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66-205 PDF 2011

PROTECTING FEDERAL 

HYDROPOWER INVESTMENTS 

IN THE WEST: 

A STAKEHOLDERS’ PERSPECTIVE 

OVERSIGHT HEARING 

BEFORE THE

SUBCOMMITTEE ON WATER AND POWER 

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

Wednesday, May 4, 2011 

Serial No. 112-27 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.fdsys.gov 

or 

Committee address: http://naturalresources.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

DOC HASTINGS, WA, Chairman 

EDWARD J. MARKEY, MA, Ranking Democrat Member 

Don Young, AK 

John J. Duncan, Jr., TN 

Louie Gohmert, TX 

Rob Bishop, UT 

Doug Lamborn, CO 

Robert J. Wittman, VA 

Paul C. Broun, GA 

John Fleming, LA 

Mike Coffman, CO 

Tom McClintock, CA 

Glenn Thompson, PA 

Jeff Denham, CA 

Dan Benishek, MI 

David Rivera, FL 

Jeff Duncan, SC 

Scott R. Tipton, CO 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Kristi L. Noem, SD 

Steve Southerland II, FL 

Bill Flores, TX 

Andy Harris, MD 

Jeffrey M. Landry, LA 

Charles J. ‘‘Chuck’’ Fleischmann, TN 

Jon Runyan, NJ 

Bill Johnson, OH 

Dale E. Kildee, MI 

Peter A. DeFazio, OR 

Eni F.H. Faleomavaega, AS 

Frank Pallone, Jr., NJ 

Grace F. Napolitano, CA 

Rush D. Holt, NJ 

Rau ́l M. Grijalva, AZ 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Dan Boren, OK 

Gregorio Kilili Camacho Sablan, CNMI 

Martin Heinrich, NM 

Ben Ray Luja ́n, NM 

John P. Sarbanes, MD 

Betty Sutton, OH 

Niki Tsongas, MA 

Pedro R. Pierluisi, PR 

John Garamendi, CA 

Colleen W. Hanabusa, HI 

Vacancy 

Todd Young, Chief of Staff 

Lisa Pittman, Chief Counsel 

Jeffrey Duncan, Democrat Staff Director 

David Watkins, Democrat Chief Counsel 

SUBCOMMITTEE ON WATER AND POWER 

TOM McCLINTOCK, CA, Chairman 

GRACE F. NAPOLITANO, CA, Ranking Democrat Member 

Louie Gohmert, TX 

Jeff Denham, CA 

Scott R. Tipton, CO 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Kristi L. Noem, SD 

Doc Hastings, WA, ex officio 

Rau ́l M. Grijalva, AZ 

Jim Costa, CA 

Ben Ray Luja ́n, NM 

John Garamendi, CA 

Edward J. Markey, MA, ex officio 

(III) 

CONTENTS 

Page 

Hearing held on Wednesday, May 4, 2011 ............................................................ 1 

Statement of Members: 

Hastings, Hon. Doc, a Representative in Congress from the State of 

Washington .................................................................................................... 6 

Prepared statement of ............................................................................... 7 

McClintock, Hon. Tom, a Representative in Congress from the State 

of California ................................................................................................... 1 

Prepared statement of ............................................................................... 3 

Napolitano, Hon. Grace F., a Representative in Congress from the State 

of California ................................................................................................... 4 

Noem, Hon. Kristi, a Representative in Congress from the State of South 

Dakota ............................................................................................................ 8 

Tipton, Hon. Scott R., a Representative in Congress from the State of 

Colorado ......................................................................................................... 6 

Statement of Witnesses: 

Corwin, R. Scott, Executive Director, Public Power Council, Portland, 

Oregon ............................................................................................................ 9 

Prepared statement of ............................................................................... 10 

Fahlund, Andrew, Senior Vice President for Conservation, American 

Rivers, Washington, D.C. ............................................................................. 22 

Prepared statement of ............................................................................... 24 

Gillen, Roman, President and CEO, Consumers Power, Inc., and 

President, Oregon Rural Electric Cooperative Association, Salem, 

Oregon ............................................................................................................ 29 

Prepared statement of ............................................................................... 30 

Karier, Tom, Washington Council Member, Northwest Power and 

Conservation Council, Portland, Oregon ..................................................... 32 

Prepared statement of ............................................................................... 33 

Morgan, Chris, Board President, Colorado Rural Electric Association, and 

Board Member, Gunnison County Electric Association, Gunnison, 

Colorado ......................................................................................................... 15 

Prepared statement of ............................................................................... 17 

Simmons, Vic, General Manager, Rushmore Electric Power Cooperative, 

Rapid City, South Dakota ............................................................................ 20 

Prepared statement of ............................................................................... 21 

Ward, Grant, Water and Power Consultant, Maricopa-Stansfield 

Irrigation District, Maricopa, Arizona ......................................................... 38 

Prepared statement of ............................................................................... 39 

(1) 

OVERSIGHT HEARING ON ‘‘PROTECTING FEDERAL HYDROPOWER INVESTMENTS IN THE 

WEST: A STAKEHOLDERS’ PERSPECTIVE.’’ 

Wednesday, May 4, 2011 

U.S. House of Representatives 

Subcommittee on Water and Power 

Committee on Natural Resources 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:01 a.m. in Room 

1324, Longworth House Office Building, The Honorable Tom 

McClintock [Chairman of the Subcommittee] presiding. 

Present: Representatives McClintock, Tipton, Gosar, Labrador, 

Noem, Hastings, Napolitano, and Garamendi. 

Also present: Representative DeFazio. 

Mr. MCCLINTOCK. The Subcommittee on Water and Power will 

come to order. The Chair notes the presence of a quorum, which 

under Committee Rule 3[e] is two Members. 

The Water and Power Subcommittee meets today to hear testimony at this oversight hearing entitled ‘‘Protecting Federal Hydropower Investments in the West: A Stakeholders’ Perspective.’’ We 

also meet under the mandate of House Resolution 72, to identify 

regulatory impediments to job creation. 

The Chair will begin by asking unanimous consent that the 

gentleman from Oregon, Mr. DeFazio, be allowed to sit with the 

Subcommittee and participate in the hearing. Without objection, so 

ordered. 

We will begin with five-minute opening statements by myself and 

the Ranking Member, followed by the Subcommittee Members, and 

I will begin by recognizing myself for five minutes. 

STATEMENT OF HON. TOM McCLINTOCK, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. MCCLINTOCK. The purpose of today’s hearing is to receive 

testimony on the benefits that hydroelectricity offers to our nation’s 

prosperity, the impediments hydroelectricity generators now face, 

and the costs that these impediments impose on the family budgets 

of millions of Americans, and on job creation at a time when Americans suffer the most prolonged period of high unemployment since 

the Depression. 

Hydropower is by all accounts the cheapest and cleanest 

electricity available to modern technology. Its cost is typically 

2 

estimated at between a half a cent and three cents per kilowatt 

hour compared with the subsidized cost of more than 14 cents per 

kilowatt hour for solar power and, of course, without those subsidies, it would be much, much higher. Hydroelectricity produces 

zero air emissions, and yet no major hydroelectricity facility has 

been built in many years and our existing facilities are being bled 

dry by endless litigation and regulatory obstacles that result in 

major increases in electricity prices and chronic shortages of electricity. 

Earlier this year this Subcommittee heard from the Federal 

agencies charged with producing and delivering hydropower. It became painfully clear that crushing new costs continue to be heaped 

on our electricity bills from overregulation, water use restrictions, 

and mandated use of so-called alternative energy sources. Worse, 

it became apparent that there are no plans actually being implemented to increase our hydroelectric generation through the construction of major new facilities. 

We see around us the wreckage of these retrograde policies. 

California, which boasts of being on the cutting edge of this folly, 

now suffers the highest electricity prices in the continental United 

States, chronic shortage of capacity, per capita electricity consumption that is now lower than Guam and Aruba, and an economy that 

leads the Nation from the bottom. This must not be America’s 

future. 

Our water and power pioneers had the vision of constructing 

large multi-purpose facilities to make the desert bloom and to provide low cost, emissions-free energy. The cheap and abundant 

hydroelectricity generated in the West’s Federal dams played a 

major role in producing the armaments and food necessary to defeat our enemies in World War II, and it laid the foundation for 

the explosive economic growth and prosperity of the western 

United States in the post-war years. 

This Administration purports to support hydroelectricity through 

press releases, yet actions speak louder than words. It continues to 

pursue the destruction of four hydroelectric dams on the Klamath 

that produce enough electricity for more than 150,000 homes. The 

capital cost of doing so is more than half a billion dollars on top 

of crushing replacement costs, on top of the loss of the Iron Gate 

Fish Hatchery that releases 5 million salmon smolt each year. 

It continues to fund extremist organizations like the one invited 

by the Minority Party today whose president has said that the destruction of these dams would be a model for the demolition of four 

additional dams on the Snake River that produce enough electricity 

for 1.1 million homes, adding a half billion dollars per year just in 

replacement costs. 

It continues to pursue high-flow spillage from the Glen Canyon 

Dam that wastes millions of dollars of lost electricity production, 

and ironically increases predator populations that devour endangered humpback chub. Upstream it has its sights on the Aspinall 

Unit in western Colorado. We will hear today that 30 percent of 

the electricity bills that families in the Pacific Northwest are just 

to meet environmental regulations. 

Protecting endangered species is a worthy goal and worthy goals 

need to be pursued with common sense and sound science, not leftVerDate Nov 24 2008 13:08 Jan 05, 2012 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 L:\DOCS\66205.TXT Hresour1 PsN: KATHY
3 

wing ideology and junk science. We need to ask whether the enormous wealth that is being consumed by these policies has made 

any significant contribution to enhancing endangered populations 

compared to far less expensive and effective alternatives, including 

predator control, increasing overall water supplies, and hatchery 

production. As far as I can tell, the principal beneficiaries of current policies have been the law firms and environmental fund raising organizations and the principal victims have been the families 

and workers who face a dismal future of rationing, shortages, prohibitively expensive water and power, and a dying economy. 

It is the purpose of these hearings to begin moving the pendulum 

back toward sensible and proven policies that build our 

hydroelectricity infrastructure. Today we will hear from leading 

experts from outside the Beltway whose work is dedicated to providing for the needs of a growing population. Their insights on 

hydropower policy will provide this Subcommittee with guidance to 

restore the Federal Government as a positive force for prosperity, 

abundance, and plenty once again. 

With that I will recognize our Ranking Member for an opening 

statement of five minutes. 

[The prepared statement of Mr. McClintock follows:] 

Statement of The Honorable Tom McClintock, Chairman, 

Subcommittee on Water and Power 

The purpose of today’s hearing is to receive testimony on the benefits that 

hydroelectricity offers to our nation’s prosperity, the impediments that 

hydroelectricity generators now face, and the costs that these impediments impose 

on the family budgets of millions of Americans and on job creation at a time when 

American suffer the most prolonged period of high unemployment since the Depression. 

Hydropower is by all accounts the cheapest and cleanest electricity available to 

modern technology. Its cost is typically estimated at between a half-cent and three 

cents per kilowatt hour, compared with more than 14-cents per kilowatt hour for 

solar power. It produces zero air emissions. 

And yet, no major hydro-electric facility has been built in many years, and our 

existing facilities are being bled dry by endless litigation and regulatory obstacles 

that result in major increases in electricity prices and chronic shortages of electricity. 

Earlier this year, this subcommittee heard from the federal agencies charged with 

producing and delivering hydropower. It became painfully clear that crushing new 

costs continue to be heaped onto our electricity bills from over-regulation, water use 

restrictions and mandated use of so-called alternative energy sources. Worse, it became apparent that there are no plans actually being implemented to increase our 

hydro-electric generation through construction of major facilities. 

We see around us the wreckage of these retrograde policies. California, which 

boasts of being on the cutting edge of this folly, now suffers the highest electricity 

prices in the continental United States, chronic shortage of capacity, per capita electricity consumption that is now lower than Guam and Aruba, and an economy that 

leads the nation—from behind. This must not become America’s future. 

Our water and power pioneers had the vision of constructing large multi-purpose 

facilities to ‘‘make the desert bloom’’ and to provide low cost, emissions-free energy. 

The cheap and abundant hydroelectricity generated in the west’s federal dams 

played a major role in producing the armaments and food needed to defeat our enemies in World War II. And it laid the foundation for the explosive economic growth 

and prosperity of the western United States in the post-war years. 

This Administration purports to support hydropower through press releases, yet 

actions speak louder than words: 

It continues to pursue the destruction of four hydroelectric dams on the Klamath 

that produce enough electricity for more than 150,000 homes. The capital cost is 

more than half a billion dollars, on top of crushing replacement costs, on top of the 

loss of the Iron Gate Fish Hatchery that releases 5 million salmon smolt each year. 

4 

It continues to fund extremist organizations like the one invited by the minority 

party today, whose President has said the destruction of these dams would be a 

model for the demolition of four additional dams on the Snake River that produce 

enough electricity for 1.1 million homes—adding a half-billion dollars per year just 

in replacement costs. 

It continues to pursue high flow spillage from the Glen Canyon Dam that wastes 

millions of dollars of lost electricity production and ironically increases predator populations that devour endangered humpback chub. Upstream, it has its sights on the 

Aspinall Unit in western Colorado. 

We will hear today that thirty percent of the electricity bills of families in the Pacific Northwest are just to meet environmental regulations. 

Protecting endangered species is a worthy goal and worthy goals need to be pursued with common sense and sound science, not left-wing ideology and junk science. 

We need to ask whether the enormous wealth that has being consumed by these 

policies has made any significant contribution to enhancing endangered populations 

compared to far less expensive and effective alternatives, including predator control, 

increasing overall water supplies and hatchery production. As far as I can tell, the 

principal beneficiaries of current policies have been the law-firms and environmental fundraising organizations—and the principal victims have been families and 

workers who face a dismal future of rationing, shortages, prohibitively expensive 

water and power and a dying economy. 

It is the purpose of these hearings to begin moving the pendulum back toward 

sensible and proven policies that built our hydro-electric infrastructure. Today, we 

will hear from leading experts from outside the beltway whose work is dedicated 

to providing for the needs of a growing population. Their insights on hydropower 

policy will provide this subcommittee with guidance to restore the federal government as a positive force for prosperity, abundance and plenty once again. 

STATEMENT OF HON. GRACE NAPOLITANO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. NAPOLITANO. Thank you, Mr. Chairman. 

Today’s hearing focuses on protection of our existing hydropower 

resources and restoring production, assuming the continuation of 

which by definition describes plentiful quantities of fish or supply. 

An abundance of hydropower in the Pacific Northwest is reminiscent of how electricity from the Columbia River powered aluminum 

plants in shipyards, enabling us to win World War II. Equally embedded into the Pacific Northwest culture is the role of fisheries in 

the region whether it is through rights and traditions of a salmon 

harvest for Native Nations or during the abundant times of the 

1860s and 1960s when commercial fisheries actually annually harvested millions of pounds of fish and salmon, thereby fueling their 

local economy. 

Let us acknowledge what abundance means to everybody. What 

it means to generations of fishermen, the Native American Tribes, 

what abundance means to generations of recreational enthusiasts, 

what it means to water and power perspective, and what it means 

to restoring our environment and commercial fisheries. The vision 

of abundance is not an isolated view. 

There is no argument about the important role hydropower has 

played and continues to play in meeting our energy demands all 

over the West. Changes since that time, dams have been built 

which include, of course, the changes in those areas include climate 

change, environmental, tribal water rights, population shifts, and 

increases. We have to face all the realities and work together to 

find the solutions. 

As Mr. Fahlund aptly mentioned in the written testimony, environmental quality is not a luxury good. Leaving our children with 

the burden of environmental deficit is no less insidious than leavVerDate Nov 24 2008 13:08 Jan 05, 2012 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6602 L:\DOCS\66205.TXT Hresour1 PsN: KATHY
5 

ing them with the burden of a financial one. To find that balance 

requires leadership and cooperation on all levels, leadership exemplified by local stakeholders like in the Klamath Basin where farmers, tribal leaders, and environmentalists reached a historic agreement that would preserve farming in the region, restore our environment, and meet our trial trust responsibilities. We seem to forget that Native Americans have the first right to water. 

Leadership like in the Yakima region where farmers and environmentalists are working together on developing and creating new 

water supplies by taking into account the needs of the environment. Leadership like in the Colorado region where stakeholders 

and water users work together to implement the multi-species 

habitat conservation plan while allowing for water and power deliveries to continue in accordance with state and Federal laws. 

Our local communities must be commended for their courage and 

their leadership in creating these collaborate partnerships. They 

are not looking to blame. They are looking for solutions. If we want 

to preserve hydropower as a resource for the future, we must support these collaborative efforts as well as look at the efficiencies, 

the new technologies, and the alternative power sources, like solar, 

wind, geo, just to name a couple, to help meet our future demands. 

I know that Northwest delegation is actively looking at solutions 

to support the development of renewals while protecting their hydropower resources and operation integrity of the BPA grid. The 

issue of high wind, high water where power supply is exceeding demand is a challenge but it is a challenge that can possibly be 

solved. 

As I have stated at our PMA budget hearing on March, I would 

like to offer any help in facilitating a solution to this discussion 

since California depends on the renewables generated in the Northwest Region. 

I see I have a couple of moments and I would like to, of course, 

state that I have looked at the statements that were submitted for 

the record with great interest, and I find that there are some concerns, and quite a few concerns in increasing rates, but I most pose 

a question to all of you. If we are not able to help the grids or the 

PMAs be able to—what do I say—increase the capability, increase 

the generation of power by adding new technology or by replacing 

some of the old turbines, by assisting them in being able to create 

a better environment, how else are you going to be able to meet it 

if you do not increase the rates, at least for a portion of time? To 

me, that is a serious question and, yes, it will mean—of course, the 

point was made that some of the folks that would be least able to 

pay for that increase would be people on fixed incomes. We have 

issues with that, yes, but it is also true that most of those are 

waived by the electric companies. 

With that, I thank our witnesses for being here today. We look 

forward to your testimony. 

Mr. MCCLINTOCK. The Chair would ask unanimous consent to 

allow Mr. Tipton to go out of order. He has an urgent matter that 

he has to attend to following his comments, so without objection 

Mr. Tipton for five minutes. 

6 

STATEMENT OF HON. SCOTT TIPTON, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF COLORADO 

Mr. TIPTON. Good morning and thank you, Chairman McClintock 

and Ranking Member Napolitano for convening this important 

hearing today. I would like to take this opportunity to be able to 

welcome one of my constituents, Mr. Chris Morgan. Chris is the 

President of the Colorado Rural Electric Association and a board 

member for the Gunnison County Electric Association. 

Skyrocketing energy prices make the topic of today’s hearing 

very timely. These high energy prices and the state of the economy 

make low-cost energy sources like hydropower more important than 

ever. Hydropower is unquestionably the most affordable and reliable form of renewable energy on the market today. Unfortunately, 

efforts by this Administration are threatening access to this carbon-free power source. The decision made in Washington have a direct effect on all stakeholders in the real world, so I am very interested to hear from Chris and our other witnesses, and again, Mr. 

Chairman, Ranking Member, thank you so much for this consideration allowing me to go a little early. Thank you. 

Mr. MCCLINTOCK. The Chair is now pleased to recognize the 

Chairman of the Natural Resources Committee, Congressman Doc 

Hastings of Washington. 

STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF WASHINGTON 

Mr. HASTINGS. Thank you very much, Mr. Chairman, and thank 

you very much for the courtesy of allowing me to be here today. 

This hearing is a valuable opportunity to discuss Federal hydropower and the importance of protecting low-cost renewable energy 

and the jobs that it creates. We are fortunate to be joined by witnesses who have firsthand knowledge of what hydropower brings 

to their communities and to their ratepayers. I would especially 

like to thank our Pacific Northwest witnesses for being here today, 

and I also want to welcome many in the audience from the rural 

utilities who have taken time to attend this hearing. 

My district in central Washington contains the heart of the Federal Columbia River Power System. This network of Federal dams 

and reservoirs has provided emission-free, reliable hydropower for 

generations. It is our duty to make this affordable renewable 

energy source, make sure that it continues into the future. 

However, these investments and economic drivers are under constant assault. They are repeatedly targeted by bureaucratic regulation, lawsuits, and even the whims of the Federal judge. According 

to the Bonneville Power Administration, over 1,000 megawatts, or 

enough energy to power one million homes, has already been lost 

in recent years to salmon recovery efforts. 

However, many salmon recovery programs are working. How do 

you measure that? You measure that by the high number of salmon 

returning to the rivers, but for some that is simply not enough. 

There are organizations whose singular focus appears to be to destroy dams and the hydropower they produce, and I would like to 

note, as the Chairman pointed out, that one of the organizations 

testifying here is a party to an almost decade-long litigation aimed 

at breaching the four lower Snake River dams—this despite the 

7 

Northwest Power and Conservation Council’s finding that such removal would, and I quote, ‘‘increase the carbon emissions, cost and 

risk of the regional power system.’’ 

I can emphatically tell you that as long as I am Chairman of this 

Committee and as long as I am a member of this Congress, these 

dams will remain intact and functioning. They will not be 

breached, removed or destroyed. The people of the Northwest 

understand that dam removal is an extreme action that drives up 

energy costs and won’t help recover fish. 

There are those who live outside the Pacific Northwest who fail 

to understand the important multiple functions these dams serve. 

In addition to providing most of the power for the region, these 

dams provide flood control, barge transportation of agricultural 

commodities, irrigation, recreation, and they ensure the reliability 

of other renewable energy sources. In addition to protecting existing resources, we must also be looking at how we can create more 

hydropower through new water storage, canal-based hydropower 

and other measures. Everything to create more hydropower should 

be on the table. Efforts to eliminate this low-cost renewable energy 

or to drive up its costs will be emphatically resisted by this Committee. 

To be clear, a true commitment to renewable energy requires a 

commitment to protecting existing hydropower dams and the many 

benefits that they provide. I am committed and have been committed to pursuing all of the above energy approach for our nation. 

This is a top priority for the Natural Resources Committee. Hydropower is a key part of this strategy. We simply need more of this 

original renewable energy. For that reason I commend the Subcommittee Chairman and Ranking Member for having this hearing, 

and I look forward to working with you on this legislation that may 

be produced by this Committee, and as the Chairman said, it all 

starts with today’s hearing. Once again, thank you for your courtesy. I yield back. 

[The prepared statement of Mr. Hastings follows:] 

Statement of The Honorable Doc Hastings, Chairman, 

Committee on Natural Resources 

This hearing is a valuable opportunity to discuss federal hydropower and the importance of protecting the low-cost, renewable energy and jobs it creates. We’re fortunate to be joined by witnesses who have firsthand knowledge of what hydropower 

brings to their communities and ratepayers. I’d especially like to thank our Pacific 

Northwest witnesses for being here today. I also want to welcome many in the audience from the rural electric utilities who have taken the time to attend this hearing. 

My district in central Washington contains the heart of the Federal Columbia 

River Power System. This network of federal dams and reservoirs has provided 

emissions-free, reliable hydropower for generations. It’s our duty to make sure this 

affordable, renewable energy source continues well into the future. 

However, these investments and economic drivers are under constant assault. 

They are repeatedly targeted by bureaucratic regulation, lawsuits, and even the 

whims of a federal judge. According to the Bonneville Power Administration, over 

1,000 megawatts—or enough energy to power one million homes—has already been 

lost in recent years due to salmon recovery efforts. However, many salmon recovery 

programs are working based on the high number of salmon returning to the rivers. 

But for some, that’s simply not enough. There are organizations whose singular 

focus appears to be to destroy dams and the hydropower they produce. 

