U.S. GOVERNMENT PRINTING OFFICE

40–683 CC WASHINGTON : 1997

S. HRG. 105–43

NOMINATIONS OF JOHNNY HAYES, JUDITH M.

ESPINOSA, D. MICHAEL RAPPOPORT, AND

MAJOR GENERAL ROBERT BERNARD FLOWERS

HEARING

BEFORE THE

COMMITTEE ON

ENVIRONMENT AND PUBLIC WORKS

UNITED STATES SENATE

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

ON

THE NOMINATIONS OF JOHNNY HAYES, TO BE A MEMBER OF THE

BOARD OF DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY;

JUDITH M. ESPINOSA AND D. MICHAEL RAPPAPORT, TO BE MEMBERS

OF THE MORRIS K. UDALL SCHOLARSHIP AND EXCELLENCE IN NATIONAL ENVIRONMENTAL POLICY FOUNDATION; AND MAJ. GEN. ROBERT B. FLOWERS, TO BE A MEMBER AND PRESIDENT OF THE MISSISSIPPI RIVER COMMISSION

MARCH 14, 1997

Printed for the use of the Committee on Environment and Public Works

(

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
(II)

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

ONE HUNDRED FIFTH CONGRESS

JOHN H. CHAFEE, Rhode Island, Chairman

JOHN W. WARNER, Virginia

ROBERT SMITH, New Hampshire

DIRK KEMPTHORNE, Idaho

JAMES M. INHOFE, Oklahoma

CRAIG THOMAS, Wyoming

CHRISTOPHER S. BOND, Missouri

TIM HUTCHINSON, Arkansas

WAYNE ALLARD, Colorado

JEFF SESSIONS, Alabama

MAX BAUCUS, Montana

DANIEL PATRICK MOYNIHAN, New York

FRANK R. LAUTENBERG, New Jersey

HARRY REID, Nevada

BOB GRAHAM, Florida

JOSEPH I. LIEBERMAN, Connecticut

BARBARA BOXER, California

RON WYDEN, Oregon

STEVEN J. SHIMBERG, Staff Director

J. THOMAS SLITER, Minority Staff Director

(II)
(iii)

CONTENTS

MARCH 14, 1997

Page

OPENING STATEMENTS

Baucus, Hon. Max, U.S. Senator from the State of Montana .............................. 3

Chafee, Hon. John H., U.S. Senator from the State of Rhode Island ................. 1

Sessions, Hon. Jeff, U.S. Senator from the State of Alabama ............................. 9

WITNESSES

Bingaman, Hon. Jeff, U.S. Senator from the State of New Mexico ..................... 4

Espinosa, Judith M., nominated by the President to be a member of the

Board of Trustees of the Morris K. Udall Scholarship and Excellence in

National Environmental Policy Foundation ...................................................... 18

Biography .......................................................................................................... 50

Committee questionnaire ................................................................................. 36

Letter from Office of Government Ethics ....................................................... 48

Letter of support from Senator Domenici ....................................................... 7

Prepared statement .......................................................................................... 35

Response to additional question from Senator Chafee .................................. 55

Flowers, Major General Robert B., Commander and Division Engineer, Lower

Mississippi Valley Division, U.S. Army Corps of Engineers, prepared statement ...................................................................................................................... 35

Biography .......................................................................................................... 70

Committee questionnaire ................................................................................. 77

Prepared statement .......................................................................................... 68

Responses to additional questions from Senator Chafee ............................... 72

Frist, Hon. Bill, U.S. Senator from the State of Tennessee ................................. 2

Hayes, Johnny H., nominated by the President to be a member of the Board

of Directors of the Tennessee Valley Authority ................................................. 10

Committee questionnaire ................................................................................. 27

Prepared statement .......................................................................................... 22

Responses to additional questions from:

Senator Chafee .......................................................................................... 25

Senator Inhofe ........................................................................................... 24

Rappoport, D. Michael, nominated by the President to be a member of the

Board of Trustees of the Morris K. Udall Scholarship and Excellence in

National Environmental Policy Foundation ...................................................... 19

Committee questionnaire ................................................................................. 60

Letters of support from Senators Kyl and McCain ........................................ 7

Prepared statement .......................................................................................... 56

Responses to additional question from Senator Chafee ................................ 58

ADDITIONAL MATERIAL

Letters from:

Senator Domenici ............................................................................................. 6

Senator Kyl ....................................................................................................... 7

Senator McCain ................................................................................................ 8

(III)
(1)

NOMINATIONS OF JOHNNY HAYES, JUDITH M.

ESPINOSA, D. MICHAEL RAPPOPORT, AND

MAJOR GENERAL ROBERT BERNARD FLOWERS

FRIDAY, MARCH 14, 1997

U.S. SENATE, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, Washington, DC.

The committee met, pursuant to notice, at 9:31 a.m. in room 406,

Senate Dirksen Building, Hon. John H. Chafee (chairman of the

committee) presiding.

Present: Senators Chafee, Baucus, and Sessions.

OPENING STATEMENT OF HON. JOHN H. CHAFEE,

U.S. SENATOR FROM THE STATE OF RHODE ISLAND

Senator CHAFEE. Will the committee please come to order?

Today we’re going to have a hearing on several nominees. The

first nominee will be Mr. Johnny H. Hayes who has been nominated by the President to be a member of the Board of Directors

of the Tennessee Valley Authority. He’s currently serving there

now.

The second panel is Ms. Judith M. Espinosa, nominated by the

President to be a member of the Board of Trustees of the Morris

K. Udall Scholarship and Excellence in National Environmental

Policy Foundation and Mr. Rappoport, likewise.

[The prepared statement of Senator Chafee follows:]

STATEMENT OF HON. JOHN H. CHAFEE, U.S. SENATOR FROM THE STATE OF

RHODE ISLAND

Good morning. The purpose of this today’s hearing is to consider the following

Presidential nominations: Johnny Hayes, to be a Member of the Tennessee Valley

Authority Board of Directors; and for the Board of Trustees for the Morris K. Udall

Scholarship and Excellence in National Environmental Policy Foundation, Judith

Espinosa and Mike Rappoport.

I would like to welcome everyone, especially Mr. Hayes, who is joined by his wife,

Mary Howard Hayes, and daughter Amy Hayes; Mr. Rappoport, who is joined by

his wife, Suzi Rappoport, and son Sloan Rappoport; and Ms. Espinosa, whose daughter was unable to attend because tonight is opening night of her high school play.

