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[Senate Hearing 108-618]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 108-618

                       MISCELLANEOUS WATER BILLS

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   on
                                     

                           S. 900                                S. 2243

                           S. 1876                               H.R. 1648

                           S. 1957                               H.R. 1732

                           S. 2304                               H.R. 3209

                                     

                               __________

                              MAY 19, 2004

                       Printed for the use of the
               Committee on Energy and Natural Resources

                                 ______

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
DON NICKLES, Oklahoma                JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho                DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee           RON WYDEN, Oregon
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri            MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana                EVAN BAYH, Indiana
GORDON SMITH, Oregon                 DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                CHARLES E. SCHUMER, New York
JON KYL, Arizona                     MARIA CANTWELL, Washington

                       Alex Flint, Staff Director
                   Judith K. Pensabene, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                    LISA MURKOWSKI, Alaska, Chairman
            BEN NIGHTHORSE CAMPBELL, Colorado Vice Chairman
GORDON SMITH, Oregon                 BYRON L. DORGAN, North Carolina
JON KYL, Arizona                     BOB GRAHAM, Florida
LARRY E. CRAIG, Idaho                RON WYDEN, Oregon
JAMES M. TALENT, Missouri            TIM JOHNSON, South Dakota
JIM BUNNING, Kentucky                DIANNE FEINSTEIN, California
CRAIG THOMAS, Wyoming                CHARLES E. SCHUMER, New York
                                     MARIA CANTWELL, Washington

   Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the 
                              Subcommittee

                        Kellie Donnelly, Counsel
                Patty Beneke, Democratic Senior Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bennett, Hon. Robert F., U.S. Senator From Utah..................     2
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     4
Burns, Hon. Conrad R., U.S. Senator From Montana.................     3
Carman, John Robert, General Manager, Metropolitan Water District 
  of Salt Lake & Sandy, Sandy, UT................................    38
Core, Andrew B., Senior Hydrologist, Hydrology Bureau, 
  Administrative Litigation Unit, New Mexico Office of the State 
  Engineer, on behalf of John R. D'Antonio, Jr., PE, State 
  Engineer.......................................................    37
Graves, Thomas, Executive Director, Mid-West Electronic Consumers 
  Association, Wheat Ride, CO....................................    30
Groat, Charles G., Director, U.S. Geological Survey, Department 
  of the Interior................................................    15
Johnson, Hon. Tim, U.S. Senator From South Dakota................     3
Jones, C. Allan, Director, Texas Water Resources Institute, 
  College Station, TX............................................    34
Keys, John W., III, Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................     5
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     1
Nypen, Jerry, Manager, Lower Yellowstone Irrigation Projects, 
  Sidney, MT.....................................................    23

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    47

                              Appendix II

Additional material submitted for the record.....................    61

 
                       MISCELLANEOUS WATER BILLS

                              ----------                              

                        WEDNESDAY, MAY 19, 2004

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:32 p.m. in 
SD-366, Dirksen Senate Office Building, Hon. Lisa Murkowski 
presiding.

           OPENING STATEMENT OF HON. LISA MURKOWSKI, 
                    U.S. SENATOR FROM ALASKA

    Senator Murkowski. Good afternoon and welcome to the 
Subcommittee on Water and Power of the Energy Committee. It's 
my pleasure to welcome you all here today. We've got seven 
bills before our subcommittee today. They are, in the following 
order: S. 900, the Lower Yellowstone Reclamation Projects 
Conveyance Act, introduced by the good Senator Burns; S. 1876, 
the Provo River Project Transfer Act, introduced by Senator 
Bennett; S. 1957, the United States-Mexico Transboundary 
Aquifer Assessment Act, introduced by Senator Bingaman; S. 
2304, a North Loup Acreage Clarification Measure, introduced by 
Senator Hagel; S. 2243, a Hydroelectric Project Deadline 
Extension bill that I have introduced; H.R. 1648, the 
Carpinteria and Montecito Water Distribution System Conveyance 
Act, introduced by Representative Capps; and H.R. 1732, the 
Williamson County Water Recycling Act of 2003, introduced by 
Representative Carter.
    I'd like to extend a special welcome to our Administration 
witnesses, who will be appearing on the first panel: 
Commissioner Keys from the Bureau of Reclamation and Director 
Groat from the USGS; appreciate you being here today. I'd also 
like to welcome the witnesses who will testify before the 
subcommittee's second panel: Jerry Nypen, the manger of the 
Lower Yellowstone Irrigation Project and Thomas Graves, the 
executive director of the Mid-West Electric Consumers 
Association, who will both present testimony on S. 900. We also 
have C. Allan Jones, the director of the Texas Water Resources 
Institute and Andrew Core, a senior hydrologist with the State 
Engineer's Office in New Mexico, who will testify on S. 1957. 
Finally, we have John Carman, the general manager of the 
Metropolitan Water District of Salt Lake and Sandy, Utah, who 
will speaking to S. 1876.
    The remainder of the bills on the subcommittee's agenda 
will be addressed by statements submitted for the record. We've 
already received many of these statements, including one from 
Senator Bennett on S. 1876. They will all be made part of the 
official hearing record.
    So again, I welcome all the witnesses here today, look 
forward to hearing your testimony. Before we get started, I 
would ask if there are any Senators who would like to make any 
opening comments.
    Senator Burns.
    Senator Burns. Well, I have a statement with regard to S. 
900.
    Senator Murkowski. Are you interested in just introducing 
it into the record or would you like to make it?
    Senator Burns. I'd like to make the statement if I could. 
Is that the first one you're going to consider?
    Senator Murkowski. That's the first one I'm going to 
consider, that's correct.
    [The prepared statements of Senators Bennett and Johnson 
follow:]

      Prepared Statement of Hon. Robert F. Bennett, U.S. Senator 
                         From Utah, on S. 1876

    Madam Chair, and members of the subcommittee, I thank you for 
holding this hearing on S. 1876, the Provo River Project Transfer Act.
    This legislation, introduced late last year, would authorize the 
title transfer of certain features of the Provo River Project, Utah, 
from the Bureau of Reclamation to nonfederal ownership. This title 
transfer will result in several benefits for both the local government 
and the federal government, including economic, environmental, 
recreational, and safety benefits.
    The facilities to be transferred are the Provo Reservoir Canal and 
associated lands and structures, the Salt Lake Aqueduct and associated 
lands and structures, and a 3.79 acre parcel of land in Pleasant Grove, 
Utah. The Provo Reservoir Canal is a large, open, mostly unlined, 21.5 
mile long canal that was constructed by the United States in the 1940s. 
The water transported through the Provo Reservoir Canal is used 
principally for municipal and industrial purposes. The Salt Lake 
Aqueduct is a 41.7 mile long, 69 inch diameter pipe, constructed by the 
United States and completed in 1951. The Provo River Water Users 
Association recently constructed a 2 million dollar office and shop 
complex on the Pleasant Grove property, without the use of federal 
funds.
    Title transfer will facilitate the use of tax-exempt bond financing 
and low-interest loan financing for needed improvements. Currently, 
there is no Reclamation program for rehabilitating aging Reclamation 
facilities. Federal ownership of the facilities prevents low interest 
loans from being obtained. On the federal level, the transfer would 
eliminate the demands on limited Reclamation resources for the 
administration of the Salt Lake Aqueduct and the Provo Reservoir Canal.
    It is anticipated that following title transfer needed improvements 
would be made. For example, the Provo Reservoir Canal would be enclosed 
to provide for the conservation of water, improved water quality and 
security, the construction of a public trail system on top of the 
canal, and to eliminate the hazards of an open unlined canal in an 
urban environment. The critical importance of eliminating the safety 
hazard of an open canal in an urban setting was recently reinforced by 
the tragic death of two young men who unfortunately were lured by the 
thrill of attempting a swim through the canal. The enclosure of the 
canal would eliminate this safety risk and hopefully prevent any others 
from making a similar mistake.
    The transfer has significant local support, including Utah County, 
Salt Lake County, Sandy City, Salt Lake City, Lindon City, Draper, 
Pleasant Grove City, Orem City and American Fork City. I look forward 
to working with the Metropolitan Water District of Salt Lake & Sandy, 
the Provo River Water Users Association, the Bureau of Reclamation, and 
all other interested parties to make this title transfer a success.
                                 ______
                                 
         Prepared Statement of Hon. Tim Johnson, U.S. Senator 
                      From South Dakota, on S. 900

    Chairwomen Murkowski, thank you for calling today's hearing of the 
Water and Power Subcommittee. I'll use my opening statement to address 
my concerns with one of the bills under discussion at today's hearing.
    I want to express my opposition to certain provisions of S. 900, 
the Lower Yellowstone Reclamation Projects Conveyance Act that, if not 
amended, will negatively impact the federal firm power customers and 
ratepayers in South Dakota and throughout the Missouri River basin.
    I am concerned that the bill establishes a harmful precedent of 
providing subsidized electric transmission benefits to a group that no 
longer chooses to adhere to the federal rules or the responsibilities 
and obligations that are attached to that benefit. Switching out one 
set of federal obligations--Bureau of Reclamation oversight--while 
retaining some of the benefits--subsidized transmission costs--weakens 
the concept of the Pick-Sloan Missouri River basin program and unfairly 
shifts costs to other participants, such as rural electric cooperatives 
and municipal electric utilities. Ultimately, these costs will manifest 
themselves through higher power rates, discouraging the very type of 
economic development that the multi-purpose Pick-Sloan program was 
created to produce.
    Enacting this bill without first amending the terms and conditions 
from which these three federal irrigation projects receive subsidized 
power costs opens the door to abuse of the long-established allocation 
and transmission of Pick-Sloan Missouri River basin federal hydropower. 
I do not oppose, and ultimately could support, the concept of 
transferring these three federal irrigation projects to the pertinent 
irrigation districts in Montana and North Dakota. Notwithstanding the 
conceptual merits in privatizing some irrigation projects, as a matter 
of equity and long-standing precedent, the legislation fails to protect 
other authorized purposes. Therefore, it would be premature for the 
committee to move the bill forward in its present form.
    The stakeholders, Bureau of Reclamation, the states, and federal 
firm power customers have made some progress toward improving the power 
supply provisions of the bill, but more must be done to equitably treat 
all authorized participants and beneficiaries of Pick-Sloan power.

        STATEMENT OF HON. CONRAD R. BURNS, U.S. SENATOR 
                          FROM MONTANA

    Senator Burns. Thank you, Madam Chairman, for holding this 
hearing on this bill, S. 900, the Lower Yellowstone Reclamation 
Projects Conveyance Act. Yesterday a similar hearing was held 
in the House of Representatives, before its Water and Power 
Committee, on the House companion bill. I think this action 
here will allow us to move forward for the best interest of 
everyone involved. I want to thank John Keys for being here 
today, the Reclamation Director, and his continued attention 
and support for the reclamation infrastructure. I read in his 
report here about how the project's a little premature and give 
all the reasons for it; but I've introduced the same bill in 
the 106th Congress and the 105th Congress and I wonder how much 
time it's going to take to be premature. I'll ask you that 
question later on, John, and you'll have to deal with that some 
way or other. And also to Jerry Nypen, manger of the Lower 
Yellowstone Irrigation Projects and Tom Graves, the director of 
the Mid-West Electric Consumers Association; thanks to all of 
you for making the trip and moving this issue forward.
    The concept outlined in the bill is not new. I sponsored 
the legislation, of course, in the 107th and 106th Congresses. 
Simply put, the goal is to allow certain irrigation districts 
along the Lower Yellowstone River to gain title to the 
irrigation projects that they now operate. Right now the 
Federal Government holds title to those projects even though 
they are successfully managed by the districts and will be 
completely paid for as a part of this legislation. Irrigation 
is the backbone, of course, of Montana's economy in northeast 
Montana along the Yellowstone River; it is key to developing 
our State today as they were when they were built some 100 
years ago; and they're still important. Five hundred families 
in northeast Montana depend on the four irrigation projects 
identified in this bill: the two Lower Yellowstone projects, 
the Intake project and the Savage project. And, in the best 
interest of the Federal taxpayers as well as the local 
communities to cede these properties to the folks who can 
operate them most efficiently.
    While I am supportive of turning over the Federal projects 
to the people who manage and operate them, I understand that S. 
900 does contain some challenges in its current form. We've 
been working with the Bureau of Reclamation and the irrigators 
and the power community to bring each of these concerns to 
resolution. Today's hearing may give us an opportunity to 
listen to each other again and if we've got any new ideas, to 
bring them to the forefront and talk about them.
    And I want to thank each and all of the principles for 
being here today and I look forward to working with all of you 
as we try to move this to a final solution. And I thank the 
chairman.
    Senator Murkowski. Thank you.
    Senator Bingaman.

         STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Bingaman. Thank you very much, Madam Chairman, for 
having this hearing, and I wanted to say just a few words about 
S. 1957, which is the bill that I've introduced that is subject 
to this hearing. Also, I want to particularly welcome Andy Core 
from the New Mexico State Engineer's Office. And I know we have 
others, C. Allan Jones, the director of the Texas Water 
Resources Institute, who's also going to testify on this bill.
    This is a bill that came out as a result of a field hearing 
that we had 2 years ago in Las Cruces, New Mexico. The 
discussion there concerned water supply issues along the U.S.-
Mexico border and particularly as it related to the Juarez-El 
Paso area in southern Dona Ana County in my State. What struck 
me most at the hearing was the lack of any consensus on the 
long-term sustainability of the groundwater resources in the 
region. Many of those groundwater resources are aquifers that 
are shared between the United States and Mexico. We've got 
rapid population growth, we've got increased demand for water; 
in my view we need to have a common understanding of the limits 
of the shared groundwater resources, and in order to accomplish 
that we developed S. 1957. It's intended to achieve a bi-
national consensus on the extent and the availability of water 
supplies along the border. It does this by establishing a 
scientific program involving the entities on both sides of the 
border to comprehensively assess transboundary aquifers. The 
information and scientific tools developed would be, in my 
view, very valuable to state and local resource managers.
    The efforts to be led in this bill, we call for it to be 
led by the U.S. Geological Survey working in partnership with 
the border States--that's Texas, New Mexico, Arizona and 
California--and also the local entities. I should note that the 
bill not only provides resources and technical assistance; it 
also maintains and protects the primacy of those States over 
water resources. I'm very pleased that we have widespread 
support and I have various letters of support that I will urge 
be included in the record, Madam Chairman, as part of this 
hearing.
    Senator Murkowski. They will be included.
    Senator Bingaman. Thank you very much. And I also very much 
appreciate Senator Domenici and Senator Kyle co-sponsoring the 
bill. And I appreciate you, again, having the hearing. Thank 
you.
    Senator Murkowski. All right. At this time we will turn to 
our first panel; Commissioner John Keys with the Bureau of 
Reclamation. If you would present us with your testimony, 
please.

 STATEMENT OF JOHN W. KEYS, III, COMMISSIONER, U.S. BUREAU OF 
            RECLAMATION, DEPARTMENT OF THE INTERIOR

    Mr. Keys. Madam Chairman, it's certainly my pleasure to be 
here again this afternoon. We have submitted official testimony 
on all five of these bills and we would appreciate them being 
included in the record.
    Senator Murkowski. They will be included in the record.
    Mr. Keys. Thank you. It's a pleasure to be here and talk 
about the bills before the committee today--S. 2304, the North 
Loup Missouri River Project; H.R. 1648, Carpinteria and 
Montecito Conveyance Act; H.R. 1732, Williamson County Water 
Recycling; S. 900, the Lower Yellowstone Project Conveyance 
Act, and S. 1876, the Provo River Tidal Transfer.
    Madam Chairman, let me begin with Senator Hagel's North 
Loup bill, S. 2304. This is a good bill; it's needed by the 
project's sponsors and the administration supports it. It 
clarifies that the acreage for which the North Loup Project is 
authorized to provide irrigation water is approximately 53,000 
acres. This minor acreage change will allow for practical and 
economic project development in light of current and future 
circumstances.
    The second bill, H.R. 1648, Carpinteria and Montecito 
Conveyance Act, would transfer title to two sets of 
facilities--pipelines and laterals, pumping plants, and real 
estate to the water districts that use them. Madam Chairman, 
these two title transfers are about local control. Once the 
titles are transferred the districts will no longer have to 
seek approval for easements, crossing permits or work to be 
done on the project. Reclamation also wins because our 
administrative load would lighten because of that transfer.
    Madam Chairman, these districts deserve a pat on the back 
for their cooperative spirit through the detailed title 
transfer process. The path has been smooth and the process 
cost-effective for all involved. Others considering title 
transfers should look to this one as a model of how to get it 
done well. The administration strongly supports passage of H.R. 
1648.
    Madam Chairman, the third bill, H.R. 1732, would authorize 
a water reclamation project for Williamson County, Texas. The 
Lower Colorado River Authority has some conceptual plans for 
this project and Reclamation's taken a look at them but we have 
not performed an appraisal-level study of these plans yet. We 
don't know whether the Authority's work meets Reclamation 
requirements; we don't know that a full-blown feasibility study 
would be possible in following the criterion set out in title 
XVI of Public Law 102-575. Unless and until we perform an 
appraisal-level study we can't answer these questions. 
Therefore, it's not possible for us to support H.R. 1732 at 
this time.
    S. 900 also presents some tough issues. In fact, Madam 
Chairman, my predecessor and I combined have testified on Lower 
Yellowstone title transfer bills three times since 1999. On 
none of these occasions was Reclamation able to support the 
legislation, and I regret to say that although we have made a 
number of accommodations and have worked through a number of 
the tough issues there, we still cannot support it today, at 
least in its present form.
    The major impediment to our support is the bill's 
requirement that we continue providing districts with Pick-
Sloan Missouri Basin project-use power although the facilities 
would no longer be owned by the United States. These costs 
increased when wholesale power was deregulated such that the 
wheeling cost now exceeds the cost of energy. Because the 
payments are made out of Western Area Power Administration 
revenues the result would be preferenced power customers 
subsidizing the wheeling costs for a non-Federal project.
    The fish protection devices provided for in section 7 of S. 
900 also present timing problems. The bill requires Reclamation 
to provide the devices within 2 years after enactment, followed 
by a 2-year monitoring period. Any needed modifications based 
on monitoring results would be required within 3 years after 
initial construction of the devices. This may not be enough 
time to allow us to see how the fish protection devices work in 
normal flow conditions. While we've been talking with the Fish 
and Wildlife Service, we are not yet in formal consultation 
under section 7 of the Endangers Species Act. So we cannot yet 
measure our cost exposure on fish protection. Other technical 
concerns are set out in our formal testimony. For now, you and 
Senator Burns and the rest of the Montana delegation have our 
pledge to continue working with you on those details to seek 
solutions for the Lower Yellowstone title transfer.
    Finally, Madam Chairman, let me explain where we are on the 
Provo River title transfer, S. 1876. We began working with the 
Provo River Water Users Association and the Metro Water 
District of Salt Lake and Sandy in late 2002. We've made a lot 
of progress since then. In August 2003, we signed an agreement 
with the Association and District for accomplishing the title 
transfer process. Since then, other districts have joined the 
process. To start the NEPA-required public review process, our 
working group compiled a list of more than 2,000 interested 
parties in this title transfer. In September 2003, a letter 
describing the proposal went to all on that list. At the end of 
October we held three public hearings, at which many issues 
were raised, and kept the comment period open through November. 
Reclamation is now drafting and is close to completion of the 
environmental assessment as we speak.
    Madam Chairman, we need to hammer out several agreements 
among all the parties to make sure that the title transfer 
works without adversely impacting other parties. One of these 
is the Central Utah Project, which runs so closely to the Provo 
River Project property that the two share access roads to get 
into the infrastructure.
    Madam Chairman, other concerns we have with S. 1876 are set 
out in our prepared testimony. Mainly, they're technical 
corrections to the bill. We think that they can all be 
alleviated if we and the interested parties can continue moving 
forward with our title transfer process and then come back to 
Congress with a more clear picture of how the transfer 
legislation should look. With the recommended issues and 
technical corrections addressed I believe that the Department 
could support passage of S. 1876 at that time. Of course, we 
will not slow down in our efforts to complete our part of the 
work to get the Provo River Project title transfer completed.
    Madam Chairman, that completes my oral testimony and I 
would certainly respond to any questions that you all might 
have.
    [The prepared statements of Mr. Keys follow:]

        Prepared Statement of John W. Keys, III, Commissioner, 
                         Bureau of Reclamation

                               ON S. 900

    Madam Chairman, my name is John Keys. I am Commissioner of the U.S. 
Bureau of Reclamation. I am pleased to provide the Administration's 
views on S. 900, the Lower Yellowstone Reclamation Project Conveyance 
Act which directs the Secretary of the Interior to transfer title of 
the Lower Yellowstone Irrigation Project, the Savage Unit of the Pick-
Sloan Missouri Basin Program (P-SMBP), and the Intake Irrigation 
Project to the respective irrigation districts.
    In October 1999, March 2000, and June 2002, Reclamation testified 
before Congress on proposals similar to S. 900. In each case, 
Reclamation opposed the legislation as premature since significant 
issues related to the delivery of Pick-Sloan Missouri Basin Program 
power, fish and wildlife mitigation, and a number of other issues 
remained unresolved. Since that time, Reclamation has worked closely 
with the districts, the State of Montana and the U.S. Fish and Wildlife 
Service on a number of these issues. Progress has been made and changes 
have been incorporated into the legislation to reflect that progress 
but significant issues remain. Therefore, it is not yet possible for 
the Department of the Interior to support S. 900 in its present form.
    Delivery of Project Use Power After Transfer: Section 6 of S. 900 
requires the Secretary to continue providing the districts with P-SMBP 
project-use power although the facilities would no longer be owned by 
the Federal government. While the legislation proposes to set the rate 
paid equal to the ``preference'' or ``firm'' power rate as well as to 
eliminate the adjustment to the rate based upon the districts' ability-
to-pay, the districts would continue to enjoy the subsidized benefit of 
their power wheeled across non-Federal lines.
    The 1944 Flood Control Act requires that P-SMBP deliver project use 
power directly to the major project pumping plants. This means that 
when Federal transmission lines are not available to the major pumping 
plants and the project use power is wheeled to the major pumping plants 
over non-Federal transmission lines, the P-SMBP, is responsible for 
these ``in-lieu-of'' costs. The cost of this wheeling significantly 
increased with deregulation of the wholesale power market.
    Currently, the Federal government is paying wheeling costs to the 
rural electric cooperative serving the Lower Yellowstone and Savage 
Irrigation Districts. For both the Lower Yellowstone and Savage 
Irrigation Districts the cost of wheeling exceeds the cost of the 
energy. In 2003, $69,012 was paid for wheeling costs associated with 
the Lower Yellowstone Irrigation Districts and $78,372 was paid to 
wheel power to the Savage Irrigation District.
    Payments are made by Western Area Power Administration and the 
costs are then incorporated into the P-SMBP Power Repayment Study. This 
results in the preference power customers subsidizing most of the 
wheeling costs for a non-Federal project. It is the Administration's 
view that the federal government should not be asked to continue 
subsidizing the cost of transmitting power to these customers.
    Authorization: S. 900 includes language that may make title 
transfer a nondiscretionary action. If Congress intends for this action 
to be treated as discretionary, the word ``shall'' should be replaced 
by ``is authorized to'' in section 3, Conveyance of Projects.
    Yellowstone River Fisheries Protection: Section 7 of S. 900 
requires the Secretary in cooperation with the irrigation districts to 
provide fish protection devices within two years of enactment, and then 
to complete all modifications within three years after they are 
constructed. Reclamation would be required to provide these devices on 
a non-reimbursable basis even though they will ultimately become part 
of a non-Federal project.
    While informal discussion with U.S. Fish and Wildlife Service is 
underway on Project operations including fish protection devices, 
formal consultation under Section 7 of the Endangered Species Act has 
not begun. The two year monitoring period to measure the effectiveness 
of the fish protection devices begins at the same time as a three year 
window in which modifications based on the monitoring must be 
completed. These time limits may be insufficient to determine whether 
or not the devices operate successfully under normal flow conditions.
    Price and Valuation: Section 3(a)(4)(a) provides that title to 
Reclamation withdrawn lands be transferred ``for their value in 
providing operation and maintenance benefits'' only. This condition on 
valuation departs from formulas used in other title transfers and may 
result in undervaluation. Valuation should be based on fair market 
value.
    Technical Issues: In addition to the items raised above, we have 
also identified several technical issues that should be addressed:
    Withdrawal Revocation Section: While the technical corrections 
presented in our last testimony have been incorporated into S. 900, in 
order to ensure that all the withdrawals are lifted it is suggested 
section 3(b) be replaced with the following:

        All Bureau of Reclamation withdrawals are hereby revoked in 
        their entirety; however, such revocation shall apply only to 
        the lands within the Lower Yellowstone Irrigation Project, the 
        Savage Unit of the Pick-Sloan Missouri Basin Program, and the 
        Intake Irrigation Project and shall not extend to lands outside 
        of the project boundaries.

    Contract Citation: The contract identified in section 3(a)(4)(B)(i) 
has expired and has not been renewed. Savage Irrigation District has 
been operating under interim contracts. We suggest section 
3(a)(4)(B)(i) be revised to read:

        As a condition of transfer, the Secretary shall receive an 
        amount from the Savage Irrigation District computed as the 
        present value of the remaining water supply repayment 
        obligation of $52,680 as full payment of the Savage Irrigation 
        District's share of the remaining unpaid construction costs of 
        the Savage Unit.

    Power Assistance Payments: The first sentence of section 
3(a)(4)(B)(ii) should be amended to read as follows to reflect the 
amount from which preference value will be calculated. This will ensure 
that the discounted amount stays accurate as rates change.

        As a condition of transfer, the Secretary shall accept an 
        amount computed as the present value of $635,879, as determined 
        by the Secretary, as payment from the Pick-Sloan Missouri Basin 
        Program (Eastern Division) power customers under the terms 
        specified in this section.

    Additionally, in the second sentence of this section, payment 
should be made to the Reclamation fund of the Treasury in Fiscal Year 
2004 or in the year in which the Act becomes law, instead of Fiscal 
Year 2003 as currently stated.
    Power: The term ``preference power rate'' in section 6 is 
undefined. If the intent is for the rate to be the 16.04 mills/kWh rate 
sometimes referred to as the ``preference power rate'' the wording 
should be changed to read ``Pick-Sloan Missouri Basin Program Eastern 
Division Firm Power Service Rate.''
    In closing, Reclamation continues to work with the districts and 
the states of Montana and North Dakota on this title transfer. The 
project power issue is difficult, but we will continue working with 
this Committee, the districts, Senator Burns and the Montana delegation 
to identify solutions.
    That concludes my statement, I would be happy to answer any 
questions.