I’d like to note that one of the organizations testifying here today is a party to 

the almost decade-long litigation aimed at breaching the four lower Snake River 

dams. This, despite the Northwest Power and Conservation Council’s finding that 

such removal would ‘‘increase the carbon emissions, cost and risk of the regional 

8 

power system.’’ I can emphatically tell you that as long as I’m Chairman of this 

Committee, and as long as I’m serving in Congress, these dams will remain intact 

and functioning. They will not be breached, removed, or destroyed. The people of 

the Pacific Northwest understand that dam removal is an extreme action that will 

drive up energy costs and won’t help recover fish. 

There are those who live outside the Pacific Northwest who fail to understand the 

important multiple functions these dams serve. In addition to providing most of the 

power for the region, these dams provide flood control, barge transportation of agriculture commodities, irrigation, recreation and ensure reliability of other renewable 

energy sources. 

In addition to protecting existing resources, we must also be looking at how we 

can create more hydropower through new water storage, canal-based hydropower 

and other measures. Everything to create more hydropower should be on the table. 

Efforts to eliminate this low-cost renewable energy, or to drive up its costs, will be 

resisted by this committee. 

To be clear, a true commitment to renewable energy requires a commitment to 

protecting existing hydropower dams and the many benefits they provide 

I’m committed to pursuing an ‘‘all of the above’’ energy approach for our nation. 

This is a top priority for the Natural Resources Committee. Hydropower is a key 

part of this strategy. We simply need more of this original, renewable energy. For 

that reason, I commend the Subcommittee Chairman for having this hearing and 

I look forward to working with him and others to pursue hydropower production legislation in the near future. It starts with today’s hearing. 

Mr. MCCLINTOCK. I now recognize Ms. Noem of South Dakota for 

her opening statement. 

STATEMENT OF HON. KRISTI NOEM, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF SOUTH DAKOTA 

Ms. NOEM. Thank you, Mr. Chairman. I am pleased to have the 

opportunity to introduce one of the witnesses today that is here 

from South Dakota, Mr. Vic Simmons. Vic graduated from South 

Dakota State University, and is the General Manager of Rushmore 

Electric Cooperative in Rapid City, South Dakota. 

He has been with Rushmore Electric for 12 years, and for over 

30 years has also had experience with the Rural Electric Cooperative and the municipal electric system. His long history of electric 

utility experience throughout South Dakota gives him a unique 

perspective on providing hydropower to communities in South Dakota generated from the dams on the Missouri River. He has a 

wealth of knowledge on the impacts of the rising costs of regulations, such as compliance with Endangered Species Act requirements, so I want to thank Vic for coming today and for testifying 

before this Subcommittee. I look forward to hearing your testimony 

and working with you on deferral hydropower investments in the 

West. Thank you. I yield back. 

Mr. MCCLINTOCK. Thank you. That concludes the opening statements. We will now hear from our panel of witnesses. Each 

witness’s testimony will appear in full in the hearing record so I 

would ask that witnesses keep their oral statement to five minutes 

as outlined in our invitation letter and also as under Committee 

Rule 4[a]. 

I would also like to explain how our timing lights work. When 

you begin to speak, our clerk will start the timer. The green light 

will appear. After four minutes, a yellow light will appear, and at 

that time you should begin to conclude your statement. At five minutes, the red light will come on. I would ask you to complete the 

statement, but then stop after that. 

9 

And with that we will begin. Our first witness is Mr. Scott 

Corwin, the Executive Director of the Public Power Council of 

Portland, Oregon. 

STATEMENT OF SCOTT CORWIN, EXECUTIVE DIRECTOR, 

PUBLIC POWER COUNCIL, PORTLAND OREGON 

Mr. CORWIN. Thank you, Mr. Chairman, Ms. Ranking Member, 

Members of the Subcommittee and greetings to Chairman Hastings 

as well from our region. I apologize for my voice this morning. I 

may have been yelling too much, which is an occupational hazard, 

but I will plow through here. 

Our members were granted preference rights to Federal power 

because these utilities are owned by their consumers, and they 

have a mandate to pass the benefits through to the citizens who 

are their owners. Several leaders of rural electric cooperatives from 

our region and around the country are here today. You have my 

full testimony as you said. I am just going to make four points. 

First, the Columbia River Power System, or FCRPS, is extraordinarily valuable and it is an investment worth protecting. It has 

31 dams, total installed hydro capacity of 22,000 megawatts. The 

system is coordinated with Canada, and there is a big decision approaching regarding whether it is in our interest to continue that 

treaty with Canada in its current form. 

The dams lend not only clean renewable power, they are critical 

to transportation, irrigation, flood control, and recreation as well. 

Barges on the Columbia River moves about 40 million tons of goods 

each year. Four lower Snake Dams provide 1,100 average 

megawatts of emission-free energy, enough to power the city the 

size of Seattle. They provide about 3,500 megawatts of capacity, 

which is increasingly important. Replacing that power could cost 

about $5 million annually, and is likely to be from thermal resources, increasing carbon productions, and the rate impacts to citizens would be dramatic. 

Certainly breaching these dams as some advocate makes no 

sense from an energy perspective, but it also would not significantly improve access to history spawning areas, and is not needed 

for juvenile or certainly adult fish passage which is already about 

96 percent at each project. 

The second point, the value has been degraded as operations of 

Federal dams are being increasingly constrained by environmental 

regulation. Notably, operational constraints on the FCRPS in the 

name of salmon mitigation, such as spilling water over the dams 

or adjusting timing of the flows in the river, have reduced the average generation of the system by about 1,100 average megawatts of 

energy, or about 13 percent since 1995. 

Over the past five years the average annual replacement cost of 

that energy has averaged $460 million, a cost borne by the customers. That is part of the total cost to BPA power customers of 

$800 million a year for fish and wildlife expenses which is about 

30 percent of their entire wholesale power bill for these utilities. 

Customers will need a continuing role and review of the operations 

and budget obligations to continue to try to make sure ratepayer 

dollars are spent more efficiently. 

10 

The first step to protecting this investment is to stabilize this 

regulatory impact by having the 2010 supplemental biological opinion approved in court, and there is a hearing in Portland next week 

on that. With all Federal agencies, almost all of the tribes in the 

entire region, and the States of Washington, Idaho, and Montana 

solidly behind that plan, it is an opportunity to move forward as 

a region and build on the success we have seen so far in salmon 

mitigation. 

The third point, beyond fish and wildlife a new challenge for hydropower investment is the impact of integration of intermittent resources like wind into this system. PPC members support efforts to 

responsibly add cost-effect renewable resources, but there is an increasing limitation on the capacity to do so, and the wind variability presents operational challenges and tees up key questions 

about proper cost allocation so that hydro ratepayers are not unfairly paying the cost of this integration. 

One anomaly occurs from time to time during heavy spring runoff and there is too much generation for regional loads threatening 

reliability. All generators interconnected to BPA system, including 

wind generators, are asked to ramp down and receive Federal hydropower at low prices or even free. The agency now has a draft 

policy out with a whole list of actions they must take before requesting wind projects to fetter off, but the agency has said it will 

not pay generators for the value of lost production tax credits, 

which is a good result from the viewpoint of electricity ratepayers 

who pay for the system and cannot envision having to pay others 

to take Federal hydropower to cover a lost taxpayer-funded subsidy. 

That said, we see policy changes we would all work on together 

such as qualifying hydropower in that instance as eligible for those 

renewable energy or tax credits. 

My last point relates to recent budget proposals. Remember that 

all of the costs of this power system are paid by ratepayers, all of 

the costs. There is no Federal subsidy involved here. That is why 

we find so offensive any proposals to force power market administrations like BPA to charge higher rates to fund deficit reduction. 

It is nothing less than a unfair regional tax. 

Our economy is dependent upon this hydropower system, and we 

feel strongly this large investment is worth protecting so we thank 

you for holding this hearing, Mr. Chairman, and for the opportunity to speak with you today, and I look forward to any questions. Thank you. 

[The prepared statement of Mr. Corwin follows:] 

Statement of R. Scott Corwin, Executive Director, Public Power Council 

Introduction 

Good afternoon, Chairman McClintock, Ranking Member Napolitano, and Members of the Subcommittee, and greetings to our Northwest Representatives on the 

Natural Resources Committee, Chairman Hastings, Representative DeFazio, Representative Labrador, and Representative Bishop. My name is Scott Corwin. I am 

the Executive Director of the Public Power Council. I thank you for the opportunity 

to testify today on this important topic, along with fellow Northwest panelists, 

Roman Gillen and Tom Karier. 

The Public Power Council (PPC) is a trade association representing the consumerowned electric utilities of the Pacific Northwest with statutory first rights (known 

as ‘‘preference’’) to purchase power that is generated by the Federal Columbia River 

11 

Power System and marketed by the Bonneville Power Administration (BPA). These 

preference rights were granted to publicly and cooperatively-owned utilities because 

they have a mandate to pass the benefits through to the citizens of the Northwest, 

the consumers who are their owners. Our member utilities have service territories 

in portions of seven western states and serve over 41% of the electricity consumers 

in the region. Several leaders of the rural electric cooperatives from our region are 

in the room today. 

These utilities, being both some of the largest and the smallest in the Northwest, 

are committed to preserving the value of the Columbia River system for clean, renewable hydropower and for the system’s multiple other uses. Because the utility 

members of PPC are owned by and answer directly to their customers, they are very 

sensitive to the rates they pay for wholesale power and transmission of electricity. 

Today, I will talk about: (1) the value of these large ratepayer investments in federal hydropower in the West; (2) some of the regulatory constraints on the hydropower system, and the fish and wildlife mitigation effort; (3) new challenges to the 

system, including integration of variable resources such as wind power; and (4) 

some ideas about how to protect the investment now and in the future. For more 

on these issues, I welcome you to visit our website at www.ppcpdx.org or the 

website of Northwest RiverPartners at www.nwriverpartners.org for issues regarding salmon recovery. 

The Investment in Federal Hydropower 

The Federal Columbia River Power System (FCRPS) is, by any measure, an incredible achievement in engineering, foresight, and political leadership that benefitted from the region’s geographical and historical uniqueness. With respect to investments in the federal hydropower system, publicly and cooperatively owned utilities and their customers are the stakeholders who pay the costs, and have the most 

invested in seeing the system maintained to successfully meet all of its statutory 

obligations. Under long-term contracts, these utilities, commonly referred to as 

‘‘preference customers’’ pay the costs attributed to power production in the FCRPS 

(power costs are about 80% of the total). Flood control, navigation, recreation, and 

irrigation are other important uses of the river system. On issues such as fish and 

wildlife mitigation, and specifically salmon recovery, the preference customers of 

BPA are committed to success as regional citizens who care for the resource and 

pay for this effort through their power rates. 

Hydropower has played, and will continue to play, an incredibly important role 

in our nation’s energy policy. Nowhere is this more evident than in the Northwest. 

This is the original renewable source of power, and has been nothing less than the 

lifeblood of the Northwest region throughout modern history. And, even with this 

history of relatively low-cost power, the Northwest has made enormous strides as 

well in achievement of energy-efficiency. 

The dams lend not only a clean, continuing supply of power, they are critical to 

transportation, irrigation, flood control, and recreation as well. Barging on the Columbia River moves 40 million tons of goods each year and keeps hundreds of thousands of trucks and their associated emissions off of the road. The Columbia and 

Snake River Basin is the number one transportation gateway nationally for wheat, 

barley and several other commodities. 

To an area that was still largely without electricity in the early 20th century, the 

dams brought light and then economic hope coming out of the Great Depression. 

Upon the foundations of the Reclamation Act in 1902 and the Flood Control Act in 

1917, investment in the system took a leap with the Bonneville Project Act in 1937. 

Construction on the larger projects, such as Bonneville and Grand Coulee Dam, 

began in 1933. The oldest dam in the FCRPS is Minidoka, which began operating 

on the Snake River in 1909. 

In the Federal Columbia River Power System there are now 31 dams run by the 

Bureau of Reclamation and the Army Corps of Engineers, ranging from a three 

megawatt diversion dam in Boise, Idaho, to the 6795 megawatt (MW) Grand Coulee 

Dam in Washington. Total installed hydropower capacity in the federal system is 

over 22,000 MW. This system is coordinated with Canada’s portion of the river system, and it should be noted that an important decision is approaching regarding 

whether it is in our interests to continue the current treaty with Canada. 

Part of the ‘‘protection of investment’’ challenge is to maintain the system we 

have. Over the next few years, total annual operations and maintenance costs to 

ratepayers for the FCRPS hydro program are expected to increase from about $280 

million annually, to almost $350 million per year, not including capital. Fish and 

wildlife mitigation costs are about $800 million per year, about one-third of the total 

power revenue requirement in BPA rates. 

12 

Of particular note in value and importance to the region are the four lower Snake 

Dams, completed in the 1970s. They provide about 1,100 average megawatts of renewable, emission-free energy which is approximately the amount of energy necessary to power the city of Seattle. Replacing that power could cost $300-$500 million annually, and is likely to be from thermal sources (a notable consideration for 

West Coast states looking at aggressive carbon reduction goals). A study by the 

Northwest Power and Conservation Council shows that removal of these dams 

would increase green house gasses by 4.4 million tons/yr in the Northwest and 5.2 

million tons/yr west-wide, nearly the equivalent of two typical 400 MW coal-fired 

power plants. This would occur because the baseline scenario, without dam removal, 

already assumes that the region will pursue all cost-effective energy conservation 

and meet state renewable portfolio standards. 

In addition, these lower Snake River dams provide other key economic benefits 

such as irrigation and transportation. Over 10 million tons of commercial cargo travels this stretch of river to Lewiston, Idaho. 

Finally, in contrast to some accounts, removal of the lower Snake Dams would not 

provide much if any benefit to fish listed under the Endangered Species Act (ESA). 

Current juvenile fish passage survival rates are at or above 95% at all four dams 

according to NOAA fisheries. In any case, these dams only affect 4 out of 13 Endangered Species Act listed salmon and steelhead stocks in the Columbia River Basin. 

And, these four dams inundated only 10% of the historic fall chinook spawning habitat in the Snake River; spring chinook, sockeye and steelhead were even less affected. 

So, removal of these dams would not significantly improve access to historic 

spawning areas, is not needed for fish passage, and would make no sense from an 

energy portfolio perspective. 

Regulatory Constraints on Federal Hydropower 

In the Northwest, we are ever cognizant of the impact of the federal hydropower 

system on the environment. An enormous portion of the investment in the system 

has been committed in order to address those concerns. This investment has been 

not only in financial form, but also in the form of time dedicated by thousands of 

individuals from state and local agencies, tribal agencies, federal agencies, and the 

private citizenry. 

For electricity ratepayers this investment is not only reflected in the current $800 

million of annual expenditures mentioned earlier, but in the cumulative impact of 

over $13 billion in costs over the past three decades for fish and wildlife efforts 

funded through BPA power rates. Most of these costs arise from implementation of 

the Endangered Species Act (ESA) and the Pacific Northwest Power Planning and 

Conservation Act. However, from a preference customer viewpoint, it appears that 

electricity ratepayers are asked to fund endeavors far beyond the actual impacts of 

the hydropower system because BPA has been the easiest funding source to tap. It 

is appropriate to remember that salmon have lifecycles covering thousands of miles 

in which mortality occurs well before and after their travel through the ratepayerfunded hydropower system. 

The 2010 supplemental biological opinion currently before the U.S. District Court 

is an evolution of at least 18 years of work by dozens of state, tribal and federal 

agencies, and is a regionally created, scientifically sound path to success. We are 

hopeful that the comprehensive approach and broad support for this latest biological 

opinion will lead to court approval and full implementation. 

Several different biological opinions under the ESA have guided regional efforts 

since the first listings of salmonids in the early 1990s. Eventually, these documents 

recognized what the science showed: hydropower operations alone would not recover 

the species. Many other factors contributed to the salmon’s decline including over 

harvest, hatchery practices, degraded habitat and ocean conditions. 

Now, the massive effort seems to be paying off: fish passage through the projects 

has been good and is improving all the time. Adult passage using ladders has been 

excellent for many years. And, new technology is seeing juvenile fish passage downstream at very high rates. In fact, the new biological opinion sets very high, but 

achievable, targets for juvenile passage at each dam of 96% in the spring and 93% 

in the summer. Last year saw 648,000 fall chinook return, and strong projections 

for 2011 could show record numbers for chinook, coho, and sockeye in the Columbia 

and Snake rivers. 

The investments put forth by ratepayers spread to many areas of the federal hydropower system, including: 

• Improvements to the fish passage structures at the eight federal dams on the 

Snake and Columbia Rivers; 

13 

• Screens in front of the turbines to keep juvenile fish from entering the turbines; • New design of the turbine blades and housing to minimize injury to fish; • Juvenile bypass systems to collect juvenile fish and route them around the 

dams; • New ‘‘fish slides’’, or spillway weirs, that pass fish safely over the dams; • Flow deflectors at spill bays to improve water quality during spill; and, • Many improvements to fish and wildlife habitat and hatcheries. 

As we look to protect these investments in fish mitigation, predation is a significant factor on salmon and steelhead mortality and needs more attention as part of 

a comprehensive plan. A classic ‘‘conflict of laws’’ problem between the ESA, the Migratory Bird Treaty Act, and the Marine Mammal Protection Act has left bird predators consuming between 4% and 21% of the juvenile salmonids migrating down 

river each year, and sea lions consuming an estimated 4% or more of the adult 

spring chinook population passing the Bonneville Dam each year. They also consume large numbers of sturgeon and lamprey. This figure does not include salmon 

and steelhead taken by sea lions from the estuary up to Bonneville Dam. 

Despite these non-hydro impacts, juvenile in-river survival today is nearly twice 

as high as it was in the mid-to-late 1970’s. Adult survival through the dams and 

reservoirs is similar to that observed in natural rivers. Again, hydropower is only 

one of many factors impacting species. Any approach to salmon recovery that will 

be successful long-term must take into account all aspects of the salmon lifecycle 

including impacts from hydro, hatcheries, harvest, and habitat. 

But, it is the mandated constraints on federal hydropower operations that have 

been most striking in both in their cost and their operational impact on the system. 

Operational constraints on the FCRPS, such as spilling water over the dams or adjusting the timing of flows in the river, have reduced the average generation of the 

system by about 1100 average megawatts of energy, or about 13%, since 1995. Over 

the past five years, the average annual replacement cost of that energy is $460 million, borne by the customers. 

Water is spilled over the federal dams in the lower Snake and main-stem Columbia River to purportedly improve survival of juvenile fish passing these dams. The 

current spill program starts in early April each year and concludes at the end of 

August. The program is balanced with optimizing safe juvenile fish passage using 

fish transportation programs which often provide the highest fish survival benefit, 

especially in low water years. 

The 2010 biological opinion allows the potential for modification of the spill program and other river and dam operations to optimize fish survival for both adult 

and juvenile fish. Research indicates that at times, transporting by barge is the 

safest route of passage for juvenile fish, especially late in the summer and during 

low water years. The current court injunction mandates specific spill schedules and 

dam operations which do not provide the flexibility to improve operations of the federal hydrosystem to maximize fish passage survival. 

The spill and flow regimes causing a decrease in federal hydropower generation, 

and the extra associated costs, have occurred at the same time that load growth and 

other demands for that power have increased in the region. As noted in the Northwest Power and Conservation Council’s Sixth Power Plan, this will push the region 

to add more thermal, carbon-emitting generation as gas-fired generation is the most 

likely available source to meet base-load power needs. 

New Challenges for the Hydropower Investment: Intermittent Resources 

As noted above, a challenge for hydropower in the near future comes from the 

combination of increasing demand for electricity at the same time that this resource 

has experienced increased regulatory limitations on generation. 

The reliability and flexibility of hydropower generation make the FCRPS particularly well-suited to integrating other renewable sources of energy, such as wind, 

that are much more intermittent. But, there is a limit to the available capacity and 

flexibility of the system, and therefore a limit to the demands that can be placed 

on the system regardless of whether those demands are created by fish and wildlife, 

wind and other intermittent resource integration, or simply following the swings in 

customers’ loads placed on the system. 

PPC members support efforts to responsibly add cost-effective renewable resources to the region’s electric generation resource mix. But, effectively integrating 

intermittent renewable resources poses a number of challenges that must be properly addressed to ensure effective operations, system reliability and cost allocation. 

Further complicating this dynamic is the dramatic pace of wind development in 

the Northwest even as the region scurries to catch up to the technological and operational challenges posed by wind power’s unique characteristics. As recently as 

14 

2005, the system operated by BPA integrated only 250 MW of wind generation. That 

amount doubled in 2006, then doubled again in 2007. Today, there is over 3500 MW 

of wind being integrated into the BPA transmission and power system. This represents a 1400 percent increase in just six years. 

BPA and the region should be acknowledged for this massive effort to integrate 

such a large volume of renewable energy so quickly. And, preference customers have 

been directly involved with the development and purchase of some of those projects. 

But, wind generation in the Northwest is mostly localized in one portion of the region. This creates a dynamic where variability of total output can range very suddenly from almost full regional capacity to almost none. 

Forecasts showing that wind capacity might double again in the next few years 

raise numerous concerns and questions about the operational impacts to the system: 

Can an increasingly congested transmission system handle this influx? Can a constrained hydro system be relied on to provide reserves to balance the variability? 

As those reserves are provided, or as additional sources of capacity and new transmission are added, who will fund these initiatives, and will proper principles of cost 

causation be followed? There is a fundamental rate-making principle that there 

should not be costs shifted to those who do not cause the cost or who do not benefit 

from the expenditure. 

Over-generation: Too Much of a Good Thing? As we look at this year’s estimate 

of high water run-off in the Columbia River system, which is currently 119 percent 

of average, it raises the specter of another serious challenge that occurs when the 

region experiences an oversupply of generation during surging spring runoff, as it 

did in June 2010. Water moving through the Columbia and Snake Rivers must pass 

through generators in order to avoid excessive spill that can harm endangered and 

threatened fish and violate Clean Water Act requirements that prevent over-saturation of gas in the water column. The challenge is further exacerbated when it occurs 

during periods of low electrical demand, since there must be a load to use the electricity that is generated at the dams in order to keep the system in balance. 

In these instances water must run through generators instead of spilled in order 

to ensure the hydropower operations necessary to meet fish protection requirements 

(avoiding high gas saturation). The extra power is sold at low prices, or even given 

for free, to utilities that reduce generation from their own projects and use federal 

power instead to make their deliveries (this is known as ‘‘environmental redispatch’’). Thermal generation projects have historically taken advantage of these 

sales to displace their own generation with lower-cost hydropower. During the high 

water oversupply event in June 2010, thermal generation was largely shut down or 

reduced by purchases of energy from BPA. 

However, because of differing economic incentives, such as the need to generate 

electricity in order to receive renewable energy credits (RECs) or tax credits, wind 

generators in the region did not similarly shutdown during the high water event 

last June. This resulted in the threat of harmful levels of spill in order for the system to avoid the extreme consequences of over-generating. 

BPA has developed a Record of Decision to describe how they will handle this type 

of event entering the spring run-off season this year. PPC believes the policy is a 

solid approach that meets the obligations of the federal system, reflects prudent 

business practice, helps protect the investment in the system, and meets legal requirements designed to protect fish. 

In line with BPA’s proposed policy, PPC believes: (1) BPA should use all other 

reasonable means to dispose of excess federal generation during a high water event 

before providing federal hydropower at no cost to displace renewable generators 

within the BPA Balancing Authority; (2) BPA should adhere to clear and transparent steps it will take to reduce spill during high runoff conditions with specific 

triggers for environmental redispatch; (3) BPA should not pay an entity to take federal hydropower in order to replace a lost taxpayer subsidy or renewable energy 

credit. Also; and, (4) BPA, its customers, and the other stakeholders should seek 

other policy changes to provide compensation for the revenues associated with federal and state renewable energy rules. For instance, hydropower delivered under environmental redispatch conditions should be classified as ‘‘renewable’’ to meet the 

REC or tax credit requirements so that wind generators still receive the associated 

revenues they expect. 

