeopardize the continued existence of" any
endangered species.\2 The act also provides a mechanism for exempting
projects from the act's requirements. 


--------------------
\1 For a species to be designated as endangered, it must be in danger
of extinction throughout all or a significant portion of its range
(the area where the species naturally occurs). 

\2 This requirement applies to projects whose construction began
after November 10, 1978. 


      CONSULTATION UNDER THE
      ENDANGERED SPECIES ACT
----------------------------------------------------- Appendix III:0.1

The act's requirement to consult concerns actions taken by federal
agencies that "reasonably would be expected, directly or indirectly,
to reduce appreciably the likelihood of both the survival and
recovery of a listed species in the wild by reducing the
reproduction, numbers, or distribution of that species." Section 7 of
the act represents a congressional design to give endangered species
priority over the primary missions of federal agencies.\3

When proposing a project, the consulting agency bears the burden of
proof to demonstrate that its actions would not likely jeopardize the
species and must determine whether its actions may affect the
species; if so, it must request consultation with the Service.  The
Service, after reviewing the proposal's potential effects on the
species, documents its determination in a "biological opinion." If
the Service finds that the proposed project would likely jeopardize
an endangered species, it issues a "jeopardy" biological opinion. 
The consulting agency can then either abandon the project or develop,
with the Service's concurrence, a "reasonable and prudent
alternative" (called hereinafter the "alternative") that modifies the
proposed project to avoid jeopardizing the endangered species.  The
biological opinion and the alternative, as well as the agencies'
decisions, must be based on the best scientific and commercial
information that is available.\4 Under the Endangered Species Act's
implementing regulations, a reasonable and prudent alternative must
be within the consulting agency's authority to implement, consistent
with the project's intended purpose, and economically and
technologically feasible. 


--------------------
\3 TVA v.  Hill, 437 U.S.  153, 185 (1978). 

\4 In this context, the word "commercial" refers specifically to
trade information (e.g., salmon harvests), not to nonscientific
information in general. 


      EXEMPTIONS UNDER THE
      ENDANGERED SPECIES ACT
----------------------------------------------------- Appendix III:0.2

The consulting agency can seek an exemption from the act's protective
provisions from the Endangered Species Committee.\5 If such an
exemption is granted, the agency can proceed with the proposed
project despite any jeopardy it may pose to an endangered species. 
In deciding whether to grant an exemption, the Endangered Species
Committee is authorized to consider information unrelated to the
jeopardy of a species.  This information may include the benefits of
a project, its regional and national importance, and the public
interest.  The Committee weighs this information against the
continued viability of the species and may determine, for example,
that the public benefits of a proposed project, such as a dam,
outweigh the risks it poses to an endangered species. 


--------------------
\5 Members of this Committee are the Secretaries of the Interior, the
Army, and Agriculture; the Chairman of the Council of Economic
Advisors; the administrators of the Environmental Protection Agency
and the National Oceanic and Atmospheric Administration; and a
representative from each affected state. 


      THE COLORADO SQUAWFISH
----------------------------------------------------- Appendix III:0.3

The Service has determined that the Colorado squawfish (Ptychocheilus
lucius) is an endangered species.  In the past, individuals in the
species have been known to grow to nearly 6 feet in length and weigh
more than 80 pounds.  It evolved as the main predator in the Colorado
River system, of which the San Juan River is a part.  Figure III.1
shows a Colorado squawfish. 

   Figure III.1:  Colorado
   Squawfish

   (See figure in printed
   edition.)

   This 38-inch Colorado squawfish
   was taken from the Colorado
   River for research purposes. 
   After the fish--the largest one
   found in the last 10 years--was
   weighed and measured, it was
   released unharmed back into the
   river.

   (See figure in printed
   edition.)

   Source:  Utah Division of
   Wildlife.

   (See figure in printed
   edition.)

The Colorado squawfish was once found throughout the warm-water
reaches of the entire Colorado River system, including areas of the
upper San Juan River and possibly its tributaries.  The Service
estimates that the Colorado squawfish now occupies only 25 percent of
its original range and that there may be as few as 10,000 adult fish
throughout the river system.  According to biological studies, the
decline in the population of the Colorado squawfish is closely
correlated with the construction of dams and reservoirs and with the
accompanying depletion of water from the river system, among other
things.  The Colorado squawfish best survives in rivers that have
great variations in seasonal flow, and much of the seasonal variation
is lessened when rivers are dammed to store the heavy spring runoff
to use during the summer.  Biologists believe the Animas River--the
largest undammed and perennial tributary to the San Juan River--has
helped the Colorado squawfish population survive in the San Juan
River. 