                                 ______
                                 
                               ON S. 1876

    My name is John Keys and I am the Commissioner of the Bureau of 
Reclamation. I am pleased to present the views of the Department 
regarding S. 1876, legislation to authorize the Secretary of the 
Interior to convey certain, lands and facilities of the Provo River 
Project in Utah.
    The Department of the Interior (Department),has an active title 
transfer program and supports transferring ownership of certain 
Reclamation project facilities to non-Federal entities, particularly in 
cases where transfers could create opportunities, not just for those 
who receive title, but for other stakeholders and the public as well. 
While we believe this transfer has the potential to create such 
opportunities, the Department has several concerns with S. 1876, as it 
was introduced. It is our understanding that the proponents of this 
transfer intend to suggest a number of specific revisions to S. 1876 
which could help to resolve some of our concerns.
Background
    The Provo River Project stores and delivers water from the Provo 
River for irrigation and municipal and industrial uses along the 
Wasatch Front, a highly urbanized area, located within Utah and Salt 
Lake Counties. The three features of the project under consideration 
for transfer are the 22-mile-long Provo Reservoir Canal; a 3.79-acre 
office building site, which would be transferred to the Provo River 
Water Users Association (Association); and the 42-mile-long Salt Lake 
Aqueduct, which would be transferred to the Metropolitan Water District 
of Salt Lake & Sandy (District).
    Reclamation began discussing this transfer with the Association and 
the District in November 2002. Since that time much work has been done 
and a great deal of progress has been made.
    In August 2003, Reclamation, the Association, and the District 
signed an agreement entitled ``Contributed Funds Act and Memorandum of 
Agreement'' (Contract No. 03-WC40-8800) which articulated the 
respective roles, responsibilities, and cost obligations for carrying 
out the title transfer process. Since that time, several other water 
user entities, including the Central Utah Water Conservancy District 
(Central) and the Jordan Valley Water Conservancy District (Jordan 
Valley) also have become involved. A title transfer work group made up 
of these entities and Reclamation was formed to discuss the issues of 
importance to the entities involved, and that work group has been 
meeting regularly.
    In order to initiate the public review process required under the 
National Environmental Policy Act (NEPA), the title transfer work group 
assembled a list of more than 2,000 individuals, agencies, and other 
entities having a potential interest in this transfer. This list 
includes a large number of owners of private property located adjacent 
to the transfer facilities. It also includes several state and federal 
agencies and environmental and recreational interest groups. On 
September 29, 2003, an initial scoping letter describing the proposal 
was mailed to all on this list. Public scoping meetings were held on 
October 27, 28, and 30, 2003 in Sandy, Lehi, and Provo respectively. 
Many concerns and issues were raised at these meetings and in 
subsequent calls, letters and e-mails by interested stakeholders. To 
enable anyone else with interests and concerns to have an opportunity 
to voice them, the official public comment period was held open until 
November 26, 2003.
    As the lead agency, Reclamation is in the process of completing a 
draft environmental assessment. The Department of the Interior's 
Central Utah Project Completion Act Office, the U.S. Forest Service, 
and the National Park Service are cooperating agencies. The draft 
environmental assessment is expected to be released to the public for 
review and comment by the end of May 2004.
S. 1876
    S. 1876 requires the Secretary to convey to the Provo River Water 
Users Association, pursuant to a transfer agreement still being 
drafted, all right, title, and interest of the United States in certain 
lands, rights-of-way, and facilities that are part of the Provo River 
Project in Utah. The bill does not impair any existing contracts that 
allow for, or create a right, to convey water through the Provo 
Reservoir Canal.
    Section 6 of S. 1876 requires that the Association and the 
Metropolitan Water District of Salt Lake & Sandy pay or contribute to 
administrative costs, real estate transfer costs, and the costs of 
compliance with the National Environmental Policy Act of 1969 (NEPA), 
the Endangered Species Act of 1973 (ESA), the National Historic 
Preservation Act, and other Federal cultural resource laws included in 
the transfer agreement. S. 1876 clearly states in Section 7 that before 
any property is conveyed, the Secretary must complete all actions 
required under NEPA, the ESA, and all other applicable laws. Section 6 
also requires the Association and the District to pay the net present 
value of the property being transferred.
    Finally in Section 9, the bill makes it clear that, upon conveyance 
of the land and facilities, the United States will not be liable for 
future occurrences on those lands and facilities, and the Association 
and District will not be entitled to receive any future Reclamation 
benefits with respect to the transferred properties, except those 
benefits available to other non-Reclamation facilities.
Issues of Concern
    Despite the Administration's support for the transfer of these 
lands and facilities, we have a number of concerns about S. 1876 as 
drafted.
    Agreements: During the course of its deliberations, the members of 
the work group identified several written agreements among the parties 
that are needed in order to ensure that the transfer achieves its 
intended purposes without adversely impacting the other affected 
parties. At present, many of the identified agreements are being 
drafted by the work group, but none have been completed or signed. 
Section 3(a) of the bill partially addresses this issue by requiring 
that the Association provide the Secretary with certification, prior to 
transfer. We are concerned that this does not fully address our 
situation or the issue.
    We believe that completing the agreements prior to passage of the 
legislation will expedite implementation of the transfer. Our 
experience has shown that transfers move more expeditiously when 
involved parties complete preliminary work, including written 
agreements, before proceeding with legislation. In many cases where 
agreements were not completed before legislation was passed, 
significant delays occurred while issues were identified, negotiated, 
and satisfactorily addressed in agreements.
    If agreements are not completed prior to passage of the 
legislation, then we believe the legislation should specify that 
certain minimum requirements be included in the agreements. For 
example, Section 2(8) of the bill defines a transfer agreement among 
the United States, the District and the Association and requires the 
transfer to be completed in accordance with the terms of that transfer 
agreement. While the work group has been actively engaged in drafting 
the transfer agreement, it is not yet finalized or signed. This 
transfer agreement should include descriptions and maps of land 
interests to be transferred, including rights-of-way. Also, at a 
minimum, the agreement defined in Section 2(8) should include terms 
which: (1) provide for orderly and efficient transfer and protect 
public interests; (2) preserve access for operation and maintenance of 
nearby facilities which will continue to be federally owned; (3) 
provide for coordinated operation of transferred and retained portions 
of the Provo River Project; and (4) ensure the Department can continue 
to fulfill its obligations.
    Certification of Agreements: Section 3(a) directs the Secretary to 
convey the lands and facilities of the Project when the Association has 
certified that the agreements entered into are satisfactory to the 
Association, District, Central, and Jordan Valley. Since many of the 
features and facilities of the Project will not be conveyed and because 
of the close relationship between this project and the Central Utah 
Project, which will not be transferred, the Secretary will be a party 
to several of these agreements. As such, we believe that both the 
Association and the Secretary should certify the agreements are 
satisfactory.
    Operational Access: The canal and the aqueduct to be transferred in 
S. 1876 are in close proximity and operationally related to the Central 
Utah Project which will remain in Federal ownership. For example, for a 
sizable portion of its alignment, the canal lies so near key Central 
Utah Project facilities that lack of access to the canal right-of-way, 
would make operation and maintenance of those Central Utah Project 
facilities difficult. Conversely, operation and maintenance of the 
canal would be problematic without access to Central Utah Project 
lands. Therefore, as indicated above, it is important that provisions 
for reciprocal access are included in the agreement defined in Section 
2(8) of the bill.
    National Forest System: In several locations, the Salt Lake 
Aqueduct crosses lands lying within the boundaries of the Uinta and 
Wasatch-Cache National Forests under the jurisdiction of the U.S. 
Forest Service. Prior to constructing the aqueduct, Reclamation 
withdrew significant blocks of land in locations where the aqueduct 
alignment crosses through these National Forests. At present, operation 
and maintenance of the aqueduct by the District within National Forest 
boundaries is possible solely because the aqueduct is federally owned 
and located upon Reclamation withdrawals. Any revocation of 
Reclamation's withdrawals will return primary jurisdiction of these 
areas to the U.S. Forest Service. S. 1876 needs to address this issue 
or it will significantly delay conveyance of the lands and rights-of-
way and will negatively impact the District's ability to operate and 
maintain the facilities once transferred. We also recommend the 
transfer agreement defined in Section 2(8) include a suitable provision 
covering replacement of withdrawals with a linear permanent easement 
for the District. We recommend that the Department of the Interior 
issue the easement of the Aqueduct. At that point, the Bureau of 
Reclamation would revoke the withdrawal on the National Forest System 
lands, and then the Forest Service would administer the easement.
    Timpanogos Interagency Land Exchange Act (P.L. 107-329): On 
December 6, 2002, Congress passed the Timpanogos Interagency Land 
Exchange Act (TILEA), P.L. 107-329. This Act authorizes the acquisition 
of land and construction of an interagency administrative and visitor 
facility by the National Park Service and the U.S. Forest Service at 
the entrance to American Fork Canyon. The proposed exchange would be 
with a private landowner who is willing to trade property in Highland 
City, Utah, for six parcels of National Forest Land. The private 
property proposed to be acquired for the site of the administrative and 
visitor facility is bisected by a strip of land owned in fee title by 
the United States and administered by Reclamation for the aqueduct. If 
fee title were transferred to the District at this location, the 
administrative and visitor facility site would be bisected by a strip 
of District-owned lands. To avoid this situation, we believe the 
transfer agreement defined in Section 2(8) should provide for the 
Secretary to convey an appropriate permanent easement to the District 
for the aqueduct where it bisects the administrative and visitor 
facility site and then to transfer jurisdiction over the same area to 
the U.S. Forest Service to be administered as part of the 
administrative and visitor facility site.
    Impact on the On-Going Utah Lake Basin Water Delivery System EIS: 
Central and the Department recently released a draft environmental 
impact statement (EIS) for the Utah Lake Basin Water Delivery System 
(ULS) to the public. This draft EIS indicates that about 24,000 acre-
feet of CUP M&I water would be conveyed through the Provo Reservoir 
Canal for use in Salt Lake County, which is proposed for transfer under 
S. 1876. As part of this legislation, or the transfer agreement for 
these facilities, it is important to ensure that this transfer does not 
impact the NEPA compliance process for the ULS or, more importantly, 
prevent the utilization of the canal to convey CUP M&I water.
Technical Issues
    In addition to the policy and procedural issues identified above, 
we have identified several minor technical corrections to S. 1876 that 
are needed in order to facilitate completion of the transfer.
    Include Both Reservoirs at the Salt Lake Aqueduct: In the 
definition for the Salt Lake Aqueduct, S. 1876 refers to the ``Terminal 
Reservoir located at 3300 South and I-215.'' There are in fact two 
reservoirs located at the terminus of the Salt Lake Aqueduct. We 
believe any transfer should include both. Therefore, Section 2(g) of 
the bill should be amended to change ``Terminal Reservoir'' to 
``Terminal Reservoirs''.
    Make Consistent with Existing Contributed Funds Act Agreement and 
Memorandum of Agreement: On August 21, 2003 Reclamation, the 
Association, and the District signed an agreement entitled 
``Contributed Funds Act Agreement and Memorandum of Agreement'' 
(Contract No. 03-WC-40-8800) (Contributed Funds Act Agreement) to 
formalize, among other things, the cost-sharing obligations of the 
various parties for transfer-related expenses. To ensure that the 
legislation is consistent with the already signed Contributed Funds Act 
Agreement, Section 6(a) of the bill should be amended to read ``The 
Secretary shall require, as a condition of the conveyance under section 
3, that the Association and the District pay all administrative costs 
and real estate transfer costs, and half of costs associated with 
compliance with the National Environmental Policy Act of 1969, the 
Endangered Species Act, the National Historic Preservation Act, and 
other federal cultural resource laws, all as described in the 
Agreement.'' This would make it consistent with the terms of the 
existing Contributed Funds Act Agreement.
    Modify Payment Requirement: Section 6(b)(1) requires the 
Association to pay ``the net present value of the Provo Reservoir Canal 
and the Pleasant Grove Property''. Similarly, Section 6(b)(2) requires 
the District to pay ``the net present value of the Salt Lake 
Aqueduct.''
    We believe the intent of these sections is to require the transfer 
recipients to pay, not the net present value of a facility 
(potentially, a very large sum), but rather the present value of the 
remaining obligations for that facility. Therefore, we recommend these 
portions of Section 6(b) be amended to read:

    (1) ``In addition to subsection (a) the Secretary shall also 
require, as a condition of the conveyances under Sections 3(a) and 
3(b), that the Association pay to the United States the net present 
value of the remaining debt obligation, including future miscellaneous 
revenue streams, attributable to the Provo Reservoir Canal and the 
Pleasant Grove Property, as described in the Agreement; Provided, 
however, that the Association may deduct from the net present value 
such sums as are required to accomplish the reimbursement described in 
the Contributed Funds Act Agreement.''
    (2) ``In addition to subsection (a) the Secretary shall also 
require, as a condition of the conveyance under Section 3(c), that the 
District pay to the United States the net present value of the 
remaining debt obligation, including. future miscellaneous revenue 
streams, attributable to the Salt Lake Aqueduct, as described in the 
Agreement; Provided, however, that the Association may deduct from the 
net present value such sums as are required to accomplish the 
reimbursement described in the Contributed Funds Act Agreement.''

    National Environmental Policy Act Citation: Section 7 should be 
modified to correct an error in the citation for the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321, et seq.).
Conclusion
    The Department recognizes significant benefits that may be achieved 
by the proposed title transfer. Much work has already been 
accomplished. If the above-mentioned issues and technical corrections 
can be addressed, I believe the Department could support passage of 
this legislation.
    Mr. Chairman, we appreciate the excellent work and cooperation we 
have had with the district, the Association, Central, Jordan Valley, 
the Central Utah Project Completion Act Office, the U.S. Forest Service 
and the National Park Service. We look forward to continuing that 
effort and to working with Senator Bennett, Committee staff, as well as 
the Association, the District, the Title Transfer Working Group and 
anyone else to craft provisions necessary to resolve these issues. That 
concludes my testimony. I would be pleased to answer any questions.

                                 ______
                                 
                               ON S. 2304

    My name is John W. Keys III. I am Commissioner of the Bureau of 
Reclamation. I am pleased to present the views of the Department of the 
Interior on S. 2304 and H.R. 3209.
    S. 2304 and H.R. 3209 would amend Title V, Section 501 of Public 
Law 92-514 known as the Reclamation Project Authorization Act of 1972. 
The original Act provided for the reauthorization of the North Loup 
Division of the Pick-Sloan Missouri Basin Program. The North Loup 
Division was to provide irrigation water for 53,000 acres of land. S. 
2304 and H.R. 3209 would amend that authorization to ``approximately 
53,000 acres''.
    There is no practical method of final project development that 
results in exactly 53,000 acres. The number of acres under irrigation 
is subject to change due to factors such as continuing project 
development and land use changes. The passage of S. 2304 and H.R. 3209 
which amends the current reauthorizing language by striking ``fifty-
three thousand acres'' and inserting ``approximately 53,000 acres'' 
would provide for authorization of minor acreage changes to allow for 
practical and economical project development in light of current and 
future circumstances.
    Mr. Chairman, the Department supports S. 2304 and H.R. 3209. Again, 
thank you for the opportunity to appear before you today. That 
concludes my statement. I would be pleased to answer any questions.

                                 ______
                                 
                              ON H.R. 1648

    Good Afternoon, I am John Keys, Commissioner of Reclamation. I am 
pleased to be here today to provide the Administration's views on H.R. 
1648, legislation to authorize the Secretary of the Interior to convey 
certain Federally-owned water distribution systems of the Cachuma 
Project in California to the Carpinteria Water Valley District and the 
Montecito Water District. We strongly support this legislation and 
applaud the committee for considering it today.
    Madam Chairman, H.R. 1648 would actually authorize two distinct 
title transfers, both of which are reflected in separate agreements 
that can be executed as soon as the authorizing legislation is adopted.
    The proposed transfers would include the following facilities:

        Carpinteria: The distribution system located in the City of 
        Carpinteria, California. This system consists of 36 miles of 
        pipelines and laterals; Gobernador Reservoir; Shephard Mesa 
        Tank; Lateral IOL, Carpinteria and Shephard Mesa pumping 
        plants; several pressure regulating vaults located throughout 
        the system; fences and structures; and rights-of-way, 
        easements, leases and other property permitting access to the 
        Federal system.
        Montecito: These facilities, located in Montecito, California 
        consist of 9\1/2\ miles of pipelines and laterals; the Asegra 
        Pumping Plant (a deactivated pumping plant connected to a 
        portion of lateral 3 located on Asegra Road); Ortega Ridge 
        Pumping Plant located on Ortega Ridge Road; pressure regulating 
        vaults, fences and structures appurtenant to the distribution 
        system; and rights-of-way, easements, leases, and other 
        property permitting access to the Federal system.

    The transfer would apply only to lands and facilities associated 
with these facilities and would not affect the Districts' existing 
water service contract with the Santa Barbara County Water Agency nor 
the Federal government receipts from water deliveries under that 
contract.
    Anticipated Benefits of These Title Transfers: We believe that 
these title transfers will enable the districts to gain greater local 
control of the distribution facilities that were constructed for their 
use. It will also eliminate the need for duplicative and unnecessary 
administrative obligations that exist for the Districts based upon the 
fact that title to the facilities is held by the United States. Once 
title is transferred, the district will no longer have to seek approval 
for easements, crossing permits, or any work on the facilities, 
required while these facilities are Federally owned.
    For Reclamation, while we currently expend limited resources on 
these facilities, there is an important benefit as well. Upon title 
transfer, periodic inspections and the processing of paperwork that is 
currently required by Reclamation will no longer be necessary. We can 
redirect our resources to other priority activities.
    Title Transfer Processes: The successful processes that we went 
through to complete these two title transfers have been cooperative, 
smooth, efficient and--most importantly-cost effective. The 
relationship and the process is a model for others to follow. Let me 
outline how that went:
    Carpinteria: On March 4, 1999, the Carpinteria Valley Water 
District requested title to the distribution system referenced above, 
which they have operated and maintained since 1956. Upon receipt of 
that request, Reclamation and the District developed an agreement on 
responsibilities and costs for carrying out the title transfer process, 
spelling out who is responsible for which activities and how costs are 
distributed. The District and Reclamation signed it in December 1999.
    On April 25, 2000, Reclamation and the District jointly held a 
public scoping session to solicit comments on the proposed transfer of 
ownership from United States to the District. No issues were 
identified.
    Subsequently the District in consultation with Reclamation, 
completed activities pursuant to NEPA, the National Historic 
Preservation Act (NHPA), the Endangered Species Act (ESA), and the Fish 
and Wildlife Coordination Act, (FWCA). On August 30, 2000, a Finding of 
No Significant Impact (FONSI) was issued.
    On September 19, 2000, in Carpinteria, California, Reclamation and 
the District held a public negotiation session to develop a title 
transfer agreement for the Federally-owned facilities (Agreement No. 
00-XC-20-0364), which spells out the terms and conditions of this title 
transfer and is the basis of this section of the legislation.
    Montecito: The process with the facilities to be transferred to the 
Montecito Water District resembled the one for Carpinteria.
    On March 23, 1999, the Montecito Water District contacted 
Reclamation to formally request title to the distribution system used 
exclusively by them and which they have operated and maintained since 
1995, when they assumed responsibility from the Summerland County Water 
District, who had operated the system since 1956.
    In April 2000, the District signed a letter of agreement with 
Reclamation to address costs and responsibilities for the title 
transfer process.
    On November 29, 2000, Reclamation and the District jointly held a 
public scoping session to solicit comments on the proposed transfer of 
ownership from United States to the District. No issues were 
identified.
    Subsequently, the District, in consultation with Reclamation, 
completed activities pursuant to NEPA, the NHPA, the ESA, and the FWCA. 
On August 6, 2001 a FONSI was issued.
    On March 15, 2001, in Montecito California, Reclamation and the 
District held a public negotiation session to develop a title transfer 
agreement for the Federally-owned facilities (Agreement No. 01-XC-20-
0365), which spells out the terms and conditions of this title 
transfer, which is the basis of the transfer of these facilities in the 
legislation.
    On March 26, 2001, the proposed draft Agreement was made available 
for a 30-day public review and comment period. No comments were 
received.
    On April 24, 2002, Representative Capps asked Reclamation to help 
draft legislation to implement both the Carpinteria and Montecito 
agreements. On April 29, 2002, the Department of the Interior provided 
such a drafting service to Representative Capps.
General Background on Reclamation's Title Transfer Activities
    Having explained why Reclamation fully supports H.R. 1648 and feels 
ready to carry it out, may I briefly update the committee on 
Reclamation's recent title transfer activities.
    Since 1996, the Bureau of Reclamation has transferred title to 
sixteen projects or parts of projects across the west--pursuant to 
various Acts of Congress. Of those sixteen, Reclamation has been given 
authority by Congress to transfer title to thirteen projects or parts 
of projects since 2000, including the transfer of facilities and lands 
to the Fremont-Madison Irrigation District in Idaho which was passed by 
this Congress and signed into law by the President on September 30, 
2003. Since each project is unique, each of the laws enacted by 
Congress has different terms, and each requires that different 
actions--such as the completion of the process under the National 
Environmental Policy Act (NEPA) or agreements with State and local 
agencies over recreation or cultural resources management be taken 
prior to transfer.
    I am pleased to say that Reclamation has been moving expeditiously 
to implement each of these laws. Since May 2001, Reclamation has 
transferred nine projects, or parts of projects. This means that only 
three of the transfers that are currently authorized have yet to be 
implemented. Of those three, one (Humboldt) was adopted late in the 
107th Congress, one (Wellton Mohawk) required that an EIS be completed 
and the transfer is expected to be completed in 2005, and one (Fremont-
Madison) was adopted in the 108th Congress and is moving forward on 
schedule.
    It is important to note that each of the completed transfers was 
done on time or ahead of our schedule and within the budgets that we 
estimated when we started. I commend the hard work and cooperation we 
have received from the water districts and entities who have been the 
recipients of these facilities as well as the other stakeholders who 
have been involved. I am also gratified by our staff's dedication to 
completing these transfers in a timely and cost-effective way.
Conclusion
    As I conclude my remarks Madam Chairman, I would like to commend 
several people who worked hard to make these transfers possible. I 
would like to thank Representative Capps for working closely with us 
and with the District to move this legislation forward. Charles 
Hamilton, General Manager and Secretary of the Carpinteria Valley Water 
District, and Fred Adjarian of the Montecito Water District were 
absolutely instrumental in making this happen. They were creative and 
cooperative in identifying and solving issues even before they became 
controversial or problematic. Sheryl Carter from Reclamation's South 
Central California Area Office did an outstanding job coordinating this 
entire process for Reclamation.
    In summary, Madam Chairman, we strongly support passage of H.R. 
1648. It is a good bill, a good title transfer, and provides a benefit 
to both the Districts and to Reclamation. I urge the Committee to move 
this legislation.
    That concludes my testimony; I would be pleased to answer any 
questions.

                                 ______
                                 
                              ON H.R. 1732

    My name is John Keys III. I am the Commissioner of the Bureau of 
Reclamation. I am pleased to present the views of the Department of the 
Interior on H.R. 1732, concerning the Williamson County water 
reclamation project in the State of Texas.
    H.R. 1732 would amend the Reclamation Wastewater and Groundwater 
Study and Facilities Act (Title XVI of Public Law 102-575), authorizing 
the Secretary of the Interior in cooperation with the Lower Colorado 
River Authority, to participate in the design, planning, and 
construction of a water reclamation project in Williamson County, 
Texas. H.R. 1732 limits the Federal share of project costs to 25 
percent of the total project costs and restricts the Secretary from 
providing funding for the operation and maintenance. Additionally, 
existing law, section 1631 of Public Law 102-575, limits the Federal 
share of project costs to not exceed $20 million (October 1996 prices).
    The Lower Colorado River Authority has developed conceptual plans 
for the project, and Reclamation has completed a cursory review of this 
proposal. Reclamation has not yet conducted an appraisal level study. 
This appraisal study would be needed to determine if the preliminary 
work initiated by the Lower Colorado River Authority meets 
Reclamation's requirements and to evaluate the potential for a 
feasibility study per criteria developed in accordance with Title XVI 
of P.L. 102-575. In that respect, until we have more information, we 
cannot comment on the merits of the project itself and therefore cannot 
support H.R. 1732.
    The Department also believes enactment of this legislation 
authorizing new construction projects is likely to place an additional 
burden on Reclamation's already constrained budget. With the tremendous 
backlog of Title XVI projects that already exist (currently estimated 
at about $2.6 billion), we do not support the addition of new 
wastewater projects at this time.
    For the record, Mr. Chairman, in 1992, the Reclamation Projects 
Authorization and Adjustment Act (Public Law 102-575) was enacted. 
Title XVI of this Act, the Reclamation Wastewater and Groundwater Study 
and Facilities Act, authorized construction of five water reclamation 
and reuse projects. The Secretary was also authorized to undertake a 
program to identify other water recycling opportunities throughout the 
17 western United States and to conduct appraisal level and feasibility 
level studies to determine if those opportunities are worthy of 
implementation. In addition, the Secretary was authorized to conduct 
research and to construct, operate, and maintain demonstration 
projects. Reclamation has been administering a grant program to fund 
these Title XVI activities since FY 1994.
    In 1996, Public Law 104-266, the Reclamation Recycling and Water 
Conservation Act, was enacted. This Act amended Title XVI and 
authorized the Secretary to participate in the planning, design, and 
construction of 18 additional projects, including two desalination 
research and development projects. To date, Congress has provided 
funding to plan or construct 19 of 25 specifically authorized projects. 
Under the general authority of Title XVI, funding has been provided to 
identify and investigate, at the appraisal or feasibility level, eight 
potential water recycling projects, and to conduct three research and 
demonstration projects.
    In summary, the Department strongly encourages local water 
recycling efforts and is engaged in numerous water reuse and recycling 
projects around the West. However, for the reasons provided above, the 
Department cannot, at this time, support authorizing this new request 
for Federally-assisted construction.
    Thank you for the opportunity to comment on H.R. 1732. This 
concludes my statement and I would be happy to answer any questions.

    Senator Murkowski. I appreciate it. Thank you for the 
testimony. And next let's go to Mr. Charles Groat, the Director 
at the U.S. Geological Survey.

