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96–084 PDF 2004

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 

(II)

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

PETE V. DOMENICI, New Mexico, Chairman 

DON NICKLES, Oklahoma 

LARRY E. CRAIG, Idaho 

BEN NIGHTHORSE CAMPBELL, Colorado 

CRAIG THOMAS, Wyoming 

LAMAR ALEXANDER, Tennessee 

LISA MURKOWSKI, Alaska 

JAMES M. TALENT, Missouri 

CONRAD BURNS, Montana 

GORDON SMITH, Oregon 

JIM BUNNING, Kentucky 

JON KYL, Arizona 

JEFF BINGAMAN, New Mexico 

DANIEL K. AKAKA, Hawaii 

BYRON L. DORGAN, North Dakota 

BOB GRAHAM, Florida 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

EVAN BAYH, Indiana 

DIANNE FEINSTEIN, California 

CHARLES E. SCHUMER, New York 

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 

JON KYL, Arizona 

LARRY E. CRAIG, Idaho 

JAMES M. TALENT, Missouri 

JIM BUNNING, Kentucky 

CRAIG THOMAS, Wyoming 

BYRON L. DORGAN, North Carolina 

BOB GRAHAM, Florida 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

DIANNE FEINSTEIN, California 

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 

(III)

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

(1)

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 

2

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. 

3

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 

4

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 Don ̃ a 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 

5

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 

6

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. 

7

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’ abilityto-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 

8

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 nonFederal 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 nonFederal 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 

9

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 impactVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 P:\DOCS\96084.TXT SENE3 PsN: SCAN
10

ing 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 

11

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 Districtowned 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.). 

12

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 91⁄2 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 

13

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 Federallyowned 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 

14

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, opVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6621 P:\DOCS\96084.TXT SENE3 PsN: SCAN
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erate, 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 

16

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 AdminisVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 P:\DOCS\96084.TXT SENE3 PsN: SCAN
17

tration 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 

18

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 binational 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. 

19

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 101⁄2 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 21⁄2 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 161⁄2 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 PickSloan 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? 

20

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? 

21

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 in- cludes 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. 

22

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? 

23

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 comVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6602 P:\DOCS\96084.TXT SENE3 PsN: SCAN
24

munity 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 21⁄2 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:]

25

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 

26

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 lowhead 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. 

27

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 

28

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 PickSloan 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. 

29

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 accomVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6621 P:\DOCS\96084.TXT SENE3 PsN: SCAN
30

plished. 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 vestVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6602 P:\DOCS\96084.TXT SENE3 PsN: SCAN
31

ed 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 PickSloan 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. 

32

[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, MidWest’s members serve over three million people in the Missouri River basin. 

Privatizing federal reclamation projects is not a new concept. However, in PickSloan, 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 PickSloan 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. 

33

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 PickSloan 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. 

34

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 seriVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6602 P:\DOCS\96084.TXT SENE3 PsN: SCAN
35

ously, 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 

36

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, Don ̃ a 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 MexicoTexas 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. 

37

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. 

38

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. 

39

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. 

40

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 

41

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 instream 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 

42

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 31⁄2 or 4 or 5 cents per kilowatt hour; 

it’s 8, it’s 71⁄2 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 

43

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? 

44

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 preferenceVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6602 P:\DOCS\96084.TXT SENE3 PsN: SCAN
45

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.] 

(47)

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. 

48

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 nonfederal 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 YellowVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00052 Fmt 6601 Sfmt 6621 P:\DOCS\96084.TXT SENE3 PsN: SCAN
49

stone 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. 

50

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? 

51

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 

52

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 lowvoltage 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. 

53

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] 

Year As Introduced1 Proposed 

Amendment2

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

20203 ............................................................................ 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

1Power 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. 2Power 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

54

POWER COSTS FOR THE NEXT 20 YEARS—SAVAGE IRRIGATION DISTRICT 

Year As Introduced1 Proposed 

Amendment2

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

20203 ............................................................................ 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

1Power 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. 2Power 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 

Year As Introduced1 Proposed 

Amendment2

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

20203 ............................................................................ 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

55

POWER COSTS FOR THE NEXT 20 YEARS—INTAKE IRRIGATION DISTRICT—

Continued

Year As Introduced1 Proposed 

Amendment2

Total ...................................................................... $23,166 $56,055

mills/kwh, year 2025 .................................................. 16.5 91.9

Cost/acre, year 2005 ................................................... $1.40 $7.80

1Power 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. 2Power 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 

56

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? 

57

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 

58

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. 

59

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. 

(61)

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 

62

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 borderwide 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. 

63

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 

64

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. 

65

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 Don ̃ a 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 

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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 fiftythree 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. 

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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 ongoing. 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 ChairVerDate 0ct 09 2002 11:51 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00071 Fmt 6601 Sfmt 6621 P:\DOCS\96084.TXT SENE3 PsN: SCAN
68

man 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 DON ̃ A ANA COUNTY

RESOLUTION NO. 04-01

A RESOLUTION 

WHEREAS, the Don ̃ a 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 Don ̃a 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, 

69

NOW THEREFORE, the Don ̃ a Ana County Board of Commissioners does hereby 

endorse without reservation the United States/Mexico Transboundary Aquifer Assessment Act, and does pledge the support of Don ̃ a 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, 

Don ̃a Ana County, New Mexico.

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