DEVELOPMENT OF A REASONABLE AND
PRUDENT ALTERNATIVE
========================================================== Appendix IV

In 1979, the Department of the Interior's Bureau of Reclamation
published a plan for the Animas-La Plata project.  At that time,
Interior's Fish and Wildlife Service consulted with the Bureau
concerning the potential effects of the project on the endangered
Colorado squawfish.  On December 28, 1979, on the basis of the
capture of a single juvenile squawfish in the San Juan River, the
Service issued a biological opinion that the project was unlikely to
jeopardize the continued existence of the Colorado squawfish. 

Surveys of fisheries conducted by federal and state researchers from
1987 though 1989 documented a reproducing population of adult
squawfish in the San Juan River.  As a result of this new
information, in February 1990 the Bureau resumed consulting with the
Service on the Animas-La Plata project.  In May 1990, the Service
issued a draft "jeopardy" biological opinion, asserting that the
project would likely jeopardize the continued existence of the
endangered Colorado squawfish and concluding that no "reasonable and
prudent alternative" to the project (referred to hereinafter as the
"alternative") existed. 

In its 1990 draft biological opinion, the Service concluded that
because major water projects on the San Juan River and its
tributaries had already reduced stream flows to a critical level for
the fish, depleting any water from the Animas River would pose an
unacceptable risk to the squawfish's survival in the San Juan River. 
The Service's draft biological opinion contained the following
statement: 

     "Since the Service believes that in most years the river is
     already at or below the threshold for minimum flows whereby the
     fish could survive in the river, any further depletions to the
     river system could render the San Juan River unuseable by the
     Colorado squawfish."

For this reason, the Service, in developing its draft opinion, had
considered but rejected each of three proposed alternatives to the
project as not biologically defensible.  These alternatives were (1)
changing the design of the Animas-La Plata project to allow stored
water to be released for the benefit of the Colorado squawfish; (2)
initially limiting and then increasing the amount of water depleted
from the Animas River for the project over time to coincide with the
construction schedule, and performing scientific studies concurrently
with the project's construction; or (3) offsetting the anticipated
depletions of water from the Animas River by releasing additional
water from the Navajo Dam and Reservoir\1 for the squawfish. 


--------------------
\1 The Navajo Dam and Reservoir stores water used by the Navajo
Indian Irrigation Project (NIIP), a congressionally authorized
project on the San Juan River that has been partially constructed. 
App.  V provides additional information on NIIP. 


      DEVELOPMENT OF AN ACCEPTABLE
      ALTERNATIVE
------------------------------------------------------ Appendix IV:0.1

During July 1990, the Bureau and the Service informally discussed the
possibility of formulating an alternative that would allow
construction of the project to proceed, according to a briefing
statement subsequently prepared by the Service.  The Bureau proposed
a fourth alternative that combined elements of the three previously
rejected alternatives.  This alternative included a fish management
plan on the San Juan River, a 5-year study to identify and evaluate
the needs of the Colorado squawfish, water releases of up to 300,000
acre-feet (in 2 of the 5 years) from the Navajo Dam and Reservoir,
and construction of the Animas-La Plata project concurrently with the
study.  The Service rejected this proposed alternative as being
essentially the same as those already rejected, maintaining that the
best available scientific data led to the conclusion that (1) any
further reductions in flow in the San Juan River would likely
jeopardize the endangered fish and (2) field studies were needed to
provide better information. 

The Service then offered to explore an alternative allowing the first
phase of the project to be constructed and 50,000 acre-feet of water
to be annually depleted from the Animas River to allow the Colorado
Ute Indians' water settlement to proceed.  An Assistant Regional
Director for the Bureau told us that the Bureau and the Service began
to develop the alternative at the request of the Secretary of the
Interior.  According to this official, the agencies held a series of
meetings looking for middle ground between the need to preserve the
endangered species and the need to comply with the 1988 Settlement
Act's mandate to build the project.  Regional hydrologists for the
Service told us they believed that the Bureau wanted to start
construction on the project before the fish studies were complete
because of the settlement's deadline for constructing the first phase
of the project. 