   STATEMENT OF CHARLES G. GROAT, DIRECTOR, U.S. GEOLOGICAL 
               SURVEY, DEPARTMENT OF THE INTERIOR

    Mr. Groat. Thank you, Madam Chairman. I would prefer to 
summarize my comments; we've submitted formal testimony for the 
record, if you'll accept that.
    Senator Murkowski. Absolutely. It will be accepted as part 
of the record.
    Mr. Groat. Thank you very much. It's a pleasure to be here 
and have the opportunity to talk about S. 1957 and the forces 
that drive it, the significant challenges in water resources 
along the U.S.-Mexico border.
    This is a good bill. It recognizes the fact that the 
regional problems along the border related to water related to 
the significant economic development are serious and are being 
taken seriously by a large number of entities that have 
resource management responsibilities along the border. When we 
recognize the fact that almost the entire length of that 
international boundary is semi-arid, it's easy to understand 
why the most challenging natural resource in the area is water. 
And when we recognize that it has to sustain not only the 
growing urban and industrial areas, but it has to sustain the 
traditional agricultural base and sustain the natural systems 
that are present along that border, it makes it even more 
daunting. The limited surface water resources in the border 
area have been allocated for several decades under both 
international and domestic agreements.
    That leaves us, then, with the best hope for increased 
water supplies and more efficient use of water supplies in the 
area of having to deal with the groundwater resource. Not only 
would the proposed legislation allow us to have a better 
understanding of the existing aquifers and groundwater systems 
near the border, but provide perhaps the only chance for 
increasing the amount of water available there as a more 
detailed assessment of those aquifers is done, thus increasing 
the potential that we might find more resources. And we have to 
be looking, Madam Chairman, not only at the freshwater 
resources that we know and love so much, but the fact that 
there are saline groundwater resources there that, for, 
example, El Paso was already utilizing and desalting as a means 
for providing drinking water. We need to understand those 
resources as well because they are part of our future resource 
endowment. This act would do that.
    S. 1957 directs the Secretary of the Interior to establish 
the United States-Mexico Transboundary Aquifer Assessment 
Program and to systematically assess those priority 
transboundary aquifers and to provide scientific foundation for 
State and local action, the managers of these resources, to 
address the water resources challenges in the border area. The 
bill also directs the Secretary of the Interior to implement 
this program in cooperation with--and it's more than 
cooperation, in fact, it's partnership--with the border States, 
universities, Water Resources Research Institutes and 
organizations that are cooperating on the other side of the 
border in Mexico.
    S. 1957 objectives include expanding the existing 
agreements between the USGS and border States, Water Resources 
Research Institutes and that points out that we do have a good 
working relationship with them, and working with them in the 
future on this important work will be a natural thing for us as 
it will for them, and also with the appropriate authorities in 
both the United States and Mexico as we conduct these joint 
investigations. This collaboration would provide what managers 
need most, and that's a scientifically based and hopefully a 
very timely understanding of those aquifer systems upon which 
they can base the difficult decisions they make in their 
allocation responsibilities.
    The role for the Department of the Interior in this bill is 
really consistent with what the USGS does in many of its 
resource monitoring, research, and assessment processes; that 
is, deal as a coalescer on issues related to resources that 
cross State boundaries and that cross international boundaries.
    So in summation, Madam Chairman, we've talked with our 
partners a lot about this necessary work. There's good general 
agreement that what is needed is what this legislation 
provides, that systematic and thorough scientific and 
engineering assessment of these important groundwater systems. 
This would provide the most significant hope that there would 
be for having not only a better understanding, as I said 
earlier, but perhaps an expanded water supply base for the 
region. So, as I said earlier, this is a useful bill; it 
provides the research efforts that are necessary to address the 
water issues on the border, it contributes to a more 
comprehensive understanding of those resources, and it allows 
more interaction among the many parties in the region 
interested in those resources from both a scientific and 
managerial point of view. It's really important that a bi-
national, multi-disciplinary effort be made and that it be a 
scientific approach to assess these inter-related issues. This 
bill makes this happen.
    Thank you, Madam Chairman, I'd be happy to answer 
questions.
    [The prepared statement of Mr. Groat follows:]

   Prepared Statement of Charles G. Groat, Director, U.S. Geological 
             Survey, Department of the Interior, on S. 1957

    Madam Chairman and Members of the Subcommittee, thank you for the 
opportunity to participate in this hearing to discuss the important 
role of water in the U.S.-Mexico Border Region and to provide the 
Administration's views on S. 1957, the ``United States-Mexico 
Transboundary Aquifer Assessment Act.'' The Administration supports the 
provisions of S. 1957, ``The United States-Mexico Transboundary Aquifer 
Assessment Act'', however, we note that we currently are undertaking 
some work in the areas covered by the bill and that no new authorities 
are needed. The program authorized in this bill would need to compete 
among the Survey's other priorities for funding.

                               BACKGROUND

    The international border region of the United States and Mexico 
(border region) has, during the past decade, experienced significant 
economic expansion accompanied by rapid population growth and urban 
development. The removal of international trade barriers quickly 
transformed the region's several small to mid-size cities into some of 
the fastest growing population centers in both countries. As a result, 
the people residing on both sides of the border now face numerous 
complex social, political, economic, infrastructure, public health, 
natural resource, and environmental-quality challenges. Along the 
entire length of the mostly arid international border region, perhaps 
the greatest challenge is how to effectively address the need for safe, 
sustainable supplies of good quality water for public, industrial, and 
agricultural uses, while maintaining a delicate balance with the needs 
of a very fragile natural-resource system.
    The limited surface-water supplies along the border have been 
allocated for several decades under international treaties and domestic 
laws. However, allocation of ground water in the border region is 
poorly regulated because little is known about its availability, 
sustainability, and quality; about how ground water interacts with 
surface-water bodies; and about the susceptibility of ground water to 
contamination. Ground water also is an important source of life-
sustaining base flow to many streams and essential for maintaining 
critical aquatic habitats.
    Ground-water pumping has lowered the water table, depleted 
aquifers, and reduced the base flow of many streams thus decreasing the 
quantity of water available to support critical riparian habitats. 
Excessive ground-water pumping in some major urban centers, such as in 
the El Paso/Juarez metropolitan region, has caused land subsidence that 
has damaged homes and essential urban infrastructure. In addition to 
the effects of ground- and surface-water depletion, degradation of 
water quality has reduced habitat suitability for the region's diverse 
biota. The problems associated with limited water quantity and 
competing uses of water also have resulted in impaired and degraded 
water quality and serious issues related to human health on both sides 
of the border. Water quantity and quality will most likely be the 
determining and limiting factors that ultimately control future 
economic development, population growth, and human health along the 
United States-Mexico border.

                                S. 1957

    S. 1957 directs the Secretary of the Interior to establish a United 
States-Mexico Transboundary Aquifer Assessment Program to 
systematically assess priority transboundary aquifers and provide the 
scientific foundation necessary for State and local officials to 
address pressing water resource challenges in the border region. The 
bill further directs the Secretary of the Interior to implement this 
program in cooperation with the Border states as well as with other 
appropriate entities, including affected Indian tribes.
    The proposed, collaborative scientific investigations and research 
efforts would address critical water supply, environmental, and 
natural-resource issues in the border region, and contribute to an 
improved understanding of the relations between the border region's 
many water, natural-resource, biological, and human-health related 
issues. We agree that a multi-discipline, bi-national, scientific 
approach is needed to address these complex, interrelated transboundary 
issues. Additionally, these studies would develop and document the 
tools, scientific methodologies, and procedures for collecting and 
integrating hydrologic, geologic, biologic, and other spatial data into 
a bi-national geographic information system for analysis and modeling 
applications.
    S. 1957 objectives include expanding existing agreements between 
the USGS, Border states, State Water Resources Research Institutes, and 
appropriate authorities in the United States and Mexico to conduct 
joint investigations; document, manage, and share data; and carry out 
the necessary bi-national work efforts. Such collaboration would 
produce timely, widely accepted scientific products and understanding 
of each priority bi-national aquifer that is needed by water and 
natural-resource managers to effectively accomplish their missions.
    The role identified for the Department of the Interior in this bill 
is consistent with the USGS leadership role in monitoring, 
interpretation, research, and assessment of the health and status of 
the water and biological resources of the Nation. As the Nation's 
largest water, earth, and biological science, and civilian mapping 
agency, the USGS provides the largest single non-regulatory hydrologic 
investigative and research capability in the Nation.
    This proposed scientific collaboration by Federal, State, Tribal, 
and academic institutions touches on many of the interdisciplinary core 
competencies of the USGS. At its heart, the proposed collaboration 
would effectively capitalize on the collective scientific capability 
and resources of the partnering institutions. The integration of this 
relevant science would address the most pressing and complex natural 
resource and environmental problems in these very fragile landscapes 
and complex ecosystems.
    The USGS has been active in a number or relevant programs and 
investigations in the arid southwest and hence has a working knowledge 
of proven methods and innovative technologies for' effectively 
characterizing, monitoring, and mapping the border region's ground-
water resources. We believe we have the authority to implement the 
activities called for in the bill and would continue to provide 
resources to address the goals of the S. 1957, provided these 
activities successfully compete against other USGS priorities. In FY 
2004, roughly $500,000 will be spent on such on-the-ground activities 
by USGS. The President's FY 2005 Budget sustains this funding level. 
USGS scientists working from offices in each of the four Border states 
actively participate in these programs and investigations, and are 
called upon by the States and border communities to provide essential 
technical insight and understanding for solving critical water supply 
and natural-resource problems. Our scientists serve on a large number 
of relevant committees, task forces, and advisory groups in the border 
region. Regional coordination and communication of USGS programs and 
activities along the international border is further enhanced 
internally through our Border Strategy Team as well as within the 
Department of the Interior as a result of our active participation on 
the U.S.-Mexico Field Coordination Committee.
    Talking with our partners in the Border states and communities, in 
the other Interior Bureaus, and other Federal agencies, as well with 
scientists and government officials in Mexico, it is widely 
acknowledged that the lack of a standardized, bi-national database on 
the availability, use, and quality of transboundary ground-water 
resources is perhaps the most significant impediment in addressing the 
Border region's numerous complex water-supply and natural-resource 
challenges. The lack of basic inventory and monitoring information 
pertaining to border water resources and water-dependent environments 
prevents a comprehensive understanding of watershed and regional 
processes and issues, and hinders the ability of science to provide the 
essential predictive capability to characterize or describe potential 
cause and effect relations associated with alternative land and water 
use and management actions.
    The program and investigations called for in this bill would 
support the development and maintenance of such a standardized, bi-
national hydrologic database and associated data analysis tools. Early 
into the program, it would be essential that bi-national consensus be 
reached on common investigative approaches, common field data 
collection protocols, laboratory methodologies, and data management, 
documentation, and reporting systems. Once these technical issues are 
resolved, it would be much easier to streamline the treaty requirements 
related to the review and public release of impartial, transboundary 
scientific data. Such consensus has been reached in the past for 
transboundary investigations having limited scope. Obtaining this 
consensus for the entire Border region would greatly enhance 
transboundary scientific collaboration in the future.

                                SUMMARY

    The proposed investigations and pertinent research efforts 
authorized by S. 1957 would address critical water, environmental, and 
health issues in the Border region and contribute to a more 
comprehensive understanding of the relations between the region's many 
water, natural-resource, biological, and health related issues. It is 
important that a bi-national, multi-discipline scientific approach be 
taken to address these interrelated issues. Additionally, these bi-
national studies would develop and document the tools, methodologies, 
and procedures to collect and integrate hydrologic, biologic, and other 
spatial data into a geographic information system for analysis and 
modeling applications.
    Thank you, Mr. Chairman, for the opportunity to present this 
testimony. I will be pleased to answer questions you and other Members 
of the Subcommittee might have.

    Senator Murkowski. Thank you, Mr. Groat.
    Commissioner, let's start with S. 900, the Lower 
Yellowstone Reclamation Projects. You've indicated that there 
are some concerns that you have and didn't really speak to the 
difference that we have with this project. Most title transfers 
are relatively--or have been, I guess, smaller in scope. This 
one is, in comparison, relatively large. How much of a problem 
is this? Can title transfers of this size lead to, one would 
hope, significant cost savings for the Federal Government or 
does this make it more problematic?
    Mr. Keys. Madam Chairman, I think title transfers of this 
size are possible. I think in most cases where we have been 
talking with them about it, they're going to happen. They give 
the local district a lot more ability to deal with issues as 
they arise. It gives them a certain degree of freedom in 
dealing with some of the Federal laws that they may be more 
constricted in if they're a Federal project. This one has a 
couple of challenges that are different than most of the others 
that we have dealt with. The largest one is the power issue. 
All three of those districts there, one of them in particular, 
receives a large amount of power from the Pick-Sloan Missouri 
Basin Program. That power is served as project use power and 
currently the project use power rate is about 10\1/2\ mils per 
kilowatt hour. Until recently, the ability to pay entered into 
the payment for that project use power and in most cases they 
were only paying about 2\1/2\ mils per kilowatt hour for that 
power. If they become a private district, we have talked to 
them and have come to an agreement that they would go to a 
preference power rate. Preference power rate, under the Pick-
Sloan Program, is 16\1/2\ mils. That's the good news. The bad 
news is that as a private district they should be paying for 
the wheeling of the power to get it there. After deregulation, 
wheeling went sky high, and wheeling in that area now ranges 
from 30 to 50 mils per kilowatt hour, which is what we said 
about it being more than the cost of power. So that's the one 
big issue involved in this title transfer.
    The second one is the fish passage facilities and 
protecting fish from going into the canal. There again we have 
talked with the districts and have come to an agreement with 
those folks that if it's authorized and funded we would provide 
those facilities. In other words, the ability to keep small 
fish out of the canals and then to provide passage for the fish 
to move up the river.
    So those are two real challenging parts of this title 
transfer. One of them we think that we have come to agreements 
with the parties on; the other is still out there.
    Senator Murkowski. You mentioned the issue with the Pick-
Sloan Project Use Power. Are there any other non-Federal 
irrigation projects who receive a Pick-Sloan Project Use Power?
    Mr. Keys. Madam Chairman, we think that this one would be 
precedent-setting. There are some other private districts that 
receive Federal power but this would be the first one of the 
title transfer programs where you would have a non-Federal 
project receiving Pick-Sloan Power.
    Senator Murkowski. So, what other--give me a current 
example, then, where public power is paying the wheeling cost 
for private irrigation district through Pick-Sloan.
    Mr. Keys. Madam Chairman, there's not another example.
    Senator Murkowski. There is none?
    Mr. Keys. Where we are paying the wheeling, that's correct.
    Senator Murkowski. Okay. So this would be first in line?
    Mr. Keys. Yes.
    Senator Murkowski. On the Provo River Project, just very 
quickly, you had mentioned that there were several agreements 
that were required for the title transfer to take place and you 
specified central Utah. Is that the only other agreement that 
is required? Are there more and what is the status of those 
agreements?
    Mr. Keys. Madam Chairman, there are a number of agreements 
that still are to be done. The one with the Central Utah 
Project is one that is accommodation among all three of us. In 
other words, Central Utah Project, the Bureau of Reclamation as 
the Federal family, and the parties that would take title to 
the facilities. And it's mainly an agreement to live together. 
In other words, we use the same access roads; in some cases our 
security providing would be--we could work with each other to 
do that. There are a number of issues there that we still need 
agreements on. I'm fumbling a little bit because there's about 
a half-a-dozen different agreements that we still have to get 
done.
    Senator Murkowski. I guess I don't need to know the 
specific details but in terms of the status of the agreements 
and whether we're getting any closer to reaching conclusion so 
that we can move forward.
    Mr. Keys. Madam Chairman, we are working on all of those 
agreements. I see no snags in them at this time. It's just the 
time that it takes to get them done. We're working on NEPA 
right now. I think that we just finished the draft 
environmental impact statement--or the draft NEPA compliance 
last Friday. So it's just getting all of those things together. 
Our preference is to have those agreements signed before the 
legislation's passed. There are differing opinions on that and 
certainly I'm sure you'll hear a different one later on. We 
would just prefer to have them signed before we go ahead 
because having them signed, you have nailed down the 
relationships that you need to make this thing successful.
    Senator Murkowski. Okay.
    Senator Burns.
    Senator Burns. Thank you, Madam Chairman. Mr. Keys, I 
wanted to also ask a question of Tom Graves; they might try to 
answer these things. We've agreed to everything but the 
wheeling costs, I think. You know, I think the power, the 14 
mils there, I think that's okay, but I think we're talking 
about file miles of line of wheeling costs. And for the four 
projects I get a total of about $140,000 last year. Is that a 
correct figure?
    Mr. Keys. Madam Chairman and Mr. Burns, that's very close.
    Senator Burns. They're pretty proud of that 5 miles. Is 
that enough?
    Mr. Keys. Madam Chairman and Mr. Burns, I think that is a 
good question for Mr. Graves.
    [Laughter.]
    Senator Burns. Is Mr. Graves in the audience? Would Mr. 
Graves like to come up and visit with us about that?
    Senator Murkowski. He's going to be giving his testimony in 
the second panel, Senator Burns.
    Senator Burns. What?
    Senator Murkowski. He's going to be testifying in the 
second panel. So he will be coming up. We'll have an 
opportunity to check in with him.
    Senator Burns. Okay. All right. Well, that's where most of 
my questions come from. And I guess I've got to talk to Tom 
more than anybody else. I don't know, in my own mind, who sets 
the wheeling rate.
    Mr. Keys. Madam Chairman, I can answer that one.
    Senator Burns. Yes.
    Mr. Keys. The Lower Yellowstone Valley Electric Cooperative 
is the co-op that is wheeling the Federal Project Use Power 
into the project.
    Senator Burns. Okay, and they set that $140,000 rate. Is 
that correct?
    Mr. Keys. They set a mil rate for however much power is 
delivered and they charge that mil rate. That's the 30 to 50 
mils that I talked about earlier.
    Senator Burns. Okay.
    Mr. Keys. There are a number of other charges involved in 
that. You asked about the $140,000----
    Senator Burns. Yes. Just expound on that, if you would.
    Mr. Keys. The $140,000 it's actually $150,000 or so, but 
that includes a $6 a kilowatt hour demand charge. It includes 
almost 80 mils per kilowatt hour for the first 5,000 kilowatt 
hours; it then drops down to about 70 mils per kilowatt hour 
for over 5,000 kilowatt hours. And then there's a base charge 
involved there. So there are a number of charges that come out 
of the co-op there for the delivery of that power.
    Senator Burns. Well, I tell you what. We could probably 
skip a lot of these things just as long as I know they set the 
rates. How many kilowatt hours do they use a year?
    Mr. Keys. Yes sir. I have some average figures here. Based 
on the year 2003, the Intake district used 67,551 kilowatt 
hours. Lower Yellowstone Number One and Two used 862,803 
kilowatt hours. And Savage used 1,177,300 kilowatt hours.
    Senator Burns. Okay. That's all the questions I have, Madam 
Chairman.
    Senator Murkowski. Senator Bingaman.
    Senator Bingaman. Thank you very much for the testimony, 
Director Groat, on this S. 1957; I appreciate it. Let me ask 
about one thing that is in your written testimony that I don't 
believe you alluded to in your statement. But in there you 
refer to work currently underway that is related to the 
programs described in S. 1957. I assume that that is a 
reference to this U.S.-Mexico Border Human Health Initiative. 
And my understanding, though, is that the Border Health 
Initiative is different from the cooperative program to assess 
transboundary aquifers that we're proposing here. Is that your 
understanding? Am I right about thinking that that is what 
you're referring to?
    Mr. Groat. Yes, Senator Bingaman. The USGS has several 
projects in the border area. The one to which you refer, the 
Border Health Initiative, is not part and parcel of what this 
program would do. We're doing some work in the San Pedro River 
Basin, for example, on surface water that has some relation to 
groundwater. And it's true in other parts of the border. But 
none of those projects, while they might be related in some 
way, carry out the functions that are addressed in this bill. 
And so they are quite different in that sense.
    Senator Bingaman. Okay. We tried--and you did sort of 
allude to this in your statement--in the provisions of S. 1957 
to establish a framework for the program to be carried out as a 
partnership among USGS, the border states and the local 
parties. Is that a workable approach to this kind of work as 
you see it? I mean, have you had experience in these kinds of 
things, that kind of framework before so that you feel 
comfortable with that?
    Mr. Groat. Yes sir. I think it's the only way it will work. 
We bring certain capabilities but certainly the State 
Engineer's Office and the Water Resources Research Institute 
have skills and capabilities related to aquifers in their areas 
that only they can bring in that level of detail. And also, 
they as well as we have relationships with the appropriate 
universities and agencies in Mexico that can cooperate in 
bringing and sharing data across the border. So it is the right 
partnership.
    Senator Bingaman. All right. Well, thank you again, very 
much. Appreciate it. Madam Chairman. That's all I had.
    Senator Murkowski. Thank you. Commissioner, I had a couple 
more questions that we're going to submit to the record. These 
were on some of the other legislation that had been presented 
that seem to be relatively non-controversial. I appreciate your 
testimony.
    Director Groat, I appreciate your comments and your support 
of S. 1957. Do you think that the legislation goes far enough 
to solicit state and local comment when you're identifying the 
priority aquifers for the study?
    Mr. Groat. Madam Chairman, I think that's one aspect that 
is not spelled out in detail in the legislation. It makes it 
clear that these priority aquifers will be identified; it does 
not describe in detail the process. And in the light of Senator 
Bingaman's question, the assumption is that it is the partners, 
which include a heavy input from States, and from Water 
Resources Research Institutes that will come to agreement on 
what these priority aquifers are and that they will therefore 
become part of the system with that agreement in place. Senator 
Bingaman might have more detail on that but that's my 
understanding of how it would work. I mean, I think there is 
adequate local input.
    Senator Murkowski. Senator Burns, did you have any further 
questions of this first panel?
    Senator Burns. I just wanted to clarify one thing, Madam 
Chairman. John, you said the intake was 57,581? Yellowstone 
One, 862,803? Is that correct? This is for 2003?
    Mr. Keys. Madam Chairman, Mr. Burns, the intake was 67 
instead of 57.
    Senator Burns. Sixty-seven.
    Mr. Keys. Five fifty-one. The other figure was correct.
    Senator Burns. And Yellowstone Two, 1,177,300?
    Mr. Keys. That's correct.
    Senator Burns. What about Savage? Is Savage included in the 
intake?
    Mr. Keys. I'm sorry. Intake was 67,551. Savage was 
1,177,300.
    Senator Burns. Well, that's Savage?
    Mr. Keys. Yes.
    Senator Burns. Okay. All right. Now, don't we have a fourth 
one in there somewhere, don't we?
    Mr. Keys. Well, Lower Yellowstone No. 1 and No. 2 were 
together for 862,803.
    Senator Burns. Okay. That's where I made my mistake. Thank 
you very much. Thank you.
    Senator Murkowski. Thank you. If there's no further 
comments or questions, gentlemen, thank you for your testimony. 
Appreciate it.
    And to join us on the second panel we have Jerry Nypen, the 
manager of Lower Yellowstone Irrigation Project; C. Allan 
Jones, the director of the Texas Water Resources Institute; 
John Robert Carman, the general manager of Metropolitan Water 
District of Salt Lake and Sandy, Utah; Thomas Graves, the 
executive director of Mid-West Electric Consumers Association 
and Andrew Core, senior hydrologist, Hydrology Bureau of the 
Administrative Litigation Unit in New Mexico. Welcome to the 
committee, gentleman. And Mr. Nypen, if you want to lead off, 
please.

STATEMENT OF JERRY NYPEN, MANAGER, LOWER YELLOWSTONE IRRIGATION 
                      PROJECTS, SIDNEY, MT

    Mr. Nypen. Thank you, Madam Chairman, and thanks for 
holding this hearing, and thank you very much for the 
invitation. Madam Chairman and members of the subcommittee, my 
name is Jerry Nypen and I'm the manager of the irrigation 
districts that are involved in this title transfer legislation.
    We are pursuing the title transfer for several reasons. We 
have met the obligations of our contracts with the Bureau and 
with the taxpayer. We have debts that we have paid. The 
districts have successfully operated these projects for 75 
years and we've put a great deal of capital into them. We can 
save the taxpayer money. The transfer eliminates duplication of 
efforts amongst the local, State and Federal agencies. Probably 
the most compelling reason, one that I hear on the streets, is 
that it would establish a sense of security for our citizens 
and that is, our local economy. The Bureau of Reclamation can 
no longer give assurance that public policy will protect water 
operations for irrigation in the future. Often the term 
``privatization'' is used to describe the transfer by making it 
known that the districts are public corporations, they are 
governed by State statutes.
    We believe that the Federal Electric Power Service for 
pumping is the obstacle in getting this legislation passed, 
specifically the wheeling. The districts receive Pick-Sloan 
Irrigation pumping power to lift water to the projects' main 
canals. This power is what got the projects constructed and 
this power is what allows them to operate year in and year out. 
The most frustrating part of this transfer has been to find a 
solution that is affordable. The Bureau and the Pick-Sloan 
electric power customers say the districts are not eligible for 
Pick-Sloan power after transfer. We have contended that we are 
and those reasons are described in more detail in my written 
testimony. Without the irrigation pumping power the community 
costs of getting water to the farm goes up from $25 to $40 an 
acre, depending on the lift. It's prohibitive when you add the 
$25 to $30 that these districts already pay for public 
distribution systems.
    We have put forth a lot of items for compromise. We have 
studied and re-studied affordability. In the bill before you 
today, the ability to pay a discounting has been removed from 
the rate. In addition, there is an elevation of project use 
rate to a level equal to the firm power or preference rate; it 
raises the rate from 2\1/2\ mils to 17 mils. These are 
conciliatory moves on the part of the irrigation district. 
There is now a more recent compromise, a compromise due to the 
efforts of Senator Burns and Mr. John Keys.
    The irrigation districts must find a way to obtain 
affordable power and they have agreed to these conditions: No. 
1, the Bureau will keep the existing power contracts in effect 
until they expire in the year 2020; No. 2, they will install a 
linear, annual step-up increase in fees during the last half of 
the contract period; No. 3, the irrigation districts will find 
the means to rehabilitate the projects and cut power 
consumption by 40 percent before contracts expire; and No. 4, 
the districts will accept preference power after the contracts 
expire. These moves are made recently to overcome the 
opposition and to get this title transfer accomplished. And we 
have gone to a great deal of risk to accommodate. We have put 
the farmers at risk, knowing that possibly this can be done, 
we're going in that direction, we've got time to do it with a 
transitional period and we're willing to take that challenge. 
This compromise should erase any concerns that the Pick-Sloan 
electric consumers have. Unfortunately, it did not. I might add 
that we have been unable to reach any kind of compromise with 
the Pick-Sloan electric consumers since we began this transfer. 
We have tried diligently to reconcile with them but we have not 
had any acknowledgments, reconciliatory moves on their part, 
even though there's huge advantage to the Pick-Sloan electric 
consumer from the irrigation function of Pick-Sloan. The 
projects are highly successful and we think they exemplify the 
Reclamation program in the Pick-Sloan program.
    There's a big spin-off from the dollars that go into the 
project. There's been a sugar beet factory there since 1925 
that puts out $70 million in crop products in products 
annually. There's a million-and-a-half bushel malt and barley 
depot that was recently put in. There's a 1,000-cow dairy. All 
of this because of the water. The projects mean everything to 
the 6,000 or so citizens in the project area.
    Madam Chairman, please accept the conciliatory items that 
I've mentioned, as we anticipate an appropriate amendment to be 
included when the bill is marked up.
    Thank you, Congressman Burns, for introducing the bill and 
for the diligent work you have done. And thank you, Mr. John 
Keys, if he's still here, for the diligent work that he has 
done in finding solutions to the affordability issue. 
Especially thank you for this opportunity to provide testimony 
for this bill, again, and we appreciate very much the efforts 
that this committee has put forth in title transfers. Thank 
you.
    [The prepared statement of Mr. Nypen follows:]

     Prepared Statement of Jerry Nypen, Manager, Lower Yellowstone 
Irrigation Project Board of Control, Intake Irrigation District, Savage 
                     Irrigation District, on S. 900

    Mr. Chairman and members of the Subcommittee, my name is Jerry 
Nypen. I am the manager of four irrigation districts located in the 
Lower Yellowstone Valley near Sidney, Montana. Thank you for 
opportunity to provide testimony on 5.900, Lower Yellowstone 
Reclamation Projects Conveyance Act. We appreciate this committee's 
support for the transfer of Bureau of Reclamation features to local 
public entities.
    We thank you Congressman Rehberg for introducing this Bill and for 
the diligent efforts of you and your staff in pursuing an important 
transfer for the people of the Lower Yellowstone Valley. We appreciate 
the Bureau of Reclamation's efforts in accomplishing transfers in the 
West and especially for the efforts of Mr. John W. Keys III and his 
staff to accomplish the transfer of the Lower Yellowstone Projects.

