**Results of the Provincial Review:**

**Estimated Budget Needs Through FY 2006**

Thomas Giese, CBFWA

April 16, 2003

The Northwest Power Planning and Conservation Council (Council)
conducted a three-year rolling review of fish and wildlife proposals to
identify proposals for BPA funding starting in FY 2000. This rolling
Provincial Review solicited, reviewed and prioritized project proposals
to implement its Fish and Wildlife Program (Program). The purpose of
this report to compile and summarize regional estimates of fish and
wildlife funding needs.

**Origin of the Cost Estimates**

Starting in FY 2000, project proposals from one-third of the subbasins
in the US-portion of Columbia River Basin were reviewed each year in an
extensive, public process the first cycle of which is just now being
completed. Each proposal estimated its budget needs for three years. The
review process is described in the Appendix. In the Provincial Review,
local groups comprised of fish and wildlife managers, Council and CBFWA
staff, public land managers, private land and water owners, and other
interested parties developed "Subbasin Summaries." These summaries
included information on the status of fish and wildlife species in the
subbasin, problems that they face, managers' goals and objectives for
fish and wildlife, and strategies to correct problems and meet the
objectives. The Subbasin Summaries are available on the CBFWA web site
([www.cbfwa.org](../www.cbfwa.org)). The summaries were reviewed by the
ISRP for their scientific adequacy and approved by the fish and wildlife
managers.

About 700 proposals were solicited through this process to address
measures in the Program and problems identified in the Subbasin
Summaries. The proposals stated their three-year objectives and
explained how they would meet their objectives and estimated the costs
required. All proposals are available on the CBFWA web site
([www.cbfwa.org](../www.cbfwa.org)) The proposals underwent a detailed
review with site visits by the ISRP for scientific adequacy and by the
fish and wildlife managers through CBFWA of management appropriateness.
The proposals were further reviewed and prioritized by local groups of
managers and landowners. Detailed review comments and responses are
available on the CBFWA web site ([www.cbfwa.org](../www.cbfwa.org)). BPA
staff was requested to participate in all aspects of the process.

**Results**

Table 1 summarizes the budget needs by category for proposals that were
recommended for funding by both ISRP and the fish and wildlife managers.
BPA's administrative overhead, estimated to be \$12 million per year has
been included in Table 1, as BPA deducts these costs from its Fish and
Wildlife Program budget. The costs associated with the operation of the
ISRP have also been included.

The F&W funding needs identified in the Provincial Review declines in FY
2005 and FY 2006 for two reasons. First, a few large investments in
implementation or construction and some research and feasibility studies
may be completed. Second, many proposals included only three years of
budget estimates, even though budget needs will likely continue (e.g.,
for O&M and M&E).

In order to better represent these continuing Program costs, for
example, operations and maintenance of facilities and monitoring and
evaluation costs, all of the proposals summarized in Table 1 were
reviewed. Table 2 estimates the additional increment of these ongoing
costs by continuing the last year of funding shown in the proposal
through FY 2006 thus summarizing proposals' funding needs beyond their
three-year estimates.

Table 3 combines Tables 1 and 2 to estimate the fish and wildlife budget
needs identified by proposals reviewed in the Council's provincial
review. From Table 3 it is apparent that the provincial review estimate
of fish and wildlife budgetary needs range from more than \$310 million
in FY 2003 and declining to more than \$278 million in FY 2006. This
represents the best available estimate of BPA fish and wildlife
responsibilities

that is available.

With the current discussion of BPA rates in mind, the BPA revenue
requirements necessary to pay for these estimated fish and wildlife
costs were estimated, based on two assumptions. First, this analysis
assumes that BPA relaxes its self-imposed restriction on borrowing funds
to purchase land. BPA can remove this limitation by announcing its
intent to capitalize land purchases in the current rate case. Second,
this analysis assumes that the revenue required to amortize borrowed
capital is 10 percent of the amount borrowed.

Using a knowledge of the individual proposals, the amount of each
category that could reasonably be capitalized was estimated. These
estimated percentages capitalized are shown in Table 4. The capitalized
portions of each category in Table 4 were reduced by 90 percent to
estimate their revenue requirements. The annual revenue required,
estimated in this manner, is about \$247 million to fund basin-wide fish
and wildlife needs. This is likely to be a minimum due to the
uncertainties in the estimate.