The proposed alternative was discussed during an August 1990 meeting
of the then-Assistant Commissioner of the Bureau, the head of the
Bureau's Durango Projects Office, an Assistant Regional Director for
the Service, and other staff from both agencies.  The former
Assistant Commissioner told us his efforts at this meeting were based
on satisfying two commitments:  (1) protecting the Colorado squawfish
and (2) meeting the construction deadline imposed by the 1988
Settlement Act.  He described his role at this meeting as one of
bringing the Service and the Bureau together to develop a final
biological opinion that would include an acceptable alternative.  He
characterized the development of the alternative as a compromise
based on assumptions that a biological study would be conducted to
collect information on the Colorado squawfish, that releases from the
Navajo Dam and Reservoir would be used to mimic the natural flows of
the San Juan River, and that some of the project's facilities would
be constructed. 

Participants in the August 1990 meeting told us that the officials
agreed that approximately 50,000 acre-feet of water would have to be
depleted from the river annually to meet the needs of municipal,
agricultural, industrial, and Indian water users.  Of this amount,
40,100 acre-feet would be reserved for Indian users.  The
participants at the meeting also decided that the Service would
incorporate these water depletions into an alternative to be included
in its final biological opinion.  According to notes from the
meeting, the participants agreed that an interagency group could work
out details of the alternative within 60 days. 

In October 1990, the Bureau formed three teams to develop a final
alternative that would allow construction of some of the project's
facilities.  The teams subsequently provided the Bureau with
additional data and opinions on the development of the final proposed
alternative.  For example, the hydrology team increased the minimum
anticipated depletions of water from the Animas River from 50,000
acre-feet to 57,100 acre-feet to account for potential evaporation. 
The Bureau forwarded the final proposed alternative to the Service in
March 1991, and the Service incorporated the alternative into its
final biological opinion in October 1991. 


      ELEMENTS OF THE ACCEPTED
      ALTERNATIVE
------------------------------------------------------ Appendix IV:0.2

The 1991 alternative contained several elements, and according to the
Service's final biological opinion, all these elements must be
implemented to avoid jeopardizing the squawfish.  Under the
alternative, construction was limited to some, but not all, of the
facilities planned for the first phase of the project:  a pumping
station to pump water from the Animas River, a conduit to carry water
from the river, and the Ridges Basin Dam and Reservoir to store the
water.  In addition, the alternative limited the amount of water that
can be annually depleted from the Animas River to 57,100 acre-feet. 
The alternative also required a 7-year-long study of the needs of the
Colorado squawfish and provided for a fish recovery program in the
San Juan River.  The final biological opinion required that, as part
of the fish study and recovery program, approximately 300,000
acre-feet of water annually be periodically released from the Navajo
Dam and Reservoir located upstream on the San Juan River and that
these water releases be protected through the squawfish's habitat. 
According to the final biological opinion, none of the project's
additional facilities can be constructed and no additional water can
be depleted from the Animas River for the project until the study is
completed and the Service determines that the squawfish would not
likely be jeopardized. 


         CONSTRUCTION OF THE
         PROJECT
---------------------------------------------------- Appendix IV:0.2.1

Bureau officials told us that the alternative is a means of starting
construction on the full Animas-La Plata project--in other words, it
is an incremental step toward completing the full project.  Whereas
the full project will annually deplete approximately 155,000
acre-feet of water from the river and physically convey it to the
areas where it will be used, the alternative annually depletes
roughly one-third of this amount of water and does not include
facilities to physically convey the water from the Ridges Basin
Reservoir to the areas where it will be used.  A memorandum of
understanding attached to the Service's final biological opinion
formally recognizes the Bureau's position on the alternative:  "The
Service is preparing a biological opinion for the Animas-La Plata
Project that contains a reasonable and prudent alternative which
provides for construction of an initial portion of the project."

The importance of the alternative as a means of starting construction
was emphasized by the Solicitor for Interior's Southwest Region in a
December 1990 briefing paper: 

     ".  .  .  construction of a portion of [the Animas-La Plata
     project] represents a gamble that more may be built later.  This
     is important because that is the only way the Ute Tribes will
     benefit and their water rights claims will finally be settled
     under the 1988 water rights legislation."


         WATER PROTECTION
---------------------------------------------------- Appendix IV:0.2.2

The Service's final biological opinion states:  "It is not enough to
only release water from the Navajo Dam.  There also must be
guaranteed delivery of the water so that it provides the habitat
improvement necessary to maintain and increase the endangered fish
population in the San Juan River." Such protection, according to the
final biological opinion, the memorandum of understanding, and
Interior officials, is under the legal jurisdiction of the Navajo
Nation and the states of Colorado, New Mexico, and Utah. 