                               BACKGROUND

    There are three Federal irrigation projects involved in this 
legislation. They are the Lower Yellowstone, Savage, and Intake 
Projects, which are located adjacent to a 72-mile section of the 
Yellowstone River near the borders of the states of North Dakota and 
Montana. There are four irrigation districts involved; the Lower 
Yellowstone Irrigation Districts 1 and 2 operate the Lower Yellowstone 
Irrigation Project. Intake and Savage Irrigation Districts operate the 
Intake and Savage Projects.
    The Irrigation Districts have had a very long partnership with the 
Bureau of Reclamation. The Bureau constructed the Lower Yellowstone 
Irrigation Project 94 years ago and transferred the facilities to the 
Lower Yellowstone Districts for operation and maintenance purposes 78 
years ago. The Bureau also constructed the pumping units at Intake and 
Savage, 46 and 55 years ago. The Districts assumed operation and 
maintenance responsibilities shortly after the pumping units were 
constructed.
    The Projects were constructed solely for irrigation purposes. 
Yellowstone River water is diverted and delivered to about 500 farms in 
the Lower Yellowstone Valley.
    The Irrigation Districts are non-profit public corporations that 
operate under the auspices of Montana and North Dakota State 
Governments. Local elected officials administer them.
    These projects have experienced an exceptional record of success. A 
small Federal investment of just over $5 million currently yields over 
$25 million in annual gross crop values. The cumulative yield in crop 
values is about $1 billion. The economic spin-off has been tremendous. 
For example, the irrigation developments have allowed a local sugar 
factory to operate continuously since 1925, a factory having annual 
product sales of $70 million while employing 350 people in the area. 
The Projects' resources continue to draw other industries. A 1.5 
million bushel malting barley depot and a 1,000-cow dairy are the most 
recent additions to our area.
    These Projects truly provide the most reliable contribution to 
national, state, and regional economies that can be obtained in this 
country. The public's investment in these Projects has been returned 
many times over. Perhaps those who have declared that it is not are not 
aware of the extension of benefits that irrigated agriculture offers.
    Features to be transferred in this Bill include irrigation water 
rights, lands and easements, and physical water control features. 
Physical features include a low-head diversion dam, 5 small pumping 
units, about 400 miles of water conveyance ditches, and numerous water 
control structures.

                          REASONS FOR TRANSFER

    The main reason we are pursuing transfer is to be assured that our 
irrigation projects will continue to secure and protect our sound and 
stable economy into the future. The Federal Government has jurisdiction 
here, but they cannot give us the assurance we need that public policy 
will protect our interests into the future.
    We've always understood that the order of events under our 
contracts with the Bureau of Reclamation's was construction, 
settlement, transfer of operation and maintenance responsibility to 
local districts, recovery of the original cost, and finally the 
transfer of ownership. The master contracts between the Districts and 
the Bureau define this process very well. The purpose this legislation 
is to simply complete the last activity, the transfer of ownership.
    The transfer will give our constituents the proprietary interest 
they anticipated and deserve. This will enable them to become true 
custodians of the public works that we have managed for decades. We 
have invested substantial dollars rehabilitating and replacing the 
federal infrastructure. For example, we have replaced all of the 
pumping units and the majority of the water distribution facilities at 
our expense. It is important for us to define the title to these works 
at this time.
    The transfer will reduce costs for the Bureau and the Districts, 
and consequently the U. S. Taxpayer. The Federal Government is 
obligated to monitor and care for its assets. For example, they must be 
involved in actions of third parties such as permitting on public 
lands. They must be involved in reviewing and implementing Federal 
laws, rules and regulations on rehabilitation activity and conservation 
measures that are not of daily routine. The Bureau must spend a 
considerable amount of time listing, reviewing and reporting features 
and activities, a duplication of what we are required to do for the 
State of Montana. I would like to point out that our Projects are on 
the North Dakota/Montana State line and it is 375 miles to the Bureau's 
Area Office in North Dakota, and 300 miles to the Bureau's Area Office 
in Montana, which makes the Bureau's work more difficult and more 
expensive.

                  FINANCIAL INTERESTS AND OBLIGATIONS

    The taxpayers' financial interests will be protected with this 
transfer. The Federal investment in constructing the projects was 
$5,135,900 and the irrigation districts obligation was $4,313,900. All 
of our debt obligations are paid except an outstanding debt for Savage 
Irrigation District of $47,221. This debt will be paid prior to 
transfer.
    A Pick-Sloan Missouri Basin Program feature allows a portion of the 
Savage Project's construction costs to be paid through the sale of 
power. The current value of this assignment is $154,226. The Bureau of 
Reclamation's title transfer guidelines require that this be paid to 
the Secretary at the time of transfer.
    We require about 640 acres of withdrawn lands for operation and 
maintenance activities. This land was not included in the repayment 
debt and will be purchased by the Districts.

                       LOCAL AND REGIONAL SUPPORT

    Local and regional supporters realize that the irrigation projects 
are the backbone of the area's economy. The irrigation projects offer 
the local communities the ultimate in economic stability. The projects 
are in a semi-arid area where irrigation water has provided consistent 
non-failing crop success since 1910. The communities realize that local 
control will guarantee that the projects will continue to operate in 
the same unfailing fashion.
    We have received letters of support for this legislation from the 
County Commissioners of Richland County, the Sidney Chamber of 
Commerce, Richland County Economic Development, Williston Economic 
Development, and numerous businesses and private individuals. We have 
also received regional letters of support from the Governor of Montana, 
the Montana Water Resources Association, and the Upper Missouri Water 
Resources Association.

                  YELLOWSTONE RIVER FISHERY PROTECTION

    The project's source of water, the Yellowstone River, has a healthy 
fish population. The Bureau of Reclamation and others have identified 
25 native species amongst 34 species known to exist. The pallid 
sturgeon, an endangered species listed in 1990, is known to utilize the 
lower reach of the Yellowstone River.
    A very significant issue with this title transfer has been the 
concern for this fishery. The results of studies by the Bureau of 
Reclamation and others reveal that there is sufficient entrainment of 
fish in the Projects' Main Canal. The results also reveal that the 
diversion dam can affect migration of bottom dwelling species including 
the endangered pallid sturgeon. There is a strong cooperative effort 
underway to install a screening device in the Main Canal and a passage 
facility at the low-head diversion dam. Participants in studies and 
design are the Districts, Bureau of Reclamation, Corps of Engineers, 
U.S. Fish and Wildlife Service, and the Montana Fish, Wildlife, and 
Parks.
    There is a Section 7, Endangered Species Act process in progress. A 
Biological Assessment was submitted to the U.S. Fish and Wildlife 
Service in August 2001. Although deadlines to complete the Section 7 
have come and gone, H.R. 2257 allows another 5 years to complete it. We 
think this Legislation is necessary to complete this action.

                        PICK-SLOAN PUMPING POWER

    Why has this title transfer not taken place after all the time has 
been spent trying to do so? The Districts had no idea when they started 
that there would be a question regarding the continuation of Federal 
power service.
    We have received Pick-Sloan Missouri River Basin Program (P-SMBP) 
project use power for operating our community pumps since the projects 
were constructed. Noneligibility would mean that Districts would pay 
for power at the preference power rate, but more importantly would pay 
for wheeling as well. The District constituents cannot afford these 
costs added to their existing District operation and maintenance 
assessments. Rates would go up from a Districts' average assessment of 
$26 per acre to an average of $60 per acre. The Savage District would 
experience a $40 increase from $30 to $70. A recent economic study by 
the State of Montana concluded that net return for Lower Yellowstone 
Projects constituents is only about $50 per acre. That tells us what we 
know as an impossible situation.
    It is very important in this testimony to know our definition of 
project use power and preference power. Project Use Power is power from 
the Pick-Sloan system that is used to carry out the irrigation 
function. It is delivered to the Districts' main pumping plants. The 
rate is the general Pick-Sloan Program rate that would cover all 
operation and maintenance of the system. It is discounted due to the 
District's ability to pay. Today it is 1.076 cents per kilowatt-hour 
discounted to 0.25 cents per kilowatt-hour due to the ability-to-pay 
factor, unique feature of the Pick-Sloan Program.
    Preference power on the other hand is power that is available for 
an entirely different function. It is power that is sold to preference 
customers for paying back the P-SMBP costs including the irrigation 
assistance. It is available off the Federal transmission system and the 
Districts would pay wheeling charges.
    Some additional perspective on P-SMBP is also important. The intent 
of the Flood Control Act of 1944 is to perform 4 main functions. They 
are 1) Irrigation, 2) Flood Control, 3) Navigation, and 4) Power. The 
main theme in 1944 was to reduce flooding, increase navigation on the 
river below Sioux City, Iowa, and develop irrigation in the upper basin 
states. The irrigation has two main purposes, provide economic 
development in the upper basin states and replace the rich bottom 
farmland that are flooded by the reservoirs in Montana and the 
Dakota's. The Projects in this Legislation fit the theme well and are a 
great success to the P-SMBP.

               FEDERAL PROJECT/NON-FEDERAL PROJECT ISSUE

    The power customers insist that project use power is limited to 
Federal Projects only. It is an eligibility issue due to language in 
the 1944 Flood Control Act. The Act ties project use power to Federal 
Projects. Federal projects would be the only way to develop 6,000,000 
acres of irrigation in a structured time frame. Many attempts had 
already been made by non-Federal entities to build canal systems and 
pump water to elevated acres, but most of them failed because of the 
lack of expertise and adequate revenue. One of the first tasks of the 
Bureau of Reclamation in project development was to establish 
irrigation districts to assume responsibility. Projects were operated 
and maintained by the Bureau during a development phase until they were 
transferred to the irrigation districts for that purpose. It was 
necessary to retain ownership of the features so that there was 
assurance that the district's repayment obligation was met. After 
repayment obligations are met, title transfer takes place, just as is 
mentioned in the repayment contracts.
    Sidney Water Users Irrigation District, and another upstream, 
Kinsey, are 2 irrigation districts nearby that operate non-Federal 
projects that obtain Pick-Sloan's project use power. They are like our 
Projects; they were developed from the same mold; they were all 
identified in the Bureau of Reclamation's Yellowstone Pumping Division 
in 1939 to be served by the Fort Peck power facilities. All of the 
districts were included in the P-SMBP plan for wide-scale development 
of the Missouri River Basin. Sidney Water Users and Kinsey operate non-
federal projects, and they were put into the P-SMBP by Congressional 
action. It seems very inappropriate that our Districts who have been 
operating Federal Projects and have been in the P-SMBP's Program now 
for over 50 years are being declared non-eligible for the Program 
because they are going from Federal to non-Federal status.
    Those that oppose the power section of this bill have stated when 
referring to our eligibility status, ``you either are or you aren't a 
Federal Project''. But how can I stand and look directly across the 
river at a non-federal project receiving project use power and. think 
that this rule is valid.
    We cannot believe that it was ever the intent of the Pick-Sloan 
Program to abandon the project use power service because of title 
transfer. It was the catalyst that made them feasible to construct and 
the catalyst that allows them to continue to operate for public 
benefit. But the 44 Act does not address the issue of title transfer 
even though it is a prescribed procedure. It is time for this Congress 
to correct this oversight.

                            PRECEDENT ISSUE

    The second concern the power customers have is that this Bill will 
induce a precedent. Their concern is very dramatized as they contend 
that it could destroy the integrity of the entire P-SMBP. They fear a 
precedent that would allow all non-federal irrigation entities to 
obtain project use power. But Federal ownership has not been a 
condition for receiving Pick-Sloan project use power in the past. The 
Sidney Waterusers, Kinsey, Haidle, and Hammond irrigation developments 
in the Lower Yellowstone Valley, and the Hilltop and Gray Goose 
irrigation districts in South Dakota are all involved in non-Federal 
facilities and receive Congressionally authorized Irrigation Pumping 
Power. The authorities are the 1944 Flood control Act, P.L. 102-575, 
and P.L. 99-662. The Bureau has discredited these situations as not 
applicable examples. But the undisputed fact is that Congress has 
authorized these entities to receive P-SMBP project use power when 
title to their irrigation works remain in the name of the districts.
    There has been precedent for maintaining existing power contracts 
involving title transfers as well. Public Law 105-351, a transfer of 
the Minidoka Project to the Burley Irrigation District, provides for 
continuation of ``Project Reserved Power'' under existing contract 
terms. Public Law 106-221, transfer of the Gila Project to the Wellton-
Mohawk Irrigation and Drainage District, provides for continuation of 
``Project Priority Use Power'' in accordance to existing contract 
terms. In both cases, Federal power benefits continue and more 
importantly, the terms of the existing Federal/District contracts prior 
to transfer remained in effect after the transfer. It is interesting to 
note that the in these two cases, the Federal Government owned the 
transmission lines to the main pumping units and they were transferred 
to the Districts. Federal power is delivered across non-Federal lines 
near our Projects and even though this is a Pick-Sloan responsibility, 
it presents a very contentious issue in negotiating the power service 
after transfer.
    Continuing with P-SMBP project pumping power for our districts 
certainly doesn't offer a green light for any non-federal entities to 
receive the same. Congress must approve all developments, and 
irrigation entities must be public and pay their respective costs of 
the assigned power facilities. In our opinion a prerequisite for an 
irrigation entity having a legitimate issue of precedent would include 
the following conditions: 1) must be a public entity, 2) must be 
custodian of a project that was constructed by the Federal Government, 
3) must possess a contract rate-of-delivery from the irrigation 
suballocation, 4) must have paid the cost of power facilities 
associated with an assigned share of the irrigation suballocation.
    We do not understand the fear of rampant irrigation development 
that the preference power customers have eluded would happen with 
passage of this bill. Only 28 districts representing only 120,000 acres 
in the entire Missouri River Basin have evolved in the last 64 years 
since the relationship between irrigation and pumping power began. 
Water on the Yellowstone and Missouri main stem is fully appropriated 
in Montana There is some reserved water available for about 90,000 
acres, but individuals, not public irrigation developments, are 
steadily consuming most of this. Other states experience the same 
conditions of low water availability. Significant irrigation 
development will just not happen.
    There is also a limit on the amount of power that can be used for 
Pick-Sloan irrigation development. The irrigation suballocation is a 
unique feature of the Pick-Sloan Program to encourage irrigation 
development. It represents 15.8% of the total Pick-Sloan power capacity 
of 2,600 megawatts. A small portion of this has been used leaving about 
13% of the total Pick-Sloan capacity remaining. This means that there 
can only be at best about 350 more megawatts used for irrigation 
development, not an amount that would destroy the P-SMBP as the power 
customer's fear.
    Congress must also approve all assignments of the irrigation 
suballocation as required by the McGovern Amendment. This is a safety 
shield for controlling the use of power for irrigation.
    The Districts in this title transfer legislation have been assigned 
a rate of capacity from the irrigation suballocation. It is 
cumulatively about 1 megawatt (the suballocation is 400 megawatts and 
the system capacity is 2,600 megawatts). The Districts have met the 
obligations assigned to them for this power. The Savage Irrigation 
District has paid their share of the cost of power facilities 
associated with power delivered to them. The other older Districts were 
not involved in paying for power facilities, but regardless, a share 
has been assigned to them by contract. Knowing this, it is difficult to 
understand why the Districts would be severed from the suballocated 
power because of title transfer
    If this severance is made with the Districts, what happens to power 
that was associated with the suballocation? The allocation cannot be 
adjusted because of the conditions of the McGovern Amendment, so we 
presume that it becomes uncommitted even though it was assigned and 
duties were paid.
    You will find that the preference power community is very concerned 
about the irrigation benefits of the Pick-Sloan Program. They benefit 
dearly by unaccomplished irrigation development, especially the 
deferred portion of the irrigation suballocation. They benefit by the 
low cost power that it produces, and they benefit from the low cost 
investment capital that exists and that is continuously received on its 
behalf.
    The deferred portion of the irrigation suballocation produces about 
1.6 billion kilowatt-hours of electricity from its 350-megawatt 
capacity. The cost of marketing this power is very low because the 
taxpayer investment for the power facilities associated therewith is 
interest-free and the repayment is deferred. It wont be repaid until 50 
years after these facilities are assigned to an irrigation project. 
Putting this power in the mix definitely compliments the preference 
power rate.
    A good percentage of the first capital investment costs are 
deferred. What about new investments. All new investment capital for 
such things as interconnects, reliability addition, transmission 
extensions, and general improvements is also discounted because of the 
unused and uncommitted portion of the irrigation suballocation. In the 
1963 Report on Financial Position of the P-SMBP, total investment in 
generators, transformers, substations, and transmission lines, and 
reservoirs was estimated to be about $884 million with the amount of 
$170 million associated with the irrigation suballocation. In fiscal 
year 2000, the power investment was reported to be about $2.6 billion 
and the amount associated with the irrigation suballocation was $408 
million. The point to make here is that 15.8% of new investment money 
is categorized as interest-free with a deferred repayment. This again 
compliments the rate setting and is a benefit to the power customer. 
Often we have heard that the irrigation function of the P-SMBP is 
unfair to the preference power community when it has been quite the 
contrary, it has helped keep rates low for the past 50 years.
    Let me share with you what we understand has happened with the 
title transfer of the Middle Loup Division in Nebraska. They like us 
had a proportionate share of the suballocation assigned to their 
Irrigation Districts. The cost of power facilities associated with this 
proportionate share was paid as a condition of the transfer. But we 
understand that the suballocation percentage has not changed. The same 
15.8% of any new power investment added to the P-SMBP is still being 
deferred.
    The Irrigation Districts have considered the issues of opposition 
on the power service many times and have offered several compromises. 
We have agreed to discontinue the ability-to-pay feature that requires 
us to pay full cost for the project use power. We have offered to pay a 
price for project use power equivalent to the preference power rate. 
These accommodations raise the rates from 0.25 cents per kilowatt-hour 
to 1.08 cents per kilowatt-hour to 1.7 cents per kilowatt-hour.
    Senator Conrad Burns, Commissioner John Keys, and the Districts 
have been working diligently in efforts to compromise and put together 
a plan that would be affordable to the Districts. We think now that 
such a compromise has been found. The details are as follows:

   The existing Bureau/District power contracts for delivery of 
        project use power shall stay in effect until they expire in the 
        year 2020.
   A linear annual step increase in fees shall be implemented 
        during the last seven years of the contract beginning in year 
        2014 and ending in 2021 (8 step increases)
   Western Area Power Administration shall issue preference 
        power contracts for the full contract rate of delivery after 
        the existing Bureau/District contracts are terminated to each 
        of the Districts involved in this transfer. Full contract rate 
        of delivery shall be maintained throughout all future 
        contracts.

    This establishes a transition period that allows the Districts time 
to implement programs to substantially reduce the power usage through 
institutional and physical changes. Time is needed to establish 
resources that will cut power consumption by 40%. This is indeed 
challenge and a risk the Districts are willing to take.
    The Districts are willing to accept the preference power service 
after contracts expire in year 2020, a move that certainly should 
neutralize the precedent setting concern.
    Mr. Chairmen, we hope that you will accept this compromise and we 
hope that by amending the Bill to incorporate the same, that the title 
transfer will be accomplished. This concludes my testimony. I would be 
happy to answer any questions you may have.

    Senator Murkowski. Thank you. Appreciate your testimony.
    Mr. Graves.

   STATEMENT OF THOMAS GRAVES, EXECUTIVE DIRECTOR, MID-WEST 
         ELECTRIC CONSUMERS ASSOCIATION, WHEAT RIDE, CO

    Mr. Graves. Thank you, Madam Chairman. My name is Thomas 
Graves and I'm the executive director of the Mid-West Electric 
Consumers Association. Mid-West was founded in 1958 as the 
regional coalition of Federal firm power customers that 
purchase hydro-power generated at the Federal facilities in the 
nine-State region of the Pick-Sloan Missouri Basin Program. 
Representing over 300 rural electric cooperatives, municipal 
electric utilities and public power districts, Mid-West's 
members serve over 3 million people in the Missouri River 
Basin.
    Privatizing Federal reclamation projects is not a new 
concept. However, in Pick-Sloan only one Federal irrigation 
project, the Middle Loup in Nebraska, has been privatized. 
There are a myriad of issues involved in the transfer of 
Federal reclamation projects into private hands. For Federal 
power customers, the transfer of the Middle Loup Project 
embraced three policies critical to the equitable divestiture 
of Federal irrigation assets--repayment of the remaining 
Federal investment by water and power users at the net present 
value of those obligations; retention of the Federal power 
allocation by the irrigation district, and payment of the Pick-
Sloan firm power rate by the irrigation district under the same 
terms and conditions as other Federal firm power customers.
    Mid-West supported the privatization of Middle Loup and 
successfully worked with the irrigation district to develop and 
implement the policies noted above, that the legislation 
embraced and Congress enacted. Middle Loup now has a firm power 
contract with the Western Area Power Administration under the 
same terms and conditions as other firm power customers in the 
region.
    The legislation before you does not follow that prototype, 
and instead sets an unfair precedent for the treatment of power 
supply for non-Federal irrigation projects in the River Basin. 
Our problem lies with the power supply provisions of the bill, 
and we will limit our testimony to that section. What concerns 
us is not the retention of the Federal power allocation by the 
irrigation projects, but the terms and conditions of that 
allocation. Let me explain, please.
    The Pick-Sloan Missouri Basin Program was established by 
the Flood Control Act of 1944 and envisioned multi-purpose 
development in the Missouri River Basin. Under that plan Pick-
Sloan would serve a variety of purposes meant to enhance 
economic development in the region--flood control, irrigation 
development, hydro-power generation, navigation, and municipal 
and industrial water supply. Hydro-power generation was looked 
upon as the cash register to finance many of these investments. 
Pick-Sloan firm power customers are responsible for repaying, 
through power rates, the Federal investment, with interest, in 
power generation and transmission facilities, and power share 
of multi-purpose costs, such as the dam, the reservoir, 
etcetera. In addition, Congress vested power customers with the 
responsibility and obligation to help repay the capital costs 
of Federal irrigation development deemed too expensive for the 
Federal irrigation districts to repay.
    What all that means is that the 300 plus Pick-Sloan power 
customers--rural electric cooperatives, municipal electric 
utilities, public power districts, Federal and State agencies 
and Native American--tribes are responsible for not only 
repaying roughly $2.5 billion in power investment, but also 
another $726 million in aid to irrigation. To date, Pick-Sloan 
power customers have repaid almost $1.2 billion of the $3.2 
billion Federal investment in power and aid to irrigation. If a 
firm power customer is not directly connected to the Federal 
transmission system, the additional transmission service costs 
to deliver that Federal power are paid for by that customer.
    Under the legislation before you, the Federal Government 
would be responsible for paying the transmission costs beyond 
the Federal transmission system incurred by these non-Federal 
irrigation projects. No other firm power customer in the Pick-
Sloan region receives this benefit; no other non-Federal 
irrigation project receives this benefit. When I say the 
Federal Government would be responsible for paying these 
wheeling costs, what I am really saying is that the Pick-Sloan 
firm power customers throughout the region are responsible for 
repaying these costs through their rates.
    Pick-Sloan Missouri Basin irrigation projects, Federal 
irrigation projects, pay a rate for power subsidized by other 
firm power customers. Until 1999, the costs of that wheeling 
were borne by the irrigation districts but with deregulation, 
as has been noted, the cost changed dramatically.
    The bill before you would transfer the irrigation districts 
into non-Federal ownership but permit the continuation of 
benefits--payment of those wheeling costs only available 
heretofore to Pick-Sloan Federal irrigation districts.
    We cannot support a privatization effort that results in 
neither fish nor fowl. Responsibilities to the Bureau of 
Reclamation relating to Federal irrigation development travel 
with the benefits of a subsidized Federal power supply; one 
goes with the other. To unencumber the irrigation project from 
its responsibilities to the Federal Government while retaining 
the special treatment of Federal irrigation projects with 
respect to power supply costs seems to be an attempt to eat 
one's cake and have it, too.
    We support the continued development of Federal irrigation 
projects in Pick-Sloan; we support the privatization of 
formerly Pick-Sloan Federal projects into private hands, but we 
cannot support the terms that are embraced in S. 900. We 
continue to try to work with the irrigation district to find a 
solution to these problems. It is not an easy issue. But we do 
recognize the value of irrigation in the region and 
particularly Montana, and we recognize the difficulty of this 
project, but we cannot support those terms and conditions. We 
have not ever made an issue of the irrigation district 
retaining its Federal power allocation. We have supported that 
concept from the very beginning and that is a very important 
distinction.
    And with that, I will end my remarks and wait for 
questions. Thank you very much.
    [The prepared statement of Mr. Graves follows:]

      Prepared Statement of Thomas P. Graves, Executive Director, 
           Mid-West Electric Consumers Association, on S. 900

    Good morning. My name is Thomas Graves. I am the executive director 
of the Mid-West Electric Consumers Association. We appreciate the 
opportunity to testify before the Senate Energy and Natural Resources 
Committee, Subcommittee on Water and Power today on proposed 
legislation S. 900 to privatize the Lower Yellowstone Irrigation 
Project (LYIP).
    Mid-West was founded in 1958 as the regional coalition of federal 
firm power customers that purchase federal hydropower in the nine 
states of the Pick-Sloan Missouri Basin Program (Colorado, Iowa, 
Kansas, Minnesota, Montana, Nebraska, North Dakota, South Dakota, and 
Wyoming). Representing over three hundred rural electric cooperatives, 
municipal electric utilities, and public power districts, Mid-West's 
members serve over three million people in the Missouri River basin.
    Privatizing federal reclamation projects is not a new concept. 
However, in Pick-Sloan, only one federal irrigation project, the Middle 
Loup in Nebraska, has been privatized. There are a myriad of issues 
involved with the transfer of federal reclamation projects into private 
hands. For federal power customers, the transfer of the Middle Loup 
project embraced three policies critical to the equitable divestiture 
of federal irrigation assets:

   Repayment of remaining federal investment by water and power 
        users at the net present value of those obligations;
   Retention of the federal power allocation by the irrigation 
        project; and
   Payment of the Pick-Sloan firm power rate by the irrigation 
        district under the same terms and conditions as other federal 
        firm power customers;