**Uncertainty in the Cost Estimates**

All estimates of future costs will have associated uncertainty. In the
case of the Provincial Review estimate, some sources of uncertainty are
reduced by identifying resource problems and needs and addressing
objectives and strategies from the Subbasin Summaries. The extensive and
thorough scientific, management and public review of the Provincial
Review materials further reduces the uncertainty of these estimates.

However, some sources of future fish and wildlife cost increases are not
addressed in the Provincial Review estimates.

1\. Over 700 proposals are summarized in this analysis, however, not all
fish and wildlife needs have been addressed by proposals in the
provincial review. The Provincial Review produced detailed estimates of
costs needed to implement the Program which is intended to "protect,
mitigate and enhance the fish and wildlife resources of the Columbia
River Basin," and to meet some of the needs of listed species under the
ESA. The NOAA Fisheries staff reviewed these projects and found them
consistent with the Biological Opinions and RPAs. Because the
requirements of ESA-listed and non-listed species overlap, the Program
makes no distinction between them. Implementation of the Program will
meet some, but not all, of the requirements of the Biological Opinions.

2\. Inflation has been only partially accounted for in this summary.
Many proposals did not provide for inflation in their estimated costs.
In addition, the estimates of continuing costs presented in Table 2 do
not account for inflation. A consistent application of inflation would
increase estimated needs in the later years.

3\. Only a very limited amount of degraded privately-owned salmon
habitat is addressed by proposals here. No needed improvements to
publicly-owned habitat (about 50 percent of the total) have been
included.

4\. The Council is developing more detailed Subbasin Plans that will
replace the current Subbasin Summaries from the Provincial Review, when
they are adopted as amendments to the Council's Fish and Wildlife
Program. The Subbasin Plans will identify additional work needed to
mitigate for the damage done by the Federal Columbia River Hydropower
System. The current schedule calls for the Council adoption of some
Subbasin Plans in FY 2004 with additional ones scheduled for subsequent
years. This will increase BPA's fish and wildlife budget needs during
the latter part of the rate period.

5\. Under the 2000 Biological Opinion, BPA must check its progress in
implementing the RPA both in FY 2003 and FY 2005. Early indications are
that additional efforts will be required for BPA to be on schedule. No
funds have been included in the current SN-CRAC proposal to cover these
costs.

6\. Recovery planning is underway in the Willamette and lower Columbia
River areas for listed salmon ESUs. Similar planning efforts are just
getting organized for the Snake River salmon ESUs. These efforts are
likely to identify additional requirements for BPA funding in the latter
part of the rate period.

All of these uncertainties point to the likelihood of increasing costs
for BPA to meet its fish and wildlife responsibilities during the
remaining portion of the rate period. Thus the fish and wildlife costs
from the Provincial Review are minimum estimates.

Table 1. Fish and Wildlife Funding Needs

(from Provincial Review, "Fund/Fund" Proposals

Table 2. Additional Fish and Wildlife Funding Needs

(Through proposal continuation)

Table 3. Currently Identified Fish and Wildlife Needs

  ------------------------ --------------- --------------- --------------- ---------------
  **Category **            **Total         **Total         **Total         **Total
                           FY2003**        FY2004**        FY2005**        FY2006**

  **Administration Total** \$19,284,918    \$19,618,090    \$19,738,980    \$19,758,946

  **Data Management        \$10,205,801    \$9,248,902     \$9,549,836     \$9,549,836
  Total**                                                                  

  **Fish Propagation       \$50,526,033    \$53,819,674    \$44,821,180    \$39,781,445
  Total**                                                                  

  **Fish Propagation-RME   \$62,336,446    \$61,996,629    \$60,216,415    \$60,088,777
  Total**                                                                  

  **Habitat Total**        \$54,619,991    \$56,854,169    \$59,420,876    \$59,291,811

  **Habitat-land           \$76,248,533    \$66,803,524    \$62,494,815    \$57,789,054
  acquisition Total**                                                      

  **Habitat-research,      \$6,915,322     \$7,139,532     \$6,624,026     \$6,032,438
  monitoring and                                                           
  evaluation Total**                                                       