Before we proceed, Senator Frist is here, and he would like to make a brief statement on behalf of Mr. Hayes. Also, I understand that Senator Bingaman would like

to introduce Ms. Espinosa.

All of our witnesses were nominated by the President on January 9 of this year,

and we have received their paperwork in the interim. It is my intention that the

Committee act expeditiously on these nominations.

Understandably, Gen. Flowers, the President’s nominee for President and Member

of the Mississippi River Commission, cannot join us today. In his current post as

the Army Corps of Engineers District Commander of the Lower Mississippi Valley,
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he is having to make critical decisions with respect to the terrible flooding in that

area.

The record will be left open for 1 week ending March 21 to accommodate written

questions from members, which will in turn, be answered by Gen. Flowers within

the following 2 weeks ending April 4 before any action is taken on his nomination.

I am pleased to report that all of the nominees have impressive and diverse backgrounds and are well-suited to the positions before them.

Johnny Hayes has served as a TVA Director since 1993. Some of you may recall

when Mr. Hayes appeared before this Committee in 1993, as the President’s nominee to fill the term of outgoing Director Marvin Runyon.

Over the last 31⁄2 years, Mr. Hayes has used his extensive experience in economic

development to help modernize and streamline TVA’s programs. TVA is undergoing

some major changes right now, with the phaseout of its appropriated programs, as

well as the larger restructuring of the electric utility industry. It is my hope that

TVA will make a successful transition from a Federal agency to a power business.

Mr. Hayes, the demands before you are great, but I am confident in your ability

to face the challenges ahead.

The President’s nominees to be trustees of the Mo Udall Foundation also have impressive backgrounds. The Foundation was established by Congress in 1992 to

honor Congressman Mo Udall for his service to the Nation as an environmental

leader and a defender of Native American rights. The Foundation operates scholarship and fellowship programs for outstanding U.S. students who are interested in

pursuing careers in environmental policy, conflict resolution, health care, and Native American public policy.

Judith Espinosa is the current President of the ‘‘Alliance for Transportation Research Institute’’ at the University of New Mexico. She has served as both Secretary

of Transportation and Secretary of the Environment for the state of New Mexico.

She has also given a substantial amount of her limited free time as a mentor to

students living within disadvantaged communities in New Mexico and California.

Mr. Rappoport, who has served on the Udall Board for the past 2 years, has a

great deal of experience with water and other natural resource issues. For the past

23 years, he has served in a variety of leadership capacities for the Salt River

Project, a mammoth water and electricity utility in Phoenix. I might add that Mr.

Rappoport is a veteran of Capitol Hill, having worked as a House legislative assistant in the early seventies.

I look forward to hearing what today’s witnesses have to say about their backgrounds and what they hope to accomplish. Thank you.

Senator CHAFEE. I note that Senator Frist is here and if you’d

like to introduce Mr. Hayes, that would be fine.

STATEMENT OF HON. BILL FRIST, U.S. SENATOR FROM THE

STATE OF TENNESSEE

Senator FRIST. Thank you, Mr. Chairman.

Chairman Chafee, Ranking Member Baucus, thank you for the

opportunity to introduce Mr. Johnny Hayes today, a fellow Tennessean and not a newcomer to this committee.

Johnny Hayes was first appointed to the post of Director of the

Tennessee Valley Authority by the President in 1993. He came to

TVA at a very critical time in its history and will serve through

another critical time in the history of this agency and its evolution.

Mr. Hayes has proven himself to be a capable member of the

Board of TVA and the President and Vice President clearly have

a great deal of confidence in his ability to meet the coming challenges posed to TVA by utility deregulation and the increasing

challenges of management of the precious land and water resources

of seven States in TVA.

Before his appointment to the board, Mr. Hayes served in our

State, the great State of Tennessee, as commissioner of Employment and Security and as commissioner of Economic and Community Development for our home State.
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Before entering public service, he was a successful, independent

businessman and is still active in the community in a number of

initiatives, both through public service organizations as well as his

church.

He continues to be active in economic development in our State,

especially in smaller communities all across the State of Tennessee.

In this capacity, he has become highly respected within the Tennessee Valley Authority.

He has overseen countless economic development projects which

have provided critical know-how as well as capital for a myriad of

small- and medium-sized business ventures which really are the

life blood of many communities in Tennessee and throughout the

valley.

He’s overseen the advent of something we can all appreciate as

we again approach our yearly appropriations cycle as TVA will

soon move all of their community and small business development,

financing from the responsibility of the taxpayer into the fully selffinanced power accounts.

Mr. Chairman, I trust that the committee members will see fit

to accept the President’s high recommendation and reconfirm Mr.

Hayes to the Board of the Tennessee Valley Authority. His expertise and experience will serve the agency and the State of Tennessee well in the coming years as he has since 1993.

Thank you.

Senator CHAFEE. Thank you very much for that high recommendation, Senator Frist.

Senator Baker also called me in connection with Mr. Hayes,

heartily endorsing Mr. Hayes for this position.

The Senators are busy and you’re certainly excused Senator Frist

unless you have any questions.

Senator Baucus.

OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR

FROM THE STATE OF MONTANA

Senator BAUCUS. Thank you. I have a statement for the record.

[The prepared statement of Senator Baucus follows:]

STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE STATE OF MONTANA

Good morning, and welcome to all of our nominees.

Mr. Hayes, I look forward to hearing how the TVA has succeeded in keeping rates

stable for 10 consecutive years while at the same time downsizing, saving more than

$100 million annually and reducing green house emissions. Sounds like quite an accomplishment, and you’ve just been there for 3 years!

Ms. Espinosa, I look forward to hearing what ideas you have for the Udall Scholarship and Foundation as a new appointee and Mr. Rappoport, as one of the first

trustees of the Udall Scholarship and Foundation, I look forward to hearing what

you’ve accomplished in your first 21⁄2 years and what new initiatives you think the

Foundation should undertake in the next century.

You two have a great responsibility. The contributions that Mo Udall has made

not only to the environment of this country but to the environmental consciousness

of America are unsurpassed. Fostering that consciousness through scholarship

awards and environmental policy awareness is not only a tribute to him, but a great

way to preserve his legacy.

I look forward to hearing your testimony.

Senator CHAFEE. Senator Bingaman, why don’t you come forward

and your folks can come up, Mr. Rappoport and Ms. Espinosa, and
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we’ll have Senator Bingaman first because he has other obligations, I’m sure.

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

THE STATE OF NEW MEXICO

Senator BINGAMAN. Thank you very much, Mr. Chairman.