Conclusion: Protecting the Investment 

In light of its significant benefits to customers and to the environment as a clean, 

renewable, and flexible form of generation, hydropower should be preserved, encouraged, and enhanced where possible. Over the last 75 years of major federal hydropower production in the Pacific Northwest, citizens of our region and neighboring 

15 

regions have benefited from this resource and its clean energy, low impact transportation, irrigation, flood control, and recreation. 

The first and best step to protecting this investment is to stabilize the regulatory 

burden upon it. The 2010 supplemental biological opinion for operation of the 

FCRPS for salmonids is the result of massive work to create science-based consensus among states, tribes, and federal agencies. It should be approved and allowed to work. 

While the biological opinion and associated memoranda of agreement represent 

ominous costs to preference customers, we also see the need to get the plan approved in order to create some regulatory stability. This is an opportunity to move 

forward as a region and build on the success we’ve seen so far in salmon mitigation. 

Meanwhile, better approaches to predation, better policies around harvest and 

hatchery practices, and more efficient use of water through the system are areas 

customers will watch closely. 

Another way to protect the investment in all areas of the FCRPS is to work hard 

to make sure future investments are sensible and are the best possible use of limited ratepayer dollars. Our goal is to have significant input at the front end of the 

BPA, Army Corps of Engineers, and Bureau of Reclamation budget processes for the 

Federal Columbia River Power System. As customers, we do not want merely to be 

arguing in rate cases over the allocation of costs already incurred. Currently, an 

evolution of the budget process for BPA called the Integrated Business Review is 

further refining how and when customers get information. But, an enhanced customer role in key spending decisions still is needed, especially as additional wildlife 

funding commitments are considered. We look forward to working closely as well 

with the Northwest Power and Conservation Council in that pursuit. 

One other way to protect the investment is to protect the investors from unintended consequences. BPA should conduct a new assessment of the impact of the 

influx of wind generation, and of potential impacts in light of forecasts for future 

development. The Northwest Wind Integration Forum, with an array of regional 

stakeholders, is one venue where this could take place. Preference customers are 

looking to BPA to adhere to the principles of cost causation as it incurs direct and 

indirect costs from this challenge. But, we are ready to work collectively towards 

long-term solutions. 

And, one final way to protect those expected to make investments in the federal 

hydropower system is to oppose any proposals to hijack the value of that investment 

by raising the rates of Power Marketing Administrations in the name of federal deficit reduction. Preference customers pay for the costs of operations and maintenance 

of the system, and they pay the principle plus interest of any Treasury debt annually (the payment to Treasury last year was $864 million). Proposals to raise the 

rates of Power Marketing Administrations for deficit reduction are a misguided attempt to create a new regional tax to fund the federal government. 

At a critical time in our nation’s history with respect to energy policy, the federal 

hydropower system will play a lead role as a key domestic source of adequate, efficient, reliable, and renewable energy. Our large investment in the system certainly 

is worth protecting. Thank you for holding this hearing, and for the opportunity to 

speak with you today. I look forward to addressing any questions you may have. 

Mr. MCCLINTOCK. Thank you very much for your testimony. Our 

next witness is Mr. Chris Morgan, President of the Colorado Rural 

Electric Association and a Board Member of Gunnison County Electric Association of Gunnison, Colorado. 

STATEMENT OF CHRIS MORGAN, COLORADO REA PRESIDENT 

AND BOARD MEMBER OF GUNNISON COUNTY ELECTRIC 

ASSOCIATION, GUNNISON, COLORADO 

Mr. MORGAN. Mr. Chairman, Ranking Member and the rest of 

the Committee, thank you for allowing me to come and speak to 

you today. 

I am here today to discuss the importance of Federal hydropower, a reliable renewable resource, and keeping the rates of 

Colorado’s 1.25 million electric cooperative member-owners affordable. Specifically, I will confine my testimony to the Aspinall Unit. 

16 

The Aspinall Unit consists of three dams—Blue Mesa, Morrow 

Point and Crystal Dams on the Gunnison River, and the Aspinall 

Unit provides a number of benefits to the folks in the western 

United States. It provides flood control, water storage for municipal 

use and for irrigation, and it provides hydropower generation. That 

hydropower generation is very cheap. In fact, hydropower generation is the cheapest source of electricity available to Gunnison 

County Electric Association and the other cooperatives in the area. 

The Aspinall Unit also has another critical feature. It provides 

nearly half of the power peaking flexibility of the Colorado River 

Storage Project. In addition, the energy produced at the Aspinall 

Unit is renewable and emissions free. As you know, Colorado has 

an active renewable portfolio standard and has goals of being a 

leader in producing clean energy. The Federal Government has set 

similar goals and is currently contemplating an RPS for the nation. 

The Aspinall Unit has been meeting those goals for many, many 

years already. 

The Aspinall Unit also provides benefits to the West. It provides 

recreational opportunities such as boating, fishing, sailing, and 

river running. They provide water flows to help protect endangered 

species, and the creation of a substantial fishery. 

Mr. Chairman, currently we have a reasonable balance in the 

Aspinall Unit. After seven years of Federal litigation and a mediated settlement, the Black Canyon Consent Decree was signed on 

December 31, 2008. The drafting of the consent degree involved approximately 30 parties including the relevant Federal agencies, 

Reclamation, National Park Service and Western Area Power Administration, also the State of Colorado, environmental interests 

and recreational enthusiasts, and Federal hydropower customers. 

So as you can see there has already been struck a balance between 

environmental interests and hydropower. 

The Bureau of Reclamation should be given the power of discretion to operate the Aspinall Unit to meet a wide variety of important needs from power generation to recreation to environmental 

concerns, and I understand there are proposals to restrict power 

generating operations at the Aspinall Unit which would have a direct impact on the ability of the Western Power Administration to 

deliver power to its customers, ultimately leading to increased 

rates. 

As you know, Colorado has been hit hard by the recent recession. 

My constituents and cooperative members have lost jobs and some 

have even lost their homes. The people of Colorado are already experiencing significant increases in the cost of electric generation 

due to many factors: increased construction costs of generation and 

transmission facilities, increased costs of siting, increased cost of 

additional regulations, and increased costs associated with rising 

fuel costs. 

The people of Gunnison County and Colorado cannot tolerate 

anymore rate increase, and since electric cooperatives are nonprofit 

utilities every additional dollar that is passed down goes directly 

to the consumer. 

Mr. Chairman, in closing, I would like to assert that I am not 

only advocating solely for the electric utility industry. This is because why? I am an environmentalist as well and a nature lover. 

17 

While I am not a scientist, I am an avid boater. I have had the opportunity to run the Grand Canyon in a kayak four times. I have 

spent over 60 nights down at the bottom of the Grand Canyon. I 

have had opportunities to kayak the Black Canyon on the Gunnison which the Aspinall Unit resides upon. I have seen that there 

is a balance. I go to these places because they are beautiful and 

they are wonderful places to go visit, and I also understand at the 

same time that we need clean, reliable, affordable, low-cost 

dispatchable electric generation, and that we cannot afford to lose 

any of our dams. We cannot afford to pass more costs onto our consumers. 

So, I would assert that we currently have a balance and we 

should maintain the status quo that we have today. Thank you 

very much, sir. 

[The prepared statement of Mr. Morgan follows:] 

Statement of Chris Morgan, Board President, 

Colorado Rural Electric Association 

Chairman McClintock and Ranking Member Napolitano, my name is Chris Morgan. I am currently a board member of Gunnison County Electric Association 

(GCEA) in Gunnison County, Colorado and I am also currently serving as the Board 

President of the Colorado Rural Electric Association (CREA). GCEA’s service boundaries encompass portions of Gunnison, Hinsdale and Saguache counties in Colorado, 

and it serves over 10,000 customers on 1,030 miles of distribution lines. CREA is 

the state association representing the 1.25 million Coloradans spread across 70% of 

the state’s landmass who depend on an electric cooperative for their electricity. 

I am here today to discuss the importance of the Federal Hydropower—a reliable 

renewable resource– in keeping the rates of Colorado’s 1.25 million electric cooperative member-owners affordable. Specifically, I will confine my testimony to the importance of the Colorado River Storage Project (CRSP) and the integral role that the 

Bureau of Reclamation’s Aspinall Unit—the facilities of which are in Gunnison 

County’s backyard—plays in providing reliable renewable generation during peak 

times of electric power consumption in the West. 

GCEA purchases power under a contract with Tri-State Generation and Transmission. GCEA’s average wholesale cost of power year for year to date 2011 is 

$69.24 per MWh. That translates into a wholesale cost of nearly 7 cents a KWh. 

As you can see from the graph to the right, Hydroelectric power represents the 

cheapest portion of the portfolio of the electricity that GCEA purchases at a wholesale rate of less than half of the cost of the blended cost the energy we purchase. 

In addition, while I do not represent nor is GCEA associated with the power conVerDate Nov 24 2008 13:08 Jan 05, 2012 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 L:\DOCS\66205.TXT Hresour1 PsN: KATHY

66205.001.eps
18 

sumed by the municipal utility of the City of Gunnison, the City of Gunnison also 

enjoys rate relief from the hydropower produced by the Aspinall Unit. 

The Aspinall Unit consists of three dams and reservoirs on the Gunnison River 

in Colorado: Blue Mesa, Crystal, and Morrow Point. The Aspinall Unit is one of the 

components of the federal multi-purpose Colorado River Storage Project that is operated by the Bureau of Reclamation. CRSP power resources are marketed, under 

long-term contract, pursuant to federal law, to non-profit entities such as electric 

cooperative and municipal utilities in the States of Colorado, New Mexico, Wyoming, 

Utah, Nevada and Arizona. The Glen Canyon Dam in Arizona is the largest generating feature of the CRSP. However, due to environmentally imposed restricted operations at Glen Canyon in Arizona and the Flaming Gorge Dam in Utah, the 

Aspinall Unit in Colorado currently provides nearly half of the peaking flexibility 

in the overall CRSP. In other words, the Aspinall Unit is like a light switch in your 

house—you can turn it on during peak times of electricity usage and turn it off 

when electricity demand decreases. 

There are proposals to restrict power-generating operations at the Aspinall Unit, 

which would have a direct impact on the ability of the Western Area Power Administration (‘‘WAPA’’) to deliver power to its customers—ultimately leading to increased rates. (WAPA delivers the hydropower generation to Tri-State Generation 

and Transmission Association, a power supply co-op headquartered in Colorado, 

which in turn provides the power to GCEA). 

As the economy struggles to make its way out of the ‘‘Great Recession’’—Colorado’s electric cooperative consumers cannot afford increased electricity rates. 

In order to understand the importance of the Aspinall Unit, it is important to 

know the history of Federal power generation in the Upper Colorado River Basin. 

The Colorado River Basin resources are split between the needs of the Upper (Colorado, Wyoming, Utah and New Mexico) and Lower (Utah, Arizona and California) 

Basin states as codified in the Colorado River Basin Compact of 1922. The compact 

calls for the Upper Basin states not to deplete the flow of the Colorado below 75 

million acre feet during any period of 10 consecutive years. During the post World 

War II boom years the population density of the U.S. began to shift to the West 

and Southwest increasing demand on the resources of the Colorado River Basin. In 

a bid to sustain economic development in the Upper Basin and prevent the catastrophic consequences to the Upper Basin states of a Lower Basin Compact ‘‘call,’’ 

Congress passed and President Eisenhower signed into law the Colorado River Storage Project Act of 1956. 

The CRSP Act authorized the construction of the Glen Canyon, Aspinall, Flaming 

Gorge and Navajo facilities. This Act had three purposes: ‘‘the reclamation [irrigation] of arid and semiarid land, control of floods, and for the generation of hydroelectric power. . .’’ The CRSP Act excluded fish, wildlife and recreation from its purposes. 

About a decade after President Eisenhower signed the CRSP Act into law, further 

population shifts to the Southwest prompted Congress to pass the Colorado River 

Basin Project Act (CRBPA). The1968 Act included language stating that 

‘‘. . .improving conditions for fish and wildlife’’ was a purpose of the Act, but it also 

explicitly states that ‘‘Nothing in this chapter [act] shall be construed to alter, 

amend, repeal, modify, or be in conflict with the provisions of. . .the Colorado River 

Storage Project Act.’’ In other words, the language included in the 1968 law for fish 

and wildlife does not, in any way, change the original purposes of the 1956 law 

which were to promote irrigation, flood control and hydropower generation. 

Unfortunately, questions still arise regarding the authorized purposes of facilities 

constructed under the authority of both laws. Those questions over the last 10 years 

have created the following debate: should the Aspinall Unit be operated primarily 

to meet the flow requirements of two endangered species of fish, the Razorback 

Sucker and Bonytail Chub OR should Reclamation have the discretion to operate 

Aspinall to meet its statutory obligations and authorized purposes while at the same 

time benefitting the additional resource needs of fish, wildlife and recreation? I 

would argue that Reclamation should operate the three dams on the Gunnison to 

meet both power generation needs and to protect endangered species. 

Nearly 10 years ago, the National Park Service asked for a reserved water right 

in the Black Canyon of the Gunnison, which is immediately downstream from the 

Aspinall Unit. In the meantime, Reclamation began work on an environmental impact statement (EIS) process which was intended to provide for operational changes 

at Aspinall to help meet flow recommendations thought to be necessary for the endangered fish species. After several years of negotiation with multiple federal agencies and stakeholders, a consensus draft EIS was prepared. The draft was put ‘‘on 

hold’’ until the Black Canyon water right issues were settled. 

19 

1Grand Canyon Trust v. United States, No. CV–07–8164–PHX–DGC, Order of March 29, 2011 

After seven years of federal litigation and a mediated settlement, the Black Canyon Consent Decree was signed on December 31, 2008. The drafting of the consent 

decree involved approximately 30 parties, including the relevant federal agencies 

(Reclamation, National Park Service, and Western Area Power Administration), the 

State of Colorado, environmental interests, recreational enthusiasts and federal hydropower customers. The decree was intended to ‘‘split the baby’’ by allowing for the 

Aspinall Unit to be operated for two concurrent purposes—a Spring Peak flow release to meet flow recommendations which should assist in the recovery of endangered species while at the same time providing a peak for the National Park Service 

resources in the Black Canyon of the Gunnison National Park.. 

In late December, 2010, after nearly two years of being ‘‘on hold’’, the draft EIS 

was reissued to the cooperating agencies. It was significantly revised by the Department of the Interior in Washington, D.C. with no consultation among the stakeholders that had worked diligently for several years during the drafting process. 

Several aspects of the revised EIS appear to elevate Park resources above the originally authorized Project purposes, and could have significant impact on the flexibility and timing of hydropower generation. 

Cooperating agencies submitted comments on April 1, but as of this time, it is uncertain as to what the next steps will be. The State of Colorado, the Platte River 

Power Authority and the Western Area Power Administration all submitted detailed 

comments recommending that those consensus provisions contained in the draft be 

reinstituted in the revised EIS and that the careful balancing of resource purposes 

and benefits that was sought by those involved in the drafting be reinstated. This 

‘‘balance’’ is critical when federal multi-purpose projects are operated. As noted in 

a recent District Court decision, Judge David Campbell, in ruling for the United 

States, highlighted the importance of ‘‘balance’’. Although he was referring to the 

operation of Glen Canyon Dam, I believe that his ruling is equally applicable to Reclamation’s operation of the Aspinall Unit because the projects of the CRSP are inextricably linked. ‘‘This experience aptly illustrates the complex set of interests Reclamation must balance in operating the Dam. Those interests include not only the 

endangered species below the Dam, but also tribes in the region, the seven Colorado 

River basin states, large municipalities that depend on water and power from Glen 

Canyon Dam, agricultural interests, Grand Canyon National Park, and national energy needs at a time when clean energy production is becoming increasingly important.’’ 1

In addition, Mr. Chairman, GCEA has sought the evaluation of the possibility of 

pursuing the addition of a hydroelectric generation facility to an existing BOR dam 

within our service territory. The specific storage facility is known as Taylor Park 

Reservoir Dam. We have conducted a feasibility study of the possibility of adding 

a hydroelectric generator to that existing dam alongside two other partners—The 

Upper Gunnison River Conservation District and the Uncompahgre Water Users Association. The results of this study concluded that there were two feasible options 

for electric generation from this facility, shown below. These conclusions are based 

upon historic hydrological conditions, existing and possible electric distribution line 

capacity, power generation potential and a comprehensive economic analysis. The 

two preliminary recommendations provided by the URS Corporation are briefly outlined below. 

• 1.960 MW hydropower plant. This would be possible under the current single 

phase transmission capabilities existing in the Taylor River Canyon currently. 

• 3.675 MW hydropower plant. This option would require a complete rebuild of 

the transmission facilities from Taylor Reservoir in order to place the energy 

on the grid. 

This power would be available from an existing water storage facility. In addition, 

the power would be emissions-free and potentially be dispatchable in order to help 

mitigate peak demands of electric energy. As you are aware, mitigation of peak demand periods eliminate or delay the need to build new generation resources, reduce 

emissions and reduce costs to the consumer. 

However, GCEA is very concerned that as we are a very small not for profit utility 

with limited revenues. The financial risks associated with the navigation of the governmental regulatory process in pursuing this project may be a hurdle we cannot 

overcome. A small utility such as GCEA needs regulatory certainty or we cannot 

pursue a project, and GCEA has observed historically that regulatory certainty is 

not something we can count on. In order for a small utility such as GCEA to help 

coordinate the use of an existing government owned water storage facility for the 

production of reliable, emission free and reliable electric energy, we need your help. 

20 

In closing, Mr. Chairman, I think Judge Campbell’s decision is correct and speaks 

to the title of this hearing. If we are moving toward a cleaner and greener energy 

future, there must be a recognition of the fact that hydropower is the cheapest, and 

most abundant renewable energy resource. In my view, protecting Federal Hydropower Investments in the West means primarily utilizing Aspinall and other CRSP 

facilities for one of the purposes for which they were originally intended—the generation of clean, renewable and affordable hydropower. 

Thank you, Mr. Chairman, I’d be happy to answer any questions you or members 

of the committee might have. 

Mr. MCCLINTOCK. Great. Thank you for your testimony. Our next 

witness who has already been introduced, Mr. Vic Simmons, General Manager of Rushmore Electric Cooperative in Rapid City, 

South Dakota. 

STATEMENT OF VIC SIMMONS, GENERAL MANGER, 

RUSHMORE ELECTRIC COOPERATIVE, RAPID CITY, SOUTH 

DAKOTA 

Mr. SIMMONS. Thank you, Mr. Chairman, Members of the 

Committee. 

As introduced, I am Vic Simmons. I am General Manager of 

Rushmore Electric Power Cooperative. Rushmore Electric is a GNT 

in western South Dakota. Our hydropower comes from the Bureau 

of Reclamation and Corps of Engineers dams on the Missouri River 

and its tributaries. 

Rushmore’s allocations along with allocations to five Native 

American tribes in western South Dakota make up about onefourth of our power supply resources. I also serve as Chairman of 

the Water and Power Planning Committee of the Midwest Electric 

Consumers Association. Midwest is a regional coalition of over 300 

consumer-owned utilities serving over 3 million consumers through 

nine western states. 

Rushmore Electric strongly supports the funding necessary to 

keep the Federal hydropower resources operating as a vital part of 

our power supply. Without dependable funding in the Federal 

budget the reliability of this system will suffer. Replacing this renewable hydropower with other resources would cost the consumers of western South Dakota over $2.7 million per year. This 

extra burden is not affordable in an area that continually ranks 

among the lowest income areas in the United States. This is an 

area where we often measure the number of miles of line it takes 

to serve a customer, not the other way around. 

The continuing rising cost of regulations, compliance with Endangered Species Act requirements, and rules that seem to lack 

common sense take up valuable time and resources. As an example, the spring rise scenario to encourage pallid sturgeon to spawn 

would release water when electric loads are at their lowest, thus 

wasting that stored water. If that water is not there in the summer 

when we need it most for peaking conditions, it would have to be 

replaced with natural gas-fired generation at a higher cost and a 

higher environmental issue. 

Like most of the infrastructure in this country, a safe and reliable Federal hydropower system needs adequate and dependable 

funding for capital improvements, operations and maintenance. 

These facilities were built over 45 years ago. While the Bureau of 

21 

Reclamation and the Corps of Engineers have done a remarkable 

job of keeping these facilities in top condition, as they get older 

these facilities need more funds, not less. 

As Federal hydropower consumers, as my friend and colleague 

stated, we pay 100 percent of the costs. We pay that back with interest. We also cover our share of the dams and the reservoirs, and 

we pay a share of irrigation. So far as of the end of 2009 $1.2 billion of the $2.8 billion Federal financed power facilities have been 

paid back with interest. 

Protecting the Federal hydropower investment in the West is not 

only about providing hydropower, flood control, municipal and industrial water supply, irrigation, recreation, navigation, fish and 

wildlife, it is also a sound business decision for the United States. 

The Corps of Engineers is determined that the Missouri River 

Dams have prevented over 25 billion in flood damage since 1938, 

thus repaying the original investment in the dams billions of times 

over. The Federal hydro system has returned the investment of the 

past and will continue to return the investments of the future. 

Thank you. 

[The prepared statement of Mr. Simmons follows:] 

Statement of Vic Simmons, General Manager, 

Rushmore Electric Power Cooperative 

Mr. Chairman and members of the subcommittee, thank you for the opportunity 

to testify before you today on protecting federal hydropower investment in the west. 

My name is Vic Simmons. I am the General Manager of Rushmore Electric Power 

Cooperative. Rushmore Electric is a Generation and Transmission cooperative serving western South Dakota. Our hydro power comes from the Bureau of Reclamation 

and Corps of Engineers dams on the Missouri River and its tributaries through allocations from the Western Area Power Administration. Rushmore Electric’s allocation along with allocations to five Native American Tribes located within our western South Dakota service territory make up just short of one-fourth of our power 

supply resources. 

I also serve as the Chairman of the Water and Power Planning Committee of the 

Mid-West Electric Consumers Association. The Mid-West Electric Consumers Association is a regional coalition of over 300 consumer-owned utilities (rural electric cooperatives, public power districts, and municipal electric utilities) serving over 3 

million consumers through purchases of hydropower generated at federal multi-purpose projects in the Missouri River basin under the Pick-Sloan Missouri Basin Program. The nine states included within the Mid-West footprint are Colorado, Iowa, 

Kansas, Minnesota, Montana, Nebraska, North Dakota, South Dakota and Wyoming. Midwest and its members enjoy an excellent working relationship with our 

federal partners. 

Rushmore Electric strongly supports the funding necessary to keep the federal hydropower resources operating as a vital part of our power supply. Without dependable funding in the federal budget, the reliability of this system will suffer. Replacing this renewable hydropower with other resources would cost the consumers of 

western South Dakota over $2.7 million dollars per year. This extra burden is not 

affordable in an area that continually ranks among the lowest income areas in the 

United States. This is an area where we often measure the number of miles of line 

it takes to serve a customer, rather than the number of customers per mile of line. 

The continually rising costs of regulations, compliance with the Endangered Species Act requirements, and rules that seem to lack common sense take up valuable 

time and resources. As an example, the spring rise scenario to encourage the pallid 

sturgeon to spawn, would release water when electrical loads are at their lowest, 

thus wasting the stored water. If that water is not there when it is needed for peak 

conditions later in the summer, expensive natural gas fired turbines would need to 

be used. 

Like most of the infrastructure in this country, a safe and reliable federal hydropower system needs adequate and dependable funding for capital improvements, operations, and maintenance. These facilities were built over 45 years ago. While the 

Bureau of Reclamation and the Corps of Engineers has done a remarkable job of 

22 

keeping these facilities in top condition, as they get older, these facilities will take 

more funds to maintain and update, not less. 

