ARMY CORPS OF

ENGINEERS

An Assessment of the

Lower Snake River

Dams’ Draft

Environmental Impact

Statement

Statement of Derek B. Stewart,

Associate Director, Energy, Resources, and Science Issues,

Resources, Community, and Economic Development Division

United States General Accounting Office

GAO Testimony

Before the Subcommittee on Water and Power, Committee

on Energy and Natural Resources, U.S. Senate

For Release on Delivery

Expected at 2:30 p.m. EDT

Tuesday

September 12, 2000

GAO/T-RCED-00-294
Page 1 GAO/T-RCED-00-294

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to discuss our recent assessment of the Corps of

Engineers’ draft Environmental Impact Statement (EIS) for the Lower Snake River dams.

The Corps initiated its EIS in 1995 as a result of the listing of Snake River salmon as a

threatened or endangered species under the Endangered Species Act. The Corps, which

operates four dams on the Lower Snake River, evaluated the feasibility and impact of

four different alternatives for improving migration conditions for salmon. These

alternatives ranged from maintaining current operations to breaching the four Lower

Snake River dams. This latter alternative attracted considerable attention because of the

implications that breaching could have for salmon and the region.

In December 1999, the Corps released its draft EIS assessing the biological,

environmental, economic, and social consequences of breaching the four dams and of

the other three alternatives. The draft EIS, which cost more than $22 million to prepare,

made no recommendations about which alternative to adopt. The final EIS, which will

include a preferred alternative, is not expected until 2001.

Our statement today is based on our July 2000 report, which we prepared at the request

of this Subcommittee.1 Our report addressed whether the Corps (1) followed applicable

procedures and guidelines in preparing the draft EIS and (2) used a reasonable

methodology to analyze and present the effects of breaching, specifically with respect to

electricity costs, transportation costs, and air quality. As agreed with the requesters, we

did not review other aspects of the draft EIS, such as the impact of breaching on salmon

recovery, water quality, or recreation. Therefore, we cannot comment on the adequacy

of the overall EIS, which alternative the Corps should eventually recommend, or the

actions of other agencies active in salmon recovery in the Columbia River Basin.

1

Army Corps of Engineers: An Assessment of the Draft Environmental Impact Statement of the Lower

Snake River Dams (GAO/RCED-00-186, July 24, 2000).
Page 2 GAO/T-RCED-00-294

In summary, we found the following:

• The Corps conducted a comprehensive EIS process that generally adhered to the

procedural requirements of the relevant federal laws and other guidelines for

conducting an EIS. However, doing so did not eliminate controversy about the EIS’

analysis or conclusions, even though the draft EIS made no recommendations about

whether the dams should be breached.

• In our judgment, the Corps' analysis and presentation of the effects of breaching on

electricity costs is reasonable; however, we could not determine the reasonableness

of the Corps' estimated effects on transportation costs and air quality. For example,

because breaching the dams would make the river too shallow for barge shipments,

the Corps estimated that as much as $532 million in infrastructure improvements

would be needed for road, rail, and storage facilities if barge shipments ceased on the

Snake River. However, the Corps assumed that these new investments would not

affect the transportation cost estimate without testing the validity of this assumption

or measuring the sensitivity of the transportation cost estimate to this assumption.

Likewise, the Corps did not consider air quality effects from breaching on certain

local populations or the effect of exposing potentially contaminated river sediments.

Background

Hydropower dams on the Columbia River and its main tributary, the Snake River,

provide electric power, inland navigation, irrigation, and recreation to the Pacific

Northwest region. The Columbia and Snake rivers and their tributaries are also home to

the salmon and steelhead that each year migrate from the Pacific Ocean to spawn in

fresh water before dying. As juveniles, their young later swim back downstream to the

ocean, before eventually repeating the cycle. These salmon were once abundant but

have dwindled from up to 16 million a century ago to less than 1 million today. Federal

agencies—including the Corps of Engineers, Forest Service, and Fish and Wildlife

Service—and electricity ratepayers, through the Bonneville Power Administration (BPA),
Page 3 GAO/T-RCED-00-294

are spending about $400 million annually in the Columbia River Basin to reverse this

decline. Salmon’s decline has been attributed to many causes, among them overfishing,

destruction of habitat, the introduction of hatchery-bred fish, and the presence of

hydropower dams. The dams restrict the passage of salmon returning to spawn and may

be especially harmful to juvenile salmon as they migrate downstream.