I appreciate the chance to say just a few words in support of Judith Espinosa for this position as Trustee for the Morris K. Udall

Foundation.

She’s a person who I’ve worked with over many years, particularly on the difficult job, which all of us face of trying to reconcile

and accommodate the need for economic growth, which we all recognize, and the need to protect our environment. She has been in

very key positions in our State where those two concerns come together.

She has twice served in the New Mexico State Cabinet under

Governors in our State, once as Secretary of Transportation and

she was also the chairwoman of the National Governors Association Committee on Hazardous Materials Transportation, which I

know this committee spends a lot of time on. Also she served as

New Mexico’s first Secretary for the Environment. She has distinguished herself in both those positions.

She is now serving as the acting president for the Alliance for

Transportation Research at the Transportation Research Institute

at the University of New Mexico.

She will bring to this position great experience and good judgment and I think the Morris K. Udall Foundation will be well

served by her being on the board. I recommend her heartily to this

committee and I hope she will be confirmed for the position.

[The prepared statement of Senator Bingaman follows:]

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

MEXICO

Thank you Mr. Chairman. I would like to give you and the committee a brief introduction to a truly outstanding candidate as trustee for the Morris K. Udall Foundation. My good friend, Judith Espinosa. In New Mexico, Judy has been an inspiration to all of us who have to wrestle with the very difficult, and often thankless,

task of reconciling our needs for economic growth and jobs with our need for a

healthy sustainable environment. Because of her boundless energy in the pursuit of

solutions on these issues, her string of accomplishments is too long for me to list

here. So let me just give you some highlights of Judy’s background that illustrate

why I think she will be a great trustee for the Foundation.

As we all know, finding real solutions to provide an environmentally sound and

sustainable economy requires building a consensus between industry, government,

the environmental community, science and education. The pursuit of consensus is

the legacy that Mo Udall left us and the goal of the Foundation, and Judith

Espinosa covers all of these bases:

She has served twice in the New Mexico State Cabinet, once as Secretary of

Transportation when she was also Chairwoman of the National Governors’ Association Committee on Hazardous Materials Transportation, and also as New Mexico’s

first Secretary for the Environment, where she chaired both the state commission

on mining and the state commission on water quality. She also headed the Government Advisory Committee to EPA on the supplemental environmental agreement for

NAFTA.

Judy, a registered nurse with a Masters in public health administration, also has

experience in the private sector, running her own consulting business for industry

and government agencies on health services and administration. Her non-profit experience includes serving on the boards of the Surface Transportation Policy Project,

and the National Wildlife Federation. Currently, she is acting president for the Alliance for Transportation Research Institute at the University of New Mexico.
5

In short, I can think of no one better qualified to oversee the Foundation’s missions to expand consensus on environmentally sustainable development, and to promote education in environmental science. She has worked in, and with, industry,

government, environmental groups, and the education and science communities. It

is rare to find someone who has worked in all of these areas and excelled in each

receiving a U.S. Fellowship in Public Health Service and Health Science, and recognition from the New Mexico State Legislature in a memorial passed to honor her

distinguished public service.

I commend her for your consideration as Trustee. Thank you.

Senator CHAFEE. Senator, we appreciate your taking the time

and trouble to come here. I must say Ms. Espinosa is off to a fine

start. Here’s a strong letter of recommendation from Senator Domenici likewise. So you’ve got both your Senators from two different parties endorsing your nomination for this position.

I’ll just read the final paragraph of Senator Domenici’s letter.

‘‘For all these reasons, I’m pleased you’ve scheduled a hearing on

Ms. Espinosa’s nomination for March 14. I highly recommend that

the committee approve her confirmation as quickly as possible so

that her extensive experience and unique talents can be utilized as

a trustee of the Morris K. Udall Foundation. Very truly yours, Pete

V. Domenici.’’

Senator do you have any questions or comments?

Senator BAUCUS. About any of the nominees?

Senator CHAFEE. No, in connection with Senator Bingaman?

Senator BAUCUS. No, thank you.

Senator CHAFEE. Thank you very much, Senator, for coming.

Senator BINGAMAN. Thank you.

Senator CHAFEE. I will put these letters in the record. There are

also two other letters from Senator McCain and from Senator Kyl.

Senator McCain’s letter says, ‘‘I’m delighted to endorse the President’s nomination of Mr. Rappoport and urge the Committee on

Environment and Public Works to favorably recommend the nomination of Mr. D. Michael Rappoport at its earliest opportunity.’’

Senator Kyl says, ‘‘I’m certain that Mr. Rappoport’s nomination

to and service on the Board of Trustees will ensure the continuation of the successful activities of the Udall Foundation.’’

You’re all batting two for two as regards to your Senators, so

that is very nice. We’ll put these letters in the record.

[The letters from Senators Domenici, McCain, and Kyl follow:]
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7
8
9

Senator CHAFEE. Before we start, I’d like to ask if there are any

family members? Mr. Hayes, do you have any of your family members here?

Mr. HAYES. My wife, Mary Howard, and my daughter, Amy.

Senator CHAFEE. Will they rise just so we have an opportunity

to see them?

We’re delighted you’re here.

Ms. Espinosa, do you have any family here?

Ms. ESPINOSA. I don’t, sir, but I have a good friend of mine who

is here, Mr. Hank Dittman from the Surface Transportation Policy

Project.

Senator CHAFEE. Fine. Glad you’re here.

Mr. Rappoport.

Mr. RAPPOPORT. Senator, thank you. I have my wife, Susie, and

our son, Sloane, here with us.

Senator CHAFEE. Fine. We welcome you all here and are very

pleased you took the trouble to come.

Gen. Flowers is the President’s nominee for president and member of the Mississippi River Commission. Gen. Flowers is extremely

busy with matters dealing with the floods in the Mississippi River

area right now, so I made the following arrangement.

We excused Gen. Flowers from appearing here. We will leave the

record open for 1 week ending March 21 to accommodate any written questions from members to Gen. Flowers. In other words, they

will have a week from today, the 14th, until the 21 of this month

to submit questions to Gen. Flowers.

Gen. Flowers will then have 2 weeks ending April 4 to answer

and no action will take place before then on his nomination. Following that, we will take up his nomination.

Before I start, Senator Sessions, do you have any comments you

wish to make?

OPENING STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR

FROM THE STATE OF ALABAMA

Senator SESSIONS. I would, Mr. Chairman.