Federal hydropower facilities are part of the multi-purpose projects that serve a 

variety of purposes—flood control, municipal and industrial water supply, irrigation, 

recreation, navigation, fish and wildlife. Unlike most other federal capital projects, 

much of the costs of constructing, operating, and maintaining these hydropower 

projects are repaid to the federal government with interest. 

Power customers purchase electrical power generated at federal multi-purpose 

projects that have been authorized for hydropower development, and are paying 

back 100% of the costs of these facilities: 

• the federal capital investment in generation and transmission facilities, with 

interest, including all of the original investment and the repair and replacement costs; 

• an allocated share of the original multi-purpose capital investment (the dam, 

the reservoir, etc.) and an allocated share of the repair and replacement with 

interest of multi-purpose facilities; 

• all of the annual operations and maintenance cost of generation and transmission facilities; 

• an allocated share of the annual operations and maintenance costs of multipurpose facilities; and 

• the portion of the cost of federal irrigation projects that is deemed to be beyond the ability of the irrigators to repay. 

• $1.2 billion of the $2.8 billion total federally financed power facilities (Power’s 

share of the dams and transmission) have been paid back. 

Protecting the Federal Hydropower Investments in the West is not only about providing hydropower, flood control, municipal and industrial water supply, irrigation, 

recreation, navigation, fish and wildlife, it is also a sound business decision for the 

United States. The Corps of Engineers has determined that the Missouri River 

dams have prevented $25 billion in flood damage since 1938, thus repaying the 

original invest in just the dams of $1.2 billion many times over. The federal hydro 

system has returned the investments of the past and will continue to return the investments of the future. 

Thank you. 

Mr. MCCLINTOCK. Thank you for your testimony. Our next witness is Mr. Andrew Fahlund. He is the Senior Vice President of 

Conservation for American Rivers, Washington, D.C. His group is 

referenced in several of the opening statements, and I want to 

stress is here at the invitation of the Minority Party. Mr. Fahlund 

for five minutes. 

STATEMENT OF ANDREW FAHLUND, SENIOR VICE PRESIDENT 

OF CONSERVATION, AMERICAN RIVERS, WASHINGTON, D.C. 

Mr. FAHLUND. Mr. Chairman and Members of the Subcommittee, 

thank you for inviting me to testify before you today. 

I am Senior Vice President for conservation programs through 

American Rivers. We were founded in 1973 with offices throughout 

the nation, and we are the leading voice for healthy rivers and the 

communities that depend on them. 

Hydropower dams have flooded forests, destroyed fisheries, diminished recreational opportunities and caused great harm to the 

long-term viability of mostly rural and coastal economies that depend on those resources. However, when hydropower is sited, operated, mitigated appropriately, hydropower can be a tremendous 

benefit to the nation. That is why American Rivers is signatory to 

settlements supporting the continued operation of thousands of 

megawatts and supports the new development of thousands more. 

To have a serious conversation about increasing our nation’s hydropower resources, let us look at where the big opportunities really lie instead of scapegoating the interests of recreation, fisheries, 

23 

tribal resources, and environmental sustainability. The majority of 

people in the hydropower industry, the environmental community 

and government have moved beyond that sort of simplistic thinking. I want to touch on the two greatest opportunities to increase 

hydropower capacity in the United States and address two of the 

greatest threats. 

The first is to use existing infrastructure. Some Federal agencies 

estimate we could increase Federal hydropower output by as much 

as 30 percent by simply replacing old turbines and generators. This 

may present an opportunity to also reduce environmental impacts 

and would spark job creation through the manufacture and installation of those devices. Adding turbines to non-hydropower dams, 

pipes and canals offers some potential as well. Numerous tax incentives and renewable energy portfolio requirements have included this sort of incremental hydropower, and we have supported 

that as well. 

The second is to better coordinate the operations of dams within 

each basin. Hydropower dams are owned and regulated by a patchwork of entities. They typically serve many more functions than 

simply generating power, and those are often competing. In fact, if 

we really wanted to maximize hydropower production, we would 

stop diverting water out of streams for consumptive use. That is 

not something that most would support. However, efficiency is part 

of the answer. 

We can make some big gains in power production as well as improve other ways of managing water if we require agencies to periodically review and coordinate dam operations on a basin-wide 

scale and balancing all of the competing interests. 

Of the threats, perhaps the greatest to hydropower production in 

the near term is drought. Models are fairly universal in their productions. The climate change will result in less snow pack and 

more drought. Confronting the causes of climate change is vital to 

maintaining our hydropower capacity as well as to protecting fisheries and other species. 

The other threat that I would like to highlight is political paralysis. Living in a democracy means that getting anything done typically involves consensus and collaboration. One side may win at the 

expense of the other for a short time, but those victories are fleeting. Continuing to fight the old flights of zero sum gains will continue to lead us into court and stalemate and won’t advance the 

cause of hydropower environmental restoration or anything else. 

We need to move forward with co-equal goals of power production, environmental enhancement and sustainable water supplies. 

That may sound Pollyanna to some, but I have seen what success 

can look like in places like Penobscot in Maine and the Klamath 

in Oregon and California. 

I visited the dams in the Klamath Basin in 2002 at the very 

height of the hostilities there, and rather than seeing despair and 

cynicism some of us saw opportunity and hope. As we began a dialogue among the many stakeholders we understood that what each 

of us wanted was not water, electricity or fish, but predictability, 

trust and hope to raise families, to make a living, and maintain a 

way of life. We reached agreement on power issues, water issues 

and fish issues when we all started viewing each other as neighVerDate Nov 24 2008 13:08 Jan 05, 2012 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6602 L:\DOCS\66205.TXT Hresour1 PsN: KATHY
24 

bors who rise and fall together. Are the needs of a farmer in Klamath Falls any more or less important than a fisherman in Eureka? 

Not anymore. And that was a remarkable transformation. 

Discussions about hydropower often get derailed into a referendum on dam removal. Despite the claims of some, dam removal 

is not the biggest threat to hydropower capacity in America. I 

would be the first to agree that suggesting all or even most dams 

should be removed is a radical notion, but no more radical than 

suggesting that all dams should remain no matter what the cost. 

Dams are not monuments. Dams are tools and tools wear out or 

become obsolete. 

Leaving our children with the burden of an environmental deficit 

is no less insidious than leaving them with the burden of a financial one, and we believe it is possible to protect the environment 

while protecting our investments in hydropower and other water 

infrastructure. 

Thank you for the opportunity to testify, and I would be happy 

to answer your questions. 

[The prepared statement of Mr. Fahlund follows:] 

Statement of Andrew Fahlund, Senior Vice President for Conservation, 

American Rivers 

1. Introduction 

Chairman McClintock, Ranking Member Napolitano, and Members of the Subcommittee: thank you for this opportunity to testify today and to share American 

Rivers’ perspective on U.S. hydropower policy. 

American Rivers is the nation’s leading voice for healthy rivers and the communities that depend on them. We believe rivers are vital to our health, safety and 

quality of life. American Rivers mobilizes an extensive network comprised of tens 

of thousands of members and activists located in every state across the county. We 

have been working to protect and restore the health of rivers that have been impacted by hydropower dams since we were founded in 1973. We also serve on the 

Steering Committee of the Hydropower Reform Coalition, a broad consortium of 

more than 150 national, regional, and local organizations with a combined membership of more than one million people. In doing so, we represent stakeholders—anglers, canoeists, outdoor enthusiasts, conservation advocates, and lake homeowners—who seek to improve the water quality, fisheries, recreation, and general 

environmental health of rivers that have been damaged by hydropower dam operations. We are active in many hydropower licensing proceedings currently pending 

before the Federal Energy Regulatory Commission (FERC), as well as other hydropower-related proceedings involving the Bureau of Reclamation and the Army Corps 

of Engineers. We have constructively contributed to numerous hydropower-related 

policy discussions. 

2. Towards a balanced Federal hydropower policy that encourages 

environmentally responsible hydropower development and operation 

American Rivers is emphatically not anti-hydropower. We seek to improve the nation’s hydropower system by encouraging increased generation while improving environmental performance. Conventional hydropower is one of the oldest and most 

well-established among a growing number of technologies that provide low-emissions alternatives to fossil-fuel energy. Nationally, hydropower provides about 

75,000 megawatts of capacity, and represents nearly 7% of total generation. We expect that hydropower will continue to be a part of our nation’s energy mix for years 

to come, and accordingly we have signed dozens of agreements supporting the continued, long-term operation of hydroelectric dams that together provide our nation 

with thousands of megawatts of generating capacity. Reasonable modifications have 

dramatically improved the performance of these dams, providing fish passage, improving flows, enhancing water quality, protecting riparian lands, and restoring recreational opportunities. 

American Rivers supports the development of new hydropower resources that can 

be brought online while avoiding significant additional harm to local ecosystems. In 

recent years, we have worked closely with the National Hydropower Association to 

25 

develop and promote several pieces of legislation that provides incentives for new 

hydropower generation. We support hydropower that is developed and operated in 

a responsible manner that avoids harm to America’s precious river resources. Given 

the very real environmental and social impacts of global climate change—especially 

on vital freshwater systems –we understand the need to develop new sources of energy that can replace America’s reliance on fossil fuels. Hydropower is and will continue to be an important part of this mix. 

However, we also know that the energy we receive from hydropower comes at an 

enormous cost to the health of our nation’s rivers and communities. Hydropower is 

unique among renewable resources in the scale at which it can damage the environment. Hydropower’s environmental and social impacts are serious and extremely 

well documented. Hydropower dam operations are responsible for the extinction and 

near-extinction of a number of species. Hydropower plants often divert water around 

entire sections of river, leaving them dry or constantly alternating between drought 

and flood-like conditions. Hydropower dams have flooded forests, destroyed fisheries, 

diminished recreational opportunities, and caused great harm to the long-term viability of the local—mostly rural—economies that depend on those resources. 

The harm caused by most hydropower dams can be avoided if hydropower is sited, 

constructed, and operated in a responsible manner. A few simple changes can make 

an enormous difference in the health of a river. Hydropower operators can change 

the timing of power generation to mimic a river’s natural hydrologic conditions, stabilize lake levels and dam releases to protect riverside land from erosion, provide 

fish ladders and other measures that protect fish and allow them to pass safely upstream and downstream of dams, restore habitat for fish and wildlife, alter the design and operation of plants to maintain appropriate temperature and oxygen levels 

in rivers, and provide public access and release water back into rivers so that people 

can fish, boat, and swim. These types of changes have a miniscule impact on the 

overall generation of the nation’s hydropower fleet. In fact, an analysis by FERC 

found that since Congress passed laws in the 1986s to encourage these types of improvements, overall generating capacity has actually increased by 4.1%. The benefits 

to human and natural communities have been immense. 

There are, however, some rare cases—where the environmental, social, and economic impacts of a dam cannot be adequately mitigated. Where those impacts outweigh the benefits of a dam, American Rivers and others sometimes advocate for 

decommissioning of hydropower dams. We take this extraordinary step with great 

caution, and only as a last resort: out of 20,441 MW of capacity that has been relicensed by FERC since 1986, American Rivers’ advocacy has led to roughly 222 MW 

of licensed capacity being identified as suitable for decommissioning. Our analysis 

indicates that this 222 MW is roughly equivalent to the capacity of existing FERCregulated projects that are in non-compliance and not generating because their owners have failed to maintain them in proper working condition. It represents just 1% 

of the capacity relicensed by FERC since 1986, and only two-tenths of one percent 

of the nation’s total hydropower capacity. American Rivers has supported policies 

and projects that have already resulted in much more new hydropower capacity 

being brought online than capacity that has been removed. 

The threat of climate change demands urgent action on two major fronts. First, 

we must dramatically reduce greenhouse gas emissions. Our current hydropower capacity contributes to decreased dependence on fossil fuels and our recommendations 

below represent suggestions for how to build additional capacity without causing 

significant additional harm to healthy rivers and the communities that depend upon 

them. Ironically, because the forecasts of climate change in the west call for less 

rain and snow, the fundamental fuel for hydropower is significantly compromised. 

Second, even if we bring emissions under control, the carbon already in the atmosphere from historic emissions will cause inevitable changes to the climate. We must 

therefore also take immediate action to help both human and natural communities 

prepare for inevitable climate changes. By protecting and restoring healthy watersheds, increasing water efficiency, and improving the quality of our infrastructure 

we can build resilient communities and ecosystems that stand a better chance of 

weathering the impacts of global warming. 

America is still blessed with many healthy, free-flowing rivers, wetlands, and natural floodplains that protect communities, support local jobs, and provide significant 

economic value. In fact, in many rural economies, recreation and tourism play a 

greater role in job creation and economic productivity than any other sector. We 

must preserve and restore these natural resources and promote them as a vital part 

of our economy. Now and in the years to come, we need hydropower projects that 

are sited, built, and operated to produce power while minimizing impacts to the rivers that sustain America’s human and natural communities. Federal agencies with 

a role in U.S. hydropower policy, including the Bureau of Reclamation, the U.S. 

26 

Army Corps of Engineers, the Department of Energy, and the Federal Energy Regulatory Commission must make the enhancement of environmental quality—at existing and new sites alike—a top priority. 

A balanced and responsible hydropower policy must encourage responsible development while continually holding developers and federal operators accountable for 

their environmental impacts and insisting on the strictest performance standards. 

It must remove unnecessary obstacles to development while recognizing at the most 

fundamental level that a high level of environmental performance it is a reasonable 

and necessary cost of doing business. It must encourage new development to take 

place while also accepting that some sites are simply not appropriate for new or increased hydropower production. Congress must address both sides of this equation 

equally. 

3. Opportunities for new hydropower development 

American Rivers supports the development of hydropower projects that are sited, 

constructed, and operated in a responsible manner so as to avoid harm to America’s 

precious river resources. Hydropower projects that re-use existing water and hydropower infrastructure are the best candidates for responsible development. There is 

enormous potential from these types of projects. The U.S. Department of Energy has 

estimated that more than 12,000 MW of new capacity could be added simply by replacing antiquated generating equipment, and more than 12,600 MW more could be 

added by adding turbines to non-powered dams (only 3% of the nation’s dams are 

currently generating power), many of which are owned and operated by the Federal 

government. With roughly 75,000 megawatts of installed capacity in the U.S., these 

types of projects could provide a 30% increase in installed capacity, all without the 

enormous costs and risks associated with new dam construction. Encouraging such 

capacity additions at existing federal facilities would be one of the most cost-effective ways to use scarce taxpayer dollars to protect federal investments in water infrastructure. 

American Rivers has long advocated for policies that would encourage or require 

hydropower operators to upgrade aging turbines and generating equipment with updated, modern equipment. We believe that the public should receive the full benefit 

of each drop of water that passes through a turbine, and antiquated, inefficient 

equipment dilutes these benefits. Efficiency improvements are relatively low-cost, 

use turbines and equipment that is manufactured in the United States, and can 

often contribute to improved environmental outcomes. These efficiency upgrades are 

the simplest, most cost-effective, and lowest-impact means of increasing hydropower 

generation. The potential gains in generation are significant: in many cases, these 

upgrades can result in a 10–20% increase in generation from the same amount of 

water. There are substantial environmental benefits to these upgrades as well: modern turbines often feature designs which are less harmful to fish, and can operate 

efficiently across a different range of release levels, allowing for managed flow regimes which more closely mimic a natural river. 

Turbines can also be added to many existing hydropower and non-hydropower 

dams. While these retrofits are not appropriate in every case, they offer new capacity for minimal additional environmental impacts when done right. In some cases, 

retrofitting existing dams for hydropower can leverage additional environmental improvements to the affected river reach. For instance, a pending retrofit at the 

Holtwood project on the Susquehanna River in Pennsylvania will more than double 

that project’s generating capacity while also providing for substantially improved 

fish passage. Several years ago, American Rivers worked closely with the hydropower industry and Members of Congress to craft legislative language that would 

encourage such forward-thinking development. This language has since been incorporated into the federal law which provides a Production Tax Credit for Renewables, 

providing developers with an incentive to develop at existing dams that are currently operated for flood control, navigation, and water supply and that could be developed without harmful changes to river flows. 

Finally, an increasing number of developers—especially in the west—are exploring off-stream hydroelectric development. Some developers propose to place turbines 

in existing water conveyance pipes. Others are adding hydropower capacity to irrigation canals. Still others are placing turbines in municipal water treatment facilities. While there is no official estimate of how much capacity may be available from 

new conduit projects, we expect that it may be significant, and new technologies are 

improving the economic viability of these types of projects. Many of these projects 

have the potential to create substantial environmental benefit. For instance, some 

irrigation districts are using the revenue from power sales to fund projects that will 

result in the more efficient use of water, leaving more water in the river to provide 

27 

ecosystem services. American Rivers is working with conduit developers to find 

ways to lower the cost and effort associated with developing these types of projects. 

3.1 Balanced management of the federal hydropower system 

The 171 hydropower plants that make up the federal hydropower system provide 

more than 37,000 MW of electric capacity, or 50% of total hydropower production 

in the United States. The federal investment in hydropower production at these facilities is typically seen as secondary to the dams’ other authorized purposes, and 

generation is very often secondary to flood control operations or water deliveries for 

agriculture. In western basins where reservoirs are used for multiple purposes, outdated operational guidelines, poor water management and conservation practices, 

and an alarming lack of coordination among multiple federal and non-federal 

projects are leaving megawatts on the table. The Bureau of Reclamation and the 

Army Corps of Engineers should improve their cooperation with FERC and its nonfederal licensees to ensure that water control and hydropower systems are being operated efficiently on a basin scale. Additionally, any water that is diverted from 

storage reservoirs for consumptive use is water that is not available to generate 

power. Federal operators should, as they examine water delivery contracts, consider 

the relationship between end-user efficiency and hydropower production, and take 

steps to ensure that hydropower generation is not threatened by inefficient and 

wasteful consumptive water use. 

American Rivers has worked on dozens of hydropower licensing proceedings before 

the FERC over the past two decades, and our experience has shown that the comprehensive review of hydropower projects operations with extensive stakeholder involvement results in significant improvements to environmental quality while retaining nearly all of those projects’ capacity to generate electricity. While the concept of a periodic review that is open to all interested members of the public is a 

long-standing one in the realm of non-federal hydropower projects, a similar process 

is lacking—and needed—for hydropower facilities that are owned and operated by 

the federal government. 

Each Federal project has a plan of operation, but many of these plans have not 

been revised in decades and are hopelessly out of date, despite laws that permit 

and/or require Federal operators to review the operational plans for their facilities. 

We recommend that this Subcommittee direct the Federal operators over which it 

has jurisdiction to examine changes to the design, configuration, or operation of 

their existing dams in order to improve upon existing operations, and to periodically 

repeat this analysis. Federal operators should be directed to consider efficiency upgrades, opportunities to install new physical capacity, and more operational changes 

that will enhance and maximize the array of beneficial public uses these dams provide, including energy production, environmental protection, water supply, navigation, recreation, and whether facilities are receiving a market return for their services, including energy production. 

3.2 Basin-scale coordination of multiple projects 

While individual hydropower dams have their own impacts, the cumulative effects 

of multiple hydropower dams are often much greater than the simple sum of their 

direct impacts. A single-dam may block fish passage and displace wildlife. A series 

of dams can harm an entire watershed or cause the extinction of an entire fishery, 

even if the effect of each of the individual dams seems relatively mild when considered in isolation. The impact of a single dam that kills only 5% of fish in its turbines 

may seem relatively small, but eight dams along the same river, each of which only 

kill 5% would reduce the river’s fish population by more than a third, placing a cumulative burden on the population that is too great to be sustained over time. 

The solution to such cumulative impacts is to address hydropower at a watershed 

or basin scale instead of at the individual project level. It is often possible to get 

an increase in generation and significant improvements in environmental quality 

when the operation and management of multiple facilities is addressed in a coordinated manner. For instance, consider Maine’s Penobscot River basin. For decades, 

a series of dams in this basin blocked access to high-quality habitat and all but 

wiped out the river’s valuable Alewife, Atlantic Salmon, and Shad fisheries. When 

these projects were relicensed, parties examined the entire basin and came up with 

a plan that would restore more than 1000 miles of habitat—and millions of fish— 

by removing two dams, bypassing a third with a nature-like fishway, and installing 

fishways at others while allowing for a net increase in power generation. This plan 

also allows the remaining dams to generate more, concentrating environmental restoration measures where they are most needed and power production where it will 

have the least impact on the basin as a whole. 

28 

1Lindley, S.T. et al, ‘‘Historical Population Structure of Central Valley Steelhead and its 

Alteration by Dams,’’ 2006. 

The Penobscot agreement demonstrates how the coordinated review and planning 

of hydropower in a basin can result in more power and better environmental outcomes. Unfortunately, the circumstances on the Penobscot—where all of the dams 

were owned by a single entity and subject to the jurisdiction of a single agency— 

are the exception rather than the rule. Consider, for instance, California’s rapidly 

declining populations of Salmon and Steelhead. A combination of federal and nonfederal dams in six watersheds in California (the American, the Feather, the 

Merced, the Stanislaus, the Tuolumne, and the Yuba) blocks these commercially valuable fish from accessing more than 2,200 miles of their highest-value historic habitat.1 These dams are managed by a patchwork of federal and non-federal operators. 

The operators coordinate the management of these watersheds for water supply and 

power production. But when it comes to mitigating the effects of this environmental 

catastrophe, each operator points its fingers at the others. There is not one major 

river in the Central Valley that has even a single fish passage structure. All the 

major salmon runs are stuck on the valley floor, unable to ascend to the upper 

reaches of these watersheds where the best quality habitat is located. FERC, its licensees, and the federal operators in these basins have failed to end this avoidance 

of responsibility by coordinating effectively to find basin-wide solutions to restore 

fish passage to this valuable historic habitat. As a result, these species are at the 

brink and downstream users are stuck with a disproportionately higher burden for 

addressing their protection and restoration. 

There is an urgent need for the type of basin-scale planning and coordination of 

hydropower projects that led to the Penobscot agreement. We recommend that Congress direct the Bureau, the Corps, and FERC to cooperate to address multiple 

projects in a coordinated fashion to increase power generation and environmental 

outcomes at the basin—not project—scale. For instance, when FERC is relicensing 

a project in a basin where the Corps or the Bureau also operate hydropower 

projects, those agencies should participate as cooperating agencies in FERC’s analysis and use that opportunity to review the operations of their own projects in coordination with the FERC-licensed projects. 

4. Conclusion 

A balanced U.S. energy policy must recognize that hydropower has impacts as 

well as promise, and it should address both. New hydropower development must be 

sited, operated, and mitigated responsibly, and it must simultaneously encourage increased generation and improved environmental performance at new and existing 

projects. American Rivers supports the development of new hydropower resources 

that can be brought online responsibly, avoiding significant additional harm to local 

ecosystems. We offer the following recommendations to this Committee as it considers how to protect the federal investment in hydropower: 

1. Encourage the development of new capacity using existing water infrastructure, espeicaly capacity and efficiency upgrades and power added to non-powered dams. As a class, these hydropower projects can be brought online for 

the least cost and with the least additional impact to the environment, and 

could provide as much as a 30% increase in hydropower generation. 

2. Direct Federal hydropower operators to evaluate their facilities and operations as well as the relative values of existing authorized purposes in order 

to find new opportunities to add power, improve efficiency, and improve environmental quality. 

3. Direct Federal hydropower operators to coordinate with each other and with 

FERC to take a basin-scale approach to hydropower development and reoperation rather than a myopic project-by-project view, and encourage multiple 

operators within a basin to find shared solutions that will increase generation, use water more efficiency, and restore environmental quality. 