The precipitous decline of salmon has caused the National Marine Fisheries Service

(NMFS), (within the Department of Commerce), the agency charged with protecting

marine species, to list four different species of salmon and steelhead native to the Snake

River as endangered or threatened under the Endangered Species Act. That act requires

federal agencies whose actions affect the survival of endangered or threatened (listed)

species to manage their activities to avert the species’ extinction. In a response to a

determination by NMFS that the Corps of Engineers’ hydropower operations jeopardize

salmon’s survival, the Corps, which operates four hydropower dams on the lower Snake

River, began a feasibility study in 1995 of how to improve migration conditions for

juvenile salmon. Under the EIS, the Corps is evaluating four alternatives, one of which

involves breaching the four dams (removing the earthen portion of the dams and

allowing the river to course around the remaining concrete structures). The other

alternatives are to (1) maintain current operations, (2) increase the transportation of

juvenile salmon around the dams, or (3) make improvements to the dams’ systems for

collecting juvenile salmon and barging or trucking them past the dams. Because

substantial changes in the dams’ operations could have significant environmental

consequences, the Corps must also adhere to the National Environmental Policy Act

(NEPA) and prepare an EIS as part of the feasibility study. NEPA’s guidelines provide a

roadmap for decision-making in cases where major federal actions may have

environmental consequences, such as significant changes in dam operations. Breaching

the dams is the alternative that would have the greatest impact on the region and is

highly contentious. It could help salmon, but it would also eliminate a source of

hydroelectric power and a waterway for barge transportation to ports 140 miles

upstream.
Page 4 GAO/T-RCED-00-294

The four Lower Snake River dams (Ice Harbor, Lower Monumental, Little Goose, and

Lower Granite) are very similar. In total, they produce about 1,250 average megawatts

per year, which is about 5 percent of the total electricity generated in the Pacific

Northwest. The dams do not provide flood control and only limited irrigation. Each of

the four dams is about 100 feet high and between 2,655 and 3,791 feet wide. Each

consists of an earthen embankment that would be removed and a concrete structure

consisting of the locks, spillway, and powerhouse that would be mothballed, if the dam is

breached. The Corps has estimated the total construction cost to breach the four dams

to be about $900 million. All four have fish ladders for upriver migration for salmon

returning to spawn and a bypass system for the downriver migration of juvenile salmon.

The Corps’ recommendation in the final Snake River EIS will be part of a comprehensive

plan to reverse the decline of salmon throughout the Columbia River Basin. For

example, NMFS has also listed eight other salmon and steelhead stocks in the Columbia

River Basin, fish that do not have to pass through the Snake River dams. In July of this

year, NMFS released a new draft biological opinion for the Federal Columbia River

Power System.2 The draft opinion is part of federal agencies’ proposed long-term

strategy for salmon recovery in the region. This strategy does not envision breaching the

dams at this time, though agencies will undertake engineering and other studies for

potential breaching in the event other recovery efforts do not meet pre-established

recovery goals.

Development of Corps’ Draft EIS Followed

Procedural Requirements and Guidelines

The Corps of Engineers generally followed procedural requirements and guidelines in

developing its draft EIS. These requirements are contained in NEPA and accompanying

regulations, which provide a framework for decision-making in cases in which major

federal actions may have environmental consequences. While the Corps adhered to

2

Under the Endangered Species Act, federal agencies, such as the Corps, whose activities could affect the

survival or recovery of endangered and threatened species or their critical habitat are required to prepare a

biological assessment of the impact their actions may have. The Secretary of the agency responsible for

conservation of the species, (NMFS in the case of marine species) responds with a biological opinion that

identifies reasonable and prudent actions that the agency needs to take to protect the listed species.
Page 5 GAO/T-RCED-00-294

these broad requirements and guidelines in preparing its draft EIS, EPA and other

affected parties have challenged some aspects of its analyses and conclusions. In

particular, the Environmental Protection Agency (EPA) has challenged the Corps’

findings in regard to water and local air quality.