  **Habitat-tributary      \$9,794,312     \$8,668,765     \$8,693,621     \$7,131,727
  passage Total**                                                          

  **Habitat-water          \$6,338,733     \$7,465,386     \$7,574,533     \$6,941,573
  acquisition Total**                                                      

  **Habitat-watershed      \$6,934,711     \$5,827,410     \$4,584,286     \$4,643,206
  assessment Total**                                                       

  **Harvest Total**        \$3,116,174     \$3,014,828     \$3,096,487     \$3,115,394

  **Mainstem Total**       \$15,210,077    \$19,633,979    \$18,206,152    \$15,705,137

  **Terrestrial Total**    \$985,759       \$862,319       \$857,819       \$857,819

  **Totals**               \$322,516,810   \$320,953,207   \$305,879,026   \$290,687,163
  ------------------------ --------------- --------------- --------------- ---------------

Table 4. Average Annual Revenue Requirements: BPA Direct Fish and
Wildlife Program

  --------------------- --------------- --------------- --------------- --------------- --------------- --------- -------------- ------------- --------------- -------------------
                        F&W Funding     F&W Funding     F&W Funding     F&W Funding     Average Annual  \%        Average        Revenue       Revenue         Total Annual
                        Total FY2003    Total FY2004    Total FY2005    Total FY2006    Funding         Capital   Capital        Required for  Required for    Revenue Required
                                                                                                                                 Capital       Expense         

  **Administration      \$19,284,918    \$19,618,090    \$19,738,980    \$19,758,946    \$19,600,234    0%        \$0            \$0           \$19,600,234    \$19,600,234
  Total**                                                                                                                                                      

  **Data Management     \$10,205,801    \$9,248,902     \$9,549,836     \$9,549,836     \$9,638,594     0%        \$0            \$0           \$9,638,594     \$9,638,594
  Total**                                                                                                                                                      

  **Fish Propagation    \$50,526,033    \$53,819,674    \$44,821,180    \$39,781,445    \$47,237,083    20%       \$9,447,417    \$944,742     \$37,789,666    \$38,734,408
  Total**                                                                                                                                                      

  **Fish                \$62,336,446    \$61,996,629    \$60,216,415    \$60,088,777    \$61,159,567    0%        \$0            \$0           \$61,159,567    \$61,159,567
  Propagation-RME                                                                                                                                              
  Total**                                                                                                                                                      

  **Habitat Total**     \$54,619,991    \$56,854,169    \$59,420,876    \$59,291,811    \$57,546,712    20%       \$11,509,342   \$1,150,934   \$46,037,369    \$47,188,304

  **Habitat-land        \$76,248,533    \$66,803,524    \$62,494,815    \$57,789,054    \$65,833,982    70%       \$46,083,787   \$4,608,379   \$19,750,194    \$24,358,573
  acquisition Total**                                                                                                                                          

  **Habitat-research,   \$6,915,322     \$7,139,532     \$6,624,026     \$6,032,438     \$6,677,830     0%        \$0            \$0           \$6,677,830     \$6,677,830
  monitoring and                                                                                                                                               
  evaluation Total**                                                                                                                                           

  **Habitat-tributary   \$9,794,312     \$8,668,765     \$8,693,621     \$7,131,727     \$8,572,107     20%       \$1,714,421    \$171,442     \$6,857,685     \$7,029,127
  passage Total**                                                                                                                                              

  **Habitat-water       \$6,338,733     \$7,465,386     \$7,574,533     \$6,941,573     \$7,080,056     20%       \$1,416,011    \$141,601     \$5,664,045     \$5,805,646
  acquisition Total**                                                                                                                                          

  **Habitat-watershed   \$6,934,711     \$5,827,410     \$4,584,286     \$4,643,206     \$5,497,403     0%        \$0            \$0           \$5,497,403     \$5,497,403
  assessment Total**                                                                                                                                           

  **Harvest Total**     \$3,116,174     \$3,014,828     \$3,096,487     \$3,115,394     \$3,085,721     0%        \$0            \$0           \$3,085,721     \$3,085,721

  **Mainstem Total**    \$15,210,077    \$19,633,979    \$18,206,152    \$15,705,137    \$17,188,836    0%        \$0            \$0           \$17,188,836    \$17,188,836