Environmental quality is not a luxury good: leaving our children with the burden 

of an environmental deficit is no less insidious than leaving them with the burden 

of a financial one. Fortunately, it is possible to protect the environment while protecting our investments in hydropower and other water infrastructure. American 

Rivers has learned some important lessons in our nearly four decades of experience 

with hydropower. Disputes over water are complex and contentious, and finding solutions to those problems requires a commitment on the part of each party to see 

that all other parties interests are respected. A solution that is based on ‘‘abundance’’ as it is defined by one party to a dispute will never be satisfactory to all. 

We must find solutions that seek abundant water, abundant clean energy, abundant 

fish and wildlife, and abundant jobs. When traditional foes stop hurling accusations 

29 

at each other and instead sit down, roll up our sleeves, and work together to meet 

each others interests, we can and often do find lasting, mutually agreeable solutions. 

Thank you again for this opportunity to testify you today. I look forward to 

answering your questions. 

Mr. MCCLINTOCK. Thank you for your testimony. Our next witness is Mr. Roman Gillen. He is the President of the Board of Directors of the Oregon Rural Electric Cooperative Association in 

Salem, Oregon. 

STATEMENT OF ROMAN GILLEN, PRESIDENT OF THE BOARD 

OF DIRECTORS, OREGON RURAL ELECTRIC OPERATIVE 

ASSOCIATION, SALEM, OREGON 

Mr. GILLEN. Thank you, Mr. Chairman. Good morning, Mr. 

Chairman and Members of the Subcommittee. I am Roman Gillen, 

President and CEO of Consumers Power, Incorporated, an electric 

distribution cooperative located in western Oregon, in Philomath 

near Corvallis. Thank you for this opportunity to testify before the 

Subcommittee today and for holding this hearing on this important 

topic. 

CPI is a customer of the Bonneville Power Administration 

through our generation and transmission cooperative, P&GC 

Power, of which I am a board member. CPI serves over 17,000 

members in parts of six counties from the Cascade Mountains to 

the Pacific Ocean, including the 4th Congressional District served 

by Representative Peter DeFazio. Most of our electricity sales are 

to residential members. Today I also represent the Oregon Rural 

Electric Cooperative Association as its board president. ORECA 

represents the legislative interests of all 18 Oregon electric co-ops, 

serving over 200,000 members in mostly rural and remote parts of 

Oregon. 

My testimony today centers on three Federal policy issues of concern to our members: high wind, high water, over-generation 

events; proposals to force power marketing agencies to sell electricity at market-based rates; and salmon recovery on the Columbia 

River Basin. 

As this Committee knows, the Northwest is blessed with an extremely valuable Federal asset, the Federal Columbia River Power 

System. CPI helps pay for this asset through the rates we pay as 

a preference customer of BPA. Today, this same Federal system 

plays a leading role to support the growth of non-hydro low variable cost renewable resources, especially wind. 

BPA Administrator Steve Wright told this Committee in March 

that the amount of wind generation in the Northwest may triple 

in size over the next six years. This really concerns me as I believe 

the Northwest is ill equipped to deal with such rapid growth in 

wind generation. Problems that occur when too much wind coincides with an abundance of hydropower and low utility loads in the 

spring will only get worse as the Northwest emerges from the 

drought conditions of recent years. 

The second Federal policy issue I would like to speak to concerns 

wholesale power rates in the Northwest. Cost-based power is the 

life blood of utilities like CPI in the Northwest, so we are gravely 

concerned to see proposals re-emerge that force PMAs to sell power 

30 

at market rates. We oppose legislation that arbitrarily taxes power 

rates in select regions of the U.S. Northwest preference customers, 

including CPI members, pay all of the costs to operate and maintain the Federal hydropower system. Forcing PMAs to sell power 

at market rates would force utilities like CPI to raise retail rates, 

perhaps dramatically, causing great harm to our residential members, especially those on fixed incomes. Many of our members depend on electricity to heat their homes in the winter with few alternatives to choose from. With the cost of food and gasoline already 

increasing it makes no sense to add an additional energy tax, especially upon consumers who can least afford it. 

Finally, I would like to say a few words about salmon restoration 

efforts in the Northwest. We sincerely hope that Federal Judge 

James Redden approves the 2008 biological opinion when he hears 

arguments on the plan next Monday, May 9. In that vein, I thank 

Chairman Hastings and Representative DeFazio for their excellent 

March 11th opinion piece that strongly endorsed this biop. 

CPI and other BPA customers also strongly support the biop 

even though it comes at a high cost to our members and other BPA 

customers who are footing the bill. We also thank Chairman Hastings and others on the Committee for their work to ensure that 

salmon recovery investments are working and that they are costeffective. 

I thank the Subcommittee for allowing me to participate in this 

discussion and I would be happy to answer any questions. 

[The prepared statement of Mr. Gillen follows:] 

Statement of Roman Gillen, President and CEO, Consumers Power, Inc., 

and President, Oregon Rural Electric Cooperative Association 

I. Introduction 

Mr. Chairman and Members of the Subcommittee, I am Roman Gillen, President 

and CEO of Consumers Power, Inc. (CPI), an electric cooperative located in Western 

Oregon in Philomath, just outside of Corvallis. Thank you for the opportunity to testify before the Subcommittee today, and for holding this hearing on this important 

topic. I also wish to thank Committee Chairman Rep. Doc Hastings and Committee 

Members Rep. Rob Bishop, Rep. Peter DeFazio and Rep. Rau ́l Labrador for their 

work to protect federal hydropower investments in the Northwest on behalf of their 

constituents who are customers of the Bonneville Power Administration (BPA). CPI 

is a customer of BPA through our Generation and Transmission Cooperative, PNGC 

Power. 

Today I am representing both CPI and the Oregon Rural Electric Cooperative Association (ORECA). We are members of NRECA, the National Rural Electric Cooperative Association, and we are members of the Public Power Council, a trade association of BPA customers led by my fellow panelist Scott Corwin. I would also like to 

recognize my other panelists, especially Tom Karier of Washington State, a member 

of the Northwest Power and Conservation Council. 

CPI is an electric distribution cooperative formed in 1939. CPI’s 60 employees 

serve 17,500 members in parts of six counties covering a 3,500 square mile service 

area, from the Cascade Mountains to the Pacific Ocean. We are the fourth largest 

electric cooperative in Oregon with 22,000 meters and 46 aMW in electricity sales 

in 2010. 70% of our sales are to residential members, 14% small commercial, 14% 

industrial, and 2% irrigation and street lighting. 

My career at CPI began in 1986 in the Information Technology area and I have 

served as President and CEO for the last five years. I am CPI’s representative on 

the board of PNGC Power, and I currently serve as the board president of ORECA. 

ORECA represents the legislative and regulatory interests of all 18 Oregon electric 

co-ops, serving over 200,000 members in mostly rural and remote parts of Oregon 

with over 30,000 miles of wire. According to Oregon State University, our economic 

activity directly and indirectly contributes to over 3,000 jobs in Oregon. 

31 

As you know, electric cooperatives are owned by our customers, who we refer to 

as members. Electric cooperatives are not owned by a government or city agency. 

We are chartered under state cooperative statutes and we are governed by a locally 

elected Board of Directors from our membership. Unlike a for-profit business we do 

not retain profits. Any income above expenses is, by law, returned to our members. 

Our goals of accountability, efficiency and meeting customer needs resemble those 

of a for-profit electric utility, but our means of getting there are different. 

My testimony today will focus on three issues of concern to CPI’s ratepayers that 

are driven by federal policy. These include: 

1. High wind/high water overgeneration conditions. 

2. Proposals to force Power Marketing Agencies (PMAs) to sell electricity at 

market based rates. 

3. Salmon recovery in the Columbia River Basin. 

II. Overgeneration 

As this Committee knows, the Northwest is blessed with a valuable federal asset, 

the Federal Columbia River Power System (FCRPS). As a preference customer of 

BPA, CPI has shared in those benefits for many years, and we have shared in paying for them through the rates we pay. Today, that same federal system is playing 

a lead role in supporting the growth of non-hydro, low variable-cost, renewable resources, especially wind. BPA Administrator Steve Wright told this Committee in 

March that the region’s wind generation system may triple in the next six years. 

I am concerned that the Northwest is not ready for that rapid growth. 

In June 2010 the region experienced overgeneration conditions, when too much 

wind and water arrived in the system at the same time. We expect more high wind/ 

high water events in the future. These events could threaten BPA’s ability to protect 

migrating salmon. Some of the proposed remedies could cause BPAs customers to 

pay higher rates for electricity. We encourage the Subcommittee to closely examine 

these issues, and we support BPA’s ongoing efforts to develop policies that protect 

our ratepayers and maintain reliability in the federal system. 

III. PMAs at Cost Based Rates 

We are aware that proposals have reemerged to force PMAs to sell power at market rates. We oppose these and any other proposal that arbitrarily taxes power rates 

in some regions. Ratepayers at CPI and throughout the Northwest pay all of the 

costs of operations and maintenance of the federal hydropower system. In addition 

to the annual revenue requirement for BPA power of over $2.2 billion, ratepayers 

fund an annual payment on principal and interest of debt to Treasury of over $860 

million. In exchange, BPA sells power at cost. Power sales at cost have been a legal 

requirement since BPA’s inception and are the foundation of the contracts that BPA 

customers signed through 2028. Forcing PMAs to sell power at market rates would 

clearly force CPI to raise our rates, perhaps dramatically. This would cause great 

harm to the residential members that we serve, especially those on fixed incomes. 

With the cost of food and gasoline already increasing, it doesn’t make sense to add 

an additional energy tax, especially upon consumers who can least afford it. 

IV. Salmon Recovery 

We are hopeful that Federal Judge James Redden will approve the 2008 FCRPS 

Biological Opinion (BiOp) when he hears arguments on the plan next Monday, May 

9. In that vein, I wish to thank Chairman Hastings and Member DeFazio for their 

excellent March 11 opinion piece that so strongly endorsed this BiOp. CPI and other 

BPA customers also strongly support the BiOp, even though it comes at a high cost 

to our members and other BPA customers who are footing the bill. We also wish 

to thank Chairman Hastings and others on the Committee for their work to ensure 

that salmon recovery investments are working, and that they are cost effective. As 

the Chairman knows, the dams at issue in this salmon plan provide our region with 

clean, renewable hydroelectric power. In addition, these dams offer residents of the 

Northwest multiple benefits, including a valuable transportation system and irrigation source. 

BPA customers have paid over $13 billion for fish and wildlife mitigation in the 

Columbia Basin over the past 32 years. The good news is that some of those investments are working. The BiOp is the product of a recent historic and unprecedented 

collaboration of Native American tribes, federal agencies, and the states of Washington, Idaho and Montana. It is based on the best available science and has been 

reviewed and approved by an independent panel of scientists. It has also been reviewed and approved by one of Oregon’s best and brightest, former Oregon State 

University professor and current National Oceanic and Atmospheric Administration 

Director, Dr. Jane Lubchenco. We hope that May 9 will mark the beginning of a 

new, successful chapter in salmon recovery in the Northwest. 

32 

V. Conclusion 

Mr. Chairman and Members of the Subcommittee, thank you for inviting me to 

testify at this hearing. As a representative of PMA customers, I appreciate the opportunity to highlight several issues that are of concern to PMA customers in the 

Northwest: high wind/high water overgeneration conditions, proposals to force 

Power Marketing Agencies (PMAs) to sell electricity at market based rates and 

salmon recovery in the Columbia River Basin. 

I thank the Subcommittee for allowing me to participate in this discussion. 

Mr. MCCLINTOCK. Thank you for your testimony. Our next witness is Mr. Tom Karier. He is a Council Member of the Northwest 

Power and Conservation Council in Portland, Oregon. 

STATEMENT OF TOM KARIER, COUNCIL MEMBER 

WASHINGTON STATE, NORTHWEST POWER AND CONSERVATION COUNCIL, PORTLAND, OREGON 

Mr. KARIER. Chairman McClintock and Members of the Subcommittee, thank you for the opportunity to testify today at this 

important hearing on protecting Federal hydropower investments 

in the West. 

My name, as you said, is Tom Karier, and I am one of two Washington members of the Northwest Power and Conservation Council, 

and Chair the Council’s Power Committee. 

The Council is a compact of the four Northwest states of Idaho, 

Montana, Oregon and Washington. The Council is authorized by 

Federal law, the Northwest Power Act of 1980, to prepare and periodically update a Northwest Power Plan that is implemented by 

Bonneville Power Administration. The power plan is also used by 

electric utilities throughout the Northwest in preparing their own 

lease cost plans, and in my State of Washington our renewable 

portfolio standards law requires the energy efficiency savings be 

calculated using the Council’s methodology. So the reach of the 

Council’s planning is region wide. 

Hydropower provides more than half of the electricity in the 

Northwest. It is in this context as an energy policymaker in a region rich in hydropower that I bring five messages for you today. 

First, preserving the capability of the existing hydropower system will keep power costs and power system carbon emissions low 

in the Northwest. In the current version of power plan which we 

completed last year, we assess the impacts of removing the four 

Federal dams in the lower Snake River from the regional power 

supply. The results are that existing natural gas-fired and coalfired generating plants would be used more intensively. The region 

would export less energy and import more. Carbon emissions would 

increase by three million tons per year, and the annual cost of the 

power system would increase by more than $530 million by 2020. 

And because Bonneville sells the output of those dams, the cost to 

the wholesale power would increase 24 to 29 percent. 

Second, hydropower helps back up intermittent wind power. Hydropower is an excellent companion for wind power because it can 

be increased or decreased almost instantaneously to match the variability of wind. The availability of this balancing energy from hydropower is one important reason why wind power is proliferating 

in the Northwest from about 4,500 megawatts of installed capacity 

today to more than 6,000 megawatts in the next few years. 

33 

Balancing is providing a new source of income for Bonneville and 

the utilities that own dams. For Bonneville, this means 30 to 50 

million dollars in annual revenue that helps to offset customer 

rates. As well, some utilities that own hydropower dams are realizing as much value from providing balancing services for wind as 

they are from selling surplus power. 

Third, energy efficiency complements and protects the Northwest 

heritage of clean and affordable hydropower. In the Northwest 

Power Act, energy efficiency is the highest priority resource to meet 

new demand for power. Bonneville has a program to require efficiency consistent with our power plan. In the 31 years since the 

Power Act the Northwest has acquired 4,250 average megawatts of 

energy efficiency. As generated power, that would be equivalent to 

the entire States of Idaho and Montana today. 

In our current power plan we identify 5,900 more megawatts at 

an average cost of 3.5 cents per kilowatt hour. That is three times 

less than the lowest cost new generating resource. That much 

energy efficiency could meet 85 percent of the new demand for 

power over the 20-year time period for this plan. Complementing 

hydropower with energy efficiency stretches the benefits of hydropower. 

Fourth, while hydropower affects fish and wildlife, the effects can 

be mitigated. The Council’s Columbia River Fish and Wildlife Program includes strategies to improve dam passage survival for migratory fish. I believe these measures in combination with improvements in fish habitat and the careful use of artificial production are 

some of the reasons for the increasing number of adult fish returns 

from the ocean to spawn. 

Fifth, and in conclusion, in our region the mix of hydropower, 

energy efficiency, and wind power is providing electricity consumers with a consistent supply of low-cost carbon-free energy. By 

continuing to add energy efficiency to the power supply the region 

will preserve and enhance the flexibility of the hydropower system 

to meet demand while also providing low-cost balancing services for 

increasing amounts of wind power. 

Thank you again for the opportunity to testify today and I would 

be glad to answer questions. 

[The prepared statement of Mr. Karier follows:] 

Statement of Tom Karier, Washington Council Member, 

Northwest Power and Conservation Council 

Chairman McClintock and members of the Subcommittee, thank you for the opportunity to testify today at this important hearing on protecting federal hydropower investments in the West. My name is Tom Karier, and I am one of two Washington members of the Northwest Power and Conservation Council and chair of the 

Council’s Power Committee. 

The Council is authorized by federal law, the Northwest Power Act of 1980 (Public 

Law 96–501; 94 Stat. 2717), to prepare and periodically update a Northwest Power 

Plan that is implemented by the Bonneville Power Administration, a federal power 

marketing administration. Bonneville markets the output of the Federal Columbia 

River Power System, which comprises 31 hydropower dams and one non-federal nuclear power plant in the Northwest. Through its customer utilities, Bonneville supplies about 30 percent of the electricity consumed in the Northwest so the Council’s 

power plan directly affects a significant portion of the region’s electricity ratepayers. 

But the plan also is used by utilities throughout the region as they develop their 

own integrated resource plans, and Washington’s renewable portfolio standard law 

requires that energy efficiency savings be calculated using the Council’s methodology. So the reach of the Council’s planning goes far beyond Bonneville. 

34 

The Federal Columbia River Power System includes many of the largest hydroelectric dams in the United States and provides 56 percent of the hydropower generated in the Northwest. Regionwide, hydropower is our largest source of electricity, 

averaging more than half of the power generated under normal precipitation. 

The first dams of the Federal Columbia River Power System were constructed 

during the Depression, and so for more than 70 years our region has been enjoying 

clean, renewable, low-cost electricity thanks to the water power of the Columbia 

River and its tributaries. 

It is in this context, as an energy policymaker in a region rich in hydropower, that 

I am testifying today. The Northwest Power and Conservation Council is working 

to ensure the long-term viability of the Columbia River Basin hydropower system 

for present and future generations while also protecting and enhancing fish and 

wildlife that have been affected by hydropower dams. 

The Council was formed by the states of Idaho, Montana, Oregon, and Washington in 1981 in accordance with the Power Act. Each state’s governor appoints two 

members to the Council. Through the Council, Northwest citizens can participate in 

determining how growing electricity needs will be met in the region, and also how 

fish and wildlife will be protected from the impacts of hydropower dams. The Council’s power plan looks 20 years into the future, and by law we review the plan for 

revisions every five years. We issued our current plan, the sixth revision since the 

Council was created, in 2010. 

According to the Power Act, the purpose of the power plan is to assure an adequate, efficient, economical, and reliable power supply for the Northwest region. The 

Act also recognized that development of the region’s hydropower dams in the Columbia River Basin had detrimental effects on migratory and resident fish, and also 

wildlife, and required the Council to develop a program to mitigate those effects. 

The Council’s Columbia River Basin Fish and Wildlife Program is an integral part 

of the Council’s power plan. The Council’s power plan and the fish and wildlife program are developed through open, public processes to involve the region’s citizens 

and businesses in decisions about the future of these two interdependent aspects of 

the Pacific Northwest environment and economy. 

Removing hydropower dams would increase carbon emissions and raise 

electricity costs 

The region’s hydroelectric system continues to be the Northwest’s most important 

generating resource. Preserving the capability of the existing system will keep 

power costs and carbon emissions low compared to the rest of the country. 

Concerns about climate change have altered the power planning landscape dramatically, both nationally and in the West. These concerns have resulted in new polices that affect electricity resource choices, such as restrictions on new coal-fired 

power plants because of concern about their emissions. In developing the Sixth 

Power Plan, the Council included estimates of the future cost of complying with carbon policies as a risk. Energy efficiency mitigates the risks of volatile fuel prices 

and unknown carbon costs. 

The Northwest power system emits about half the carbon dioxide per kilowatthour of the nation or the rest of the western states. This is due to the large role 

played by the hydroelectric system of the region. A power system that maximizes 

cost-effective energy efficiency and renewable resources is a system that also minimizes the risk of exposure to the uncertain future cost of complying with carbonreduction policies. To quantify the value of such a system, the Council’s Sixth Power 

Plan includes an analysis of the effects of reduced hydropower capability. The analysis, which technically was one of our future-scenario models, examines the effects 

of removing the four federal dams on the lower Snake River—Lower Granite, Little 

Goose, Lower Monumental, and Ice Harbor—from the regional power supply. While 

the scenario is specific to the removal of those four dams, the results could apply 

to other changes that reduce the capability of the hydroelectric system for any 

reason. 

The lower Snake River dams provide 1,110 average megawatts of energy under 

average water conditions, about 5 percent of regional annual electric energy needs. 

In addition, the dams provide 3,500 megawatts of short-term capacity, a little more 

than 10 percent of the total hydroelectric system capacity, and as part of the Automated Generation Control (AGC) System, they provide system reserves to maintain 

the reliability of the power supply. They also provide reactive support for the stability of the transmission system. 

The effects of removing the capability of the lower Snake River dams are mainly 

determined by the replacement resources that would be required for the power system to duplicate the energy, capacity, real-time load following, stability reserves and 

reactive support currently provided by the dams. The analysis assumed that the 

35 

power produced by the dams was removed in 2020—half way through the 20-year 

timeframe of the Sixth Power Plan—and the energy and capacity were replaced by 

other least-cost resources selected by the Council’s regional portfolio model. That is, 

given the reduced energy and capacity of the hydroelectric system, a low-cost and 

low-risk portfolio of new and replacement resources would take the place of the four 

dams. 

The analysis showed that dam removal would increase the carbon emissions, cost, 

and risk of the regional power system. Existing natural gas-fired and coal-fired generating plants would be used more intensively. In addition, the region would export 

less energy and import more. Carbon emissions would increase 3 million tons per 

year because of the increased use of generating plants that burn fossil fuels, and 

the annual cost of the power system would increase by more than $530 million by 

2020. Further, because the lower Snake River dams serve Bonneville public-utility 

customers, those utilities and their consumers would bear the cost increases. Using 

a rate-making rule of thumb that a $65 million to $80 million cost increase translates into a $1 per megawatt-hour increase in Bonneville rates, a $530 million increase in Bonneville costs would raise rates by between $6.60 and $8.15 per megawatt-hour. Based on Bonneville’s priority firm rate (this is the rate Bonneville 

charges its public utility customers) of $28 per megawatt-hour in 2009, dam removal 

would raise that rate 24 percent to 29 percent. 

Hydropower helps back up intermittent wind power 

While the primary resource in the Council’s Sixth Power plan is energy efficiency, 

cost-effective renewable resources also play a large role, accounting for 17 percent 

of new resources. This amount is only what is required to meet existing renewable 

energy portfolio standards in Oregon, Washington, and Montana (Idaho does not 

have a renewable portfolio standard). Aside from hydropower, wind currently is the 

dominant form of renewable energy in the Northwest, as it is competitive in price 

with new natural gas-fired generation given the various incentives and subsidies for 

wind power. 

Beginning in 1998 with the 25-megawatt Vansycle Ridge project in southeastern 

Washington, commercial wind power has grown to exceed 4,000 megawatts of nameplate capacity in the Northwest. Wind power now is the fourth-largest component 

of the Northwest power system in terms of installed capacity (4,571 megawatts). 

Current plans call for wind power capacity to reach 6,200 megawatts in just a few 

years. 

Although wind power is four times as expensive as energy efficiency, wind power 

shares some of the important advantages of efficiency. It is free of fuel-price risk 

and carbon-policy risk and can be developed in small increments with relatively 

short lead times. However, wind has very little capacity value for the power system. 

That is, it cannot be counted on to meet peak loads because wind turbines do not 

produce power in consistent amounts throughout the day. In addition, rather than 

providing flexibility to adjust to changing electricity demand, wind power imposes 

additional flexibility requirements on the power system because of its variability. 

Hydropower is an excellent companion for wind because hydropower can be generated continuously and the output of dams can be increased or decreased to match 

the variability of wind. The availability of this backup energy from hydropower is 

one important reason why wind power is proliferating in the Northwest. So it is important to continue to maintain and improve the efficiency of the hydroelectric system where possible. 

This backup role (sometimes called ‘‘balancing’’) for hydropower also is providing 

a new source of income for Bonneville and utilities that own dams. For Bonneville, 

this is yielding $30 million to $50 million in annual revenue that offsets customer 

rates. Some utilities that own hydropower dams are realizing as much value from 

providing backup services as they are from selling surplus power. 