Under NEPA regulations, federal agencies are required to compile and develop accurate

scientific information on a range of alternatives, obtain expert advice from other

agencies, and allow public comment on the alternatives before making decisions with

environmental consequences. NEPA lays out a general process for achieving these goals

but leaves agencies with considerable latitude in deciding exactly how to develop an EIS.

While NEPA does not dictate the scope of an EIS, the scope of the Corps’ draft EIS is

substantial. The geographic scope of the draft EIS generally focuses on the 140-mile long

stretch of the Lower Snake River between Lewiston, Idaho, and the Tri-Cities area

(Pasco, Richland, and Kennewick) in southeastern Washington. Within this area, the

draft EIS examines the impact of each of the four alternatives across a comprehensive

range of possible effects, including biological analyses of salmon and steelhead; electric

power generation and facilities; transportation via navigation, railroads, and highways;

air quality; water quality and hydrology; and other physical and economic effects.

The Corps’ procedures for preparing the draft EIS were generally consistent with NEPA

and the agency’s implementing guidance. In accordance with NEPA’s requirements, the

Corps involved other federal agencies, consulted with affected Indian tribes, involved

other stakeholders and the public, and sought outside technical review.

Procedural adherence to NEPA and other guidance by the Corps has not been sufficient

to ensure agreement with the EIS by others. The draft EIS has been challenged by other

agencies and affected parties that disagree with the analysis or conclusions. EPA is the

most noteworthy of these critics because of its responsibilities under NEPA and the

Clean Air Act to review and comment on all environmental impact statements. In

comments provided to the Corps in April 2000, EPA rated the draft EIS as inadequate
Page 6 GAO/T-RCED-00-294

because it did not adequately assess potentially significant impacts on water quality and

was incomplete in its review of air quality.

Corps’ Analyses of Electricity, Transportation, and Air Quality Vary in Quality

Breaching the dams would mean losing both the hydroelectric power generated by the

dams and barge shipments on the Lower Snake River. Breaching would also affect air

quality by increasing dust in the air and adding airborne pollutants from substitute

sources of power and transportation. The Corps’ analysis and presentation of the effects

of breaching on electricity costs is reasonable; but its transportation cost estimate and

its air quality analysis are insufficiently developed to determine whether they are

reasonable.

Estimated Effects on Electricity Costs Are Reasonable

The Corps’ estimates of the costs associated with losing hydropower from the four dams

are reasonable and are supported by multiple analyses and by outside reviewers. The

Corps generally adhered to accepted guidelines, economic principles, industry practices,

data sources, and modeling techniques. The process was also open to public

participation, and stakeholders representing widely divergent views on the future of the

dams generally were satisfied with both the process and quality of the estimates.

Breaching the four dams on the Lower Snake River would raise the net cost of electric

power supplies in the western United States by $245 million annually. According to the

draft EIS, this could increase the average electricity bill for households in the Pacific

Northwest by $1.20 to $6.50 per month, while large users, such as aluminum companies,

could see monthly increases approaching $1 million. However, the EIS also notes that if

the electric industry becomes more competitive, BPA, which transmits and markets

power created by the dams, may not be able to raise rates to recover higher costs.

The power system cost estimates are supported by multiple analyses that yielded similar

results. Three different organizations—the Corps, BPA, and the Northwest Power
Page 7 GAO/T-RCED-00-294

Planning Council—conducted parts of the analysis, using different approaches to

estimate the impact of breaching the four dams on the cost of electric power supplies.