I appreciate the opportunity to be here and I thank you for holding this hearing to consider the nomination of Johnny Hayes, an

individual that I’ve gotten to know on several occasions and talked

in some depth about before the Tennessee Valley Authority, and

Ms. Judith Espinosa and Michael Rappoport to be members of the

Board of Trustees for the Morris K. Udall Scholarship Foundation.

Over 70 years ago Congress, along with President Franklin Delano Roosevelt, passed the Tennessee Valley Act as part of the New

Deal to help bring the Tennessee Valley out of the Depression.

The preamble of the original Act states:

TVA’s purpose is to improve navigability and to provide for flood control of the

Tennessee River; to provide for reforestation and the proper use of marginal lands

in the Tennessee Valley; to provide for the agricultural and industrial development

of said valley; and to provide for the national defense by creation of a corporation

for the operation of government property at or near Muscle Shoals in the State of

Alabama.

The need, justification and intent of the original Act is important

still even today.
10

I’m concerned by recent reports that many of those activities

might be abandoned and we need to discuss what might take their

place and how some of those absolutely essential duties would be

developed.

Tennessee Valley Authority does much more than just produce

efficient, commercial power for the residents of the Tennessee Valley; it is responsible for flood control and in charge of managing its

economic and development programs in that region.

The Tennessee Valley Authority has successfully managed the

rivers and government lands in the Valley since 1933. Someone

would need to continue those activities if the TVA does not do

them.

I think there is a concern in Alabama and in the region concerning what is going to happen if we make major changes in that.

Those are some things that I would want to talk with Mr. Hayes

about today. Flood control is basic and that is something we’ll need

to talk about.

The Environmental Research Center in Muscle Shoals is a remarkable institution. I think it’s on the road to perhaps proving

that it can stand on its own. It’s been cut every year in its budget

and it has 230 employees, but because of the quality of their work

and contracting out activities, it appears they may very well be

able to stand on their own.

I met with the leadership of that Center and they have a positive

attitude about the challenges they are facing. I believe they are

going to be very successful and we want to be sure that we don’t

hamper or undermine their ability to succeed. We want to be sure

that they continue in the Muscle Shoals area and not be transferred somewhere else.

I understand TVA has established a 19-member task force to examine some of these issues and I look forward to working with

them. I look forward to working with you, Mr. Hayes, as we go forward today.

Thank you, Mr. Chairman.

Senator CHAFEE. Thank you very much, Senator.

Mr. Hayes, I’m sure this isn’t anything new to you, there is a belief that I share that we want to get TVA to the greatest extent

possible away from having to receive annual appropriations from

here. Since you’ve been on the Authority, you’ve worked to achieve

that.

What do you receive now, $106 million a year?

STATEMENT OF JOHNNY H. HAYES, NOMINATED BY THE

PRESIDENT TO BE A MEMBER OF THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY

Mr. HAYES. Yes, sir.

Senator CHAFEE. Has that come down over the years?

Mr. HAYES. It has come down.

Senator CHAFEE. At least it hasn’t grown with inflation?

Mr. HAYES. No, sir, it hasn’t. It’s come down every year. At one

time we were getting, when I first began serving, approximately

$140 million and it’s down to $106 million.

Senator CHAFEE. Do you see possibilities of further reductions as

we go along?
11

Mr. HAYES. Over the past 3 years, as Senator Sessions said, the

Environmental Research Center has been on a path to self-financing. It only receives about $15 to $16 million dollars in appropriations at the present time and about $17 to $18 million comes from

self-perpetuating projects. That was to be phased out in next year’s

budget as a plan that was started 3 years ago, instituted by us and

Congress.

The economic development program which we’re very proud of in

the Valley, we’ve restructured it, worked at it hard. It is down to

where we’re only asking for $4 million and to be phased out the

following year. We’ve developed the economic development program

and moved it entirely over to funding from the power sources.

We’ve moved those two projects out of the appropriated funding

into private funding.

Senator CHAFEE. Well, no question, the economic program has

been successful. You presented to me this document from TVA

about the automobile industry. If I have it correctly, I believe there

is a greater production of Japanese automobile companies in the

State of Tennessee than in any State in the Nation, is that true?

Mr. HAYES. I think there’s probably more employees, other than

possibly California. We’re very proud of that. We have a great work

force in the Valley, not only the manufacturing plants, but also

support industries.

Senator CHAFEE. I believe that when President Roosevelt conceived the idea of the TVA that he took George Norris of Nebraska

down there, didn’t he?

Mr. HAYES. I think so, yes.

Senator CHAFEE. That got the legislation through?

Mr. HAYES. Right.

Senator CHAFEE. Another bit of trivia. When I was growing up,

there was a song they used to sing, ‘‘She’s so dumb, it really is a

shame. She thinks Muscle Shoals is a boxer’s name.’’

[Laughter.]

Mr. HAYES. I’m glad Senator Sessions was out of the room.

[Laughter.]

Senator CHAFEE. Senator Baucus.

Senator BAUCUS. Thank you, Mr. Chairman.

Mr. Hayes, just following a bit the same line of questioning of the

Chairman, did I hear you say TVA you think will phase out its

need for Federal appropriations by the year 1999?

Mr. HAYES. We’re phasing out Economic Development and the

Environmental Research Center from appropriated programs.

We have a proposal that you’ve probably heard of that was presented within the past couple of weeks that would phaseout all of

TVA’s appropriated programs, but this is a proposal and we’ve got

a task force of 19 people from across the Valley, TVA employees,

that are looking at this proposal, studying ways to either do TVA

programs more efficiently with other agencies, or to possibly leave

them as they are. Who knows what the task force will come back

with.

TVA has always been an agency of change. Since I’ve been at

TVA, we’ve realigned the Environmental Research Center, realigned Economic Development. We’ve preached productivity for
12

the nuclear program and fossil and hydro and the transmission

system.

This portion that we’re looking at, the flood control and navigation and the land, stewardship, are the only programs that we

haven’t taken a look at and the proposal is to look at those areas.

The proposal would have to have the cooperation of Congress, it

would have to have the cooperation of the State, if it works, but

we don’t know what it’s going to be because we have the task force

looking at it.

Senator BAUCUS. What is the role of TVA when this country

moves to the degree that it does to deregulate power?

Mr. HAYES. Deregulation, as you’re aware, is an extremely complex issue. TVA right now serves power to 160 wholesale distributors, and approximately 67 direct-serve customers throughout the

Valley. Those are large power loads, aluminum companies, paper

companies, et cetera.

We have, by legislation, a fence around TVA territory that borders several States and we can only sell power to 14 companies

that bordered us, that we bought and sold power from in 1959. So

we have an opportunity to sell to those.