    Mid-West supported the privatization of the Middle Loup project and 
successfully worked with the irrigation district to develop and 
implement the policies (noted above) that the legislation enacted by 
Congress embraced. Middle Loup now has a power contract with the 
Western Area Power Administration on the same terms and conditions as 
other firm power customers in the region.
    The legislation before you today does not follow the prototype 
established by the Middle Loup transfer, and instead sets an unfair 
precedent for the treatment of power supply for non-federal irrigation 
projects in the river basin.
    Our problems lie in the power supply provisions of the bill, which 
can be found in section 6 of the proposed legislation. Section 6 deals 
with the power supply for the irrigation projects after transfer. The 
terms and conditions proposed for this power supply are unique and 
troublesome. If the legislation is enacted as proposed, these now 
nonfederal irrigation projects would receive an allocation of Pick-
Sloan power but retain benefits afforded only to federal irrigation 
projects in the Pick-Sloan Missouri Basin Program. What concerns us is 
not the retention of the irrigation projects' allocation of Pick-Sloan 
power, but the terms and conditions of that allocation.
    Let me explain.
    The Pick-Sloan Missouri Basin Program was established by enactment 
of the Flood Control Act of 1944, and envisioned multi-purpose 
development in the Missouri River basin. Under that plan, Pick-Sloan 
would serve a variety of purposes meant to enhance economic development 
in the region--flood control, irrigation development, hydropower 
generation, navigation, and municipal and industrial water supply. 
Hydropower generation was looked upon as the cash register to finance 
many of these investments. Pick-Sloan firm power customers are 
responsible for repaying through power rates the federal investment, 
with interest, in power generation and transmission facilities, and 
power's share of multi-purpose costs (the dam, the reservoir, etc.). In 
addition, Congress vested power customers with the obligation to help 
repay the capital costs of federal irrigation development deemed too 
expensive for the federal irrigation districts to repay. This 
responsibility for repaying a share of irrigation investment in the 
region is commonly called ``aid to irrigation.''
    What all that means is that the 300 plus Pick-Sloan power 
customers--rural electric cooperatives, municipal electric utilities, 
public power districts, federal and state agencies and Native American 
tribes--are responsible for not only repaying roughly $2.5 billion in 
power investment, but also another $726 million in aid-to irrigation. 
To date, Pick-Sloan power customers have repaid almost $1.2 billion of 
the $3.2 billion federal investment in power and aid to irrigation.
    Also, if a firm power customer is not directly connected to the 
federal transmission system, the additional transmission service costs 
to deliver that federal power are paid for by that customer.
    Under the legislation before you, the federal government would be 
responsible for paying the transmission costs beyond the federal 
transmission system incurred by these non-federal irrigation projects. 
No other firm power customer in the Pick-Sloan region receives this 
benefit. No other non-federal irrigation project receives this benefit. 
When I say the federal government would be responsible for paying these 
wheeling costs, what I am really saying is that Pick-Sloan firm power 
customers will be paying for these costs through their power rates.
    Pick-Sloan Missouri Basin Program irrigation projects--federal 
irrigation projects pay a rate for power subsidized by other firm power 
customers. Until 1999, the costs of wheeling the power over non-federal 
lines to federal irrigation districts were borne by the irrigation 
districts.
    In 1999, without hearing or public process, the Bureau of 
Reclamation determined that for federal irrigation projects in Pick-
Sloan, transmission costs beyond the connection to the federal system 
would be included as obligations of power users to support irrigation 
in the river basin. Although Mid-West objected to the Bureau's 
determination at the time and still objects to applying aid-to-
irrigation to water users' operation and maintenance financial 
obligations, that discussion is for another time.
    The bill before you would transfer the irrigation district into 
non-federal ownership, but permit the continuation of benefits--payment 
of wheeling costs only available to Pick-Sloan federal irrigation 
projects.
    Mid-West cannot support a privatization effort that results in a 
creature neither fish nor fowl. Responsibilities to the Bureau of 
Reclamation relating to federal irrigation development travel with the 
benefits of a subsidized federal power supply. One goes with the other. 
To unencumber an irrigation project from its responsibilities to the 
federal government while retaining the special treatment of federal 
irrigation projects with respect to power supply costs seems to be an 
attempt to eat one's cake and have it too.
    Even though non-federal irrigators in the Missouri River basin 
receive Pick-Sloan power as part of the power resource of their rural 
electric cooperatives, there are many nonfederal irrigation projects 
seeking direct allocations of Pick-Sloan power. If this legislation is 
enacted and permits a non-federal irrigation district to receive 
benefits--payment of transmission costs beyond the federal transmission 
system--heretofore only provided to Pick-Sloan federal reclamation 
projects, the non-federal irrigation projects in the region are sure to 
add this to their efforts. It is difficult to see how Congress will be 
able to stanch the demand for special treatment of all non-federal 
irrigators. Every year will bring to Congress not one Lower Yellowstone 
but scores of Lower Yellowstones.
    The low cost power provided through the Pick-Sloan Missouri Basin 
Program is the economic life-blood of the region. Power users are not 
simply an open checkbook for private entities. Transmission service 
costs must be paid by everyone, including irrigators, and not shifted 
to other users. It is unreasonable to expect power customers to accept 
this kind of inequitable cost shifting. Pick-Sloan power rates are 
already increasing. By the end of this calendar year, power users will 
have seen a 15.6% increase in the firm power rate. Next year, we are 
expecting another rate increase, perhaps another 10%.
    These costs are being added to a shrinking Pick-Sloan power 
resource. In 1995, Mid-West supported a proposal by the Western Area 
Power Administration to establish a Resource Pool to provide 
allocations of Pick-Sloan power to Native American tribes in the river 
basin and eligible new preference customers. To accomplish that, 
Western's existing preference customers gave up 4% of their Pick-Sloan 
power allocations. Today, we are anticipating a smaller withdrawal to 
develop a Resource Pool for eligible preference entities. If the 
wrangling over the Corps of Engineers' Master Manual ever ends, Pick-
Sloan power customers may see their allocations reduced yet again to 
reflect the new hydrology of the river.
    Mid-West supports the continued development of federal irrigation 
projects under the Pick-Sloan Missouri Basin Program. Mid-West supports 
privatization of federal reclamation projects that follow the power 
provisions of the Middle Loup transfer. Mid-West cannot support the 
power supply provisions in S. 900/H.R. 2257. The National Rural 
Electric Cooperative Association also opposes the power supply 
provisions in this legislation. A copy of their resolution is attached.
                                 ______
                                 
            National Rural Electric Cooperative Association
                    62nd annual meeting resolutions
Adopted at the 62nd Annual Meeting February 10-18, 2004 New Orleans, 
        Louisiana

                POWER AND WATER RESOURCES COMMITTEE (H)

                      DILUTION OF PREFERENCE POWER

    NRECA opposes changes in the allocation of federal or state 
preference power that would expand rights to this power to non-
traditional customers. Such changes will upset a carefully crafted 
legal balance among many preference customers.
    Rural America is the most vulnerable to harm should these changes 
occur. Preference power protects fragile rural economies from unstable 
power rates. Any consideration of such changes in preference power 
allocation exposes rural America to a wide range of competing demands 
from others. These changes, including precedent-setting proposals 
requiring preference customers to bear the costs of wheeling federal 
power to non-federal customers, will dilute preference power benefits 
of existing legitimate preference power customers leading to 
unaffordable electricity rate increases for rural Americans.
    Our opposition to expansion of preference power rights relates to 
proposals that would allow preference power to automatically flow 
across IOU distribution lines through lease arrangements with new 
public power entities. Such sham public power entities could easily be 
formed by private power marketers and others exploiting unmerited 
access to cost-based preference power as a means to gain a competitive 
advantage. We believe the ability of nontraditional customers and IOUs 
to obtain increased access to preference power through lease 
arrangements encourages the export of low-cost private power resources 
in one region to customers outside the region. Such exports could 
easily threaten the stability of regional rates. We oppose attempts to 
redefine preference based upon the classification of end users, as 
opposed to the type of utility distributing the energy. (01-H-1)

    Senator Murkowski. Thank you.
    Mr. Jones.

 STATEMENT OF C. ALLAN JONES, DIRECTOR, TEXAS WATER RESOURCES 
                 INSTITUTE, COLLEGE STATION, TX

    Mr. Jones. Thank you, Madam Chairman. My name's Allan 
Jones; I'm the director of the Texas Water Resources Institute. 
I'd like to thank you and the subcommittee for the opportunity 
to testify concerning S. 1957, the United States-Mexico 
Transboundary Aquifer Assessment Act.
    I think it goes without saying that water is very important 
in the far west Texas-southern New Mexico area. I'll skip any 
remarks about that importance and go on to the importance of S. 
1957, which is designed to help State and local water planning 
and management agencies to do a number of things. First, to 
build upon previous groundwater studies and to help develop 
high quality, comprehensive groundwater data bases for the 
transboundary aquifers along our border with Mexico. Second, to 
analyze trends in groundwater quality, including salinity, 
toxic pathogens, and nutrients in those aquifers. Also to 
improve existing groundwater flow models that we use to manage 
our water supplies and to help improve and develop new hydro-
geologic maps in the area. All of these things will help our 
state and local organizations, agencies that plan and manage 
the use of our groundwater in their very important 
responsibilities.
    The Texas Water Resources Institute has worked very closely 
with the Texas Water Development Board staff to provide input 
to the committee, and we'd like to thank the staff of the 
committee for being very receptive to our comments and to 
taking them seriously, working with us. We strongly support the 
close coordination among Federal, State and local authorities 
in all of these areas--aquifer characterization and modeling, 
cooperative selection of other important transboundary aquifers 
to be studied, and collaborative data collection sharing and 
analysis. I'd like to note that the committee has received a 
number of supporting letters. I won't go into all of those but 
we're very pleased to see that the major water users in far 
west Texas have signed on and feel that this is a very 
important bill.
    My counterpart in New Mexico, Dr. Karl Wood, who's here 
today, the director of the New Mexico Water Resources Research 
Institute, and I are committed to bringing the expertise of New 
Mexico and Texas institutions of higher education to bear on 
the problems addressed by S. 1957. We look forward to working 
with U.S. Geological Survey and with facilitating its 
cooperation with the State agencies and the local authorities 
in our respective States. We also look forward to cooperating 
with USGS in engaging Mexican institutions with expertise and 
interest in these issues.
    The experience in Texas suggests that the best public 
policy results from engaging a wide variety of local and 
regional stakeholders with their Federal counterparts in the 
design and implementation of water resource planning and 
management. In my judgment, S. 1957 will certainly accomplish 
that goal and we look forward to working on it.
    Thank you.
    [The prepared statement of Mr. Jones follows:]

 Prepared Statement of C. Allan Jones, Director, Texas Water Resources 
               Institute, College Station, TX, on S. 1957

    I would like to thank the Committee for the opportunity to provide 
input to its consideration of this important bill. The ``United States-
Mexico Transboundary Aquifer Assessment Act'' authorizes the Secretary 
of Interior, ``to cooperate with the States on the border with Mexico 
and other appropriate entities in conducting a hydrogeologic 
characterization, mapping, and modeling program for priority 
transboundary aquifers, and for other purposes.'' The purpose of this 
written testimony is, first, to inform the Committee of the importance 
of scientific assessment of transboundary aquifers. Second, I wish to 
stress the need for cooperation among local, state and federal 
organizations in the characterization, mapping, and modeling of 
transboundary aquifers.
    The Texas Water Development Board is in the process of implementing 
a Groundwater Availability Model (GAM) for each of the state's major 
and minor aquifers. This marks a major step in groundwater assessment 
and management for Texas, and the GAMs are being used by many of the 
state's groundwater districts to plan and manage groundwater use. The 
Mesilla Basin and Hueco Bolson in Far West Texas, southern New Mexico, 
and adjacent Mexico are two of the most important sources of water in 
this dry region. Their wise use and long-term sustainability are 
extremely important to the economic development of the area. A good 
scientific understanding of the aquifers' characteristics and response 
to pumping is needed for local and state water authorities to plan and 
manage their use. Aquifer data bases and models developed under S. 1957 
will improve the Texas GAMs for the state's transboundary aquifers, 
improving our ability to plan and manage our groundwater resources.
    The Hueco Bolson is the sole drinking water source for Ciudad 
Juarez and a major source of water for El Paso. It has little recharge, 
water levels have declined by more than 250 feet, and its quality is 
deteriorating. The U.S. Geological Survey (USGS) in Albuquerque in 
cooperation with El Paso Water Utilities has developed a GAM of the 
Hueco Bolson aquifer in Texas, New Mexico, and Mexico. While useful, 
this model does not provide adequate detail, especially with regard to 
water movement and quality within the aquifer to accurately assess the 
effects of pumping on future groundwater quantity and quality. The 
Mesilla Basin is the largest rechargeable aquifer in the region. It is 
used for domestic and supplemental irrigation water, but its recharge 
by waters of the Rio Grande is poorly understood, its southern boundary 
in Mexico is poorly defined, and there have been no bi-national 
modeling efforts to date. If enacted, S. 1957 will help state and local 
water planning and management agencies:

   Build on previous groundwater studies to develop high-
        quality, comprehensive, groundwater quantity and quality 
        databases for the Mesilla Basin, Hueco Bolson, and other 
        important transboundary aquifers.
   Analyze trends in groundwater quality, including salinity, 
        nutrients, toxics, and pathogens in these aquifers.
   Improve existing groundwater flow models, or if appropriate 
        develop new models to facilitate regional water assessment and 
        planning.
   Improve or develop new hydrogeologic maps of both surface 
        and bedrock deposits associated with transboundary aquifers.
   Evaluate strategies to use groundwater supplies wisely and 
        protect groundwater quality.

    I expect that these tasks will be addressed by multi-institutional 
teams of scientists reporting to and receiving feedback from local 
water user groups. It is important that cooperating institutions 
clearly define the scope and time line for each task to avoid 
unnecessary delay and expense.
    The Texas Water Resources Institute has worked closely with Texas 
Water Development Board staff to provide input to Committee staff 
concerning the bill. We have stressed the importance of developing 
scientifically sound data and models that will assist state and local 
agencies responsible for groundwater planning and management. We 
strongly support close coordination among federal, state, and local 
authorities in aquifer characterization, and modeling; cooperative 
selection of other important transboundary aquifers for future study; 
and collaborative data collection, sharing, and analysis. These data 
can be used, where applicable, to improve and strengthen existing 
groundwater models. We also understand that nothing in this Act affects 
the jurisdiction or responsibility of the cooperating states or local 
entities to plan, manage, or use water from a transboundary aquifer. 
Based on these understandings, the Texas Water Resources Institute 
strongly supports its passage.
    I am pleased to note that a number of local, regional, and 
transboundary organizations have written letters or otherwise indicated 
support for S. 1957, including: Border Trade Alliance, City of Deming, 
City of Las Cruces, Dona Ana County, Elephant Butte Irrigation 
District, El Paso County Water Improvement District Number 1, El Paso 
Water Utilities, Far West Texas Water Planning Group, New Mexico-Texas 
Water Commission, Southwest Regional Water Plan Steering Committee, and 
the Water Resources and Desalination Consortium. The Paso del Norte 
Water Task Force also written a letter of support for the comprehensive 
groundwater assessment authorized by S. 1957. The Task Force's 
membership consists of the City of Las Cruces, Elephant Butte 
Irrigation District, New Mexico State University, Crowder Enterprises, 
City of El Paso, Texas A&M University-El Paso Center, University of 
Texas-El Paso, El Paso Community Foundation, Environmental Defense, 
Houston Advanced Research Center, International Garment Processors, 
Ciudad de Juarez, Universidad Autonoma de Ciudad Juarez, Juarez 
Distrito de Irrigacion No. 9, and Grupo Bermudez. Ex-officio members 
include the International Boundary and Water Commission and its Mexican 
counterpart.
    My counterpart in New Mexico, Dr. Karl Wood, Director of the New 
Mexico State University Water Resources Research Institute, and I are 
committed to bringing the expertise of New Mexico and Texas 
institutions of higher education to bear on the problems addressed by 
S. 1957. In addition, we look forward to our role of facilitating 
cooperation with state agencies and local authorities in our respective 
states. Through our institutes, we will cooperate with USGS to engage 
Mexican institutions with expertise and interest in improving aquifer 
characterization, modeling, and management. These organizations will be 
valuable partners in securing and interpreting groundwater and water 
use data for Mexico. They are expected to include: Tecnologico de 
Monterrey; Universidad Autonoma de Ciudad Juarez; Colegio de la 
Frontera Norte; Comision Internacional de Limites y Aguas; Instituto 
Nacional de Investigaciones Forestales, Agricolas, y Pecuarias; and 
Ciudad de Juarez.
    Experience in Texas suggests that the best public policy results 
from engaging a wide variety of local and regional stakeholders in the 
design and implementation of water resource planning and management. In 
my judgment, S. 1957 will accomplish that goal and serve well the 
people of Far West Texas, southern New Mexico, and adjacent Mexico.

    Senator Murkowski. Thank you, Mr. Jones.
    Mr. Core.

       STATEMENT OF ANDREW B. CORE, SENIOR HYDROLOGIST, 
 HYDROLOGY BUREAU, ADMINISTRATIVE LITIGATION UNIT, NEW MEXICO 
 OFFICE OF THE STATE ENGINEER, ON BEHALF OF JOHN R. D'ANTONIO, 
                    JR., PE, STATE ENGINEER

    Mr. Core. Thank you, Madam Chairman. I appreciate you 
holding this hearing. I would like to note that John D'Antonio, 
who is the State engineer of the State of New Mexico has 
submitted a written statement and I would appreciate it being 
considered as part of the record.
    Senator Murkowski. It will be included as part of the 
record.
    Mr. Core. Thank you, ma'am. The mission of the Office of 
the State Engineer is to quantify and apportion water within 
the State of New Mexico to protect the uses of senior water 
right holders throughout the state and we are committed to 
finding new and better ways to do that.
    S. 1957 is potentially very good for the State of New 
Mexico because it addresses cooperative research that can lead 
to new solutions to water shortages in the rapidly growing Las 
Cruces-El Paso-Juarez metropolitan area. I understand that 
negotiations are underway to make some changes to the original 
draft of the bill; we have seen a very current draft today and 
we do consider those changes very positive.
    The New Mexico agencies are working very diligently to 
develop fresh and saline water sources throughout the State, 
saline water being a priority of the Governor, and we are 
looking for ways to implement those priorities and this bill 
does a very interesting thing in including these saline water 
sources in the transboundary aquifer study. We are also fully 
engaged in attempts to regionalize water sources, water 
conservation and active resource management. This bill really 
brings a great deal of funding toward the development of 
pathways that reach those regional goals.
    One of the things that New Mexico is proud of is that we 
were the first State to implement conjunctive water resource 
management, and this bill recognizes the importance of 
groundwater-surface water interaction. And we are very 
committed to helping develop ways to further that kind of 
research.
    We really are very interested in engaging the USGS, the 
various WRIs and other agencies that will be involved in this 
project to provide a proper level of guidance. The thing that 
we are really interested in is seeing new data, new drill 
holes, new testing, new measurements; we don't want any rehash 
of old material if we can help it. And this bill provides us a 
great deal of that kind of guidance, I believe.
    So, I would like to express support for the bill. And with 
that I will take any questions that you'd like.
    [The prepared statement of Mr. D'Antonio follows:]

  Prepared Statement of John R. D'Antonio, Jr., PE, New Mexico State 
                          Engineer, on S. 1957

    Senate Bill 1957 is potentially good for the state of New Mexico 
because it addresses cooperative research that can lead to new 
solutions to water shortages in the rapidly growing Las Cruces-El Paso-
Juarez metropolitan area. I am aware that negotiations have been 
underway to introduce some changes to the original draft. The changes 
that my staff has analyzed seem very positive.
    New Mexico agencies, including mine, are working diligently to 
develop new fresh and saline water sources and the technologies to make 
them available for our citizens. This bill adds significantly to that 
effort.
    The New Mexico water community is engaged fully in an attempt to 
regionalize water sources, water conservation and active resource 
management. This bill provides funds for the development of pathways 
toward those regional goals.
    Of primary interest to New Mexico is the doctrine of conjunctive 
management, which administers water in major river valleys and their 
connected aquifers as one combined source. New Mexico was the first 
state to put this doctrine into practice more than forty years ago. The 
common link in the Mesilla and Hueco aquifers noted, as a priority 
within the bill is the historic Rio Grande. We welcome the opportunity 
to see a true regional study of the Lower Rio Grande Basin.
    I believe that the proposed study does need to have a proper level 
of guidance and control that includes the state agencies directly 
involved in water resource management. Furthermore, I believe that a 
strong bias toward new data collection that builds upon previous 
studies should be an important component of the bill.
    I want to express my support for the passage of this bill and look 
forward to working with the New Mexico congressional delegation to 
bring this effort to fruition.

    Senator Murkowski. Thank you, Mr. Core.
    Mr. Carman, your testimony.

   OPENING STATEMENT OF JOHN ROBERT CARMAN, GENERAL MANAGER, 
  METROPOLITAN WATER DISTRICT OF SALT LAKE & SANDY, SANDY, UT

    Mr. Carman. Thank you, Madam Chairman, members of the 
committee. We appreciate the opportunity to be here today to 
testify on this bill. We wanted to thank Senator Bennett and 
his staff, particularly Luke Johnson, for their assistance in 
introducing our bill.
    The Metropolitan Water District of Salt Lake and Sandy 
provides wholesale supplemental drinking water to Salt Lake 
City and Sandy City. In most years we also provide water to our 
sister agency, the Jordan Valley Water Conservancy District, 
the other large public water wholesaler located in Salt Lake 
County. The Metropolitan Water District of Salt Lake and Sandy 
is a major shareholder in the Provo River Water Users 
Association. The Association is a non-profit, private mutual 
irrigation company. I'm currently serving as the president of 
their board of directors, and their general manager, Keith 
Denos, is here with me today. The District and the Association 
we're here representing are the entities responsible for 
repayment to the United States of all the costs of construction 
for the Provo River Project, which kicked off in 1935. 
Repayment for operation and maintenance of the two divisions of 
the project, the Aqueduct Division, the responsibility is with 
Metro and the Provo or, the Deer Creek Division of the Provo 
River Project is with the Association.
    We're interested in pursuing title transfer on three 
components of the project: the Provo Reservoir Canal; the 
office-shop complex in Pleasant Grove and the Salt Lake 
Aqueduct. The Salt Lake Aqueduct has been operated by my 
district, Metropolitan, and basically is a pipeline that's 41.7 
miles long, with a drinking water reservoir at the other end. 
The Provo Reservoir Canal is about 21.7 miles long; it's an 
earthen canal that goes through an increasingly suburbanized 
area. And the office-shop complex is a four-acre piece of land 
upon which we just built the Association's office and shop 
complex at no cost to the Federal Government.
    I'm going to skip over some of this additional detail if we 
can have my written comments put in Senator Murkowski. The full 
text of your comments will be included in the record.
    Mr. Carman. Thank you. The proposed title transfer in our 
view will be an important first step in accomplishing the 
following goal: improved public safety. The canal itself is in 
an area, as I previously mentioned, that's increasingly 
suburban. In the past 20 years, 14 people have died in that 
canal through drownings in the siphons. Enclosing that canal 
would virtually eliminate the risk and so this title transfer 
is the first step for a future project of enclosing that canal. 
Ironically, since it's held in the name of the Federal 
Government, our district can't use its tax exempt status to 
bond for these improvements. So by transferring the title of 
the canal and to a local public entity, that's how we hope to 
utilize our own tax exempt financing. That non-Federal 
financing in the tax exempt form is very important to us. In 
terms of the owners of the Provo River Water Users Association, 
a private, non-profit mutual irrigation company, more than 90 
percent of the ownership is now in government hands.
    The enclosure project, which is what we're contemplating, 
this being the first step to, will produce a number of 
important benefits. Water conservation is a key issue; we're in 
the fifth or sixth year of a drought in Utah and we estimate 
that approximately 8 percent of the water going through the 
canal is lost to seepage. So by enclosing it we get that water 
back. We anticipate that some or all of that conserved water 
would be sent to the Department of the Interior in a deal to 
help pay for the enclosure, so that's part of the deal that's 
on the table. And this would soon be an increase to the Central 
Utah Project water supply. Our district is the second largest 
petitioner to the Central Utah Project and it's very important 
to us that they have a complete supply to make their supplies 
available to us. Enclosing that canal will improve drinking 
water protection from a water quality perspective as well as 
from a security perspective. The canal goes through many 
communities and it's very hard to protect as an open canal. We 
believe that the enclosure project would make for more 
efficient and coordinated use of the water conveyance 
facilities and water treatment facilities of the large water 
providers on the Wasatch front. In addition, the canal is in a 
right-of-way that would make a great recreational opportunity 
for Utah County, and we are engaged in discussions to help 
facilitate that process. And finally, we believe that transfer 
of these assets will reduce the demands on Reclamation 
resources while it will increase ours.
    Completion of the title transfer to the Salt Lake Aqueduct 
and Pleasant Grove property will require a title transfer 
agreement with the Secretary. Completion of title transfer to 
the Provo Reservoir Canal will require certain agreements among 
impacted local entities and the United States. Completion of 
the title transfer will require NEPA and other compliance work. 
The first step, in our view, is congressional authorization of 
this process. We ask for your support in this critical first 
step.
    I wanted to add our appreciation for John Keys and his 
staff, their work on the NEPA process, proposed changes to 
legislation and the agreements we've been working on has been 
outstanding. We really appreciate their support. We believe 
that most of the concerns that were addressed by Commissioner 
Keys have been worked out in concept and will come out during 
the mark-up. Therefore, we believe it's timely for the Senate 
to move forward on this legislation.
    Again, I wanted to express my appreciation for this 
opportunity to testify, and I'd be happy to answer any 
questions you might have.
    [The prepared statement of Mr. Carman follows:]

Prepared Statement of John Robert Carman, General Manager, Metropolitan 
       Water District of Salt Lake & Sandy, Sandy, UT, on S. 1876

    My name is John Carman. I am the General Manager of the 
Metropolitan Water District of Salt Lake & Sandy.
    The Metropolitan Water District of Salt Lake & Sandy provides 
wholesale supplemental drinking water to Salt Lake City and Sandy City. 
In most years our District also provides water to a sister agency, 
Jordan Valley Water Conservancy District, the other large public 
wholesaler located in Salt Lake County.
    The Metropolitan Water District of Salt Lake & Sandy is the major 
shareholder in the Provo River Water Users Association. I serve as the 
President of the Board of Directors of the Provo River Water Users 
Association.
    The District and the Association I represent are the entities 
responsible to repay to the United States all of the costs of 
construction of the Provo River Project. Repayment for, and the 
operation and maintenance of, the Aqueduct Division of the Provo River 
Project is the responsibility of the District. Repayment for, and the 
operation and maintenance of, the Deer Creek Division of the Provo 
River Project is the responsibility of the Association.
    The District and the Association are interested in pursuing a title 
transfer of certain features of the Provo River Project in Utah. The 
Association and the District are seeking title to the Salt Lake 
Aqueduct, the Provo Reservoir Canal, and a 3.79 acre parcel of land in 
Pleasant Grove, Utah that is being used for the Association's Office 
and Shop Complex.
    Construction of the Salt Lake Aqueduct was initiated in 1939. The 
Salt Lake Aqueduct consists of a new intake structure, recently 
constructed without federal funds, located at the base of Deer Creek 
Dam, at the top of Provo Canyon in Wasatch County, Utah. From the 
intake structure water is conveyed through approximately 41.7 miles of 
pipe with an inside diameter of 69", as well as several tunnels. The 
Salt Lake Aqueduct reaches from the intake to the District's Little 
Cottonwood Water Treatment Plant in Salt Lake County. From the plant, 
water is conveyed to two 20 million gallon finished water reservoirs 
located at approximately I-215 and 3300 South in Salt Lake City.
    The Provo Reservoir Canal is approximately 21.5 miles long and 
reaches from the mouth of the Provo Canyon, through eight Utah County 
cities to the south end of Salt Lake County. For most of its length the 
canal is an open, unlined, earthen structure, perched on foothills 
above and below a rapidly urbanizing area. The Provo Reservoir Canal 
includes four large siphons to move water under streams and roads.
    The Provo Reservoir Canal was privately constructed in the early 
1900s. Legal title to the Provo Reservoir Canal was conveyed to the 
Bureau of Reclamation in 1939 to facilitate financing of canal 
improvements through the Reclamation Act of 1902. Ironically, because 
the United States holds legal total to the Provo Reservoir Canal, the 
local governmental entities are inhibited from obtaining locally 
financed improvements that are critically needed.
    The 3.79 acre parcel of project land in Pleasant Grove, Utah is the 
location of a new $2 million Office and Shop Complex recently completed 
by the Association using no federal dollars. Though the Association was 
given a perpetual right to use this land in 1956, title to the land 
remains in the name of the United States.
    The proposed title transfer will be the first step to accomplishing 
the following goals:
    1. Improved public safety. The land surrounding the canal is 
quickly developing, and interactions with the canal are increasing 
exponentially. Approximately 14 people have drowned in the Provo 
Reservoir Canal in the last 20 years. Enclosure would virtually 
eliminate this risk.
    On one occasion the earthen canal failed, flooding lands below. 
Those lands are more developed today. On another occasion a slip in the 
canal bank was detected before the canal was filed for the season. 
Enclosure would virtually eliminate this risk.
    2. Improved public drinking water protection and security. Today 
the majority of the water moved through the Provo Reservoir Canal is 
treated and used for drinking water. The open canal exposes the water 
to a number of contaminants.
    3. Non-federal financing of necessary facility improvements. While 
the Salt Lake Aqueduct is generally in very good condition, we 
anticipate accelerating repairs in the coming decades to improve 
security, seismic safety and longevity of the facility. In the near 
future we anticipate a seismic upgrade to the two 20 Million Gallon 
reservoirs that are a part of the Salt Lake Aqueduct.
    The Provo Reservoir Canal must be enclosed. We anticipate an 
enclosure project in partnership with the Central Utah Project.
    The fact that title is held by the United States prevents certain 
low-cost, non-federal financing sources.
    4. Water conservation. It is estimated that the unlined Provo 
Reservoir Canal loses approximately 8% of the water moved through that 
facility. The proposed enclosure would make that water available for 
use.
    5. Use of some of the conserved water for stream habitat. It is 
anticipated that some of the saved water will be used by the Department 
of the Interior for in-stream purposes in the lower Provo River by 
agreement. The lower five miles of the Provo River have been designated 
critical habitat for the June Sucker.
    6. An increase in the Central Utah Project (CUP) water supply. It 
is anticipated that several petitioners for CUP water will be able to 
turn back some CUP water because of the availability of the water saved 
through enclosure of the Provo Reservoir Canal.
    7. More efficient and coordinated use of water treatment and 
conveyance facilities for the benefit of a number of local governmental 
entities. The Provo Reservoir Canal, the Salt Lake Aqueduct and the 
Jordan Aqueduct all serve water to north Utah County and Salt Lake 
County. Several water treatment plants are or will be tied together 
with this facility, and additional facilities currently being 
constructed by this District. Transfer of title to the Salt Lake 
Aqueduct and the Provo Reservoir Canal, and enclosure of the canal, 
will allow a more comprehensive and coordinated use of these 
facilities, to the benefit of all of the communities involved. It is 
anticipated that the coordinated use of these facilities will assist 
the Central Utah Project in meeting some minimum instream flow 
commitments.
    8. New public recreational opportunities. Water quality and safety 
concerns prevent the lawful use of the Provo Reservoir Canal 
maintenance road as a public trail. When the canal is enclosed the 
surface could be used safely for a public trail.
    9. The elimination of demands on limited Reclamation resources. The 
Bureau of Reclamation provides dedicated and competent staff support 
and resources to assist with the maintenance of the aqueduct and canal 
rights of way. Those responsibilities will be assumed completely by the 
District and the Association, and Reclamation resources will be freed 
up for other federal needs.
    Completion of title transfer to the Salt Lake Aqueduct and the 
Pleasant Grove Property will require a title transfer agreement with 
the Secretary. Completion of title transfer to the Provo Reservoir 
Canal will require certain agreements among the impacted local entities 
and the United States. Completion of title transfer will require NEPA 
compliance and other compliance work. The first step is Congressional 
authorization of this process. We ask for your support of this critical 
first step.