The electricity cost estimate resulted from an open process with active participation by

stakeholders representing a spectrum of views on the question of the dams. The results

of the analysis generally met with the approval of these stakeholders. These

stakeholders included environmentalists, Native Americans, and other advocates of freeflowing rivers, as well as industrial users that are heavily dependent on inexpensive

hydropower from dams. Each of these groups participated on the team that developed

and reviewed the initial estimates. Representatives of these groups with whom we spoke

were generally satisfied with both the process followed and the quality of the cost

estimates. The Council’s Independent Economic Analysis Board also reviewed the

Corps’ methodology and analysis. The Board found that the Corps used sophisticated

models and accepted methods and that the results can be relied on as a reasonable

representation of the economic effects.

There are two concerns with the cost estimation and presentation of the effect of

breaching on power costs, but these are not material to the Corps’ estimate. First, the

power cost estimate assumes that the demand for power will not be affected by higher

rates charged for electricity.3

An earlier study developed by the Corps, BPA, and the

Bureau of Reclamation reported that a rate increase necessary to cover increased costs

for replacement power would reduce the demand for power and thereby reduce the cost

estimate for power by less than 10 percent. However, Corps, BPA and Council officials

told us that they did not model the relationship between electricity rates and the demand

for electricity because it would have required considerable cost and effort without

having a significant effect on the results. The second concern is presentational. The

draft EIS does not subtract $26 million of avoided costs of operating and maintaining the

dams if they are breached from its annual power cost estimate. Instead, the draft EIS

3

The Corps’ draft EIS assumes zero price elasticity of demand. Price elasticity of demand is the relative

change in quantity demanded divided by the relative change in price. In this case, zero price elasticity of

demand means that a rate increase will not change the quantity demand.
Page 8 GAO/T-RCED-00-294

reports an annual power cost estimate of $271 million and, elsewhere in the EIS

recognizes the avoided costs of not operating the dams. However, by not including

avoided costs in the power cost estimate, the draft EIS conveys a greater effect on

electricity costs than may actually occur. Corps officials said that the overall net cost for

all economic effects is more important than understanding the net power system costs,

and that is why they did not subtract the avoided costs from their estimate.

Transportation Cost Estimate Needs Further Development

The draft EIS’ overall approach to computing the costs of breaching the dams on the

current river transportation system is generally reasonable. However, the Corps’

analysis and presentation did not fully consider the effect of possible changes in some

key but uncertain assumptions. We could not determine whether further investigation of

the validity of its assumptions would materially affect the Corps’ final estimate.

The Corps estimated that breaching would increase shipping costs for all commodities

by $21 million each year over the next 100 years. A key assumption the Corps made in

arriving at this estimate is that infrastructure improvements needed to replace barge

transportation would not add to the transportation cost estimate. However, the Corps

did not sufficiently test the sensitivity of the transportation cost estimate for this

assumption. The draft EIS estimates that the infrastructure improvements needed to

replace barge transportation—including such things as new grain elevators farther

downstream on the Columbia River, highway improvements, new rail cars, and track

improvements—will cost between $207 million and $532 million. However, the draft EIS

assumes that these infrastructure improvements can be absorbed by the transportation

sector without affecting their long-run costs. The Washington State Department of

Transportation and the Independent Economic Analysis Board contend, however, that

making these improvements could increase transportation costs, perhaps significantly.

Corps officials are considering these and other comments and have not completed their

responses.
Page 9 GAO/T-RCED-00-294

Another uncertainty arises from the Corps’ assumption that estimated shipping costs

provide a better estimate of actual costs than do published shipping rates. Applicable

guidelines recommend using published rates to estimate transportation costs unless

these rates are not competitively established.4Corps officials stated that published rates

were not used because barge operators have limited competition and can charge rates

that are higher than competitive rates. Barge representatives told us that their rates are

competitive and have been used in other studies of Columbia and Snake River shipping.

The Corps did not test the sensitivity of its transportation cost estimate to using

published rates instead of estimated costs.