Senator BAUCUS. Do you think it’s a good idea to completely deregulate power in a way where TVA is part of that and treated the

same way, that is TVA can buy and sell nationwide, but without

the Federal subsidy?

Mr. HAYES. If they’re going to allow private companies to come

inside the fence and take our customers, then we’re going to have

to be able to sell outside.

Senator BAUCUS. And you think you’re prepared to do that by the

turn of the century?

Mr. HAYES. I think we’re prepared to do it today.

Senator BAUCUS. Today, you’re prepared to do that?

Mr. HAYES. Yes. We’re very competitive.

Senator BAUCUS. Without subsidy?

Mr. HAYES. Yes.

Senator BAUCUS. Good. Thank you.

Senator CHAFEE. For instance, Duke Power, they must sell in

your area, don’t they?

Mr. HAYES. No, sir, not inside the fence.

Senator CHAFEE. So you have a certain area that you say is inside the fence, wherever it is?

Mr. HAYES. Yes.

Senator CHAFEE. And that is solely TVA’s?

Mr. HAYES. That’s solely TVA territory. We have 10-year contracts with our customers, with our wholesale customers, and these

are rolling contracts every day, so they could come in and pick off

a customer that’s on that border. They can’t come inside the fence,

but Duke could pick off Murphy, NC, that borders Duke, but if the

contract held, it would be 10 years before they could begin serving.

We just lost Bristol, VA because although it was one of our 160

customers, it was outside that fence and they did not have a 10-

year contract with us. Their contract expires next January.

Senator CHAFEE. It would be my hope, obviously, that you’d be

able to end the subsidies totally and I encourage you to continue

your work in that direction.
13

Mr. HAYES. Thank you.

Senator CHAFEE. Senator Sessions.

Senator SESSIONS. Thank you, Mr. Chairman.

Let me ask a few questions, Mr. Hayes. I think it would be an

opportunity now to clear up concerns and we hear about people

who have jobs they’ve held for a long time who are getting nervous

and rightly so. They’d like for us to speak clearly and effectively

and sometimes we have to repeat ourselves to make sure the message gets out.

With regard to the Environmental Research Center, the Federal

funding for that is being reduced substantially and will be zeroed

out in how many years, 2 more?

Mr. HAYES. One more.

Senator SESSIONS. One more year, it will be zeroed out, Mr.

Chairman, and that agency will be standing on its own.

Mr. HAYES. Yes.

Senator SESSIONS. There is no plan, to your knowledge, and you

have no plans to support, an effort to move that center from the

Muscle Shoals area to anyplace else, is that right?

Mr. HAYES. Let me just say to you and for the record, I’m committed and I think the other two board members are committed,

to make the Environmental Research Center a success and we will

make it a success. We don’t have plans at all to move the Environmental Research Center from Muscle Shoals, AL.

Senator SESSIONS. I’ve toured it and they are doing some remarkable research, Mr. Chairman, on how to convert waste to energy, to some of the best in the Nation; they have programs for

very small towns, how they can convert waste and utilize it. They

really are in the forefront, don’t you think, Mr. Hayes, of environmental technology in America?

Mr. HAYES. Absolutely. Especially in water areas, et cetera, yes.

Senator SESSIONS. By the way, we talk here about clean air, I

happened to be on an airplane a few weeks ago with the chief scientist at TVA who does their clean air work at this Center and

talked to the chairman of the board at TVA. What is your best estimate now of the cost of the Tennessee Valley electric users of the

new requirements of the Clean Air Act on TVA alone?

Mr. HAYES. Our best estimate right now is about $2 billion.

Senator SESSIONS. Mr. Chairman, Ms. Browner was here and I

believe she estimated nationally this would be a $6 to $8 billion

cost to America. TVA alone is saying it may be $2 billion for them,

so obviously those costs will be passed on to the consumers and

that will happen all over America.

I think it points out your concerns that we need to be real careful

about these clean air proposals.

Next, on flood control, you have about 900 employees involved in

resource management, flood control, maintaining the waterways

and that sort of thing?

Mr. HAYES. The resource group is about 900 and they cover all

facets.

Senator SESSIONS. I think what concerns a lot of people is that

flood control and resource management are a part of every governmental resource development and if TVA doesn’t do it, who will,

and are we going to go through some situation in which all TVA
14

employees are laid off and some other agency would bring in new

people to do this work?

Can you tell us what you are doing to make sure that if a transition from TVA occurs, that the people who are doing that now and

doing a good job would have an opportunity to be retained?

Mr. HAYES. I can give you my commitment that whatever the

task force brings back, if they were to bring back a change, I certainly would not want to displace employees or hurt families in any

way, I don’t know what the task force is going to bring to us, I can

certainly tell you that my commitment would be to work with these

people to make sure they are not displaced.

Senator SESSIONS. I had to step out for 1 minute. Did you explain

the task force?

Mr. HAYES. I did.

Senator SESSIONS. That task force’s mandate is to determine

whether or not a transition is feasible and how to do it in such a

way that would be least detrimental to the people, many of whom

have given their lives to this effort.

Mr. HAYES. At the least cost to the Federal Government and how

it could be done most effectively.

Senator SESSIONS. I would just like your commitment that you

will do what you can as leader of this agency to make sure that

no unnecessary displacements of the good and decent employees occurs?

Mr. HAYES. I will give you that commitment.

Senator SESSIONS. The Economic Development Program is something you took a lead in when you first came with the agency, did

you not?

Mr. HAYES. Yes, sir.

Senator SESSIONS. Would you share with the chairman what

kind of personnel reductions have occurred in just that agency in

the last several years?

Mr. HAYES. We had 264 people when I came 3 years ago and

we’ll be down to 60 by the time this phases out but we’re still doing

things more effectively. We’re on the right path. We’ve gone from

grants to loans and leveraging money, creating jobs.

Senator SESSIONS. I think that’s a real record of achievement to

go from 200 and some employees to 60, Mr. Chairman, and Mr.

Hayes has personally been the leader in that effort.

With regard to economic development, you are committed,

whether it’s federally appropriated funds or not to continuing the

Economic Development Program for the Tennessee Valley area?

Mr. HAYES. You have my commitment and certainly it’s not only

an interest of mine but it’s an interest of the rest of the board.

They’ve been very supportive in all the economic development

measures we’ve done throughout the Valley.

Senator SESSIONS. Can you tell me and really speak to the employees of the Tennessee Valley Authority with regard to what they

can expect when this committee reports, what kind of opportunities

they will have during the process of this committee and afterwards

to express themselves, and officials of Congress, what opportunities

we’ll have to be involved in that process?