    Senator Murkowski. Thank you. I appreciate your testimony.
    Let me just very quickly begin with you and we'll work 
backward. I believe the comment was made that the transfers 
will take some time or the agreements that are pending will 
take some time, and that it's not necessary to have those 
complete before the legislation goes through. You've indicated 
that the legislation is a priority. You don't see this as being 
an impediment to moving this issue forward?
    Mr. Carman. No, we believe it would help. Right now we have 
a lot of folks spending a lot of money in the hopes that this 
legislation will go through. I could give one example. We have 
communities, cities, that own shares in irrigation companies in 
Utah County, that they use for their water supply. Those 
irrigation companies are private, non-profit entities that own 
capacity in this canal. So to work out the joint public agency 
concept that we've all agreed to as a premise going forward, 
there has to be a lot of legal work to unentangle the 
capacities that are owned by those cities through these private 
companies and then transfer those into a government entity so 
that we can finance that component of the canal with tax exempt 
financing. So we feel that getting the legislation in place 
will give everybody a better level of comfort that those 
investments and the legal costs to unentangle their assets, it 
will help that process move forward.
    Senator Murkowski. Good, good. A question for either Mr. 
Jones or Mr. Core. If there were to be significant groundwater 
contamination or depletion found on either side of the border, 
what kind of cooperative agreement, or is there some agreement 
between the State of Texas and Mexico to address and remedy a 
situation like this?
    Mr. Jones. Madam Chairman, I don't believe at this time 
there is that sort of an agreement in place.
    Senator Murkowski. So, if it were to happen we'd just work 
through it and hope for the best? The purpose of this 
legislation, obviously, is to use some science to help us with 
these allocation issues so that we don't get to a point where 
we have a problem that we've got to rectify or remedy. But what 
you're saying is if we were to find something or if there are 
significant depletion problems we really don't have any kind of 
an agreement in place at this time?
    Mr. Jones. That's my understanding and I think what we lack 
here is a scientific understanding of the situation. And then, 
if we do find significant problems, I'm certain that we would 
address those appropriately with a good scientific basis for 
our action.
    Senator Murkowski. Good. And you would concur, Mr. Core?
    Mr. Core. Yes ma'am, I would. In fact, I think the dearth 
of information from the Mexican side is one of our biggest 
problems at the moment and any cooperative effort that we can 
put together than increases our scientific knowledge of those 
entire systems will feed directly into solving any 
contamination problem.
    Senator Murkowski. Good. Mr. Nypen, at the end of your 
testimony you suggested that a proposed amendment could or will 
phase out this project use power. Can you describe the power 
cost differences between what's currently in the bill and then 
what the proposed amendment might do in terms of the cost 
difference?
    Mr. Nypen. Well, what's currently in the bill, if it were 
to pass, would be--the cost of power would be 10 mils.
    Senator Murkowski. Okay.
    Mr. Nypen. Excuse me. It would be at the preference power 
rate which is about 17 mils.
    Senator Murkowski. And that's the current language?
    Mr. Nypen. That's the current language. The compromise is 
to absorb the wheeling. And again, we have this wheeling issue. 
And it would result in about 100 mils because when I look at 
wheeling, I look at dividing the total dollars by the amount 
that's used. And when you do that, it isn't 3\1/2\ or 4 or 5 
cents per kilowatt hour; it's 8, it's 7\1/2\ or 8, and I think 
maybe I'm thinking the same way that Mr. Burns is thinking when 
asking the questions about being specific on the amount that we 
use and the dollars. When you divide those out, that's what we 
look at. So you have to add the 17 mils for the power and the 
wheeling on top of that which is, you know, another 80 mils.
    Senator Murkowski. And do these numbers--I'm assuming that 
all of the districts, as part of this proposal or the plan, are 
all making the assumption that you have. What would be the 
impact if one of the districts were to withdraw from the title 
transfer proposal?
    Mr. Nypen. That's part of really studying the affordability 
and what we can do. The problem is that they're all linked 
together. There's one diversion dam and the main canal was 
constructed in 1909 for the two large irrigation districts. A 
third irrigation district was added in 1946; it gets its water 
from the main canal, not the river, so the Federal facilities 
diverge and convey water to the point at which the southern 
district pumps its water from. Likewise farther downstream 
another district was added in 1950. So it's a real problem 
because the Bureau has not been able to tell us what happens if 
we divide them up. There would have to be Federal water 
conveyed through facilities that were transferred to get to 
these two districts. And so they're all, you know, linked 
together and that's a big problem and we haven't been able to 
take them apart.
    Senator Murkowski. Senator Burns.
    Senator Burns. Thank you. Just got a couple of questions. 
Mr. Graves, from Mr. Nypen's testimony that Federal ownership 
has not been a condition of receiving Pick-Sloan power in the 
past, citing places like Kensie Irrigation Development. What's 
your response to this?
    Mr. Graves. Sir, the Kensie Irrigation District was 
developed back in the 1930's, I believe it was.
    Mr. Nypen. Twenties.
    Mr. Graves. Twenties? Way before Pick-Sloan, when they were 
developing Ft. Peck, which you know was the first of the dams 
to be completed and later incorporated into the Pick-Sloan 
plan. My understanding is the Bureau of Reclamation at that 
time was shopping for customers because this was a new dam, 
they wanted to serve irrigation, and so by administrative 
action they began providing them with Ft. Peck power. There was 
no pumping rate, there was no aid to irrigation; none of those 
things existed at that time. And then it was incorporated by 
reference with the establishment of the Flood Control Act of 
1944.
    Senator Burns. Okay. And now, on the Middle Loup title 
transfer.
    Mr. Graves. Yes, sir.
    Senator Burns. How does that compare to this transfer on 
the Lower Yellowstone?
    Mr. Graves. The primary difference is the wheeling costs.
    Senator Burns. There are wheeling costs in the Loup?
    Mr. Graves. There are but as Jerry will tell you and we 
certainly agree all irrigation projects are very different, and 
in Nebraska, they obviously do not have the same kind of lift 
out of the river in terms of their power costs. They're all 
different, but yes, there are wheeling costs involved and there 
are power costs involved.
    Senator Burns. Is there any area in your mind where we can 
reach middle ground on this?
    Mr. Graves. Well, ironically enough, Senator, you don't 
have to be worried about my mind; it's my board's mind. But we 
are working on this. We continue to work on this. I have been 
racking my brain, quite frankly, to try to figure out a way to 
reduce the costs to the district and continue to do so. I do 
know that Lower Yellowstone, when they had to establish these 
wheeling rates because of FERC Order 888, did employ an 
engineering firm that does this kind of thing as a matter of 
record. We continue to look for it. Our concern is what happens 
after, if this legislation were enacted. Because as you know, 
the overwhelming majority of irrigation development in the 
whole River Basin is not Federal. It's non-Federal. There are 
only about 27 Federal irrigation projects in the district. And 
if one non-Federal irrigation project starts getting additional 
costs covered, they're all going to be coming in, banging on 
the door, asking for the same deal.
    Senator Burns. I think it's great.
    [Laughter.]
    Mr. Graves. Thanks.
    Senator Burns. And I don't want to crimp your lifestyle or 
anything, but I think, you know, that's the reason the 
cooperatives were established in the first place, to provide 
power out there where we had no power. And I think maybe we've 
gotten away from that a little bit. Maybe I have a skewed 
vision of that, but I'll tell you what I want to do. I want to 
sit down with you and all the stakeholders. If we have to do it 
in Montana we'll do it in Montana. But there has to be a way, 
because this wheeling cost, I think for five miles, is just--I 
mean, evidently that's acceptable to the irrigation districts, 
the wheeling costs, but, nonetheless, what would be the 
preferred rate? Or the firm power rate?
    Mr. Graves. The firm power rate today is about 16.3 mils; 
come October 1 it will be going up to 16.8 mils.
    Senator Burns. What's driving the cost on that?
    Mr. Graves. There are a couple of things. One is just 
agency costs, because we're talking about the Western Area 
Power Administration, Corps of Engineers and the Bureau of 
Reclamation, and the lack of the liquid stuff we need to 
irrigate the projects; drought. But we are expecting next year, 
as well, to get another rate increase.
    Senator Burns. Can we get you all together out there?
    Mr. Graves. Any time you want, sir. This is not a happy 
issue.
    Senator Burns. I know it's not. It's very unhappy; I don't 
like it at all. Because I'm very supportive of the co-ops and I 
want to see them survive, and I'm very supportive of what these 
people have in mind up there. If you know what I mean.
    Mr. Graves. Yes sir. And we would like very much to 
facilitate and make this transfer happen if that's what the 
districts want, but we have the economy in the Upper Great 
Plains, as you know, is not exactly robust, and we have to be 
very careful about the costs we're adding to the Pick-Sloan 
resource. Our resource is shrinking so we have costs being 
spread over a smaller base. In 1999, we supported Western Power 
Administration in creating a resource pool, withdrawing 4 
percent of the power from every co-op and municipality in the 
region to establish a resource pool to provide new power to 
Native American tribes and to other preference-qualifying 
entities. If the Corps of Engineers ever finishes the master 
manual we may see our resource shrink again because of changed 
hydrology in the river. Our contracts also provide for 
withdrawals as Federal irrigation development does come on-
line. So, we share your goal and we share your concern.
    Senator Burns. Mr. Nypen.
    Mr. Nypen. Yes, sir?
    Senator Burns. Well, I think that's the way we'll proceed 
on this. And I'll try to get together out there sometime this 
spring and we'll set a date and see if we can't come up. I want 
to get some more figures, but I'll do them in private. I'll get 
some more figures from both of you and we'll do some figure-
crunching here and then we'll try to set up that meeting.
    And I thank the chairman for having this hearing today. 
That's very, very important that we get our cards on the table 
and we start working on this thing in earnest because I've 
worked two Congresses on this thing and it's time to finish it. 
And, you know, then, I thank you both for coming. I appreciate 
that very much.
    Mr. Graves. Thank you, Senator.
    Senator Murkowski. Thank you, gentlemen. Appreciate your 
testimony this afternoon. If there are any follow-up questions 
we'll send them to you. We appreciate your time. And we will 
look forward to working with all of you on these issues, to 
resolve them so we can move forward. Thank you. We're 
adjourned.
    [Whereupon, at 3:50 p.m., the hearing was adjourned.]

                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

                        Department of the Interior,
           Office of Congressional and Legislative Affairs,
                                   Washington, DC, August 27, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S. Senate 
        Washington, DC.
    Dear Mr. Chairman: Enclosed are responses prepared by the Bureau of 
Reclamation to questions submitted following the May 19, 2004, hearing 
before the Subcommittee on Water and Power on S. 900, to convey the 
Lower Yellowstone Irrigation Project, the Savage Unit of the Pick-Sloan 
Missouri Basin Program, and the Intake Irrigation Project to the 
pertinent irrigation districts; S. 1876, to authorize the Secretary of 
the Interior to convey certain lands and facilities of the Provo River 
Project; S. 1957, to authorize the Secretary of the Interior to 
cooperate with the States on the border with Mexico and other 
appropriate entities in conducting a hydrogeologic characterization, 
mapping, and modeling program for priority transboundary aquifers; S. 
2304 and H.R. 3209, to amend the Reclamation Project Authorization Act 
of 1972 to clarify the acreage for which the North Loup division is 
authorized to provide irrigation water under the Missouri River Basin 
project; H.R. 1648, to authorize the Secretary of the Interior to 
convey certain water distribution systems of the Cachuma Project, 
California, to the Carpinteria Valley Water District and the Montecito 
Water District; and H.R. 1732, to amend the Wastewater and Groundwater 
Study and Facilities Act to authorize the Secretary of the Interior to 
participate in the Williamson County, Texas, Water Recycling and Reuse 
Project.
    Thank you for the opportunity to provide this material to the 
Committee.
            Sincerely,
                                             Jane M. Lyder,
                                               Legislative Counsel.

[Enclosure.]

                     Questions From Senator Dorgan

    S. 900 THE LOWER YELLOWSTONE RECLAMATION PROJECTS CONVEYANCE ACT

    Question 1a. Lower Yellowstone (S. 900)--I understand that the 
Bureau has been working with the local irrigation districts on this 
title transfer proposal for some time. Please summarize for us the 
benefits that you believe would be obtained from this title transfer.
    Answer. Reclamation supports title transfer for projects that could 
be efficiently and effectively managed by a non-federal entity. This 
title transfer would divest Reclamation of the responsibility for the 
operation, maintenance, management, regulation of, and liability for 
the project.
    Question 1b. What are your concerns?
    Answer. As we have testified on several occasions, Reclamation 
believes this title transfer is premature since significant issues 
remain to be resolved related to the continued delivery of Pick-Sloan 
Missouri Basin Program (P-SMBP) power following title transfer, fish 
and wildlife mitigation, and appropriate pricing and valuation of lands 
being transferred to the non-Federal entity.
    Question 2a. Lower Yellowstone (S. 900)--I know that one of the 
witnesses on the next panel has concerns regarding the implications of 
subsidizing the cost of wheeling power to the project once the title 
transfer is complete. Do you share this concern?
    Answer. Yes. Reclamation has testified consistently, and it is the 
Administration's view, that the federal government should not be 
required to provide irrigation pumping power at subsidized rates to 
projects that are transferred out of federal ownership.
    Question 2b. Would we be setting a new precedent?
    Answer. Yes, as proposed the legislation sets two significant 
precedents related to the manner in which power is provided: 1) this 
legislation would create a non-federal irrigation district with a 
federal wheeling subsidy, and 2) this legislation would provide a 
Western firm power customer with a federal wheeling subsidy. Western's 
preference/firm power customers are currently not entitled to federally 
subsidized wheeling when the power is moved over non-federal 
distribution lines.
    Question 2c. How would this impact power customers in the region?
    Answer. The P-SMBP firm or preference power users (power customers) 
currently pay most of the costs of providing power to the federal 
irrigation districts along the lower Yellowstone River. S. 900/H.R. 
2257 as introduced would reduce some of the costs paid by power 
customers because the irrigation districts would pay for power at a 
rate that recovers the costs of making the power available. However, 
Pick-Sloan customers would continue to pay for the federal wheeling 
subsidy.
    Question 3a. Lower Yellowstone (S. 900)--I understand that in 1999, 
the Bureau started including in the obligations of Pick-Sloan power 
users the costs of transmitting power across non-federal lines to 
federal irrigation projects. What impact did this have on the rates 
paid by the water districts that are advocating the title transfer 
under S. 900?
    Answer. Prior to 1999, Federal irrigation districts paid for their 
project use power up to their ability-to-pay. This included 1 mil/kwh 
for wheeling. In 1999, Reclamation determined that the Pick-Sloan 
legislation obligated the Federal government to absorb wheeling costs 
incurred in delivering project use power to the district's pumps as a 
Pick-Sloan power expense. Between 1999 and about 2001, Reclamation 
reimbursed the districts for their wheeling costs. Since that time, the 
costs of transmitting power for Federal irrigation districts across 
non-federal lines have been included as costs to be recovered from the 
Pick-Sloan power rate payers. Most irrigation districts in the Great 
Plains Region have no additional ability-to-pay, and therefore the 
power rate paid by the districts was not affected by this. The economic 
effect is that wheeling costs incurred by the districts are now paid by 
firm power customers, driving the districts' costs down. Since 2001, 
wheeling costs have significantly increased, imposing additional costs 
upon firm customers of about $500,000 per year, or .05 mills/kWh for 
Pick-Sloan power rate payers, but resulting in no additional charges to 
the districts.
    Question 3b. If this policy hadn't been changed in 1999, would the 
districts be paying these wheeling charges now?
    Answer. Yes. If the policy had not been changed and procedures 
remained as they were before 1999, the irrigation districts would have 
continued to pay the cost of wheeling power over non-Federal lines. 
These costs have increased substantially over the past five years as a 
result of the unbundling of costs following deregulation.
    Question 4. Lower Yellowstone (S. 900)--Mr. Nypen's testimony 
provides several examples of instances where non-federal projects have 
received project use power (Sidney Water Users, Kinsey, Haidle, and 
Hammond irrigation developments in the Lower Yellowstone Valley; 
Hilltop and Gray Goose Irrigation districts in South Dakota; Minidoka 
Project transfer to Burley Irrigation District; and Gila Project 
transfer to Wellton-Mohawk Irrigation and Drainage District). For the 
record, can you please explain the circumstances, terms and conditions 
under which this project use power (or project reserved power) is 
received, and whether these instances are analogous to the situation 
presented in S. 900?
    Answer. In 1946, Reclamation entered into contracts to provide 
Kinsey Irrigation Company and the Sidney Pumping Project electrical 
service under authority of the 1938 Ft. Peck legislation. These Ft. 
Peck power contracts were later converted to P-SMBP project use power 
contracts when Congress integrated the Ft. Peck power system into P-
SMBP. The present contracts for these districts run until 2020, are at 
a 2.5 mil rate, and wheeling is included in the rate. Lower Yellowstone 
Irrigation District I and II, as well as Savage Irrigation District, 
are similar to Kinsey and Sidney in that they were also to receive 
power from Ft. Peck Dam, and were later incorporated into P-SMBP for 
project use power. However, they were constructed as Reclamation 
projects and as such remained under Federal ownership after 
construction, unlike Kinsey and Sidney. These projects are not 
analogous to Lower Yellowstone because they became eligible to receive 
P-SMBP project use power through the integration of Ft. Peck into P-
SMBP.
    In 1986, legislation was enacted authorizing Hilltop and Grey Goose 
Irrigation Districts as P-SMBP units and making them eligible for P-
SMBP power. The present contracts for these districts run until 2020, 
are at the 2.5 mil rate, and wheeling costs are included. Both projects 
were constructed under USDA programs. This is not analogous to the 
situation presented in S. 900. Hilltop and Grey Goose were originally 
private irrigation districts that were converted to Federal ownership 
by legislation.
    In 1992, legislation was enacted making P-SMBP power available to 
Haidle Irrigation Project and Hammond Irrigation District. The power 
was to come from the project use allocation (pumping power) but was to 
be marketed by Western as firm power. The present contracts for these 
districts run until 2020; are through Western at the firm rate; and 
wheeling is not included. These projects are not analogous to Lower 
Yellowstone because, like all Western firm power customers, these 
irrigation districts are responsible for their own wheeling costs in 
excess of 1 mil/kwh.
    Public Law 105-351 authorized the Secretary to convey certain 
facilities of the Minidoka Project to the Burley Irrigation District. A 
provision in the law allows for the continued receipt of project 
reserved power in accordance with the terms of the existing contracts. 
The administration testified against the continued provision of 
subsidized power after transfer. This instance is not analogous to 
Lower Yellowstone because wheeling above 1 mil/kwh was always the 
responsibility of Burley Irrigation District.
    In the instance of the Gila Project transfer to the Wellton-Mohawk 
Irrigation and Drainage District, the District will continue to receive 
and pay the full cost of project use power where the project use rate 
is equal to the actual cost of operation, maintenance, replacement and 
amortization. This instance is not analogous to the present situation 
because wheeling costs were a responsibility of Wellton-Mohawk 
Irrigation District.
    Question 5. Lower Yellowstone (S. 900)--Do you believe the bill as 
drafted would give the Bureau sufficient time to complete necessary 
environmental compliance?
    Answer. No. Section 7 of S. 900 requires the Secretary, in 
cooperation with the irrigation districts, to provide fish protection 
devices within two years of enactment, and then to complete all 
modifications within three years after they are constructed. 
Reclamation would be required to provide these devices on a non-
reimbursable basis even though they will ultimately become part of a 
non-Federal project.
    Informal discussions with the U.S. Fish and Wildlife Service are 
underway on project operations, including fish protection devices. 
Consultation under Section 7 of the Endangered Species Act will follow. 
The decisions resulting from the Section 7 process will define the fish 
protection requirement. This consultation process will take from 6 
months to well over a year, depending on the conclusions reached in the 
biological opinion. Under the bill as currently drafted, a two-year 
monitoring period to measure the effectiveness of the fish protection 
devices runs concurrently with a three year window in which 
modifications based on the monitoring must be completed. These time 
limits may not be sufficient to determine whether or not the fish 
protection devices operate successfully under normal flow conditions.
    Following ESA compliance, NEPA and cultural resource compliance 
would be necessary. Preliminary internal scoping suggests that the City 
of Glendive and others will be concerned about the economics/viability 
of the paddlefish fishery. Depending upon the magnitude of these 
concerns, we will determine whether an Environmental Assessment (EA) or 
an Environmental Impact Statement (EIS) will be required. That decision 
and the cultural resource compliance will both affect the timeframe for 
environmental compliance.
    Question 6. Lower Yellowstone S. 900--You note in your testimony 
that there are issues relating to the price and valuation of the 
withdrawn lands that will be transferred. How does the valuation 
contemplated in the bill differ from the formulas used in other title 
transfers?
    Answer. This bill provides that the valuation process must 
determine the value of the withdrawn lands based on ``their value in 
providing operation and maintenance benefits'' only. Assets should be 
accounted for in a valuation process that appropriately protects the 
financial interests of the Treasury, not limited or conditioned to the 
value of the assets being used in a particular way.
    Question 7. Lower Yellowstone (S. 900)--Does this title transfer 
conform to the Bureau of Reclamation guidelines governing such 
transfers?
    Answer. With the exception of the wheeling subsidy issue, the 
Districts have worked diligently with Reclamation on completion of the 
title transfer process, in accordance with Reclamation's guidelines and 
policies.

               S. 1876 PROVO RIVER PROJECT TITLE TRANSFER

    Question 8a. I understand that the Bureau of Reclamation would 
prefer that certain agreements be in place prior to the passage of this 
legislation. Can you please describe these agreements and tell us when 
you think they will be completed?
    Answer. The members of the Title Transfer Working Group identified 
several written agreements among various parties that will be needed 
either prior to or subsequent to transfer. The Secretary will be a 
party to two of these agreements. These two agreements, which are in 
draft final awaiting approval by the parties, are described in the 
following paragraphs:
    (a) A master title transfer agreement entitled ``Agreement among 
the United States, the Provo River Water Users Association, and the 
Metropolitan Water District of Salt Lake & Sandy to Transfer Certain 
Lands and Facilities of the Provo River Project.'' This key agreement 
is defined in Section 2(8) (Contract No. 04-WC-40-8950), and referenced 
in Sections 3(a), 3(b), and 3(c) of S. 1876. This agreement establishes 
very specific terms upon which the title transfer legislation, if 
passed, will be implemented. It provides essential details regarding 
the duties of the parties, manner of conveyance, and exceptions and 
reservations. It also ensures that the interests of all affected 
parties, including the public, are protected after transfer.
    (b) A multiparty operating agreement entitled ``Agreement Regarding 
the Coordinated Operations of Provo Reservoir Canal, Salt Lake 
Aqueduct, and Jordan Aqueduct System among the United States, Provo 
River Water Users Association, Metropolitan Water District of Salt Lake 
& Sandy, Central Utah Water Conservancy District, and Jordan Valley 
Water Conservancy District.'' Each of the parties to this agreement 
hold various interests in the use, operation, and maintenance of one or 
more of three large water conveyance facilities (Provo Reservoir Canal, 
the Salt Lake Aqueduct, and the Jordan Aqueduct) which transport water 
from the Provo River in Utah County to end users located in Utah and 
Salt Lake Counties. All of the parties believe coordinated use and 
management of these three facilities is highly desirable. Currently, 
these three facilities are owned by the United States and are operated 
by the other parties pursuant to contracts with the United States. S. 
1876 would transfer two of these facilities, the Provo Reservoir Canal 
and the Salt Lake Aqueduct, out of federal ownership. This multiparty 
operating agreement articulates the operational roles and 
responsibilities and environmental commitments of the various parties. 
It also commits the parties to coordinated and cooperative management 
of the facilities before, during, and after title transfer.
    The Title Transfer Working Group met on June 29, 2004, and adopted 
final drafts of these two agreements. Reclamation supports both draft 
agreements and is prepared to sign them as soon as NEPA compliance has 
been completed. The comment period for NEPA compliance is now closed 
and we foresee no issues that would cause a delay. The Secretary will 
not be party to other agreements. The parties may want to enter into 
agreements with each other, and we believe those agreements can be 
developed after transfer is completed.
    Question 8b. I understand that there is a proposal to convey 
Central Utah Project municipal and industrial water through the Provo 
Reservoir Canal for use in Salt Lake County. Have the details of this 
arrangement been completed and formalized in an agreement?
    Answer. The Department of the Interior and the Central Utah Water 
Conservancy District filed a draft EIS for the Utah Lake Water Delivery 
System (ULS) with the Environmental Protection Agency (EPA) on March 
25, 2004. The deadline for public comments was June 11, 2004. The draft 
EIS indicates that about 24,000 acre-feet annually would be conveyed 
through the Provo Reservoir Canal for use in Salt Lake County, and the 
draft EIS also indicates that an agreement would be required to convey 
this Central Utah Project (CUP) M&I Water through the canal. It has 
been assumed that title transfer of the canal would not occur prior to 
the execution of the conveyance agreement and therefore, the Department 
has assumed that title transfer of these facilities would not impact 
the NEPA compliance process for the ULS or prevent the utilization of 
the canal to convey CUP M&I Water.
    Question 8c. Is legislation premature at this time?
    Answer. No. At the time S. 1876 was introduced, Reclamation 
believed that the legislation was premature. Now that the parties have 
resolved key issues and negotiated final drafts of the master title 
transfer agreement and the multiparty operating agreement which capture 
those understandings, we no longer believe the legislation is 
premature.
    Question 9. Provo River Project Title Transfer (S. 1876)--What are 
the benefits of this transfer? What concerns, if any, do you have about 
the transfer of these facilities?
    Answer. Reclamation believes this transfer has potential to yield 
multiple benefits:
    (1) The Provo River Water Users Association (PRWUA) desires to 
enclose the Provo Reservoir Canal, and the Metropolitan Water District 
of Salt Lake & Sandy (MWDSLS) desires to rehabilitate both terminal 
reservoirs of the Salt Lake Aqueduct.
    Because federal funding for such major rehabilitation programs is 
no longer available, PRWUA and MWDSLS must each secure financing from 
the private sector. Private sector financing opportunities are 
extremely limited because neither PRWUA nor MWDSLS owns the facilities 
in question. Transfer of title would facilitate private financing of 
major rehabilitation activities at very favorable interest rates.
    (2) Enclosure of the Provo Reservoir Canal (currently cost-
prohibitive under federal ownership) would promote water conservation 
and enhance public safety. Additionally, there is great public interest 
in development of a public recreation trail along the canal alignment. 
Safety considerations preclude development of a trail next to the open 
canal. Enclosure of the canal would make development of a trail 
feasible.
    (3) These facilities are located in a highly urbanized area. 
Reclamation receives numerous requests for crossing and right-of-use 
agreements annually and must use its limited staffing and resources to 
review and process these requests. Additionally, MWDSLS must review and 
concur with any request that impacts the facility they manage. Transfer 
of these facilities out of federal ownership would allow Reclamation to 
devote limited staff and resources to management of other projects and 
facilities. It would also allow applicants for rights-of-use to seek 
approval directly from MWDSLS or PRWUA, rather than dealing with both 
Reclamation and the water users.
    Question 10. Provo River Project Title Transfer (S. 1876)--Does 
this title transfer conform to the Bureau of Reclamation guidelines 
governing such transfers?
    Answer. Yes.
    Question 11. Provo River Project Title Transfer (S. 1876)--Will the 
United States receive a fair return on the land and facilities under 
this transfer?
    Answer. Yes. Sections 6(a) and 6(b) of S. 1876 requires PRWUA and 
MWDSLS to pay an appropriate share of expenses incident to title 
transfer. Sections 6(c)(1) and 6(c)(2) require PRWUA and MWDSLS to pay 
the net present value of the portion of their respective debt 
obligation to the United States which is associated with the lands and 
facilities to which they will receive title. They are also required to 
pay the net present value of historic revenue streams which have been 
collected by the United States for rights-of-use issued on these lands 
and facilities.
    Question 12. Provo River Project Title Transfer (S. 1876)--Does 
this title transfer proposal raise issues with respect to the 
coordination of operations with the Central Utah Project? If so, please 
describe. How will these issues be addressed?
    Answer. On November 1, 1994, the United States of America, the 
Central Utah Water Conservancy District, and the Provo River Water 
Users' Association executed an agreement entitled ``Deer Creek 
Reservoir/Jordanelle Reservoir Operating Agreement.'' This agreement, 
along with the multiparty operating agreement among the same parties 
(now in final draft) as part of the title transfer, will define the 
terms of the coordinated operation of Central Utah and Provo River 
projects. These agreements should address any operations issues.