Whereas Colorado and New Mexico have agreed to ensure that the
released water will reach the Colorado squawfish's habitat, neither
the Navajo Nation nor Utah has provided such guarantees to the
Service.  According to the Service's draft proposal outlining the San
Juan River's fish recovery program--which relies on the use of this
water--this situation may require that consultation between the
Service and the Bureau on the alternative be reopened. 


THE NAVAJO INDIAN IRRIGATION
PROJECT AND ITS RELATIONSHIP TO
THE ANIMAS-LA PLATA PROJECT
=========================================================== Appendix V

Both the Animas-La Plata project and the Navajo Indian Irrigation
Project (NIIP) are located in the San Juan River basin and affect the
same population of endangered Colorado squawfish in the San Juan
River.  One of the elements of the "reasonable and prudent
alternative" for the Animas-La Plata project (referred to hereinafter
as the "alternative") involves annual releases of water from the
Navajo Dam and Reservoir, which stores water used by NIIP.  However,
the Navajo Nation disputes this use of reservoir water because it may
jeopardize the completion of NIIP and the Navajo tribe's rights to
use the water. 


      AUTHORIZATION AND
      CONSTRUCTION OF NIIP
------------------------------------------------------- Appendix V:0.1

The Congress authorized NIIP and another project--the San Juan-Chama
project\1 --in 1962 (P.L.  87-483).  The authorization for NIIP
included an annual water supply of 508,000 acre-feet to irrigate over
110,000 acres of land on the Navajo Indian Reservation; water for the
project would be stored behind the Navajo Dam, in the Navajo
Reservoir, on the San Juan River. 

The Bureau of Reclamation completed construction of the Navajo Dam in
1963.  The Bureau began constructing facilities to deliver water for
NIIP in 1964 and initially planned to complete construction by 1979. 
However, the construction of these facilities was subsequently
delayed by a conflict between the Bureau and Interior's Bureau of
Indian Affairs (BIA), the project's sponsor.  The Bureau and BIA
eventually agreed that NIIP would be constructed in 11 units, each
encompassing 10,000 acres.  By August 1995, the Bureau had completed
construction of seven units and was constructing the eighth. 


--------------------
\1 Construction of the San Juan-Chama project was completed in 1971. 
This project diverts water from the San Juan River and provides it to
Albuquerque and to the Jicarilla Apache Indian Reservation.  In
exchange for New Mexico's support for NIIP, the Navajo Nation did not
oppose the use of water for the San Juan-Chama project. 


      CONSULTATION ON NIIP AND ITS
      RELATIONSHIP TO THE
      ANIMAS-LA PLATA PROJECT
------------------------------------------------------- Appendix V:0.2

BIA initiated consultation with the Fish and Wildlife Service on the
first eight units of NIIP in July 1991.  On October 28, 1991, the
Service issued its biological opinion on NIIP, which allowed existing
depletions from the San Juan River for NIIP to continue.  However,
the Service disallowed additional depletions of about 56,900
acre-feet, which had been requested by BIA to fully develop the
seventh and eighth units.  In its biological opinion on NIIP, the
Service noted that the additional depletions requested by BIA were ". 
.  .  beyond the point of jeopardy delineated in the .  .  . 
Animas-La Plata biological opinion .  .  .  ." The Service also wrote
that ".  .  .  any further depletions considered necessary for the
operation of NIIP, will be evaluated based on the results of the
7-year research program as stipulated in the .  .  .  Animas-La Plata
Biological Opinion." Interior officials told us that the Service
allowed water depletions under the 1991 alternative to the Animas-La
Plata project, rather than allowing them for NIIP, because the
Bureau's consultation on the Animas-La Plata project was begun and
completed earlier than BIA's consultation on NIIP.\2

In December 1990, when the Bureau was consulting with the Service on
the Animas-La Plata project, the Solicitor for Interior's Southwest
Region stated in a briefing paper that a decision to allow water
depletions for the Animas-La Plata project, rather than NIIP,
jeopardized the future of NIIP.  Similarly, in a December 1990
memorandum to the Secretary of the Interior, the then-Assistant
Secretary for Indian Affairs questioned whether the rights of the
Navajo Nation were being adequately considered.  In January 1994, the
then-President of the Navajo Nation and a tribal attorney told us
that the tribe's position was that the Bureau's use of water from the
Navajo Reservoir for the alternative to the Animas-La Plata project
threatened the tribe's claim to water in the reservoir under the 1962
congressional authorization of NIIP and the tribe's other rights to
water in the San Juan River. 