Estimated Effects on Air Quality Are Incomplete

The Corps’ air quality analysis is incomplete because it did not assess how local air

quality or human health would be affected if the dams were breached and did not

consider the effects of all relevant pollutants. The draft EIS’ air quality analysis

estimated the gross increase in air emissions resulting from replacement power

generation, increased truck and rail transportation, and airborne dust from dam

deconstruction and exposed reservoir sediments across the entire region. The Corps

concluded that the combination of these air quality components would not have a

significant regional effect. However, the Corps did not examine certain pollutants, such

as chemicals in the reservoir sediments. The Corps also assumed the emissions that

were studied would be equally distributed across the region, instead of being

concentrated in specific locations, possibly affecting local air quality and human health.

To identify these more localized effects, EPA, the agency responsible for reviewing and

commenting on all environmental impacts of federal activities, has requested that the

Corps complete a more thorough analysis.

The Corps’ draft EIS reported that breaching the dams would have some effects on air

quality during the breaching process, as well as from changes in the river level and

transportation and power generation practices after the dams are breached. For

4

The Corps followed the Water Resources Council’s Economic and Environmental Principles for Water

and Related Land Resources Implementation Studies (1983), which specifies guidelines for evaluating
Page 10 GAO/T-RCED-00-294

example, the draft EIS reports that replacement power generation would increase

emissions of carbon monoxide and carbon dioxide, while deconstruction of the dams

and the resulting exposed reservoir sediment would contribute to an increase in

particulate matter.

The Corps’ air quality assessment was incomplete because it did not consider the impact

of breaching on local air quality and human health and because it omitted from the study

certain pollutants, such as chemical contaminants in reservoir sediments, that would be

exposed as a result of breaching. In some cases, the Corps compared the changes in

emissions across a wide geographic area but did not consider concentrated local

impacts. For example, the draft EIS estimated that the loss of barge transportation

would lead to a decrease in total emissions from carbon monoxide, nitrogen dioxide, and

sulfur dioxide. However, this summary view masks increased emissions from trucks

hauling grain that is likely to occur in certain areas of eastern Washington State.

According to the draft EIS, the elimination of barging is expected to result in 223

additional trucks per day and their accompanying emissions in the Tri-Cities area. The

draft EIS also reported that reservoir sediments contain heavy metals and DDT, but the

Corps did not perform the dispersion modeling necessary to determine whether they

could pose a threat to human health.

Difficulties with the Corps’ air quality analysis can be attributed, in part, to the Corps’

getting a late start on the analysis. Initially, the Corps did not include an air quality

assessment within the scope of the EIS. Corps officials stated that they did not believe it

was a significant issue for this EIS and planned to incorporate a 1995 air quality

assessment. However, in April 1998, following discussions with BPA and others, the

Corps, using input from EPA as a cooperating agency, initiated a new air quality segment

as part of the Corps’ scope of work. Nevertheless, the Corps did not complete significant

portions of its original air quality scope of work, including an assessment of the direct

and cumulative effects on air quality, because several of the tasks included in the scope

of work could not be done for the cost or time allotted, according to Corps and

national and regional economic effects.
Page 11 GAO/T-RCED-00-294

contractor officials. In order to meet budget and time constraints, the Corps reduced the

work plan. The Corps and EPA are currently negotiating the additional analysis that the

Corps will perform for its final EIS.

The Corps is currently revising its draft EIS in consideration of public comments and

assessments of its draft EIS performed by us and others. It is essential, given the

controversy and importance of this issue, that the Corps provides sufficient analysis and

information to support its recommended alternative to policymakers and the public.

----

Mr. Chairman, this concludes our prepared statement. We would be pleased to respond

to any questions you or the Members of the Subcommittee may have.

Contact and Acknowledgement

For future contacts regarding this testimony, please contact Derek B. Stewart on (202)

512-3841. Individuals making key contributions to this testimony include Paul

Aussendorf and Bill Swick.

(141495)
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