                H.R. 1648 CACHUMA PROJECT TITLE TRANSFER

    Question 13a. Does this transfer conform to the Bureau of 
Reclamation guidelines governing such transfers?
    Answer. Yes, both the Carpinteria Valley Water District (CVWD) and 
the Montecito Water District (MWD) worked closely with Reclamation and 
followed Reclamation's processes and guidelines to complete this 
transfer.
    Question 13b. Will the Federal Government receive fair return on 
the land and facilities to be conveyed under the bill?
    Answer. Yes, we have completed a complete valuation assessment of 
both sets of facilities and believe that there has been a fair return 
on the lands and facilities for conveyance. In July 2000, CVWD 
completed its repayment obligation to the Federal Government for the 
construction costs of their distribution facilities. The costs of the 
easements, rights of way, and lands purchased in fee title have been 
included in the construction costs of repayment contracts for CVWD.
    MWD has a minimal amount remaining on their repayment contract for 
the construction costs of their distribution facilities and has agreed 
to make a final lump sum payment prior to title transfer. The costs of 
the easements, rights of way, and lands purchased in fee title have 
been included in the construction costs of repayment contracts for MWD.
    Question 13c. Have you complied with all environmental laws?
    Answer. Yes. In both the Carpinteria and Montecito transfers, 
Reclamation has complied with all environmental laws including the 
National Environmental Policy Act, the National Historic Preservation 
Act, the Endangered Species Act, and the Fish and Wildlife Coordination 
Act. There are no Indian Trust Assets within the project area. On 
August 30, 2000 a Finding of No Significant Impact (FONSI) was issued 
for CVWD and on August 6, 2001 a FONSI was issued for MWD.
                                 ______
                                 
                    Lower Yellowstone Irrigation Districts,
                                         Sidney, MT, July 14, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.

Subject: S. 900--The Lower Yellowstone Reclamation Projects Conveyance 
Act, Reply to your letter dated June 30, 2004.

    Dear Senator Domenici: I appreciate the opportunity to answer 
questions of Lisa A. Murkowski, Chairperson, Subcommittee on Water and 
Power, pertaining to S. 900. The responses are enclosed and are 
submitted for the record.
            Sincerely,
                                               Jerry Nypen,
                                                           Manager.
[Enclosure.]

                    Questions From Senator Murkowski

    Question 1. What financial benefits will this transfer grave to the 
local irrigators?
    Answer. There are no financial benefits for irrigators associated 
with the transfer; however, there will be prevention of future 
financial impact. Districts are non-profit public corporations governed 
by state law and will not capitalize in any way on the transfer of 
title. The Districts continue with their function after transfer, i.e. 
divert a fixed water right and distribute it to farms in an equitable 
manner via community features the same as they have for decades.
    Our utmost concern is the costs associated with the government 
agencies administrating Section 7 of the ESA. The Bureau of Reclamation 
and the Fish and Wildlife Searvice are currently in a painfully slow 
consultation process that involves the endangered Pallid Sturgeon and 
the federally owned diversion dam. The cost of fish protective devices 
for this feature is estimated to be $9 million. The Bureau assumes 
responsibility for the cost at this time, but we expect that this will 
not always be the case. The bill provides that the ongoing ESA process 
be completed in a timely manner. If the bill does not pass, the 
districts are at great risk of assuming this anticipated cost as well 
as the cost of any future Section 7 processes. We have no control over 
this process whatsoever--Fish protection devices such as those 
anticipated now could cost about $10 per acre per year for 40 years, 
not to mention the probability of loss due to federal involvement in 
the water operations.
    There is also significant financial impact on one of the districts, 
the Savage Irrigation District, if the bill does not pass. A water 
supply contract has expired and would be renewed at an estimated cost 
of $100,000. This district is very small, 2,300 acres, and the cost of 
contract renewal and other contract requirements could cost the 
districts another $5 per acre.
    All of the Districts are subject to the costs incurred by the 
Bureau of Reclamation in administrating federal assets. The cost of 
review of maintenance of facilities, cost of contracting and permitting 
on federal lands and rights-of-way, and the general costs of 
administrating Reclamation Law and updating rules and regulations are 
being passed on to the Districts. The Bureau is just now beginning to 
pass these costs on to the districts and a dollar amount is not 
available.
    Question 2. Please describe the power cost differences between what 
is currently in the bill and the proposed amendment phasing out Project 
Use Power.
    Answer. The current bill allows continuation of the Project Use 
Power to the districts' main pump units, not at the Project Use Power 
rate, but at a rate equal to the Preference or Firm power rate. The 
current bill provides that wheeling of low-voltage power over short 
distances to the pumps remains a Pick-Sloan function. The total annual 
cost of power for the districts would be $31,550.
    The amended bill allows the current power rate to remain in affect 
until 2014 when a step increase begins. By year 2021, the beginning of 
a new contract period, the total annual cost is $157,210 without 
adjustment for inflation.
    The four districts (two operating jointly) have power requirements 
that vary significantly. Enclosed are individual tabulations 
illustrating the costs of power over the next 20 years,
    Question 3. What would be the impact if one of the districts 
withdrew from the title transfer proposal?
    Answer. There would not be any significant impact. The two smaller 
districts, Intake and Savage, obtain their water supply from the other 
two districts, Lower Yellowstone Irrigation Districts 1&2 (operating 
jointly). They contract the use of the Lower Yellowstone Irrigation 
Project's Diversion Dam and the first few miles of the Main Canal. It 
is awkward to transfer two out of three districts, but arrangements 
could be made to deal with the integrated features. The bill must 
specify the conditions for dealing with the integrated features if any 
of the districts withdrew front the title transfer effort.

Average Usage (kwh) . . . . . . . . . . .663,431
Ave REA wheeling (mills/kwh) . . . . . . . . 69.5
Acres served . . . . . . . . . . . . . . . . .2,347

     POWER COSTS FOR THE NEXT 20 YEARS--LOWER YELLOWSTONE IRRIGATION
                              DISTRICTS 1&2
                            [LL-MC Pump Only]
------------------------------------------------------------------------
                                                As           Proposed
                  Year                     Introduced\1\   Amendment\2\
------------------------------------------------------------------------
2006....................................         $10,947          $1,659
2007....................................          10,947           1,659
2008....................................          10,947           1,659
2009....................................          10,947           1,659
2010....................................          10,947           1,659
2011....................................          10,947           1,659
2012....................................          10,947           1,659
2013....................................          10,947           1,659
2014....................................          10,947           8,243
2015....................................          10,947          14,827
2016....................................          10,947          21,411
2017....................................          10,947          27,996
2018....................................          10,947          34,580
2019....................................          10,947          41,164
2020\3\.................................          10,947          47,767
2021....................................          10,947          57,055
2022....................................          10,947          57,055
2023....................................          10,947          57,055
2024....................................          10,947          57,055
2025....................................          10,947          57,055
                                         -------------------------------
    Total...............................       $218, 932        $494,532
                                         ===============================
mills/kwh, year 2025....................            16.5            86.0
Cost/acre, year 2005....................           $4.66          $24.31
------------------------------------------------------------------------
\1\ Power is project use power but at a rate equal to the firm power
  rate of 16.5 mills/KWH. All wheeling is included in the rate.
\2\ Power is project use power. A step increase begins in year 2014 for
  the purpose of accepting the REA wheeling fees for 1 mile of line now
  utilized by WAPA but owned by REA.
\3\ End of existing contract.

                                 ______
                                 
Average Usage (kwh) . . . . . . . . . .1,196,713
Ave REA wheeling (mills/kwh) . . . . . . . . 61.8
Acres served . . . . . . . . . . . . . . . . .2,309

      POWER COSTS FOR THE NEXT 20 YEARS--SAVAGE IRRIGATION DISTRICT
------------------------------------------------------------------------
                                                As           Proposed
                  Year                     Introduced\1\   Amendment\2\
------------------------------------------------------------------------
2006....................................         $19,746          $2,992
2007....................................          19,746           2,992
2008....................................          19,746           2,992
2009....................................          19,746           2,992
2010....................................          19,746           2,992
2011....................................          19,746           2,992
2012....................................          19,746           2,992
2013....................................          19,746           2,992
2014....................................          19,746          13,553
2015....................................          19,746          24,114
2016....................................          19,746          34,675
2017....................................          19,746          45,236
2018....................................          19,746          55,797
2019....................................          19,746          66,358
2020\3\.................................          19,746          76,949
2021....................................          19,746          93,703
2022....................................          19,746          93,703
2023....................................          19,746          93,703
2024....................................          19,746          93,703
2025....................................          19,746          93,703
                                         -------------------------------
    Total...............................        $394,915        $809,129
                                         ===============================
mills/kwh, year 2025....................            16.5            78.3
Cost/acre, year 2005....................           $8.55          $40.58
------------------------------------------------------------------------
\1\ Power is project use power but at a rate equal to the firm power
  rate of 16.5 mills/KWH. All wheeling is included in the rate.
\2\ Power is project use power. A step increase begins in year 2014 for
  the purpose of accepting the REA wheeling fees for 3 mile of line now
  utilized by WAPA but owned by REA.
\3\ End of existing contract.

                                 ______
                                 
Average Usage (kwh) . . . . . . . . . . . . 70,200
Ave REA wheeling (mills/kwh) . . . . . . . .  75.4
Acres served . . . . . . . . . . . . . . . . . . 827

      POWER COSTS FOR THE NEXT 20 YEARS--INTAKE IRRIGATION DISTRICT
------------------------------------------------------------------------
                                                As           Proposed
                  Year                     Introduced\1\   Amendment\2\
------------------------------------------------------------------------
2006....................................          $1,158            $176
2007....................................           1,158             176
2008....................................           1,158             176
2009....................................           1,158             176
2010....................................           1,158             176
2011....................................           1,158             176
2012....................................           1,158             176
2013....................................           1,158             176
2014....................................           1,158             931
2015....................................           1,158           1,687
2016....................................           1,158           2,443
2017....................................           1,158           3,199
2018....................................           1,158           3,955
2019....................................           1,158           4,711
2020\3\.................................           1,158           5,469
2021....................................           1,158           6,451
2022....................................           1,158           6,451
2023....................................           1,158           6,451
2024....................................           1,158           6,451
2025....................................           1,158           6,451
                                         -------------------------------
    Total...............................         $23,166         $56,055
                                         ===============================
mills/kwh, year 2025....................            16.5            91.9
Cost/acre, year 2005....................           $1.40           $7.80
------------------------------------------------------------------------
\1\ Power is project use power but at a rate equal to the firm power
  rate of 16.5 mills/KWH. All wheeling is included in the rate.
\2\ Power is project use power. A step increase begins in year 2014 for
  the purpose of accepting the REA wheeling fees for 1 mile of line. The
  line is owned by the WAPA and expected to be transferred to the REA.
\3\ End of existing contract.

                                 ______
                                 
                       Texas A&M University System,
                           Texas Water Resources Institute,
                              College Station, TX, August 25, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Senator Domenici: This is in response to your request for my 
response to Senator Murkowski's two questions concerning S. 1957.
    Question 1. If significant sources of groundwater contamination or 
depletion are found on either side of the border, is there a 
cooperative agreement between the State of Texas and Mexico to address 
and remedy the problem?
    Answer. To my knowledge, there is no such cooperative agreement.
    Question 2. There is a well established hydrologic relationship 
established between surface and groundwater contamination. Do you think 
S. 1957 goes far enough to address the significant contamination of the 
Rio Grande River and its effect on the sustainability of ground water 
storage?
    Answer. Yes, S. 1957 would facilitate the scientific investigations 
needed to understand the movement of water and contaminants into and 
through transboundary aquifers. This information is necessary for 
authorized state and local authorities to manage for sustainable use of 
the aquifers.
    Thank you for the opportunity to respond to these questions.

                                            C. Allan Jones,
                                                          Director.
                                 ______
                                 
 Bureau of Reclamation's Responses To Questions from Senator Murkowski
   s. 900, the lower yellowstone reclamation projects conveyance act
    Question 1. Most title transfers have been small in scope. This one 
is relatively large. Can title transfers of this size lead to 
significant cost savings for the federal government?
    Answer. Potentially, but not in this case. The Districts currently 
operate and maintain the project with minimal Reclamation oversight. 
The costs savings generated by the transfer of these facilities would 
be minimal.
    Question 2a. Your testimony raises concerns with the delivery of 
Project Use Power after transfer. Specifically, you state that the 
``districts would continue to enjoy the subsidized benefit of their 
power wheeled across non-federal lines.'' The proponents of this 
legislation argue that there is already precedent for such action. How 
do you respond?
    Answer. In 1946, Reclamation entered into contracts to provide 
Kinsey Irrigation Company and the Sidney Pumping Project electrical 
service under authority of the 1938 Ft. Peck legislation. These Ft. 
Peck power contracts were later converted to P-SMBP project use power 
contracts when Congress integrated the Ft. Peck power system into P-
SMBP. The present contracts for these districts run until 2020, are at 
a 2.5 mil rate, and wheeling is included in the rate. Lower Yellowstone 
Irrigation District I and II, as well as Savage Irrigation District, 
are similar to Kinsey and Sidney in that they were also to receive 
power from Ft. Peck Dam, and were later incorporated into P-SMBP for 
project use power. However, they were constructed as Reclamation 
projects and as such remained under Federal ownership after 
construction, unlike Kinsey and Sidney. These projects are not 
analogous to Lower Yellowstone because they became eligible to receive 
P-SMBP project use power through the integration of Ft. Peck into P-
SMBP.
    In 1986, legislation was enacted authorizing Hilltop and Grey Goose 
Irrigation Districts as P-SMBP units and making them eligible for P-
SMBP power. The present contracts for these districts run until 2020, 
are at the 2.5 mil rate, and wheeling costs are included. Both projects 
were constructed under USDA programs. This is not analogous to the 
situation presented in S. 900. Hilltop and Grey Goose were originally 
private irrigation districts that were converted to Federal ownership 
by legislation.
    In 1992, legislation was enacted making P-SMBP power available to 
Haidle Irrigation Project and Hammond Irrigation District. The power 
was to come from the project use allocation (pumping power) but was to 
be marketed by Western as firm power. The present contracts for these 
districts run until 2020; are through Western at the firm rate; and 
wheeling is not included. These projects are not analogous to Lower 
Yellowstone because, like all Western firm power customers, these 
irrigation districts are responsible for their own wheeling costs in 
excess of 1 mil/kwh.
    Public Law 105-351 authorized the Secretary to convey certain 
facilities of the Minidoka Project to the Burley Irrigation District. A 
provision in the law allows for the continued receipt of project 
reserved power in accordance with the terms of the existing contracts. 
The administration testified against the continued provision of 
subsidized power after transfer. This instance is not analogous to 
Lower Yellowstone because wheeling above 1 mil/kwh was always the 
responsibility of Burley Irrigation District.
    In the instance of the Gila Project transfer to the Wellton-Mohawk 
Irrigation and Drainage District, the District will continue to receive 
and pay the full cost of project use power where the project use rate 
is equal to the actual cost of operation, maintenance, replacement and 
amortization. This instance is not analogous to the present situation 
because wheeling costs were a responsibility of Wellton-Mohawk 
Irrigation District.
    Question 2b. Are there any non-federal irrigation projects who 
receive Pick-Sloan project use power?
    Answer. Yes, Sidney Pumping Project Users and Kinsey Irrigation 
Company. Please see the first paragraph of the response above 
describing Sidney/Kinsey for additional information.
    Question 2c. Is there any other current example in the Pick-Sloan 
Missouri Basin Program where public power is paying the wheeling costs 
for a private irrigation district?
    Answer. Sidney Pumping Project Users and Kinsey Irrigation Company, 
both of which receive project use power, have their wheeling costs 
included as an operation and maintenance cost of the overall P-SMBP 
power program.
    Question 3. Under the Irrigation Districts' compromise proposal, 
what is the total cost to power customers for wheeling federal power to 
the irrigation districts?
    Answer. This would depend upon the actual cost of wheeling power 
over the next 17 years, 2004 through 2020. If we used the 2003 actual 
costs, the total costs would be approximately $2.1 million in present 
day dollars.
    Question 4a. If this transfer doesn't take place, will project use 
power ``subsidies'' continue indefinitely on these three irrigation 
projects? Are there non-federal irrigation projects that receive Pick-
Sloan project use power?
    Answer. The districts' current power contracts include a right to 
renew. If title to the projects is not transferred, the current power 
contracts will remain in place.
    There are two non-federal irrigation districts receiving Pick-Sloan 
project use power. They are Kinsey and Sidney Irrigation Districts. 
These projects were provided electrical service under the 1938 Ft. Peck 
legislation and later integrated into Pick-Sloan.
    Question 4b. Some point to other transfers that keep project use 
power benefits. Were these transfers similar in scope to this proposed 
transfer?
    Answer. See response to Question #2 above.
    Question 5a. How similar are the wheeling expenses for other 
transferred projects (Burley Irrigation District and Wellton-Mohawk)?
    Answer. Subsidized wheeling is not included in the power rates 
provided to the Burley Irrigation District or Wellton-Mohawk. Wheeling 
costs were and continue to be the responsibility of those irrigation 
districts.
    Question 5b. Are there any private irrigation districts waiting in 
line to receive this same kind of public power subsidy?
    Answer. We anticipate a significant increase in the requests for 
Pick-Sloan Missouri Basin project use power by private irrigation 
districts if the precedent is set for providing subsidized power to 
non-federal projects.

                    Questions From Senator Domenici

    Question 1. S. 900 requires the Secretary to provide fish 
protection devices on a non-reimbursable basis. How much will such fish 
protection devices cost?
    Answer. Although final determination of the magnitude of fish 
protection devices necessary to protect the pallid sturgeon is pending 
formal consultation under Section 7 of the Endangered Species Act, the 
current construction estimates for these features range from $10 to $20 
million.

              S. 1876, PROVO RIVER PROJECT TITLE TRANSFER

    Question 6a. What agreements are required for this title transfer 
to take place?
    Answer. The members of the Title Transfer Working Group identified 
several written agreements among various parties that will be needed 
either prior to or subsequent to transfer. The Secretary will be a 
party to two of these agreements. These two agreements which are in 
draft final awaiting approval by the parties, are described in the 
following paragraphs:
    (a) A master title transfer agreement entitled ``Agreement among 
the United States, the Provo River Water Users Association, and the 
Metropolitan Water District of Salt Lake & Sandy to Transfer Certain 
Lands and Facilities of the Provo River Project.'' This key agreement 
is defined in Section 2(8) (Contract No. 04-WC-40-8950), and referenced 
in Sections 3(a), 3(b), and 3(c) of S. 1876. This agreement establishes 
very specific terms upon which the title transfer legislation, if 
passed, will be implemented. It provides essential details regarding 
the duties of the parties, manner of conveyance, and exceptions and 
reservations. It also ensures that the interests of all affected 
parties, including the public, are protected after transfer.
    (b) A multiparty operating agreement entitled ``Agreement Regarding 
the Coordinated Operations of Provo Reservoir Canal, Salt Lake 
Aqueduct, and Jordan Aqueduct System among the United States, Provo 
River Water Users Association, Metropolitan Water District of Salt Lake 
& Sandy, Central Utah Water Conservancy District, and Jordan Valley 
Water Conservancy District.'' Each of the parties to this agreement 
hold various interests in the use, operation, and maintenance of one or 
more of three large water conveyance facilities (Provo Reservoir Canal, 
the Salt Lake Aqueduct, and the Jordan Aqueduct) which transport water 
from the Provo River in Utah County to end users located in Utah and 
Salt Lake Counties. All of the parties believe coordinated use and 
management of these three facilities is highly desirable. Currently, 
these three facilities are owned by the United States and are operated 
by the other parties pursuant to contracts with the United States. S. 
1876 would transfer to two of these facilities, the Provo Reservoir 
Canal and the Salt Lake Aqueduct, out of federal ownership. This 
multiparty operating agreement articulates the operational roles and 
responsibilities and environmental commitments of the various parties. 
It also commits the parties to coordinated and cooperative management 
of the facilities before, during and after title transfer.
    Question 6b. What is the status of those agreements?
    Answer. The Title Transfer Working Group met on June 29, 2004, and 
adopted final drafts of these two agreements. Reclamation supports both 
draft agreements and is prepared to sign them as soon as NEPA 
compliance has been completed. The comment period for NEPA compliance 
is now closed and we foresee no delaying issues. The Secretary will not 
be party to other agreements. The parties may want to enter into 
agreements with each other, and we believe those agreements can be 
developed after transfer is completed.
    Question 6c. It is my understanding that the proponents of this 
measure believe that only one agreement--the Title Transfer Agreement--
is essential for passage of the bill. How do you respond?
    Answer. Reclamation believes that both the master title transfer 
agreement and the multiparty operating agreement described above are 
essential. It is our understanding that the proponents concur that both 
of these agreements are necessary. Reclamation is prepared to sign them 
as soon as NEPA compliance has been completed.
    When we were first asked to testify on S. 1876, the Provo River 
Title Transfer Working Group, comprised of all of the water districts 
and Reclamation and set up to work through the issues associated with 
this proposed title transfer, had just begun to scope out the issues 
and to identify the agreements that might be necessary. Therefore, our 
testimony at the time expressed concern that the legislation was 
premature, given that the issues and agreements referenced in the 
legislation were not even initiated. However, since that time, the 
Working Group has made an enormous effort and progressed to the point 
that there is consensus on the terms and conditions of the title 
transfer and post-transfer operating agreement. These terms and 
conditions are memorialized in the Title Transfer Agreement and 
Coordinated Operations Agreement discussed in the answer to Question 
6(A). Given that these documents have been developed, that they are in 
final draft form, and that there is agreement on them, we believe that 
the concern that we raised in our earlier testimony regarding whether 
this legislation is premature has been addressed.
    At this point, given the progress that has been made, the high 
level of cooperation that has been shown and the fact that these two 
agreements are in draft final form, we believe that it is appropriate 
to move S. 1876 forward, regardless of whether the agreements have been 
formally ratified by all the district boards and signed by all the 
participants.
    Question 6d. How will the transfers of title interface with the 
National Forest Service land, and the National Forest Service and 
National Park Service plans for the American Fork Interagency 
Administrative and Visitor Facility?
    Answer. The Forest Service and the National Park Service plan to 
construct the American Fork Interagency Administrative and Visitor 
Facility on a parcel of private land to be exchanged for National 
Forest lands. The Salt Lake Aqueduct intersects that private parcel, 
and is located on a strip of fee land acquired by Reclamation decades 
ago for the Salt Lake Aqueduct. With or without title transfer, that 
strip may be used for a parking lot for the center. The master title 
transfer agreement (now in final draft) contains a provision, approved 
by the Forest Service and the National Park Service, which addresses 
this issue. The Salt Lake Aqueduct crosses the corner of several 
parcels of forest lands. In the 1930s, Reclamation did not survey a 
right of way for the Salt Lake Aqueduct across those National Forest 
lands, but rather, the Secretary simply withdrew large parcels in 
aliquot parts from the Forest lands, pursuant to former Section 3 of 
the Reclamation Act. The master title transfer agreement (now in final 
draft and approved by the Forest Service) contains a provision that 
will convey an appropriately sized easement for the aqueduct as a part 
of title transfer. After that land is conveyed, the withdrawal will be 
revoked. There will be a net gain in lands under primary Forest Service 
jurisdiction. Reclamation has coordinated with the local Forest Service 
representatives and has received their support.

               H.R. 1648, CHACHUMA PROJECT TITLE TRANSFER

    Question 7. What about this title transfer has made it so ideal?
    Answer. There are many important factors that made these transfers 
good candidates and that made the process for coming to agreement on 
the terms and conditions so smooth and cooperative. First, these are 
simple conveyances of the distribution facilities and the associated 
acquired lands. Both CVWD and MWD title transfers provided for only the 
repayment of the construction costs for their distribution facilities. 
There were no land, water rights, or power issues to consider.
    Second, the purpose and goal for the entities seeking title was 
very clear and it was well articulated to both Reclamation and to other 
Stakeholders. This enabled the participants in the transfer process to 
focus on the interests and needs of the districts to identify a 
solution that meets all the needs of the participants.
    Third, both CVWD and MWD were very cooperative with Reclamation and 
willing to identify and address any and all issues that existed. There 
was also a strong willingness by all parties to address the issues and 
concerns in a public and open manner. There were public scoping 
meetings held at the very beginning of each transfer and all the 
negotiation sessions were open to the public to attend.
    As we stated in our testimony, we believe that this transfer and 
the open and cooperative process that was used should be a model to 
others who may be interested in title transfer. It was a cooperative, 
efficient and cost effective process.