  **Terrestrial Total** \$985,759       \$862,319       \$857,819       \$857,819       \$890,929       0%        \$0            \$0           \$890,929       \$890,929

  **Totals**            \$322,516,810   \$320,953,207   \$305,879,026   \$290,687,163   \$310,009,052             \$70,170,979   \$7,017,098   \$239,838,073   **\$246,855,171**
  --------------------- --------------- --------------- --------------- --------------- --------------- --------- -------------- ------------- --------------- -------------------

**APPENDIX: Provincial Review Process Summary**

#  Introduction

The Rolling Provincial Review process was developed by the Northwest
Power Planning Council (NWPPC) in February 2000 in response to
recommendations by the Independent Scientific Review Panel (ISRP) and
the Columbia Basin Fish and Wildlife Authority (CBFWA). Under this new
province based process each individual project proposal within a
province will be reviewed for technical merit and management relevance
every three years. Under the previous process all project proposals for
Bonneville Power Administration (BPA) funding under the Fish and
Wildlife Program were reviewed annually. The purpose of the NWPPC's new
multi-year process is to reduce the burden of reviewing large numbers of
proposals, most of which had been reviewed just one year before, and to
provide for a more thorough review of the project proposals in the
context of a subbasin summary. Additionally, the process is intended to
provide the opportunity for site visits by reviewers, project
presentations with a question and answer period, and provide reviewers
with more detailed background and planning documents which will reduce
the reviewer's reliance strictly on the proposal form.

The subbasin summaries developed under this process are intended to be
interim and will be replaced by subbasin plans developed to meet
requirements of the recently amended Fish and Wildlife Program.

The subbasin summaries were developed collaboratively by the NWPPC
staff, ISRP, fish and wildlife managers, other stakeholders, and CBFWA
staff, culminating in CBFWA project and budget recommendations for three
years. The subbasin summaries are provided only as context for the
project recommendations.

The CBFWA process for providing these recommendations utilized the ISRP
preliminary findings and integrated manager evaluations of the technical
and management merits of the project proposals relative to anadromous
fish, resident fish and wildlife management needs, and the goals and
objectives identified in the subbasin summaries.

# Project Review Process

## Subbasin Summaries

The Rolling Province Review was initiated in April 2000 in the Columbia
Gorge Province. The review is scheduled to be completed for the final
province, Mainstem and Systemwide, in June of 2003. For each province,
an invitation was sent to an extensive distribution list to encourage
all interested parties (i.e. land and water managers, representatives of
watershed councils, etc.) to attend and provide input. The purpose of
this first meeting was to provide all interested parties with the
opportunity to identify sources of information necessary for the
development of subbasin summaries for this province (i.e. monitoring
data, habitat restoration results, existing assessments, etc.). The
intent was to ensure BPA expenditures for fish and wildlife projects
compliment and enhance existing efforts and ensure that priority needs
are addressed. Subsequent meetings were held to review draft summaries
and identify goals and objectives.

Previously, ecosystem summaries for each subbasin were developed as a
means of providing context for project proposals. Under the new process,
a more formal structure with subbasin teams was formed to develop the
more comprehensive subbasin summaries of the newly identified provinces.
Other local interested parties also provided input to and participated
on the subbasin teams (i.e. other land and water managers,
representatives from watershed councils, etc.).

Subbasin summaries were completed for each subbasin in the Columbia
River Basin that contain BPA funded projects. The project sponsors were
asked to show a direct tie between their projects and the needs
identified in the subbasin summaries.

## Review by the ISRP

The ISRP reviewed project proposals for each province. To ensure a
consistent and fair evaluation, standard formats and criteria were
applied to all proposals to generate comments and scores prior to the
proposal review workshop. These scores and comments were not made
available to the project sponsors at the workshop, but were used by the
ISRP to develop questions for the site visits and workshop
presentations. The workshops consisted of site visits and project
presentations.

### Site Visits 

The ISRP, subbasin teams, fish and wildlife managers, the CBFWA province
review team and other stakeholders toured the province to gain a better
understanding of the existing ecological conditions and limiting factors
as well as view some ongoing projects in each subbasin. During the tour,
managers provided oral presentations for areas/projects within the
province that the group was unable to visit.