Energy efficiency is the highest-priority new resource in the Northwest 

So important is energy efficiency in the Northwest’s mix of electricity resources 

that in the Power Act Congress not only made it the highest-priority resource but 

also directed Bonneville to have a program to acquire efficiency resources consistent 

with the Council’s plan. Importantly, Congress directed the Council to include in its 

power plans all of the energy efficiency that the Council determines is costeffective—not all of the energy efficiency that is available at any cost. Nonetheless, 

in developing its Sixth Power Plan in 2010 the Council identified a vast amount of 

cost-effective energy efficiency, nearly 6,000 average megawatts through the year 

2029. The Council noted the size and value of this resource in the text of the Sixth 

Plan: 

36 

Across multiple scenarios considered in the development of the plan, one 

conclusion was constant: the most cost-effective and least risky resource for 

the region is improved efficiency of electricity use. 

and 

The plan finds enough conservation to be available and cost-effective to 

meet 85 percent of the region’s load growth for the next 20 years. If developed aggressively, this conservation, combined with the region’s past successful development of energy efficiency could constitute a resource comparable in size to the Northwest federal hydroelectric system. This efficiency resource will complement and protect the Northwest’s heritage of 

clean and affordable power. 

Over the years since the Council was formed, improved energy efficiency has met 

nearly half of the region’s growth in energy-service demand. If the region’s energy 

savings were added back to the regional energy loads, load would have increased 

by 8,150 average megawatts between 1980 and 2008. During that time the region 

acquired 3,900 average megawatts of energy efficiency, so that actual loads to be 

met by electricity generation only increased by 4,250 average megawatts. Today, in 

2011, acquired energy efficiency totals nearly 4,300 average megawatts. The Council’s power plan is rich with energy efficiency because the Power Act requires the 

Council to meet future demand with cost-effective resources, energy efficiency gets 

highest priority among resources in the Act, and the Council has identified literally 

hundreds of potential efficiency improvements that cost less than one-third as much 

as the lowest electricity-cost generation technologies. The average cost of the energy 

efficiency in the Sixth Power Plan in 2009 was 3.6 cents per kilowatt-hour; the cost 

of the least-expensive new natural gas-fired power plant was 9.2 cents, and wind 

power in the Columbia Basin cost 10.4 cents per kilowatt-hour. 

The availability of so much cost-effective energy efficiency is good news for those 

of us who care about protecting federal hydropower investments in the West, as it 

means that energy efficiency is helping to ensure that hydropower will remain the 

dominant electricity resource in our region by reducing the need to build thermal 

generating plants to augment the hydropower supply. Not only is energy efficiency 

by far the least-expensive resource available to the region, it also avoids risks of 

volatile fuel prices and the financial risks associated with large-scale resources, and 

also mitigates the risk of potential carbon-pricing policies to address climate-change 

concerns. Improved efficiency contributes not only to meeting future energy requirements but also provides capacity during peak load periods. The savings from efficiency generally follow the hourly shape of energy use, saving more energy when 

more is being used. As a result, efficiency contributes more to load reduction during 

times of peak usage. Or in other words, efficiency improvements have capacity 

value, as well as energy value. 

Hydropower affects fish and wildlife, but the effects can be mitigated 

Preserving the capability of the existing hydroelectric system has significant value 

for the region. Mitigating damage to anadromous fish from development of the Federal Columbia River Power System has changed the operation of the hydroelectric 

system, reducing its energy capability and its flexibility. It is important to mitigate 

this damage, but also to do it in a way that best preserves the value of the lowcost, low-carbon hydropower resource. The Council attempts to ensure that its fish 

and wildlife program uses cost-effective strategies to improve survival of juvenile 

and adult anadromous fish that migrate past Columbia and Snake river dams to 

and from the Pacific Ocean, including salmon, steelhead, sturgeon, and Pacific lamprey. The program also addresses the effects of hydropower on resident fish—those 

that do not go to the ocean. 

Importantly, the fish and wildlife program is part of the power plan. The Power 

Act requires the Council to include measures in the program to protect, mitigate, 

and enhance fish and wildlife affected by the development, operation, and management of hydropower dams in the Columbia River Basin while also assuring the Pacific Northwest an adequate, efficient, economical, and reliable power supply 

through the power plan. The Act also directs federal agencies that operate the dams 

and sell their power to undertake those responsibilities in a manner that provides 

equitable treatment for such fish and wildlife with the other purposes for which the 

dams and related facilities are managed and operated. 

The program identifies a comprehensive set of interrelated fish and wildlife problems and responsive strategies. State and federal fish and wildlife agencies, Indian 

tribes, and others propose projects to the Council to address the problems and implement the strategies. All project proposals are reviewed by the Council’s Independent Scientific Review Panel, which submits its reviews to the Council. The 

Council then makes project-funding recommendations to Bonneville. 

37 

Mainstem hydropower dam operations and fish-passage improvements are addressed in the program with strategies that aim to optimize the survival of focal 

species. These efforts include re-establishing natural river processes to the extent 

feasible and consistent with the Council’s responsibilities in the Power Act. The program also aims to rebuild healthy, naturally producing fish and wildlife populations 

by protecting, mitigating, and restoring habitats and the biological systems within 

them. 

This has resulted in operational changes at the dams since the Council was created. Because of the Power Act, and more specifically because of the Endangered 

Species Act listings of more than a dozen species of salmon and steelhead in the 

Columbia River Basin since the early 1990s, hydropower generation has been reduced by about 1,100 average-megawatts. This primarily is due to legal requirements to spill water over dams to aid downstream juvenile fish migration during 

the spring and summer months. 

The fish and wildlife program includes strategies to improve passage survival for 

migratory fish at the dams. I believe these measures, in combination with improvements in fish habitat and the careful use of artificial production, are helping to 

boost the number of adult fish returning from the ocean to spawn. In the last ten 

years or so we have seen big increases in some runs, particularly some species of 

Chinook and sockeye salmon. Especially since 1999, adult salmon and steelhead 

counts at Bonneville Dam have been averaging much higher than any comparable 

period since the dam was completed and fish counting began in 1938. 

Snake River sockeye, the first Columbia River Basin salmon species listed for protection under the Endangered Species Act (in 1991), have demonstrated a strong response to a captive broodstock program and favorable ocean conditions over the last 

decade. The number of these fish returning to spawn and counted at Lower Granite 

Dam has been higher in recent years than any time since the 1950s. As well, juvenile salmon and steelhead passage survival at the dams also has been improving 

in recent years due to factors such as spill, system bypass improvements, and inriver improvements such as predator control. 

Finally, fish spawning and rearing habitat is being improved under the Council’s 

fish and wildlife program. From 2005 to 2010, for example, 1,435 miles of instream 

and streamside habitat were improved and 1,527 miles of habitat were opened to 

spawning by the removal of passage barriers. 

Conclusion: Hydropower and energy efficiency: Critical to a low-cost, lowrisk power supply 

The Pacific Northwest power system is faced with significant uncertainties about 

the direction and form of climate-change policy, future fuel prices, salmon recovery 

actions, economic growth, and integrating rapidly growing amounts of variable wind 

generation. The Council’s resource strategy for the Sixth Power Plan provides guidance for Bonneville and the region’s electric utilities on choices that will help meet 

the region’s growing electricity needs while also reducing the risk associated with 

uncertain future conditions. 

Hydropower is the most important source of electricity in the Northwest, not only 

providing low-cost, carbon-free energy on a consistent basis but recently providing 

critical backup for the increasing amount of carbon-free wind power in the region. 

By continuing to add energy efficiency to the power supply, the region will preserve 

and enhance the flexibility of hydropower to meet demand while also providing lowcost backup services for increasing amounts of renewable energy. 

Mr. MCCLINTOCK. Thank you for your testimony. For the final 

testimony of the day I would like to yield to Mr. Gosar to make the 

introduction. 

Dr. GOSAR. Thank you, Mr. Chairman. 

First of all, I would like to welcome my fellow Arizonan up here 

to Washington. Now if he can take some of this rain back to Arizona, we would love it. Principally he has served as a consultant 

primarily for the State Legislature throughout the state for numerous water and electrical districts, but more importantly, primarily 

for the Maricopa-Stanfield District, Mr. Grant Ward. 

Thank you very much. 

38 

STATEMENT OF GRANT WARD, WATER AND POWER CONSULTANT, MARICOPA-STANFIELD IRRIGATION DISTRICT, 

MARICOPA, ARIZONA 

Mr. WARD. Thank you, Representative Gosar. I appreciate that. 

Chairman McClintock and Ranking Member Napolitano, Members of the Committee, my name is Grant Ward and I served from 

1995 to 2008 as the General Manager of the Maricopa-Stanfield 

Irrigation and Drainage District, and since then have been serving 

as their water and power consultant. MSID was created in the late 

1960s and includes 87,000 acres of irrigated farmland located in 

western Pinal County of Arizona. 

I would first like to address my remarks to the title of this hearing by discussing the hydropower produced at the Glen Canyon 

Dam. When one looks at the issue of protecting Federal investments, it should be noted that while Glen Canyon Dam has the capacity to produce 1,361 megawatts, the capacity has been reduced 

by approximately one-third. This means that instead of having the 

availability of 1.361 megawatts there is only about 900 megawatts 

available. Based on whether the capacity of the dam is for a wet 

or a dry year, the loss is in the range of 200 megawatts to 400 

megawatts which is equivalent to providing enough electricity for 

175,000 to 250,000 residential customers. 

Utilities still have to make up that loss by buying supplemental 

electricity to provide to their customers and that most often is generated in the form of coal, oil, or natural gas. What that means is 

that instead of having clean renewable energy in the from of hydropower a carbon footprint is created equaling approximately 1.63 

billion pounds of carbon annually. We would ask for a more reasonable approach to the use of the full capacity of Glen Canyon Dam. 

We recognize there has to be a balance between the economy and 

the environment, but believe that the operation of Glen Canyon 

Dam is not the ultimate cause of the environmental concerns. 

Second, I would like to discuss the opportunity for the construction of low head hydro units for the purpose of generating power 

both Federally owned and private canal systems. My experience 

and understanding comes from the efforts to construct a hydropower unit for our canal system. Our district began looking into 

this capacity of installing such units in early 2009. 

We first reviewed our canals to determine the amount of drop at 

our gates and turnouts, and the average flow of water that would 

go over that structure for the year. We found that we have a possibility of constructing 14 separate low hydro units at a minimum. 

The largest output on any individual drop structure was determined to be approximately 300 kilowatts to 350 kilowatts. Combining all of the units together we found that the total amount of 

electricity that could be produced equaled approximately 2,200 kilowatts which would provide electricity to power 550 to 1,100 residential homes. 

Our struggle over the last two plus years has been trying to determine the requirements of the Bureau of Reclamation. Briefly, 

our struggles can be summed up in the following four points: 

Reclamation rules of ownership, exactly how that is qualified, 

and we have struggled in getting some of the direction from Reclamation as well as understanding where we should go. As a result 

39 

of owner, under ownership you are required to have a lease of 

power privilege agreement. Exactly how does that apply to a canal 

system such as ours? Under the environmental assessment being 

required if it is a Bureau-owned system, if the canal was built in 

the last several years and was required to have an EA at that time, 

is it necessary to go through the complete process again if all the 

new work will be within the original right-of-ways? 

And finally FERC, Federal Energy Regulation Commission, most 

hydro units in our canals would produce hydropower of less than 

1.5 megawatts, yet we are still required to go to FERC for an exemption permit. If it is the exemption and there are rules that say 

how it should be exempted, we believe that it raises the question 

of why having to apply for a permit to get an exemption if we already meet those standards. 

These four items together can be very costly and very time consuming, and being able to be successful in building systems. 

As a final note, during our two plus years of determining our eligibility to either work through Reclamation or paying our own 

costs, we have found Reclamation sincerely interested in getting 

low head hydro systems off the ground and developing this type of 

renewable energy. However the concern we have is the time delay 

that has taken place to obtain answers, and sometimes the different answers from different departments or locations. 

We would make a suggestion that as interested as Reclamation 

is in going forward with low head hydro systems they put any and 

all resources that are working on these systems in one office for all 

requests, all questions, all opportunities, and when someone or 

some entity shows any desire to look into low head hydro systems 

their call is immediately forwarded to that one office for any and 

all answers and direction. 

I thank you for the opportunity to testify. 

[The prepared statement of Mr. Ward follows:] 

Statement of Grant R. Ward, Water and Power Consultant to 

Maricopa-Stanfield Irrigation & Drainage District 

My name is Grant Ward and I served from 1995 to 2008 as the General Manager 

of the Maricopa-Stanfield Irrigation & Drainage District (MSIDD), and since then 

have been serving as their Water and Power consultant. MSIDD was created in the 

late 1960s and includes 87,000 acres of irrigated farmland, located in western Pinal 

County of Arizona. It was formed primarily to take Colorado River water from the 

Central Arizona Project (CAP) system, when it became available, by connecting with 

the CAP’s Tucson aqueduct and delivering the water through more than 250 miles 

of concrete-lined canals, laterals, pipelines, pumping plants and related works. The 

system is also used to deliver groundwater operated with pumps powered by electricity from Hoover Dam, Glen Canyon Dam, and Parker-Davis Dam, as well as supplemental purchased power, all provided by its sister district, Electrical District No. 

3, Pinal County. 

I would first like to address my remarks to the title of this hearing by discussing 

the Hydropower produced at the Glen Canyon Dam. When one looks at the issue 

of protecting federal investments, it should be noted that while Glen Canyon Dam 

has the capacity to produce 1,361 mw (equivalent to producing power of up to 

1,320,000 residential customers), the capacity has been reduced by approximately 1/ 

3 based on a Record of Decision issued October 8, 1996, Operation of Glen Canyon 

Dam Final Environmental Impact Statement. This means that instead of having the 

availability of 1,361 mw (name plate number), there is only about 900 mw available. 

Based on whether the capacity of the dam is for a wet year or a dry year the loss 

is in a range of 200mw to 400mw, which is equivalent to providing enough electricity for 175,000 to 250,000 residential customers. Utilities still have to make up 

that loss by buying supplemental electricity to provide to their customers, and that 

40 

most often is generated in the form of coal, oil or natural gas. What that means 

is that instead of having clean renewable energy in the form of hydropower, a carbon footprint is created equaling 1,341 pounds per mwh, or 1.63 billion pounds of 

carbon annually. 

We would ask for a more reasonable approach to the use of the full capacity at 

Glen Canyon Dam. We recognize there has to be balance between the economy and 

the environment, but believe that the operation of Glen Canyon Dam is not the ultimate cause of the environmental concerns. 

Second, I would like to discuss the potential opportunity for the construction of 

low head hydro power units for the purpose of generating power in both federally 

owned (Bureau of Reclamation) and private canal systems. My experience and understanding comes from the efforts to construct a hydro power unit for our canal 

system. Our district began looking into the possibility of installing such units in 

early 2009. We first reviewed our canals to determine the amount of drop (the actual footage from one level of the canal down to the next level) at our gates and 

turnouts and the average flow of water that would go over that structure for the 

year. We found that we have a possibility of constructing 14, as a minimum, (up 

to 17) separate low head hydro units along various drops and canal turnouts. The 

largest output on a drop structure was determined to be approximately 300kws to 

350kws. Using the more conservative number that is enough electricity to power approximately 100 residential customers. When we reviewed the numbers for the installation of possible low head hydro units we found that the total amount of electricity that could be produced equaled approximately 2,200kws (further study would 

be needed on some of the proposed systems to determine cost/benefit ratios), which 

could provide electricity to power 550 to 1100 residential homes. 

Our struggle over the last 2 plus years has been trying to determine the requirements of the Bureau of Reclamation (the canals are federally owned, although our 

district operates and maintains the entire system serving the district). Briefly our 

‘‘struggles’’ can be summed up in the following four points: 

1. Reclamation rules of ownership—if Reclamation is involved in providing any 

funding for a hydro project, they will own all improvements to the facility 

(meaning the hydro unit). But if the canal is fully operated and maintained 

by the district, the debt for the original construction has basically been paid 

off, and the District is willing to pay 100% for the new construction, must 

Reclamation still have ownership of the low head hydro facility? 

2. Under ownership requirements of Reclamation, all must comply with the 

issuing of a Lease of Power Purchase agreement, which requires Reclamation 

to give a Federal Register Notice allowing companies to bid, and Reclamation 

awards the bid to the successful bidder, even if the district is constructing 

the unit either by itself or through a contractor that has been approved by 

the district board under their bidding regulations. Lease of Power privilege 

requires an annual fee. We are not sure what that fee will be but have been 

told it could be 1–3mils/kwh, or could be 5% of the annual revenue. 

3. Environmental Assessment will be required. If the canal was built in the last 

20 years (the system is fully cement lined) and was required to have an EA 

at that time, is it necessary to go through the complete process again if all 

the new work will be within the original rights-of-way? 

4. Reclamation has indicated that if the canal is a federally owned canal, and 

the original legislation (or contract) creating the canal system was also approved for power development, the District would not be required to have a 

FERC permit. However, when districts either don’t have that clause in their 

contract, or if they are private canals, they would have to face going to FERC 

for an ‘‘exemption’’ permit. Most of these drop structures will produce hydropower of less than 1.5mw, which I understand falls below FERC’s regulations. In any event, they have to obtain an exemption permit which, when 

one Arizona private district located on the west side of Phoenix had to obtain 

an exemption permit (for 12kw), they had to spend $40,000.00 (including probono work by a consultant), and it took 8–9 months to obtain the permit. 

As a final note, during our 2 plus years of determining our eligibility to either 

work through Reclamation (funding) or paying our own costs, we have found Reclamation sincerely interested in getting low head hydro systems off the ground and 

developing this type of renewable energy. We have met with the Commissioner’s, 

office, the Denver office, the Phoenix Area office, as well as the Power Manager’s 

office. However, the concern we have is the time delay that has taken place to obtain answers (approximately 30 emails as well as several face to face meetings), and 

sometimes the different answers from different departments or locations. To their 

credit they have been trying to obtain the correct answers between departments, but 

that has added to delays (I can’t help but feel that the review of most hydro projects 

41 

are being appraised using rules that primarily apply to dams that presently have 

no hydro plants, not irrigation canals). We would make a suggestion that as interested as Reclamation is in going forward with low head hydro systems, they put any 

and all resources that are working on these systems in one office—for all requests, 

questions, opportunities—and when someone or some entity shows any desire to 

look into low head hydro systems, their call is immediately forwarded to that one 

office for any and all answers and direction. 

I wish to thank the subcommittee for this opportunity to present our concerns to 

you and hereby submit this testimony for your review and consideration. 

Mr. MCCLINTOCK. Thank you all very much for your testimony 

and for your presence here today. At this point we will begin questions of witnesses. To allow all of our Members to participate and 

to ensure that we can hear from all of our witnesses, Members will 

be limited to five minutes for questions, although if Members have 

additional questions we can have additional rounds, and Members 

can also submit questions for the hearing record. 

After the Ranking Member and I pose our questions, I will then 

recognize Members alternatively on both sides of the aisle in order 

of their appearance here today, and I will now begin by recognizing 

myself for five minutes. 

First, I would like to correct the misimpression that somehow the 

agreement to tear down the four dams on the Klamath was the result of a local consensus. Quite the contrary. There has been at 

least one voter referendum in Siskiyou County in which voters 

overwhelmingly opposed the agreement. There have been several 

elections on both sides of the state line that were decisively settled 

in favor of the opponents of the agreement, and the Siskiyou County Board of Supervisors has formally called for the agreement’s reversal. 

I would like to begin with Mr. Corwin regarding the proposal for 

the destruction of the Snake River Dams. Who exactly is proposing 

this and at what stage is the proposal? 

Mr. CORWIN. Thank you, Mr. Chairman. 

As far as the actual parties operating the system, all of the relevant Federal parties, all of the ratepayer groups, the states, all of 

those folks who were listed before on the biological opinion, none 

of them are proposing destruction of those dams. 

Mr. MCCLINTOCK. Who is proposing it? 

Mr. CORWIN. In years past it tended to be some of the advocacy 

groups, you know, that had proposed that, so some of the fish advocacy groups and others. 

Mr. MCCLINTOCK. Are any of them here today? 

Mr. CORWIN. Yes, the American Rivers is part of that coalition. 

Mr. MCCLINTOCK. At the invitation of the Minority Party, I 

would stress. 

Mr. CORWIN. Yes. 

Mr. MCCLINTOCK. What would be the replacement cost of this 

proposal? What is the cost of destroying those dams and what is 

the value of the dams themselves that we would be destroying? 

Any ballpark estimates? 

Mr. CORWIN. You know, when you total it all up it is in the billions and we can provide the reports that have been done in the 

past. Frankly, it is not under—you know, it hasn’t been updated 

42 

for awhile because we have been trying to move forward with a 

real solution. 

Mr. MCCLINTOCK. OK. Could I ask each of your power providers 

to give me an estimate of the percentage of the electricity bills that 

their consumers are paying right now because of environmental 

and other governmental regulations and litigation? 

Mr. CORWIN. Yes. 

Mr. MCCLINTOCK. Start with you, Mr. Corwin. 

Mr. CORWIN. Yes, certainly. Like I said, just for fish and wildlife 

the wholesale electricity bill is 30 percent. On that you could probably add a few percent more for other constraints. On your question before, too, we do have—just the power replacement portion 

for those Snake River Dams, and this is in Mr. Karier’s testimony 

as well, it is like he said, about a half a billion dollars, and you 

are looking at rate increases—— 

Mr. MCCLINTOCK. OK, I would just like to—— 

Mr. CORWIN.—25 percent. 

Mr. MCCLINTOCK.—know on behalf of the consumers how much 

of their electricity bill is going to meet all of these demands. Mr. 

Morgan, any ideas for your folks? 

Mr. MORGAN. Yes, sir. I have to clarify something. Gunnison 

County Electric is the second smallest cooperative in the State of 

Colorado, and we do not directly purchase power from anyone except under a purchase power agreement, wholesale power agreement with TriState Generation and Transmission. So all the Federal hydropower is purchased by TriState, and their whole blended 

portfolio of energy, about 18 percent is regulation. 

Mr. MCCLINTOCK. Mr. Simmons. 

Mr. SIMMONS. I am not sure that is an easy question to answer, 

and the reason for that is a lot of these costs are embedded in our 

wholesale rates and it is hard to find out exactly how much money 

is being spent on the different issues. We don’t know them. 

Mr. MCCLINTOCK. Would you say—is 30 percent about right, Mr. 

Corwin’s number, about 18 percent Mr. Morgan’s? 

Mr. SIMMONS. I would say we are in the similar ballparks. 

Mr. MCCLINTOCK. OK, Mr. Gillen. 

Mr. GILLEN. For our utility, about 30 percent of our wholesale 

power bill pays for Bonneville’s fish and wildlife costs. Wholesale 

power costs are about half. 

Mr. MCCLINTOCK. Mr. Karier. 

Mr. KARIER. Thank you, Mr. Chairman. Those numbers from 

Scott Corwin and Roman Gillen sound about right. The Council 

tracks—— 

Mr. MCCLINTOCK. I am going to have to move on because my 

time is short. Mr. Ward? 

Mr. WARD. Since 1996, the cost economics for Glen Canyon 

Dam’s loss of that power if over 500 million. Breaking it out probably somewhere in the range of 20 to 25 percent. 

Mr. MCCLINTOCK. Do the consumers get any notice on any of 

their bills that nearly a third of their electricity prices is the cost 

of these regulations and this litigation? 

Mr. WARD. Not to my knowledge. 

Mr. GILLEN. We do not publish a line item on the bill. 

43 

Mr. MCCLINTOCK. Don’t you think they have a right to know how 

much of their electricity bill is going for these purposes? 