Mr. HAYES. From the first day when we announced this, we said

we would have input from Valley stakeholders. Certainly that in-
15

cludes employees and Congress. We couldn’t have a report that

would be meaningful unless you had this input, so we’ll have it.

We want to work with Congress. We will work with Congress.

We will work with all the stakeholders in the valley. So if you’re

talking about stakeholders, you’re certainly talking about employees. TVA’ employees are on this task force. They are employees of

the Valley from Alabama to Kentucky, Memphis to east Tennessee.

Senator SESSIONS. I think that’s important because we do not

need to get in a rush and get so busy and have some governmental

regulation develop so that we end up going out and finding new

people to do jobs that could be done better by the experienced people that are in those positions.

I know you’ve got an efficiency burden and the whole Authority

has done a remarkable job of improving efficiency. Did you state

how much employee reduction has occurred in the last decade in

the Tennessee Valley?

Mr. HAYES. We’re down to about 16,200 people from about

35,000.

Senator CHAFEE. In how many years, 10 years?

Mr. HAYES. I think it’s 10 years, yes, sir.

Senator CHAFEE. That’s extraordinary.

Mr. HAYES. It’s since the 1980’s, the mid-1980’s.

Senator CHAFEE. From 32,000——

Mr. HAYES. Thirty-five thousand to sixteen thousand.

Senator CHAFEE. To 16,000?

Mr. HAYES. Yes. Since I was here before you the last time,

through voluntary outs and retirement programs, we’ve cut about

3,000 people.

Senator SESSIONS. It is a remarkable effort on Tennessee Valley

Authority’s part to reduce unnecessary expenditures and to increase productivity. As I told them, if they had not done that, I

think this whole agency would be in jeopardy but they have responded aggressively to the request of Congress, the taxpayers who

want more for their dollar, and you have a leaner and more

healthy TVA, don’t you, Mr. Hayes?

Mr. HAYES. Yes, sir.

Senator CHAFEE. I suppose some of that reduction in force has

come about through operations that you previously were engaged

in that now you’ve spun off in some fashion?

Mr. HAYES. A lot of those jobs were in the Construction Program,

but a lot of it has been in operations. We’re very lean in operations,

but in being lean, we certainly haven’t forgotten safety.

Senator SESSIONS. I just want to say there is a feeling sometimes

by some of us on the Hill and people in the Valley that TVA is

somewhat insensitive at times. It may not be fair but it is a perception out there. You’re an open person and a person that’s easy to

talk to. I just want you to know that we want to be supportive; we

think you’ve made some real progress and we want to make the

Tennessee Valley Authority a productive, valuable part of the

American economy.

There was another question. Tell me about the Belafonte Facility.

Mr. Chairman, there is a nuclear facility in Belafonte in Jackson

County, AL that I believe nearly $4 billion was spent on it. One
16

of the units is about 80 percent complete but because of regulations

or other problems, it has been stopped and remains idle.

It’s remarkable. You go in it and it looks like it’s ready to turn

a switch and operate. It’s that nearly complete. It’s an investment

that we simply cannot allow to go to waste.

Can you tell us, Mr. Hayes, what thoughts you have about how

to get that facility into production and not waste the investment

that we have in it?

Mr. HAYES. As you said, we stopped construction on that facility,

active construction, in 1994. We now have, and have had for the

past several months, a task team looking at the best way TVA can

make that a productive asset. We’re looking at coal, we’re looking

at coal/gas, we’re looking at natural gas, and we’ve certainly not

ruled out nuclear, with the right financial partners, but we would

have to have the right partners to do that.

We should have the report back by the end of November or the

fall and we will be making a decision there, but it is an asset that

we will turn into a productive asset.

Senator SESSIONS. Is it your commitment that you’re going to be

working to turn that into a productive facility and not leave it idle?

Mr. HAYES. It is my commitment.

Senator SESSIONS. I would say this. I would not discount nuclear.

It’s so close to being a facility ready to operate that it’s remarkable

to me that whatever has happened, we’ve not been able to complete

that.

When we talk about particulate and ozone, I think our air would

be better in that area if we did not use fossil fuels.

Mr. HAYES. We’re certainly looking at all aspects and looking

hard, and working with people around the country looking at partners.

Senator SESSIONS. Just a question of study and care and I hope

you will give it that. We’ve simply got to get that facility into production and I would encourage you to do everything you can to do

that.

Thank you.

Senator CHAFEE. Thank you, Senator.

I must say it is dazzling to me these tremendous expenditures

put into these plants and then they stop the construction. That

happened in Long Island, then Seabrook had a terrible battle and

finally Seabrook sent it away.

What happens? Why did you stop? Senator Sessions indicated

you put some $2 billion into that place?

Mr. HAYES. I think it’s closer to $4 billion.

Senator CHAFEE. Even for somebody from Washington, that’s a

considerable sum of money.

Mr. HAYES. It’s a lot of money.

Senator CHAFEE. So what went wrong, what happened?

Mr. HAYES. When I came on the TVA board, the construction had

phased down and it was a financial decision. We were looking at

a $30 billion debt, a cap on the debt, we were looking at stiff regulations. We had two facilities, Watts Bar and Belafonte. Watts Bar,

if I recall correctly had been under construction for some 20 years.

Senator CHAFEE. Is that a nuclear plant too?
17

Mr. HAYES. Yes, sir, and it was 98 percent complete and the

board made a commitment to complete that plant. We completed it

and we got it on-line last year. We brought that plant on-line and

Browns Ferry III back on-line, two in 1 year.

Now we’re looking to see what we can do at Belafonte. When you

talk about 80 percent, certainly my people tell me, Senator Sessions, it’s one of the top facilities around but it’s 80 percent of an

unknown number. It’s very difficult to tie that figure down on what

it will cost to complete.

Senator CHAFEE. Fine. Do you have any other questions, Senator?

Senator SESSIONS. I think not, Mr. Chairman. I just think the

Tennessee Valley Authority has grown out of the people, it was created by the people and the taxpayers, and it must be responsive,

it must be sensitive to the thousands of people who have given

their lives to it.

You’ve made cuts, you’ve demonstrated that you’re not going to

pay people to do work that’s not productive, but there’s work that

has to be done in keeping the channel operating, the safety there,

the environment secure in that great region. We need to be sure

that we are sensitive to the needs of the employees who have supported it so long.

Mr. HAYES. You have my commitment.