### Project Presentation 

Prior to the presentation of individual project proposals, subbasin team
leaders provided a general overview for their respective summaries.
Following each subbasin summary presentation, project proposals relative
to that subbasin were presented to the ISRP, CBFWA province review team,
fish and wildlife managers, NWPPC staff, CBFWA staff and other
stakeholders. All project sponsors were provided 15 minutes to present
their proposal and answer questions. During this review, the CBFWA
province review team applied Subbasin Project Review Criteria to each
project. Every effort was made to be consistent among all project
proposals reviewed.

## Preliminary ISRP Report

The ISRP released a *Preliminary Review of Project Proposals* for each
province. This report summarized the ISRP\'s preliminary review of each
project proposal and identified areas of concern where they had
requested a written response to questions. The due date for written
responses to this report was two weeks following its release.

## CBFWA Province Review Group 

CBFWA Province Review Groups reviewed all project proposals within each
province using standard criteria which resulted in a consensus "Yes" or
"No." Subbasin team members also participated in the review of the
project proposals. The following elements were considered during the
review:

-   How well does the project relate to the criteria

-   Validation of existing work- is the current funding level
    appropriate (Section 6 O&M and Section 7 M&E of existing projects)?
    Is it appropriate to continue implementation of existing work
    (Section 4 P&D and Section 5 C&I of existing projects)?

-   Evaluation of proposed new work- does a new project proposal
    demonstrate a priority need over implementation strategies within
    existing projects (Sections 4 and 5 of existing projects)?

Project proposals were grouped by program or focus area during their
review. The preliminary ISRP technical review of all proposals was
utilized while discussing the technical merits of each project.
Following the technical and management review, the project proposals
were prioritized within each area of focus according to the fish and
wildlife and Program needs. The following definitions were used for the
subbasin prioritization:

-   Core Program - These projects are integral to the infrastructure
    and/or information needs of the F&W Program in the Columbia River
    Basin for planning and management.

-   High Priority - These projects or tasks within a project are high
    priority within the subbasin. The project addresses a specific need
    within the subbasin (program) summaries.

-   Recommended Actions - These are good projects that cannot
    demonstrate a significant loss by not being funded this year. These
    projects should be funded, but under a limited budget, they could be
    delayed temporarily without significant loss.

-   Do not fund - These projects are either technically inadequate or do
    not address a need within the subbasin (program) summaries. These
    projects may be inappropriate for BPA funding.

**CBFWA Review and Approval of Subbasin Summaries and Project
Recommendations**

The final step in the project proposal review process was the consensus
approval of the project recommendations by CBFWA Members. The CBFWA
Members review and the recommendations in the subbasin summaries and
province work plan demonstrate regional support by the fish and wildlife
managers. The CBFWA provided three year funding recommendations for each
province.

**Rolling Province Review Date Summary (decision points)**

  --------------------- -------------- -------------- ------------- --------- -----------
  **Province**          **Date of      **Date of      NWPPC         Months    BPA Dec.
                        Initiation**   CBFWA          Recommend.    for       
                                       Recommend.**                 Council   
                                                                    Dec.      

  Gorge                 Mar-00         Nov-00         Mar-01        12        Sep-03

  Intermountain         Mar-00         Nov-00         Mar-01        12        Sep-03

  Mountain Columbia     Jul-00         Mar-01         Oct-01        15        Mar-03

  Columbia Plateau      Nov-00         Aug-01         Jan-02        14        Mar-03

  Blue Mountain         Mar-01         Nov-01         Apr-02        13        Jun-03

  Mountain Snake        Mar-01         Nov-01         Apr-02        13        Jun-03

  Columbia Cascade      Jul-01         May-02         Nov-02        16        

  Lower Columbia        Aug-01         May-02         Nov-02        16        

  Estuary               Aug-01         May-02         Nov-02        16        

  Middle Snake          Aug-01         May-02         Nov-02        16        

  Upper Snake           Aug-01         May-02         Nov-02        16        

  Mainstem/Systemwide   Oct-01         Oct-02         Jun-03        20        
  --------------------- -------------- -------------- ------------- --------- -----------

.

tom\\Budgets\\rPR BudgetResults041603