      H.R. 1732, THE WILLIAMSON COUNTY WATER RECYCLING ACT OF 2003

    Question 8a. Has the Bureau met with the local sponsor to discuss 
this project?
    Answer. Yes. The Lower Colorado River Authority (LCRA) has 
developed conceptual plans for the project, and Reclamation has 
completed a cursory review of this proposal.
    Question 8b. Does this project fit the Bureau's criteria for a 
Title XVI project?
    Answer. At this point, this is unknown. Reclamation has not yet 
conducted an appraisal level study for this project. This study would 
be needed to determine if the preliminary work initiated by the Lower 
Colorado River Authority meets Reclamation's requirements, and to 
evaluate the potential for a feasibility study per Title XVI criteria.
    Question 8c. Does it appear that the local sponsor is ready and 
able to provide the local cost share?
    Answer. Yes. The LCRA proposes to coordinate through its alliance 
with Brazos River Authority to combine several current and future 
projects into a Williamson County Reuse System. Under this proposal the 
LCRA would partially finance and construct certain reuse facilities, 
and the Brazos River Authority would operate them. The Lower Colorado 
River Authority has advised that funding will be allocated in 2004 to 
begin appraisal investigations.
    Question 8d. Williamson County is one of the fastest growing 
counties in Texas. Is the Bureau involved with reuse projects 
throughout the State of Texas? If so, how many and where?
    Answer. Yes. Reclamation is currently conducting three feasibility 
studies in Texas with the cities of San Antonio, Austin and 
Brownsville.

                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                      Federal Energy Regulatory Commission,
                                     Washington, DC, June 22, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.

Re: Comments on Legislation (S. 2243) Relating to a Hydroelectric 
Project in the State of Alaska, FERC No. P-11480

    Dear Mr. Chairman: Thank you for your June 16, 2004 letter asking 
for my comments on S. 2243, a bill to extend the deadline for 
commencement of construction for a hydroelectric project in the State 
of Alaska.
    I submitted testimony for the record of the hearing held on May 19, 
2004 by the Subcommittee on Water and Power to consider this bill and 
other pending measures. I am enclosing a copy of my testimony in 
response to your request for comments.
    If I can be of further assistance to you in this or any other 
matter, please let me know.
            Best regards,
                                             Pat Wood, III,
                                                          Chairman.
[Enclosure.]
                                 ______
                                 
                 Statement of Pat Wood, III, Chairman, 
                  Federal Energy Regulatory Commission

    Madam Chairman and Members of the Subcommittee, I appreciate the 
opportunity to comment on S. 2243, a bill to extend the deadline for 
commencement of construction of a hydroelectric project in the State of 
Alaska. Section 13 of the Federal Power Act requires that construction 
of a licensed project be commenced within two years of issuance of the 
license. Section 13 authorizes the Federal Energy Regulatory Commission 
to extend this deadline once, for a maximum additional two years. If 
project construction has not commenced by this deadline, the Commission 
is required to terminate the license. Section 13 also authorizes the 
Commission to extend the deadline for completion of construction when 
not incompatible with the public interest.

                              THE PROJECT

    On October 24, 2000, the Commission issued a license to Haida 
Corporation to construct, operate, and maintain the 5-megawatt Reynolds 
Creek Project No. 11480, on Prince of Wales Island, in southeast 
Alaska. The original deadline in the license for the commencement of 
construction, October 23, 2002, was, at the licensee's request, 
extended by the Commission to October 23, 2004, four years after 
license issuance. The request cited the lack of a power purchase 
contract.
    Construction of Project No. 11480 entails building a 20-foot-long, 
6-foot-high diversion dam, a 3,200-foot-long penstock, a powerhouse 
with two turbine-generator units, and a transmission line.

                            THE LEGISLATION

    S. 2243 would authorize the Commission, at the request of the 
project licensee, and after reasonable notice, in accordance with the 
good faith, due diligence, and public interest requirements of section 
13 and the Commission's procedures under that section, to extend the 
time period during which the licensee is required to commence the 
construction of the project for three consecutive two-year periods 
beyond the date that is four years after the date of issuance of the 
license.
    In cases where project-specific extensions of construction 
deadlines are authorized by the Congress, it has been the position of 
prior Commission chairmen that such extensions should not go beyond ten 
years from the date the project was licensed. I have no reason to 
depart from this extension policy.
    S. 2243 would permit the licensee for Project No. 11480 to extend 
the deadline for commencement of construction for three consecutive 2-
year periods beyond the date that is four years after the date of 
issuance of the license. Accordingly, construction could commence no 
later than ten years from the date the license was issued. This time 
frame is consistent with the Commission's policy, and I have no 
objection to the bill.
                                 ______
                                 
                           Paso del Norte Water Task Force,
                                   El Paso, TX, September 12, 2003.
Hon. Jeff Bingaman,
Ranking Member, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Senator Bingaman: We would like to thank you for meeting with 
the Paso del Norte Water Task Force on July 3 at the Water Resources 
Research Institute in Las Cruces. We appreciated the opportunity to 
discuss with you the water problems and possible solutions along the 
U.S. and Mexico Border.
    We appreciate your offer to assist us and as such, I am providing 
you with the following summary of what we discussed during your visit.
Groundwater Issues

   We support the need for funding to conduct a comprehensive 
        groundwater assessment for both fresh and brackish waters as 
        the extent of these waters is not well known in this region.
   We appreciate your support for the desalination research 
        facility in Alamogordo along with planned new municipal 
        facilities in El Paso and other cities of the region.
Surface Water Issues

   We encourage federal help for conversion of river water for 
        municipal use with development of new facilities and regional 
        planning.
   We have concerns about water quality as it relates to 
        irrigation and human health. Secure and safe water is dependent 
        on federal help for these border-wide problems.
   Irrigation efficiency is critical to our region and we ask 
        for continued support for research, instrumentation, delivery, 
        and application technology.
Environmental Issues

   Many environmental enhancements are needed in the region. We 
        encourage your support of programs that are representative of 
        local community needs and goals.
   Invasive and exotic plant species are present along the 
        border and pose many problems to water management. Solutions 
        for their management need to be found.

    We also request your help for preparing a region-wide assessment of 
future water needs. Such an assessment is essential for regional water 
planning. Currently, it does not exist. Instead, partial assessments 
are prepared for Las Cruces, El Paso, Far West Texas, and Juarez, each 
using different timeframes, methods, and assumptions. This project will 
require participation of water managers from Mexico and the United 
States.
    Again, your visit and discussion were greatly appreciated. We look 
forward to working with you and your staff. If a follow-up visit with 
you and/or your staff is desirable, we can meet in New Mexico or 
Washington, D.C.
            Sincerely,
                                             Dr. Karl Wood,
                                                          Chairman.
                                 ______
                                 
                                        City of Las Cruces,
                                   Las Cruces, NM, January 7, 2004.
Hon. Senator Bingaman,
Ranking Member, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.

Re: S. 1957, United States-Mexico Transboundary Assessment Act

    Dear Senator Bingaman: I am writing on behalf of the City of Las 
Cruces to express appreciation and support for introducing legislation, 
specifically S. 1957, cited as the United States-Mexico Transboundary 
Assessment Act, which will address pressing water resource challenges 
in the United States-Mexico border region.
    As you know, in the desert region of the border, surface water is 
scarce and unreliable making ground water the primary and in some areas 
the only source of water. Successful management of shared ground water 
resources by state and local authorities in the United States and 
appropriate authorities in Mexico requires cooperation in assessing and 
understanding ground water resources. It is imperative that a multi-
discipline and multi-organization approach be taken to integrate 
expertise and scientific capabilities. Investigations will be conducted 
in close collaboration with the United States Geological Survey, border 
Water Resources Research Institutes, Sandia National Laboratory and 
appropriate state agencies and Mexican counterparts.
    Issues requiring immediate attention include:

   Inadequate data and knowledge of transboundary water 
        resources
   Increasing water demands
   Need for understanding the extent, depletion rates, water 
        quality and solute movement of transboundary aquifers
   Need for understanding conjunctive surface and ground water
   Drought impacts on water quantity-quality
   Develop and improve ground water flow models for bi-national 
        aquifers to facilitate regional water resource assessment and 
        planning
   Assess movement and interaction of water resources
   Analyze trends in ground water quality, including salinity, 
        nutrients, toxics and pathogens
   Apply the new data and models to evaluate strategies to 
        protect water quality and enhance supplies

    The City fully supports the purpose of this program and the 
positive impact it will have on future water planning efforts.
            Sincerely,
                                          William Mattiace,
                                                             Mayor.
                                 ______
                                 
                                     Border Trade Alliance,
                                    Phoenix, AZ, February 20, 2004.
Hon. Jeff Bingaman,
Ranking Member, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Senator Bingaman: We write to you today to convey the Border 
Trade Alliance's (BTA) support for your bill, S. 1957, the United 
States-Mexico Transboundary Aquifer Assessment Act. As an organization 
concerned with the future of the U.S.-Mexico border region's water 
supply, we applaud the objectives of your bill.
    We concur with your bill's findings that increased cooperation 
between officials in the United States and Mexico is necessary ``for 
the successful management of shared groundwater resources'' of our two 
countries. The BTA believes that establishing a United States-Mexico 
transboundary aquifer assessment program, as called for by S. 1957; 
would be key in fostering such cooperation.
    The bill's objective to ``develop and implement an integrated 
scientific approach to assess transboundary groundwater resources,'' is 
a worthy one and will help authorities on both sides of the border gain 
a better grasp of the water resource challenges facing this growing 
region. Should this bill become law, the BTA will be pleased to act 
as.a liaison between the Department of the Interior and the appropriate 
border-region agencies to encourage full participation in the project.
    We look forward to working with you and your staff to ensure that 
S. 1957, the United States-Mexico Transboundary Aquifer Assessment Act, 
becomes law. The Border Trade Alliance offers its 17 years of border 
affairs experience as we work together to achieve this goal.
            Sincerely,
                                        Jessica M. Pacheco,
                                                             Chair,

                                       Stephen L. Birdsall,
                       Chair, Agribusiness and Fisheries Committee.
                                 ______
                                 
                        Elephant Butte Irrigation District,
                                 Las Cruces, NM, February 25, 2004.
Hon. Jeff Bingaman,
Ranking Member, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Senator Bingaman: I am writing on behalf of the Elephant Butte 
Irrigation District to express appreciation and support for legislation 
introduced by yourself, specifically S. 1957, cited as the United 
States-Mexico Transboundary Assessment Act, which will address pressing 
water resource challenges in the United States-Mexico border region.
    As you know, in the desert region of the border, surface water is 
scarce and unreliable making ground water the primary and in some areas 
the only source of water. Successful management of shared ground water 
resources by state and local authorities in the United States and 
appropriate authorities in Mexico requires cooperation in assessing and 
understanding ground water resources. It is imperative That a multi-
discipline and multi-organization approach be taken to integrate 
expertise and scientific capabilities. Investigations will be conducted 
in close collaboration with the United States Geological Survey, border 
Water Resources Research Institutes, Sandia National Laboratory and 
appropriate state agencies and Mexican counterparts.
    Issues requiring immediate attention include:

   Inadequate data and knowledge of transboundary water 
        resources
   Increasing water demands
   Need for understanding the extent, depletion rates, water 
        quality and solute movement of transboundary aquifers
   Need for understanding conjunctive surface and ground water
   Drought impacts on water quantity-quality
   Develop and improve ground water flow models for bi-national 
        aquifers to facilitate regional water resource assessment and 
        planning
   Assess movement and interaction of water resources.
   Analyze trends in ground water quality, including salinity, 
        nutrients, toxics and pathogens
   Apply the new data and models to evaluate strategies to 
        protect water quality and enhance supplies

    The Elephant Butte Irrigation District fully supports the purpose 
of this program and the positive impact it will have on future water 
planning efforts.
            Sincerely,
                                         Gary L. Esslinger,
                                                 Treasurer-Manager.
                                 ______
                                 
                                            City of Deming,
                                         Deming, NM, March 1, 2004.
Hon. Jeff Bingaman,
Ranking Member, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Senator Bingaman: Attached please find two resolutions in 
support of the U.S.-Mexico Transboundary Aquifer Assessment Act. The 
City of Deming Resolution was passed unanimously following an excellent 
presentation by Dr. Karl Wood, Director, and Bobby Creel, Associate 
Director, New Mexico Water Resources Research Institute.
    The Second Resolution indicates unanimous support by the Southwest 
Regional Steering Committee. The Southwest Regional Water Planning 
Steering Committee is composed of representatives from four counties 
(Catron, Hidalgo Luna and Grant), ten municipalities, six Soil and 
Water Conservation Distracts and several members at large.
    Thank you for your interest in identifying more accurately the 
amount of this scarce resource in our area.
            Sincerely,
                                               John Strand.
[Enclosure.]

                            Resolution 04-01

    SUPPORT OF THE U.S.-MEXICO TRANSBOUNDARY AQUIFER ASSESSMENT ACT

    Whereas, water in New Mexico is a scarce and finite recourse, and
    Whereas, the State of New Mexico has completed a State Water Plan 
and ten or twelve of sixteen regional water plans each calling for more 
accurate information on water availability, and
    Whereas, the information as to the quantity and quality of the 
aquifers we share with Mexico in the Southwest Region is of vital 
importance to our Regional Water Plan, and
    Whereas, the U.S.-Mexico Transboundary Aquifer Assessment Act 
sponsored by Senator Jeff Bingaman provides federal dollars to assist 
us in determining the water supply available in those aquifers along 
the U.S.-Mexico border,
    Therefore Be It Resolved That, the Southwest Regional Water Plan 
Steering Committee supports without reservation the passage of the 
U.S.-Mexico Transboundary Aquifer Assessment Act
    PASSED, ADOPTED, AND APPROVED this 26th day of February, 2004
            ATTEST:
                                                  Tom Bates
                          Southwest Regional Water Planning Manager
                                 ______
                                 
                           El Paso Utilities Board,
                                           Weather Service,
                                         El Paso, TX, May 12, 2004.
Hon. Jeff Bingaman,
Ranking Member, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Senator Bingaman: I want to express the support of the Public 
Service Board of the El Paso Water Utilities for S. 1957, United 
States-Mexico Transboundary Aquifer Assessment Act, that provides for 
hydrogeologic characterization, mapping, and modeling program for 
priority transboundary aquifers.
    The El Paso Water Utilities (EPWU) is the regional planner and 
provider of water and wastewater services to nearly 700,000 people in 
the greater metropolitan area of El Paso. The combined regional 
population that includes the City of Juarez in the State of Chihuahua, 
Mexico is over two million. The population within this region continues 
to grow at a near constant rate. During the last ten years, the El Paso 
Water Utilities Public Service Board has-begun to implement long range 
plans to ensure sustainable supplies of water. The aquifers or bolsons 
provide approximately 50% of our City's water needs and 100% of the 
water needs for the City of Juarez. Southern Dona Ana County, New 
Mexico relies exclusively on water from the Mesilla Bolson for its 
municipal supplies which include those for the City of Las Cruces.
    Because of planned demand water increases expected by El Paso, 
Juarez and southeastern New Mexico municipalities, we are faced with 
the challenge of extending the life of these aquifers by identifying 
and developing new sources of supply, conserving and making the best 
use of our existing resources, and partnering with other entities 
within the region. The El Paso water utilities will work with entities 
within the region to identify bi-state and bi-national solutions to the 
region's water problems. The challenges are not easy to overcome given 
different political, jurisdictional, environmental, legal, and 
technical differences that each area must abide by. It is worth noting 
that there is sufficient water within the region to sustain us far 50 
years and beyond. However, the costs to ensure that are going to be 
significant. We believe that S. 1957 provides mechanisms that will 
assist us in addressing these challenges.
    The City of El Paso, Texas and the City of Juarez, Chihuahua, 
Mexico are engaged in preliminary regional water studies and, as a 
result, have developed approaches for the long-term protection of 
drinking water within the region. The El Paso Water Utilities continues 
to take an active role in working with the Juarez Water Utility and 
anticipates being able to use S. 1957 to support the work we have 
initiated. Federal assistance would help continue studies for the 
protection of the region's drinking water programs. We believe the 
legislation will allow for implementing programs to protect regional 
aquifers that expedite Texas/New Mexico/Mexico regional solutions for 
preserving long-term water supply for the entire region.
            Sincerely,
                                   Edmund G. Archuleta, PE,
                                                   General Manager.
                                 ______
                                 
                       Far West Texas Water Planning Group,
                                         El Paso, TX, May 18, 2004.
Hon. Jeff Bingaman,
Ranking Member, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Senator Bingaman: At our most recent meeting, the Far West 
Texas Water Planning Group (``the Planning Group'') voted unanimously 
to voice strong support for S. 1957. For the last seven years, the 
Planning Group has studied the water resources and demands of the seven 
counties of Far West Texas in an attempt to craft a water plan for our 
region for the next fifty years. Since many of the aquifers of Far West 
Texas also underlie parts of Mexico and New Mexico, we have been 
repeatedly frustrated by our inability to address the entirety of our 
resources and our needs. The lack of data regarding our common aquifers 
is perhaps the most significant limiting factor to the Planning Group 
being able to achieve our legislated mandate.
    The Planning Group believes that the United States-Mexico 
Transboundary Aquifer Assessment Act could be of significant help to 
water planners and scientists in both the United States and Mexico. It 
is unquestioned by anyone that we are overdrafting--mining--our border 
aquifers. However, no one can evaluate the current effect on both 
quantity and quality because of the lack of long-term data, and no one 
can predict future quality and quantity.
    Our lack of data is both geographical and historical. On the one 
hand, we really cannot define even the physical boundaries of our joint 
aquifers, without which effective planning is seriously limited; on the 
other, we cannot relate current demands and supplies in Far West Texas 
with future demands and supplies. S. 1957 holds great promise for 
bridging those gaps. The Planning Group urges you to support it.
            Respectfully yours,
                                                 Tom Beard,
                                                          Chairman.
                                 ______
                                 
           Statement of Twin Loups Reclamation District and 
                     Twin Loups Irrigation District

    To the Honorable Chairman Murkowski and Members of the Committee, 
thank you for this opportunity to provide information regarding the 
need for passage of Senate Bill 2304.
    Public Law 92-514--October 20, 1972, known as the Reclamation 
Project Authorization Act cat' 1972 provided for the reauthorization of 
the North Loup Division of the Pick-Sloan Missouri basin Program in 
Nebraska. Among other things, the Act authorizes the Project ``. . . 
for the purposes of providing irrigation water for fifty-three thousand 
acres . . .''
    Contracts between the Twin Loups Reclamation District and Twin 
Loups Irrigation District (Districts) and the U.S. Bureau of 
Reclamation require the Bureau of Reclamation to make a determination 
of acres eligible for Project irrigation following final Project 
development. Construction and development of the North Loup Division is 
complete, Project operation, maintenance are now responsibilities of 
the Districts.
    Nebraska Statutes require a final filing of acres for water rights 
on acres that have received irrigation service. The State of Nebraska 
has issued notice to the Districts that determination of acres for 
final filings of water rights must be made on acres that will have 
received irrigation service prior to October 1, 2004.
    As the Districts and the Bureau of Reclamation proceed with the 
required Project acreage determinations it has became evident that it 
will be impossible to designate exactly 53,000 irrigable acres, as The 
Act specifically requires, and still comply with State and other 
Federal requirements. In the future, adjustments to Project acres will 
become necessary due to road construction, water conservation 
practices, Federal Farm Program requirements, conservation easements, 
and other reasons as yet unknown, all of which will cause a variance 
from 53,000 acres as directed by the explicit language of The Act.
    The Districts can not provide an exact, final number of acres at 
this time as the process of finalization for water rights and Bureau of 
Reclamation records is on-going. The Districts anticipate that the 
final number of acres may exceed 53,000 acres.
    A change in the total acres does not necessarily indicate an 
increase in utilization of water, Many of the Districts' fields are odd 
shaped due to topography or civil development. It is not uncommon for 
water demand to exceed 1,100 gallons per minute for gravity irrigated 
fields containing 60 to 100 acres, As these fields change to pivot 
sprinkler irrigation it is often necessary to add acres to make the 
irrigated field circular, and/or make the expense of pivot development 
feasible. The most common rate of demand for District fields utilizing 
pivot development is about 800 gallons per minute. Changing from 
gravity irrigation, pivot irrigation usually results in lowering water 
delivery demands.
    Initial applications for District water rights were filed in years 
past and do contain restrictions such as: No diversion of water from 
streams during the months of July and August, and no diversion from 
streams during September if storage water is available. In addition, 
construction of District dams for the diversion from streams and for 
storage of water in reservoirs is complete. The amount of water that 
can be taken from streams and stored in District reservoirs for 
irrigation use is limited by the capacity of the dams and reservoirs. 
Changes in final acreage amounts can not and will not increase District 
storage water capacity.
    District contracts with the Bureau of Reclamation require payment 
of water distribution works construction costs ``. . . based on the 
estimated 53,000 acres . . .''. (Contract 6-07-70-W0115) Paragraph 4b. 
of the same contract states in part that, ``This obligation shall be 
adjusted to the actual acreage of irrigable lands in the District as 
determined by the Secretary.'' Adjustment of Project acres to an amount 
other than 53,000 acres is not a new concept and was evidently 
contemplated in 1976 when the Contract was signed.
    Enactment of Senate Bill 2304 will allow the Bureau of Reclamation 
and the Districts to finalize Project acres in compliance with State 
and Federal regulations and not be contrary to Congressional 
directives.
    We ask that you support enactment of Senate Bill 2304 and the 
companion bill H.R. 3209.

                                 ______
                                 
            Statement of Don Christiansen, General Manager, 
                Central Utah Water Conservancy District

    Chairman Murkowski, Senators Bennett and Hatch and members of the 
Committee, I appreciate the opportunity to submit written testimony 
today in support of S. 1876 the Provo River Project Transfer Act to 
authorize the transfer of title to certain features of the Provo River 
Project. You might wonder why the Central Utah District cares about 
this bill. The Central Utah Project and the Provo River Project have 
been intertwined and co-dependent for decades. Both projects have dams 
for water storage on the Provo River, both projects capture this high 
quality water and divert it through conveyance structures to water 
users in Northern Utah and Salt Lake Counties and both Projects share a 
duty to the recovery of the June sucker in the lower Provo River and 
Utah Lake.
    This bill is important to us at several levels. First, the District 
is finalizing planning and NEPA review for the construction of the 
facilities required to distribute the remaining water supply being 
developed by the Bonneville Unit for use along the Wasatch Front. While 
we have not selected a proposed action, several of the alternatives 
being studied contemplate the delivery of new supplies of water to Salt 
Lake County. Salt Lake presently ``drinks'' its Provo River supplies 
through one of three ``straws''; the Provo Reservoir Canal, the Salt 
Lake Aqueduct and the Jordan Aqueduct. Our new Bonneville Unit water 
must be delivered through one or more of these existing conveyance 
straws. We believe that the coordinated operation of these three 
conveyance ``straws'' will maximize the efficient delivery of water at 
the least cost. Hence, before title is transferred out of federal 
ownership to two of these three straws, we believe it is important to 
advance this dialogue among the various water districts.
    Of particular importance to the Central Utah Water Conservancy 
District are the provisions of the bill authorizing the title transfer 
for the Provo Reservoir Canal. When the Canal was first planned, there 
were only a few communities along its right of way, one of which is a 
beautiful community of Alpine where I lived for twenty five years. 
Nearly two decades ago while serving as the Mayor of Alpine, I started 
a campaign to convince the Bureau of Reclamation to replace the open 
canal with a buried pipeline. I failed then . . . but my journey led me 
from Mayor to Chairman of the Board of Trustees and then to General 
Manager of the Central Utah Water Conservancy District.
    My concern then as Mayor was one of safety for the community. This 
concern remains, just last year two young men drowned in a tragic 
accident in the Provo Reservoir Canal. In addition to the safety issues 
of an open canal, which now runs through numerous residential 
neighborhoods, we estimate that over 8,000 acre feet of water are 
wasted through evaporation and leakage. The Central Utah Water 
Conservancy District has offered to pay half of the estimated $115 
million cost to enclose the canal in return for which we would receive 
the conserved water. This water would then be made available to the 
Secretary under provisions of the Central Utah Project Completion Act, 
which enables the water to be applied to in stream flows in the lower 
Provo River to help recover the endangered June sucker through the 
recovery program. I want to point out that the obligation to the June 
Sucker Recovery Program is one that is shared by all of the water users 
who divert water from the Provo River, including the water districts 
that operate the storage facilities on the Provo River.
    It is our plan to create a Joint Public Agency among the Central 
Utah District, the Jordan Valley Water Conservancy District, and the 
Metropolitan Water District of Salt Lake & Sandy to take title to a 
portion of the capacity in this facility. This is a vital step in order 
for us to be able to finance the project with tax advantaged bonds 
which are available only to local public water districts.
    We understand that the Department supports the concept of this 
title transfer bill but believes that the bill should not proceed until 
after all the details have been negotiated to the several agreements 
that will govern the operation of the facilities. While we agree that 
these agreements are vital, it is our view that the legislation should 
proceed simultaneously with the negotiations on the several agreements 
associated with the title transfer. If we were to wait another six to 
eight months, the time it will take to conclude our discussions, it 
will be too late in the legislative process to advance the bill from 
introduction to enactment. To address the Department of the Interior's 
concerns, we have built a mechanism into the bill draft that restricts 
the Secretary's authority to transfer the title to the Provo Reservoir 
Canal until the Provo River Waters Users Association certifies that the 
necessary future ownership, financing, operation and transfer 
agreements have been completed. I want to thank John Carmen and the 
Metropolitan Water District of Salt Lake & Sandy and Senators Bennett 
and Hatch for working with us on this provision. With its inclusion, we 
urge you to move forward with this bill as soon as your calendar 
permits. Thank you.
                                 ______
                                 
                     Resolution of Dona Ana County
                          resolution no. 04-01

                              A RESOLUTION

    WHEREAS, the Dona Ana County Board of Commissioners is tasked to 
represent and address the needs of its residents, and
    WHEREAS, The prudent allocation of groundwater resources is a 
paramount concern for the residents of Dona Ana County now and in the 
future so as to support sustainable economic growth that enhances the 
health, safety and welfare of all residents, and
    WHEREAS, Federal legislation has been introduced by New Mexico 
Senator Jeff Bingaman which will establish a United States/Mexico 
Transboundary Aquifer Assessment Act, which will fund significant 
studies of aquifer resources in southern New Mexico, southwest Texas 
and northern Chihuahua in the Republic of Mexico, and
    WHEREAS, The aforementioned studies will benefit all residents of 
this region by identifying the extent and lifetimes of groundwater 
resources to support current use and future growth, and
    WHEREAS, This Board of County Commissioners understands the gravity 
of prudent groundwater allocation throughout the region, as well as the 
importance of sustainable conservation initiatives, and
    WHEREAS, Study after study shows that New Mexico is depleting its 
groundwater resources faster than they can be replenished, thereby 
exacerbating an ongoing drought that is adversely affecting run-off and 
surface water quantity, and
    WHEREAS, The state's water pacts with neighboring states and the 
Republic of Mexico will be bolstered and enhanced by Sen. Bingaman's 
legislation,
    NOW THEREFORE, the Dona Ana County Board of Commissioners does 
hereby endorse without reservation the United States/Mexico 
Transboundary Aquifer Assessment Act, and does pledge the support of 
Dona Ana County in any supportive role that maybe asked or required.
    PASSED, APPROVED AND ADOPTED this 13th day of January, 2004

                             Board of County Commissioners,
                                       Dona Ana County, New Mexico.

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