Senator SESSIONS. Thank you.

Senator CHAFEE. Thank you very much, Mr. Hayes. You’re excused if you wish.

Now we will consider the trustees nominated for the Mo Udall

Foundation. Both have impressive backgrounds.

The Foundation was established by Congress in 1992 to honor

Congressman Mo Udall for his service to the Nation. Mo Udall was

a famous wit amongst other things and sought the Democratic

nomination for President. He was a very strong environmental

leader, a defender of rights of Native Americans.

The Foundation operations scholarship and fellowship programs

for outstanding U.S. students who are interested in pursuing careers in environmental policy and as I understand it, conflict resolution, health care, and Native American public policy.

Ms. Espinosa is the current president of The Alliance for Transportation Research Institute at the University of New Mexico. You

have served as both secretary of Transportation and secretary of

the Environment for the State of New Mexico, and given a substantial amount of your free time as a mentor to students living within

disadvantaged communities in New Mexico and California.

Mr. Rappoport served with the Udall Board for the past 2 years

and has a great deal of experience with water and other natural

resources for the past 23 years. He’s served in a variety of leadership capacities for the Salt River Project, a mammoth water and

electricity project in Phoenix.

I might add Mr. Rappoport is a veteran of Capitol Hill having

worked as a House Legislative Assistant in the early 1970’s.

Are there any comments either of you want to make? Ms.

Espinosa?
18

STATEMENT OF JUDITH M. ESPINOSA, NOMINATED BY THE

PRESIDENT TO BE A MEMBER OF THE BOARD OF TRUSTEES

OF THE MORRIS K. UDALL SCHOLARSHIP AND EXCELLENCE

IN NATIONAL ENVIRONMENTAL POLICY FOUNDATION

Ms. ESPINOSA. Thank you, Mr. Chairman and Senator Sessions.

It’s an honor for me to be here and to have been nominated for

the Board of Trustees of the Morris K. Udall Foundation.

I was very pleased when that occurred and when I was able to

see that I might be able to lend some of my background to the

Foundation and to the work that it did.

I have talked to a lot of students over the years. I hate to say

how long it’s been that I’ve been working in the area of recruiting

students into the health sciences and public health and environmental arenas, but it has been a long time.

I find that students don’t think about the issues of community

and public health and environmental health and the environment

too much when they’re first going to school, so I always try and

talk to them about the importance of that.

I’ve worked a lot in disadvantaged communities. I’ve also worked

with nontraditional students, women who have gone back to school

after many, many years of being at home.

Senator CHAFEE. You do all of this through your University of

New Mexico job?

Ms. ESPINOSA. Not at this time, but I have in the past. I’ve

worked at the College of Nursing as an instructor back in the early

1970’s. While I was nursing there, I was also doing recruitment for

the College of Nursing with minority studies and nontraditional

students. We were looking at recruiting more minority students

into the College of Nursing as well as older students who wanted

to go back to school.

I also have done that in California. I worked in the Los Angeles

area for many years while I was out there, both when I was getting

my Master’s degree as well as after that and working with students

in Los Angeles to have them look at the health sciences and the

environmental sciences if they were thinking about going to school,

so I’ve done this off and on in my career.

We have embarked on a program at the Alliance for Transportation Research Institute looking at recruitment of students into

the technology and transportation and environmental sciences, and

we will be starting that hopefully sometime this summer.

We hope to be working with the Department of Energy which

I’ve had conversations with recently on the work they would like

to do to get students looking at technology applications and the

sciences that will advance technology and transportation systems

in this country.

Senator CHAFEE. Mr. Hayes, before all of you leave, I have a couple of standard questions that we ask of all nominees, so I’ll address this to all three of you.

Are you willing, at the request of any duly constituted committee

of the Congress, to appear in front of it as a witness?

Mr. HAYES. Yes.

Senator CHAFEE. Yes?

Ms. ESPINOSA. Yes, sir.

Mr. RAPPOPORT. Yes.
19

Senator CHAFEE. OK. Do you know of any matters which you

may or may not have thus far disclosed which might place you in

any conflict of interest if you’re confirmed in this position? Do you

know of anything?

Ms. ESPINOSA. No, sir.

Mr. HAYES. Not at all.

Mr. RAPPOPORT. None whatsoever.

Senator CHAFEE. All right, fine. Mr. Hayes, that’s fine for you.

Senator CHAFEE. Mr. Rappoport, do you have anything you want

to say?

Mr. RAPPOPORT. I do.

STATEMENT OF D. MICHAEL RAPPOPORT, NOMINATED BY

THE PRESIDENT TO BE A MEMBER OF THE BOARD OF

TRUSTEES OF THE MORRIS K. UDALL SCHOLARSHIP AND

EXCELLENCE IN NATIONAL ENVIRONMENTAL POLICY FOUNDATION

Mr. RAPPOPORT. Thank you, Mr. Chairman, particularly for those

kind words of introduction.

I also would like to express my appreciation to Senator Kyl and

Senator McCain for their letters of recommendation as well.

Senator Sessions, thank you for adjusting your schedule to be

here.

With your permission, Mr. Chairman, I would request that my

prepared statement be placed in the record.

Senator CHAFEE. Definitely. You can give us a summary of it.

Mr. RAPPOPORT. I very much appreciate the committee scheduling this opportunity for me to present myself as a nominee for a

second term on the Udall Foundation Board of Trustees.

If I may, I would like the record to show that Terry Bracey, who

is the hardworking chairman of the Udall Foundation, is in the audience. In large measure, much of the success, I will summarize

today, is due to Terry’s leadership and commitment to the Udall

Foundation.

We welcome Judith Espinosa and her unique background coming

on the Foundation and would certainly urge you and your colleagues to favorably report her nomination to serve as trustee.

My association with Mo Udall extends back 30 years to a time

when he was instrumental in building support for the Central Arizona Project, which as you may recall is a large water and energy

facility in the State of Arizona.

In the early years of our association, the interests that I represented were not always in total agreement with those so effectively advocated by Mo Udall, but throughout the remainder of our

association, I had the good fortune to serve either as chair or a

member of one of Mo’s business advisory committees, on several of

his energy and water task forces, as well as on a number of his reelection committees.

Like so many others over the years, I came to admire Mo Udall’s

sense of civility, his ability to fashion consensus, and above all, his

integrity and commitment to public service.

When Congress established the Udall Foundation, it gave special

recognition to those qualities. Specifically in 1992, Congress authorized to be appropriated $40 million for the Udall Foundation.
20

About half of that amount has been appropriated to date. The

Foundation administers those funds and in my prepared remarks,

several of the purposes for which those funds are expended are

identified.