(See figure in printed edition.)Appendix VI

--------------------
\2 Consultation on the Animas-La Plata project was most-recently
initiated in February 1990 and completed when the Service issued its
final biological opinion on October 25, 1991. 


COMMENTS FROM THE BUREAU OF
RECLAMATION
=========================================================== Appendix V



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



   GAO'S COMMENTS
--------------------------------------------------------- Appendix V:1

The following are GAO's comments on the Bureau of Reclamation's
comments enclosed in a letter dated September 21, 1995. 

1.  We have not revised the report because we believe this suggested
change adds nonessential detail. 

2.  We have clarified the sentence. 

3.  To minimize the use of acronyms in the report, we have used the
term "alternative" rather than "RPA" to refer to the "reasonable and
prudent alternative." We have clarified our usage of this term
throughout the report. 

4.  We disagree with this suggested addition.  Only the Colorado
squawfish was specifically identified in the draft and final
biological opinions issued by the Fish and Wildlife Service for the
Animas-La Plata project.  The Service subsequently addressed the
potential impact of the project on the razorback sucker in a
conference opinion.  In 1992, the Service stated that the conference
opinion should be incorporated into the previous opinions concerning
the Animas-La Plata project and noted that implementation of all
elements of the alternative for the Animas-La Plata project would
likely avoid jeopardizing the razorback sucker.  Because the
Service's biological opinions on the Animas-La Plata project did not
address the razorback sucker and because the alternative to the
Animas-La Plata project was not subsequently modified to address the
razorback sucker, our report refers only to the Colorado squawfish. 

5.  We have changed the date. 

6.  We have substituted the term "deplete" for "withdraw" to reflect
the Bureau's use of the term.  We have also clarified that the
figures for acre-feet of depleted water used in the report were taken
from the Service's draft and final biological opinions.  In both the
Animas-La Plata project and the alternative, water is physically
taken only from the Animas and La Plata rivers--although these
depletions ultimately affect the amount of water flowing downstream
in the San Juan River--and we have retained this usage in our report. 

7.  We disagree with the suggested change because the cost-sharing
agreement was negotiated separately from the settlement of the Ute
tribes' water claims. 

8.  We disagree with this comment.  Facilities to physically convey
water to the Colorado Ute tribes are planned to be constructed only
in the second phase of the Animas-La Plata project.  While the Ute
tribes receive ownership of water in the first phase of the project,
the tribes' water will be stored in the Ridges Basin Reservoir until
the project's second phase is constructed.  We have substituted the
phrase "physically convey" for "deliver" for more specificity
throughout our report. 




(See figure in printed edition.)Appendix VII
COMMENTS FROM THE FISH AND
WILDLIFE SERVICE
=========================================================== Appendix V



(See figure in printed edition.)



(See figure in printed edition.)



   GAO'S COMMENTS
--------------------------------------------------------- Appendix V:2

The following are GAO's comments on the Fish and Wildlife Service's
memorandum dated September 21, 1995. 

1.  We have not revised the report because we believe the suggested
change adds nonessential detail. 

2.  The Navajo Dam and Reservoir and the Navajo Indian Irrigation
Project (NIIP) were separately authorized as participating units of
the Colorado River Storage Project.  We have clarified the sentence
to state that the Navajo Dam and Reservoir stores the water used by
NIIP. 

3.  We disagree that our statement is incorrect.  The 1991 final
biological opinion issued by the Fish and Wildlife Service explicitly
restricts construction of and water depletions for the Animas-La
Plata project under the accepted alternative pending the outcome of
the fish study (which the Service agreed would require at least 7
years to complete).  We have clarified the sentence to specify that
these restrictions apply only to the alternative (not to other
water-development projects). 

4.  We have clarified the sentence. 

5.  We disagree with the Service's characterization of the Navajo
Nation's concerns.  The Navajo Nation is concerned about the
alternative to the Animas-La Plata project because the Service, in
effect, allowed depletions for the alternative at NIIP's expense, and
because the Service allowed annual releases of water for the
alternative from the Navajo Dam and Reservoir, which stores water for
NIIP.  At the time of the consultations, representatives from the
Navajo Nation expressed their concerns about this use of water to
which the Navajo Nation has legal claim, but the Service did not
respond to their concerns.  We have clarified this paragraph to more
specifically describe this situation. 


MAJOR CONTRIBUTORS TO THIS REPORT
======================================================== Appendix VIII

Sandra P.  Davis
Brian A.  Ellison
Sue E.  Naiberk
Pamela K.  Tumler


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