Mr. GILLEN. Absolutely, and we do print that information in 

many publications that we provide to our members. 

Mr. MCCLINTOCK. Let me ask if any of the providers who want 

to take a crack at it, what do you see as the future for your consumers under existing Federal policy given the current litigation 

and regulatory structure, and what can we do to fix it? In 20 seconds or less. 

Mr. WARD. Twenty seconds or less. 

[Laughter.] 

Mr. WARD. I would say that what we are facing right now in litigation is reducing the amount in Glen Canyon Dam down to 50 

percent of supply. 

Mr. MCCLINTOCK. I will try and pick that up in my second round 

of questions. My time is about to expire, and I will yield to the 

Ranking Member for five minutes. 

Mrs. NAPOLITANO. Thank you, sir. 

Mr. Karier, you mentioned the Council’s six power plan. What 

role do efficiencies play in preserving hydropower production and 

how much of the projected future demand of the Northwest can be 

met with efficiencies? 

Mr. KARIER. Thank you. The plan covers a 20-year period and 

over that 20-year period we expect that we can meet 85 percent of 

the new loads through energy efficiency, and at a cost, again, of a 

fraction of other new generation. 

Mrs. NAPOLITANO. Thank you. Mr. Fahlund, you mentioned on 

page 5 of your testimony that you would hope that the multiple 

Federal agencies work together. 

Mr. Chair, I am introducing into the record an MOU between the 

agencies in December of last year to streamline and simplify authorization of small hydro projects. If you wish a copy, I would be 

glad to provide it for you. 

You also mentioned efficiency—— 

Mr. MCCLINTOCK. Without objection. 

Mrs. NAPOLITANO. Thank you. You also mentioned efficiency upgrades as one of the simplest. Most cost-effective and lowest impact 

means of increasing hydropower generation, can Congress help to 

incentivize efficiency upgrades at existing facilities and how? 

Mr. FAHLUND. Yes, Congresswoman. I think Mr. Simmons alluded to this briefly, that effectively most of these facilities which 

were sort of built during the last great Federal stimulus program 

were effectively—have effectively not been heavily invested, with a 

few exception, in terms of new turbines, new generators, and so 

these old facilities could be upgraded significantly. There are technologies out there that can also help enhance fish and wildlife, provide fish and wildlife benefits and give an ability to release water 

and generated at various levels and at different times that can be 

beneficial to both the environment and to power production. DOE 

has done a lot of study on this. 

Mrs. NAPOLITANO. Which then leads me to Mr. Simmons. On 

page 2 you indicate that some of the facilities are 45 years or older, 

and a lot has been gone over, the cost of O&M is costing more to 

44 

fund, consequently the ratepayer ends up paying for that, I am assuming. 

What is the life expectancy of some of the—especially the on that 

you are with that will demand infrastructure repair, infrastructure 

addition or a replacement of? 

Mr. SIMMONS. A lot of these facilities are figured at basically 100- 

year lives. So we are halfway through that life cycle. Now, rotating 

equipment, bearings, things like that need to be replaced, and a lot 

of that has been done through operations and maintenance. So it 

is an ongoing item. The real problem, I think, is that we need dependable funding from you guys to make sure that these things get 

done. 

Mrs. NAPOLITANO. OK, and that would be at low-cost loans? 

Mr. SIMMONS. They are your facilities. They are not ours. 

Mrs. NAPOLITANO. But you benefit from them. 

Mr. SIMMONS. We pay those rates, but they are your facilities, 

and this is a question that probably will come up later, but we as 

customers put up funding for capital improvements. We are doing 

that through basically cash advances that we do. I don’t know how 

we can put up more when we do not have title to something. You 

know, if we are going to pay for something—— 

Mrs. NAPOLITANO. That is an issue that we need to take up then. 

Mr. SIMMONS. You know, pay for something that you guys own, 

how do we get a loan to do that when we don’t have title? 

Mrs. NAPOLITANO. OK. Well, that is an issue we should be able 

to look at. 

Again, Mr. Fahlund, you mentioned in your testimony you would 

like to see Federal facilities take a basin-wide approach to hydropower. Can you give an example of where it has worked in the past 

and why would this be beneficial from an environmental? 

Mr. FAHLUND. Yes. One example from the East very quickly is 

the Penobscot River. We reached an agreement with Pennsylvania 

Power & Light, which owns the dams on the Penobscot River, and 

effectively that yielded an agreement that restored habitat, access 

to habitat, and also yielded a net increase in power production. 

That project hasn’t been fully implemented just yet, but the agreement nonetheless we can see adequate trades offs between power 

and fish and wound up getting an increase in both. 

Mrs. NAPOLITANO. Thank you, Mr. Chair. Look forward to the 

second round. 

Mr. MCCLINTOCK. Next is Ms. Noem. 

Ms. NOEM. Thank you, Mr. Chairman, and I have a question for 

Mr. Simmons, I guess. You mentioned in your testimony the rising 

costs of complying with regulations such as the Endangered Species Act. And I know you gave us a couple of examples of how that 

directly impacts ratepayers, but there are other rules that are costly and time-consuming. Could you expand on some of those other 

rules and the effect that they have on electric co-ops? And then 

specifically, I mean, address how consumer rates increase to meet 

the cost of complying with these government regulations because 

that is truly how they are impacted, how the ratepayers are impacted by your administrative costs and by the costs that you have 

because of these regulations you are trying to comply with. 

45 

Mr. SIMMONS. All of the costs for whatever we have to do end up 

in the customers’ rates. There is no other place to put it. I mean, 

we are consumer owned. So if one neighbor doesn’t pay for it, the 

other neighbor has to, so it all ends up in the rates. 

Endangered species is probably the biggest issue that we deal 

with on the river. We have the pallid sturgeon that we deal with 

in the Missouri River, we have the least tern in the piping plover. 

We have been dealing with the tern and the plover for 25 years. 

It is hard to identify what that cost is because it has become part 

of the normal operations. 

Ms. NOEM. So you don’t have any specifics on how much, what 

percentage of the costs actually would be probably complying with 

regulations or—— 

Mr. SIMMONS. I am not sure we can identify that. We don’t know 

most of those costs. 

Ms. NOEM. Have you significantly seen those costs rise as regulations have risen? 

Mr. SIMMONS. I would say drought has more of an issue than 

that does by far on us, but they are there. 

Ms. NOEM. Are these customers aware that their rate increases 

are related to government regulations and for outside influences? 

Mr. SIMMONS. If I can’t tell you how much they are, how could 

they? 

Ms. NOEM. But do these recognize that—— 

Mr. SIMMONS. I don’t think so. 

Ms. NOEM. They don’t. OK, thank you very much. I appreciate 

it. I yield back the balance of my time. 

Mr. MCCLINTOCK. Mr. DeFazio. 

Mr. DEFAZIO. Thank you, Mr. Chairman. 

To the Power Counsel witness, Mr. Karier, you have an incredibly ambitious plan. I mean, 85 percent of new load or new demand 

can be met through efficiency and conservation, is that correct? 

Mr. KARIER. That is correct. 

Mr. DEFAZIO. Anybody else in the United States of America come 

anywhere near those kind of numbers in any other region? 

Mr. KARIER. I think there are a few areas. California does a lot 

with conservation, but I think we are among the leaders in the 

country in this. 

Mr. DEFAZIO. Right. So what if we just said, well, how about you 

come up with another 3,500 megawatts of short-term power, or 

1,110 megawatts of annual power, just dump that on top of what 

you are already doing, could you easily meet that through more 

conservation? 

Mr. KARIER. The difficulty there is that we invest and plan to invest in all cost-effective conservation, and the fact that we lose 

some generation doesn’t necessarily change that calculation. So it 

is not easy to draw on that. 

Mr. DEFAZIO. So for those who say simplistically to me, well, we 

will take those dams out which don’t block the prime spawning 

habitat which are blocked by the high dams up—private high dams 

up, further up the Snake which no one is challenging their re-licensure, no prominent national environmental groups, none that I am 

aware of. 

46 

Second, so we are going to lose that power, we are going to increase costs by $530 million to ratepayers, and we are going to increase west-wide 5.2 million tons of CO2 for replacement power. 

Now, why would we do that, and does that include the costs of loss 

of navigation in terms of carbon? Does that include the cost of dam 

removal? 

Mr. KARIER. No, we are looking only at the cost of replacing the 

generation and capacity that those dams—— 

Mr. DEFAZIO. What about the 10 years of barging that the Clinton Administration determined would be necessary because of the 

massive siltation with the removal of the dams, what would that 

cost, and what would that do to the survival of salmon? That seems 

like three generations of all the smolts being barged. I thought 

barging was a problem. If barging is a problem, why would we 

want to barge all the smolts for 10 years? 

Mr. KARIER. Those are good questions, Congressman. 

Mr. DEFAZIO. Has the Council addressed those things? 

Mr. KARIER. We haven’t. There was a Federal study by the Army 

Corps of Engineers. 

Mr. DEFAZIO. Yes, I read it actually. I think very few others 

have. 

Mr. KARIER. And I think they did a good job of documenting all 

of those additional costs, and the costs were significant in all those. 

Mr. DEFAZIO. Yes, I think we were looking probably—in today’s 

dollars we would be talking $2-$3 billion for dam removal. Then we 

had the loss of navigation. Then, of course, in those days we didn’t 

think about—people say, oh, just put all the wheat on the trains, 

and I have talked to the railroads and they say, we don’t have anymore capacity, and guess what? The Columbia River is there so we 

can’t expand the line, so I guess they go on trucks. No, maybe they 

will go in a different direction or who knows what will happen, 

down the Mississippi through the Panama Canal, I don’t know how 

it is going to get there. Well, thank you. 

We have another big problem which is private wind generation, 

contracted very much to California, which does have ambitious 

goals on meeting their needs for alternate transportation, and Mr. 

Gillen, and I appreciate him traveling all the way here, I know how 

difficult it is, addressed this. Do you want to just address briefly 

the concern of our public ratepayers or customers of Bonneville 

Power Administration subsidizing private wind power which is 

being sold under contract to Southern California in high wind, high 

water years? 

Mr. GILLEN. Yes, that is a concern. We want to make sure that 

the capacity of the Federal hydro system is compensated to firm 

those resources. Another concern is that as those projects that benefit folks outside the region are built, that takes capacity away 

from the Federal system that we are going to need in the Northwest as we continue to meet growing loads as well. So there is just 

a variety of, I think, hidden things that we are concerned about, 

we are watching very closely. 

Mr. DEFAZIO. Wouldn’t it be fair to say it would be just sort of 

a general principle that private wind power entering into contracts 

with Southern California utilities should pay the costs that they 

47 

add to the system, whether it is on transmission or loss of capacity 

or whatever costs they create? 

Mr. GILLEN. I think that would be a fair policy to establish, yes. 

Mr. DEFAZIO. Yes, we don’t want to be subsidizing a private industry, right? 

Mr. GILLEN. That would not make sense. 

Mr. DEFAZIO. Yes. OK, thank you. Thank you, Mr. Chairman. 

Mr. MCCLINTOCK. If the gentleman will yield for a moment I will 

just point out we now are requiring 30 percent of our electricity to 

be generated from these facilities. 

Mr. DEFAZIO. Right. 

Mr. MCCLINTOCK. We stopped building new major facilities decades ago. 

Mr. DEFAZIO. Right. 

Mr. MCCLINTOCK. Do you expect us to pay the cost of these policies? 

Mr. DEFAZIO. I know that might be unreasonable, Mr. Chairman. 

Mr. MCCLINTOCK. Next is Mr. Gosar. 

Dr. GOSAR. Thank you very much. 

For all of you, you know, with regulation comes litigation and it 

is sometimes inseparable. Can each of you tell me if there are any 

sources of litigation that are awarded through the Equal Access of 

Justice Funds to challenge hydropower projects? Let us start on the 

left side and work our way down. 

Mr. CORWIN. You know, I would need to check into that and get 

back to you. I am not certain. 

Dr. GOSAR. I would love to know that. 

Mr. CORWIN. Yes. 

Dr. GOSAR. And the amounts. Yes, sir? 

Mr. MORGAN. That would be a question you would have to address to our power supplier, and so I do not know the answer. 

Mr. SIMMONS. Ditto. I don’t know the answer to that. We could 

find out. 

Dr. GOSAR. We would like that. You, sir? 

Mr. GILLEN. I don’t have an answer but we could find out. 

Dr. GOSAR. I want it. 

Mr. WARD. And we would do the same. 

Dr. GOSAR. Mr. Ward? 

Mr. WARD. Congressman, we have seen numbers. To be honest 

with you I can’t tell you exactly what they are and we will send 

to you a copy of what we have seen for those numbers. 

Dr. GOSAR. Part of why I bring that up is there is a symbiotic 

relationship between that funding and the regulatory bodies because they work synonymously in court, so I would like to see those 

numbers. 

Mr. WARD. We will do that. 

Dr. GOSAR. Mr. Ward, as you know, we are going to be more specific about this, is that we have had in the Endangered Species Act, 

and we have reduced some of the power at the Glen Canyon Dam 

in regard to the humpback chub. When we reduce the flow of, or 

reduce—increase the flow of water out of the Glen Canyon Dam, 

for that five-year study did we actually see an increase in the number of humpback chubs or did we see something contradictory? 

48 

Mr. WARD. We did not. The only thing that we have done sediment removal or sediment replacement, we have done high flow, 

low flow, medium range. The only thing that has shown an increase in the humpback chub has been from mechanical harvesting 

of trout, which are non-native, which started around 2000 for about 

three years, and the humpback chub numbers started coming back 

up. 

Dr. GOSAR. And Mr. Ward, I know that there are two different 

kinds of chubs here. How do we discern those two different kind 

of chubs? 

Mr. WARD. I cannot answer that. I will have to—— 

Dr. GOSAR. Actually a dorsal fin with seven ribs versus six ribs, 

if I am not mistaken. That is the only identifiable aspect. 

Mr. WARD. That sounds good. 

Dr. GOSAR. Yes. Now, if we were to take that off of line here and 

I know I am very specific about this because Arizona has got a 

problem, we have deteriorating transmission lines, it is very hard 

to add on to, some of the worst in the United States. How do we 

replace that? Is there some way of replacing this lost power? 

Mr. WARD. Through the transmission lines? 

Dr. GOSAR. Well, I mean the loss of this power from—— 

Mr. WARD. From Glen Canyon? 

Dr. GOSAR.—this hydroelectric output? 

Mr. WARD. It would require some new construction and those 

costs, of course, would be part of each of the utilities that participate. There are some utilities looking to replace transmission in 

the southern part of the state, but it would be through a cost factor, and that would increase the volume supply available for hydro 

or other power. 

Dr. GOSAR. Now, wouldn’t you say that Arizona is one of the 

prime areas for solar, and a pretty prime spot for wind? Can they 

make up the difference? 

Mr. WARD. Under the current structure of our hydro dams that 

have been there for many years, all of the power is allotted. You 

would have to remove some of that allotment from customers to 

make up the base load for supplying solar and wind. 

Dr. GOSAR. But both those are temperamental, are they not? 

Mr. WARD. They are temperamental. Sometimes the wind blows, 

sometimes the sun—the sun shines most of the time, I will say 

that. 

Dr. GOSAR. Yes. 

Mr. WARD. But it doesn’t shine at night. 

Dr. GOSAR. That is why I put them in that order. 

Well, thank you, Chairman. I will yield back my time. 

Mr. MCCLINTOCK. Mr. Labrador. 

Mr. LABRADOR. Thank you, Mr. Chairman. 

Is it Mr. Fahlund? 

Mr. FAHLUND. Fahlund. 

Mr. LABRADOR. Fahlund. OK. Your organization has focused on 

reaching the four lower Snake River Dams for salmon passage, but 

if it is true that only four of the listed runs past these dams, what 

do you suggest for the other nine species listed in the Columbia 

River Basin? 

49 

Mr. FAHLUND. Well, we have been working on restoration of the 

Columbia River and Snake River Basin stocks really for about the 

past 25 years pretty intensively. No, no, I take that back—20 

years. Our Northwest office is about to celebrate the anniversary. 

And so we have worked actually with several of the public utility 

districts, Grant County, Chelan County, on the re-licensing of their 

facilities, trying to improve passage flows and so forth which have 

met with some success, I believe. We certainly looked at some of 

the other Federal facilities in ways in which they can reduce impacts as well, so that is by no means is the Snake River dam removal the only game in town as far as the full panoply of stocks, 

but the Snake stocks, the science is pretty clear that the best way 

to achieve harvestable runs once again to benefit fishing communities along the coast is to remove the lower four Snake River 

Dams and that is why we have advanced that position. 

Mr. LABRADOR. What about Grand Coulee, would you advocate 

taking that out along with 6,800 megawatts of renewable energy 

contribution and its flood control and irrigation roles? 

Mr. FAHLUND. No, by no means. 

Mr. LABRADOR. What is your view on endangered coastal runs 

that do not pass any dams? 

Mr. FAHLUND. Well, endangered coastal runs suffer from a different host of issues, habitat being probably the main one of those. 

Certainly historical logging and mining operations had impacts. It 

really depends on the stock and the run in particular, so those are 

areas where my organization hasn’t particularly focused. We have 

limited resources. Other groups have. 

Mr. LABRADOR. So wouldn’t that be just as true with respect to 

habitat with the Columbia River species? 

Mr. FAHLUND. The Columbian snake species do have habitat 

issues. That is why in fact we are trying to get most of the Snake 

River stocks up into the upper basin because the best habitat available through upstream passage is actually up in Idaho in the Salmon River Basin in particular and the clear water. 

Mr. LABRADOR. I understand that American Rivers is in current 

litigation against the Federal Government on Federal dam operations in the Pacific Northwest. As American Rivers received Federal grant money? 

Mr. FAHLUND. We receive Federal grant money from various 

sources, yes. 

Mr. LABRADOR. And how much is that? 

Mr. FAHLUND. I couldn’t tell you exactly off the top of my head. 

I think it may be in the disclosure statement, or I would be happy 

to provide you with that information. 

Mr. LABRADOR. I really would like to see for the record the grant 

money and also the Equal Access to Justice Act that was just referred to money received over the last decade. 

Mr. FAHLUND. Yes, I don’t believe we have received any Equal 

Justice Act money. We don’t employ litigators so that money goes 

elsewhere. 

Mr. LABRADOR. OK. At least the grant money, I would like to see 

that. 

Mr. FAHLUND. Yes, by all means. 

50 

Mr. LABRADOR. OK. For all panelists starting with Mr. Corwin, 

we are right now in a pretty serious reduction mode, deficit reduction mode. Tell me a little bit more about why you do not think 

power marking administrations should charge market rates for 

their power as proposed by some? 

Mr. CORWIN. Thank you, Representative. Again, we are talking 

today about investments in Federal hydropower projects. Those investments are made though by ratepayers. This is all ratepayerfunded dollars. It is not Federal money at stake. So to the extent 

you are increasing the rates to try to reduce the deficit, you are 

really just increasing the rates on one part of the country here and 

one set of customers within that part of the country. It seems unfair. It is a regional tax. We just don’t think it makes any sense 

in the deficit reduction scenarios. 

Mr. LABRADOR. OK. I guess we only have 30 seconds so if one 

more person wanted to respond to that. 

Mr. GILLEN. I would agree with Mr. Corwin. Regional burden to 

help the overall Federal budget issues just doesn’t seem very fair, 

but as Americans we are concerned about the budget issues, too. 

We just want to see fairness in how that is done. 

Mr. LABRADOR. Thank you very much. 

Mr. MCCLINTOCK. Mr. Tipton. 

Mr. TIPTON. Thank you, Mr. Chairman, and I would like to ask 

Mr. Morgan. Given the reduction in hydropower generation at the 

Glen Canyon Dam unit due to environmental compliance, just how 

critical has the Aspinall Unit become meeting peak electrical demand during the summer months and other seasons of high electrical usage? 

Mr. MORGAN. It has become very critical. As you know, peaking 

generation, especially in the summer months, is very expensive, 

and being able to utilize the Aspinall Unit for peaking generation 

allows our power supplier to utilize inexpensive peaking generation 

that would otherwise probably come from natural gas, which has 

a significantly higher cost and has emissions, has, you know, environmental considerations as well, so we think it is critical. 

Mr. TIPTON. You know, if we didn’t have that peaking capacity 

during the times of critical usage during the summer months, as 

you know we are going to have to be buying more expensive generation on the market, thus increasing consumer rates in a very 

bad economy, hurting a lot of the citizens, particularly in my district where we had better than double-digit unemployment in, I believe it is 27 of the 29 counties that I represent in the State of Colorado. 

What is the practical impact that you really see? How is that 

going to be hitting people at home? 

Mr. MORGAN. Well, I mean, with our power supplier having to 

purchase expensive market-based power or generating peaking 

power with high cost ramping evenness for that peak, that cost is 

going to be passed on directly to our consumers, and you are correct, Gunnison County is in a bad place right now. 

Mr. TIPTON. Right. I think that is something, Mr. Chairman, that 

is incredibly important for us to be able to keep in mind. A lot of 

the decisions that are faced here are impacting real people at 

home, and we have one of the—the cleanest source of energy proVerDate Nov 24 2008 13:08 Jan 05, 2012 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6602 L:\DOCS\66205.TXT Hresour1 PsN: KATHY
51 

duction in the entire country when we are talking about hydroelectric power and the importance to our communities, and particularly when we get out into the western United States, that is the 

source. So if we want clean energy, this is certainly one of the great 

points. 

Mr. Ward, I would like to maybe have you comment just a little 

bit in terms of some of the impacts, some of the high flow that has 

been coming out of the Grand Canyon Dam. 

Mr. WARD. Part of the problem we have had, Congressman, is 

when those timings may be made under the agreements between 

the environmental community and the utilities there are times of 

the year that those waters are released when they are not doing 

the most advantage to the utilities and the power rates peaking, 

for example. 

If we go to what they would like us to do, which is a low flow 

or level flow, that means it runs the same way all year long, but 

what do you do in the summer with the high temperatures or in 

the winter. So as a result it does impact us on how it flows. 

Mr. TIPTON. I am incredibly sorry Representative Gosar had to 

go to another meeting here. He is one of the few vets that we have, 

somebody that probably really understands it, but one of the purposes of these high flows is to be able to help the humpback chub, 

and he was able to describe it apparently what they look like, going 

downstream from the dam. 

What fish have benefitted most from these high releases? 

Mr. WARD. You know, that is difficult to say. I don’t know that 

the humpback chub have been affected either way. The trout have 

probably benefitted. They don’t seem to have the same problem. 

High flows a lot of times will create sediment. That doesn’t seem 

to bother the trout too much but it seems like the humpback chub 

has a hard time finding their food source and so on as a result of 

sediment in the water. 

Mr. TIPTON. Right. Just kind of historical perspective, I grew up 

in the Southwest, you know, before we had some dams, McPhee 

Reservoir in my part of the country, and oftentimes those rivers 

would almost—natural causes almost run dry. What happened? 

Mr. WARD. You know, your winter runoff comes in April-May. If 

you don’t have dams, that water goes on down to the coast. If you 

have no rain or whatever and you have drought, you don’t have 

much rain, and there were times in the early West that they could 

cross the Colorado in the late summer by walking across almost. 

Mr. TIPTON. Right. I would be kind of curious, and this may or 

may not be in your purview, but does more water, does it equal 

more endangered fish being saved in this case, and is water the 

only mechanism really to be able to same the humpback chub? 

Mr. WARD. That is a good question because I don’t know that can 

be answered. I don’t know that more water is the answer to the 

problem. It is when the water is released, as far as the environmental community is concerned, and how they approach it and 

some of the litigation is that it should be released at certain times 

of the year to avoid certain times like spawning and so forth, so 

it just really depends on—— 

Mr. TIPTON. Do we use fish hatcheries? I apologize, Mr. Chairman. 

52 

Mr. MCCLINTOCK. Yes. 

Mr. WARD. We have in the past. I say ‘‘we’’, game and fish in Arizona has done that. I do not believe they have had much success, 

and I don’t know why in the humpback chub. 

Mr. TIPTON. Thank you. 

Mr. MCCLINTOCK. Mr. Garamendi. 

Mr. GARAMENDI. I yield to Mr. DeFazio. 

Mr. DEFAZIO. Thank you, Mr. Chairman. Mr. Garamendi had a 

phone call he had to make. 

To Mr. Fahlund, you said something I thought was really extraordinary, and I have seen some numbers out there that if we removed those four dams that we would have an incredibly robust 

coastal fishing area of commercial size for a number of species. We 

are getting 95 percent smolt survival now with those four days, 

which is pretty equivalent to what happens in rivers without dams. 

So what is happening there? How is that going to give us this huge 

coastal fishing area on these endangered species that are currently 

endangered? 

Mr. FAHLUND. Well, I think you shouldn’t take my word for it. 

I think you should take the American Fishery Society’s word for it. 

They are the fish biologist experts. 

Mr. DEFAZIO. Right, there are biologists on both sides and Jane 

Lubchenco has quite some credentials as I understand, and she engaged her own peer review of the biop. and didn’t come to that 

same conclusion. Thank you. 

Then have you read the Corps of Engineers report, the one that 

was commissioned during the Clinton-Gore Administration on dam 

removal? Have you read it? It is quite long, about 600 ages. 

Mr. FAHLUND. There were several—— 

Mr. DEFAZIO. Yes, well, the 600-page one that talked about the 

siltation 10 years and barging all the smolt. 

Mr. FAHLUND. My staff—— 

Mr. DEFAZIO. About the costs. Well, have you heard, do they tell 

you about those things? If barging is bad and we have a problem 

now with survival, we are going to barge all the smolts for 10 years 

while incurring a $3 billion cost of dam removal because of siltation. That would be good for the future of these species. What do 

the biologists say about that? 

I mean, then if barging is that great that we can do it for three 

generations, why don’t we just barge them all right now, give them 

a free ride down to the base of the Columbia? 

Mr. FAHLUND. I think that is largely what we are depending on 

currently. 

Mr. DEFAZIO. No, it is not. 

Mr. FAHLUND. Spill has been mandated because that has been 

determined to be a preferable option. 

Mr. DEFAZIO. Right, but we are not barging the largest proportion of the smolt. What percent are we barging? 

Mr. FAHLUND. I couldn’t tell you. I haven’t got those figures. 

Mr. DEFAZIO. Yeah, you would have to ask your staff. 

So let us go back to what the Northwest Power Council conclusions. Do you contest those conclusions that it would cost the ratepayers $530 million on an annual basis if we remove those dams 

to purchase replacement power? The replacement power, since they 

53 

already have the most ambitious conservation program and renewable program in the country, would have to be done with thermal, 

regionally would increase carbon emissions by 4.4 million tons, 

West-wide by 5.2 million because we would be buying power outside the region and shipping it back in because we have lost the 

capacity, and then, of course, the other small details, barging all 

the smolts for 10 years, the loss of navigation which isn’t included, 

I don’t believe. Did you include that in your carbon estimates, loss 

of navigation? 

Mr. KARIER. No we did not. 

Mr. DEFAZIO. OK, that is another pretty significant factor because actually barging is more efficient than rail and rail is way 

more efficient than trucking, and since we can’t put all that stuff 

on the rail we are going to probably put them on trucks or maybe 

we are going to send it somewhere else. I don’t know. 

So anyway, so when you hear all of that you just think we should 

press ahead with dam removal despite the biop, despite the conclusions of the Obama Administration on this, and the Clinton Administration? We are not talking about the Bush Administration here. 

We are talking about two Democratic Administrations that came to 

the conclusion it would be a really stupid idea. 

Mr. FAHLUND. Are you asking me? 

Mr. DEFAZIO. Yes. 

Mr. FAHLUND. I think that we need an honest dialogue that 

keeps all options on the table, and we haven’t had that ever. We 

have never had a common—— 

Mr. DEFAZIO. Did you see the amendments that—you know, and 

the language that Ms. Lubchenco had put into the biop that said 

should we not meet expectations in terms of these species, that indeed we would return to a review of dam removal? 

Mr. FAHLUND. Yes, I did. 

Mr. DEFAZIO. But let us try the biop first, and if it doesn’t work 

then we could go back to look at this incredibly stupid and impractical idea of removing all the dams? 

Mr. FAHLUND. Yes, I have seen that. 

Mr. DEFAZIO. OK. Think that is pretty good? That puts it on the 

table if we need it, right? Only if we need it. 

Mr. FAHLUND. It is on the table if we need it. I suppose that is 

a promise but not a guarantee that is for sure. 

Mr. DEFAZIO. OK, thank you. Thank you, Mr. Chairman. 

Mr. MCCLINTOCK. Mr. Garamendi? Mr. Garamendi, you still 

have 20 seconds. 

Mr. GARAMENDI. I hardly know where to start after I have yielded to Mr. DeFazio. 

[Laughter.] 

Mr. MCCLINTOCK. You have about 10 seconds. 

Mr. GARAMENDI. I am shuffling my papers quickly. 

Mr. MCCLINTOCK. I think now the gentleman’s time has expired, 

but we will have a bonus round with questions—— 

[Laughter.] 

Mr. MCCLINTOCK.—that will begin right now, and the good news 

is you will be next up after the Ranking Member. 

54 

Mr. GARAMENDI. I think I will just wait until after the Ranking 

Member and try to figure out where Mr. DeFazio was coming from 

with all of that. So if I could just defer for a moment. 

Mr. MCCLINTOCK. I don’t blame you. And I do want to stress for 

the third time that the gentleman from American Rivers is the Minorities’ guest here today. 

I would like to return to the question that I began my questions 

with, and that is the purpose of this series of hearings is to assess 

our current Federal policies, where they are going, and to determine what adjustments we have to make to get back to a period 

of abundance and prosperity, and I would like to ask each of the 

witnesses here today, where are we going under current Federal 

policies and what can we do to fix that? 

Mr. CORWIN. Thanks, Mr. Chairman. Certainly costs are going 

up. Rates have gone up significantly in the last several years, and 

that is tied to some of these policies. 

Mr. MCCLINTOCK. Why? Why? Because of Federal policies? 

Mr. CORWIN. Yes. Certainly for customers of BPA power fish and 

wildlife costs have escalated over the last 20 years enormously. 

How do you get to that? You need to meet your statutory obligations unless you can change the statutes and you need to do it 

more efficiently. Obviously, within a $800 million fish cost, there 

are a lot of efficiencies that can still be found. Northwest Power 

and Conservation Council is trying—— 

Mr. MCCLINTOCK. And by the way on that point, what are the 

challenges to fish? What are the biggest challenges to fish populations? 

Mr. CORWIN. You know, they are all throughout the life cycle. So 

this focus on hydropower is—that is where I disagree strongly with 

some of the statements by the gentleman from American Rivers. 

You know, these fish face challenges all throughout their life cycle. 

They are still intentionally caught and harvested as well. They face 

predation by sea lions, significant amounts, eating the adults who 

are the folks coming back to spawn. 

Mr. MCCLINTOCK. Are the predations a greater factor in mortality than the Federal hydropower facilities? 

Mr. CORWIN. Certainly for adults they are, yes. There is almost 

no issue with adult passage through the Federal hydropower system. The adults go right up the river. But almost all this focus has 

been on the juvenile passage downstream. Well, there we have also 

had years where avian predation, birds have eaten 10 million or 

more of the juvenile smolts that we are spending all this money to 

protect trying to get them out to the river, so there are a lot of 

issues. Ocean conditions are another big one. You can’t control that 

a lot, that makes these populations fluctuate. 

What we would like to see are more efficiencies in operations, especially on the spill regime that has been mentioned. 

Mr. MCCLINTOCK. What would you offer as a more cost-effective 

ways of dealing with these issues? For example, fish hatcheries, 

predator control, what are your views on that? 

Mr. CORWIN. Absolutely more predator control, more aggressive 

regime on that; more efficient fish hatcheries. They have made 

some improvements on those over time. Not spilling water over the 

dams when there aren’t fish in the river is a good start. We are 

55 

trying to make steps in that direction. This biop makes steps in 

that direction, but those are just a few items. 

Mr. MCCLINTOCK. Any other thoughts on this subject from the 

providers? 

Mr. GILLEN. The region’s commitment to the biop, that has undergone considerable scrutiny and again at considerable cost to our 

members. We are in support of that because we think that is the 

best chance to address the needs of these endangered fish. 

Mr. WARD. I believe one other thing is, and it was mentioned a 

moment ago, was predator control, and with Glen Canyon Dam you 

are between a rock and a hard spot. Trout being the non-native 

fish are enjoying their lunch on the humpback, but on the same 

token the fish below that dam—— 

Mr. MCCLINTOCK. And your customers are paying 30 percent 

more on their electricity bills in order to feed the trout. Is that essentially what is going on? 

Mr. WARD. I think that is one way of saying it. 

Mr. MCCLINTOCK. This is insane. 

Mr. WARD. And I will say that the trout fishery below the dam 

is one of the greatest in the world, so they are caught between 

what do they do. Do they get rid of them? Do they—you know, it 

is a difficult decision. 

Mr. MCCLINTOCK. OK. Mr. Corwin, American Rivers testified for 

a basin scale coordination on hydropower. Would this impose a new 

review requirements on existing hydropower and keep new regulations on top of old regulations? 

Mr. CORWIN. You know, I am not sure exactly what kind of coordination he was referring to so I would have to look at that. As 

far as the power system goes, the Federal Columbia River Power 

System is a model of coordination. To have 31 dams all generating, 

to have this system working the way it does to meet the needs of 

the Northwest is incredible right now. 

Mr. MCCLINTOCK. Mr. Karier, just a quick yes or no on this. As 

I understand it, when we add wind and solar to the grid because 

it is an integrated grid and because wind and solar are intermittent for every megawatt that we add of one of these intermittent 

sources—wind or solar—we have to have an additional megawatt 

of reliable backup, is that correct? 

Mr. KARIER. Yes. 

Mr. MCCLINTOCK. All right, thank you. Ranking Member. 

Mrs. NAPOLITANO. Thank you, Mr. Chair, and I would like to 

submit for the record, Mr. Chair, the number of cases pending litigation as of January 2011 at the Bureau of Reclamation for the 

Mid-Pacific Region. There are 20 of them. Five are environmental 

suits, the rest are cities, ditches, alliances, et cetera, et cetera. Just 

for the record one is closed, so that leaves four out of 20, and I 

would like to submit that for the record. 

Mr. MCCLINTOCK. Without objection. 

Mrs. NAPOLITANO. Second, Mr. Karier, you indicate that almost 

500 million annual is spent on environmental mitigation. BPA has 

on the books the building of four nuclear plants. Am I correct? 

Mr. KARIER. Washington Public Power Supply System from the 

plants that weren’t built. 

Mrs. NAPOLITANO. Correct. 

56 

Mr. KARIER. Yes. 

Mrs. NAPOLITANO. Three were not built. How much are you paying on that debt? How much is BPA paying? I am sorry. 

Mr. KARIER. I would have to get back to you, but that is one of 

the largest cost items for Bonneville Power is still paying the interest on that debt. 

Mrs. NAPOLITANO. Almost a billion dollars annually is my estimation. How does that compare to the mitigation of the environmental issues that we have? 

Mr. KARIER. The estimates that we have received from Bonneville about the annual costs for the fish and wildlife program is 

about $800 million a year—or $750-$800 million—and that includes the cost of the foregone power from spilling water for fish, 

so it includes some of those operations costs as well as the out-ofpocket costs, so that is the range. We report on that annually to 

the Governors of the Northwest. 

Mrs. NAPOLITANO. I understand, but my concern is that we are 

comparing some of these costs, and you are bearing costs for something that was never built. 

Mr. KARIER. That is correct. That, again, is one of the largest line 

item costs for Bonneville is—— 

Mrs. NAPOLITANO. Thank you. 

Mr. KARIER.—paying the interest on that investment. 

Mrs. NAPOLITANO. Mr. Morgan, you mentioned in your testimony 

you need help in developing more hydropower resources, and are 

you aware the Memorandum of Understanding between FERC and 

the State of Colorado signed last August to simplify procedures authorizing the development of small-scale hydropower projects at existing facilities in Colorado, and have you taken advantage of the 

program? 

Mr. MORGAN. No, I was not aware of that. 

Mrs. NAPOLITANO. We would like to furnish the information to 

you, sir. 

Mr. MORGAN. OK. 

Mrs. NAPOLITANO. Because we do have it available. 

And it is my understanding, Mr. Morgan, that a change to the 

draft EIS to reflect that Black Canyon’s Federally reserved water 

rights and that Reclamation has committed to delivering the park’s 

water as well as its obligations as part of the Aspinall Unit. 

How can we jump to a conclusion and say that Reclamation isn’t 

protecting hydropower before the filed EIS is even released? 

Mr. MORGAN. Well, the movement forward is to continue to restrict that. That is the direction that it is moving in. 

Mrs. NAPOLITANO. But it is not final. 

Mr. MORGAN. You are correct, it is not final. 

Mrs. NAPOLITANO. And how are we assuming that? 

Mr. MORGAN. That just appears to be the direction that it is moving in. 

Mrs. NAPOLITANO. OK. Mr. Fahlund, in your testimony you mentioned an analysis by FERC which found that since Congress 

passed laws in the mid-1980s to encourage environmental improvements overall generating capacity has actually increased by 4.1 

percent. Could you elaborate on how generation would increase 

while mitigating the environmental impacts? 

57 

Mr. FAHLUND. That is simply because many of the efforts within 

those re-licensing proceedings resulted in agreements were environmental interests supported additions of capacity where facilities 

were under capacity. We also supported modifications to operations 

that would have facilitated increases in generation, not just capacity, so it had intended to net out positive. 

Mrs. NAPOLITANO. Thank you. Mr. Chair, I have more questions 

for the record but I would like to leave my remaining 57 seconds 

to Mr. Garamendi, then he can have his five. 

Mr. MCCLINTOCK. Then Mr. Labrador can have his. 

Mrs. NAPOLITANO. Yes, I know but—— 

Mr. GARAMENDI. The Chairman spoke to the issue of abundance 

and prosperity, good, but an abundance of what and prosperity for 

whom, and I will go through a series of questions about those, and 

also I note that we are looking at river segments that basically 

cover the entire West, and therefore the issues are remarkable different or dramatically different on each river, and each segment of 

the river, and so one size is clearly not appropriate, and it certainly 

doesn’t fit all, so I will come to those questions. Thank you, Mr. 

Chairman. 

Mr. MCCLINTOCK. Mr. Labrador. 

Mr. LABRADOR. Thank you, Mr. Chairman. Mr. Corwin, we have spent $13 billion of taxpayer money on 

salmon restoration. Can you explain greater detail where this funding is being spent? 

Mr. CORWIN. Certainly. Thank you, Representative. And on that 

to compare costs, to follow up on a question a little earlier there, 

I think that number was wrong as far as the debt costs remaining 

on the nuclear plants. The total payment of Bonneville to the Federal Treasury is almost a billion dollars a year, but that includes 

a lot of other pieces of debt structure in there, so their entire power 

revenue requirement is $2.5 billion a year, so they don’t have a $1 

billion payment on just the nuclear plant out of that, but there is 

still a remaining amount. It is going to be paid off in several years. 

The pieces of the fish budget break down into an integrated program that is reviewed by the Power Council and they do a good job, 

but there several hundred projects involved with that. That is 

about $250 million a year. The Power Council’s oversight costs 

themselves are another several million. The Fish and Wildlife Service has a piece of about 30 million. The Corps of Engineers has a 

reimbursement piece of about 40 million, a little bit more than 

that, and then you have this enormous operations piece from power 

replacement purchases or foregone revenues that is about $460 

million a year, and then you have capital on the fish projects which 

is about $150 million a year, so that is kind of how it breaks down. 

More and more of that has become related to ESA needs, the biological opinion needs as opposed to general mitigation in the region 

under Northwest Power Act. 

Mr. LABRADOR. Do you think this money is being spent as efficiently as possible? 

Mr. CORWIN. No. It has gotten better over the years, but we have 

a long way to go, and we need to keep our noses to the grindstone 

as customers and work with the Power Council and Bonneville and 

other agencies to make sure that is as efficient as possible. 

58 

Mr. LABRADOR. Aside from the dollars spent to replace power loss 

through spill, what are some of the operational impact to losing 

this generation? 

Mr. CORWIN. Yes. I mean, just the spill portion and flow that we 

were talking about before, the capacity, the flexibility that you lose 

is, as was mentioned earlier, that is the same flexibility people 

want to use to try to integrate new resources, these variable resources that drop off suddenly in an hour. Well, hydro can follow 

those—back up those resources hour to hour, so you lose that capability. You also lose important voltage support for reliability of the 

system. 

We have gotten better about that over time, but in 1996, the 

West Coast power outage put four million people into a blackout, 

and that was mainly because of really increasing temperatures and 

loads, and the lines sagged into some trees, and then McNary Dam 

went down. Well, part of what they needed was more voltage support and when you have all that project spilling, you don’t have 

that. It is also one of the arguments that came to fore when they 

were looking at drawing down the John Day Reservoir; that if you 

didn’t have that resource there how would you back up those power 

needs when you really need them in those situations. 

Mr. LABRADOR. Yes, American Rivers has said that the Snake 

River dams are incompatible with healthy salmon runs. What is 

the current rate of fish passage at the Snake River Dams? 

Mr. CORWIN. Yes, as we were saying earlier, it is about 96 percent, and certainly for adults it is the same as you would have with 

a natural river. There are other issues that get pulled up in that 

debate, but the proof is in the pudding on the returns that we are 

seeing now. The Chinook, especially is really showing good returns, 

and specific to the Snake River, those returns have improved, and 

the trend is upwards. 

Now, they go up and down according to ocean conditions as well, 

but the passage improvements that you can measure through the 

hydropower system are evident. 

Mr. LABRADOR. OK, thank you. 

Mr.—is it Karier? 

Mr. KARIER. Karier, yes. 

Mr. LABRADOR. We heard some say that without the four Lower 

Snake Dams in place the region could replace that energy and capacity with energy efficiency and renewable energy. Is that true? 

Mr. KARIER. Well, that has been one part of this argument. The 

Council’s analysis looked at how the region would practically do 

that. It is more complicated than just energy because of the capacity value of the dams. The dams can meet peak loads. Wind power, 

for instance, cannot do that for the most part. 

So if those dams were removed and the region was faced with replacing that, the Council’s analysis shows a combination of primarily less exports, more imports into the region, an increased use 

of the existing coal plants and the natural gas plants, and expansion of natural gas plants in the Northwest, a small increment of 

conservation beyond what we already are getting primarily because 

we are getting all cost-effective conservation in our current plan. 

Mr. LABRADOR. Great. Thank you. 

59 

Mr. KARIER. So that would be the portfolio that would be required to replace that. 

Mr. LABRADOR. Thank you. Thank you, Mr. Chairman. 

Mr. MCCLINTOCK. Mr. Garamendi. 

Mr. GARAMENDI. Thank you, Mr. Chairman. 

Abundance and prosperity for whom and what? Clearly the issue 

of abundance of the natural species in the river is of great concern. 

If you are talking salmon, you are also seriously talking about 

prosperity for those who rely upon the salmon for their income. But 

we really have to deal with the balancing here. It is not one way 

or the other. It is a balancing situation. 

The testimony that I heard a few moments ago that it is about 

predation, listen, it is about dams on the river. Predation has always been there in one for or another, and will always be there, 

and the ocean does change from time to time, but clearly there is 

no doubt that the dams on the river are the principal issue. 

The question for us is given that there are dams on the river how 

do we provide abundance in its many forms: abundance of electrical 

power, abundance of water when needed, where needed, and also 

abundance of fish, many species, and this is true on everyone of the 

river here, and I will note once again that each of these river segments is quite different from the other so we are dealing with different circumstances. 

Some dams can be removed without great harm to electrical 

power or others. Other dams, no way, no how, it isn’t going to happen, so let us get real here and kind of focus on what each of the 

rivers need and each specific stem of the river. It has been a long 

time since I have dealt with the Columbia, in fact, it was 1998 that 

I left the Department of the Interior and the work that I was doing 

on the Columbia, so I am not up to date, and I have missed most 

of this hearing. I apologize for that, but I will come up to speed on 

it. 

Going forward what I would like to see us do, Mr. Chairman, is 

to really figure out how best to deal with a very complex problem 

to achieve all of the abundance that we need: abundance of fish, 

salmon, other species, as well as the abundance of power. It is not 

going to be easily done. We have added to the mix in the last decade—wind, solar—both of which as you point out, Mr. Chairman, 

are intermittent, and we have the electrical power. The integration 

of these sources of power is of utmost importance to all of us because all are clean energy, and it may require us to think differently than we have in the past about the integration, about the 

resources, and the timing of those resources. 

I also note, and I guess I am just making a speech here without 

many questions, but so be it. That was Mr. Boehner’s word, wasn’t 

it, ‘‘so be it’’. Anyway, how can we do these thing? How can we 

have an abundance of fish? 

Trucking, Mr. DeFazio’s purpose about moving beyond the dams. 

A lot of the testimony here that I have heard, 96 percent return 

compared to what? Downstream, the smolt going downstream, the 

salmon issues. 

Mr. Chairman, you are on an issue here that if we think about 

this in a very holistic way, taking into account the complexities 

that exist, I think we can make some progress here. We are not 

60 

going to remove the dams on the Columbia or the Snake for that 

matter. It isn’t going to happen, at least in our lifetimes. So given 

that how can we improve the fisheries on an extraordinary river 

system? That is our challenge. We ought to focus on those things 

that are possible. 

I know the Klamath—you and I may disagree with that, Mr. 

Chairman—but on the Klamath we ought to complete the study on 

the Klamath about removing the dams. It hasn’t yet been completed. We don’t have all the information in. It may make a lot of 

sense to do so. It may not. We come to this with our own initial 

prejudices. I suspect yours, Mr. Chairman, is don’t remove them. 

I know mine is to remove them, but let us get on with it and let 

us find out what the details are in the Klamath. 

With regard to the Colorado, yes, the fish have been eating each 

other for a long time, but we want to make sure that they are all 

there to eat each other in the future. Numbers have been tossed 

around here about power losses and the like and about costs and 

the like, but we are really kind of playing a political game without 

getting down to the real details that we need to understand. I 

thank the Ranking Member for bringing out some of those points, 

so let us get past the rhetoric, and let us recognize that we have 

a very complex problem in which we ought to be maximizing the 

abundance in every form, and making sure that there is prosperity 

for all who have now historically and in the future depended on 

these rivers. That ought to be our goal. These are complex issues, 

very tough issues. But if we go at it with goodwill, I think we can 

make some progress. 

Mr. Chairman, I thank you for the hearing, and I look forward 

to working with you. 

Mr. MCCLINTOCK. Thank you. That concludes our rounds of questions. I want to thank all of our witnesses for their valuable testimony. Members of the Subcommittee may have additional questions or comments for witnesses. We would ask that you respond 

to those in writing, and I also would like again to ask all of you 

for your input on what changes you believe need to be made in current Federal policy to achieve those objectives of abundance and 

prosperity that we have outlined. The hearing record will be open 

for 10 business days to receive these responses. 

If there is no further business to be brought before the 

Committee, without objection, the Committee stands adjourned. 

[Whereupon, at 11:56 a.m., the Subcommittee was adjourned.] 

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