I am privileged to serve as the chairman of the Foundation’s

Management Committee and in that capacity, I have a variety of

responsibilities including supervising the Foundation’s investment

portfolio and budget.

I am extremely pleased to say today that as in our 1996 annual

report, we have thus far awarded 55 outstanding college juniors

and seniors scholarships. They represent colleges and universities

from 38 States and Puerto Rico. This next year in 1997, we anticipate awarding 70 undergraduate scholarships and 2 graduate fellowships.

Also in 1996, we implemented the first summer internship program for Native American students. They had the opportunity to

serve in both House and Senate offices, as well as in the White

House. I particularly wanted to express appreciation to Senator

Baucus for placing one of our interns last year and hope that you

will all have an opportunity to visit some of our interns this summer.

The Foundation works very closely with the Udall Center which

is located at the University of Arizona. In 1996, we co-sponsored

an environmental health issues seminar of some note, and in 1997,

we will host in April the Environmental Conflict Resolution in the

West Conference, again in conjunction with the Center.

In sum, the Foundation’s purpose and plan is best captured by

Mo’s own words of a few years ago, ‘‘America is never done like a

poem or a painting.’’ I am sure Mo Udall believes, as we at the

Foundation do, that we are well on our way to helping future generations care enough to change things.

I would very much appreciate the opportunity to serve a second

term as a Udall Foundation Trustee to continue to help meet that

challenge.

I am prepared to answer any questions the committee may have

at this time.

Thank you.

Senator CHAFEE. Thank you very much, Mr. Rappoport.

I briefly looked over your annual report here and tell me this. Is

there an annual appropriation of some modest sum? What do you

get annually?

Mr. RAPPOPORT. Mr. Chairman, originally $40 million was authorized. During the early years, 1992 and 1993, a total of $19.6

million was actually appropriated.

Senator CHAFEE. I see.

Mr. RAPPOPORT. We understand, however, that the President’s

budget this year includes I believe $2 million per year for the next

5 years to be added to the Foundation corpus.

Senator CHAFEE. Do you raise private money also?

Mr. RAPPOPORT. We are authorized to do so. We have not yet

commenced a solicitation program, but it is our intention in the

next several years to be far more aggressive in that area, yes, sir.

Senator CHAFEE. How long are the terms? How long is each

term?
21

Mr. RAPPOPORT. When Congress established the Foundation, it

staggered the initial terms of three members at 2 years, three at

4 years, and three at 6 years. After the initial rollover, we are now

appointed and would serve for a period of 6-year terms.

Senator CHAFEE. I see. Do you get paid? Do the trustees get

paid?

Mr. RAPPOPORT. No. We are authorized to be reimbursed for expenses and those funds come directly out of the Foundation’s operating budget.

Senator CHAFEE. But you don’t get anything in addition to the

expenses?

Mr. RAPPOPORT. No, sir.

Senator CHAFEE. So it’s a labor of love.

Mr. RAPPOPORT. Indeed in many ways.

Senator CHAFEE. I think it’s very impressive and I was interested that apparently one of your students was an intern with Senator Baucus?

Mr. RAPPOPORT. Yes, sir, last summer. I’m not sure which tribe

but it was quite an experience for the intern.

Senator CHAFEE. I think that’s a great experience and maybe we

ought to look into that and see if we can’t do something likewise.

I don’t want to make any commitments because I just don’t know

what the situation is, but I’ll have my staff get in touch with your

folks.

Mr. RAPPOPORT. Thank you, Mr. Chairman.

Senator CHAFEE. Fine.

Senator Sessions.

Senator SESSIONS. I just want to congratulate you, Ms. Espinosa

and Mr. Rappoport for being nominated to this prestigious position.

I think it is indeed an honor to serve on the Morris K. Udall Foundation. That’s the kind of thing that those who have been interested in the environment over the years certainly would be honored

to do.

I’ll also note that they play a pretty fair game of basketball in

Arizona. My hometown team was leading them 10 points last night

with 5 minutes to go and it evaporated.

[Laughter.]

Senator SESSIONS. I didn’t get much sleep last night, I had a little bit of ingestion, but it was a great game and a great team.

I just want to say on behalf of the Senate, I know you will do

an outstanding job and we’re pleased to have you in Washington.

Senator CHAFEE. Let me just say it’s my intention to report these

nominations out as soon as we can and get them moving to the

floor, so unless there is something unsuspected which arises, I

would expect we could get all these nominations to the floor by

next week and hopefully get the whole process completed before recess. We go on recess a week from today and that would be my objective.

Thank you all very much for coming.

That completes the hearing.

[Whereupon, at 10:24 a.m., the committee was adjourned, to reconvene at the call of the Chair.]
22

PREPARED STATEMENT OF JOHNNY H. HAYES, DIRECTOR,

TENNESSEE VALLEY AUTHORITY

Mr. Chairman, and members of the committee. I appreciate this opportunity to

come before you today. I am grateful to President Clinton for the privilege of serving

on the TVA Board for the past 31⁄2 years. and I’m honored by his confidence in

nominating me for a full term.

I want to thank Senator (Bill) Frist for his introduction, and all the members of

the Tennessee Valley delegation who have supported me and my Board colleagues

in our work to make TVA a more valuable asset for our nation. I also want to thank

the members of this committee for your guidance and support, and with your approval I will continue working to ensure that TVA remains a productive national

asset.

My experience on the Board reaffirms my belief in the value of TVA as an effective force for supporting and promoting quality economic growth. TVA continues to

develop and explore new approaches for producing and delivering electricity more

reliably, efficiently, and with less impact on the environment. One example is the

installation of a state-of-the-art electricity transmission device that maintains a constant voltage to our customers.

Today, the pending deregulation of the electric utility industry presents an opportunity to make TVA’s operations even more efficient and to use our extensive experience in meeting reliability and environmental challenges that affect the utility industry. For example, we have compiled an excellent record of meeting more stringent clean air standards, while keeping our rates stable for the past 10 years. TVA

intends to be successful in a deregulated utility market, and I am proud of the steps

we have taken during my tenure to prepare for success in the future.

Our preparations include improving the performance of our power system and

taking steps to phaseout appropriated funding for the Environmental Research Center and our economic development programs. We recently created a task team to examine the operations of our other tax-supported non-power programs. The team’s

mission is to explore funding and operational alternatives and determine the most

efficient approach for continuing these programs, whether it is under TVA or another agency. The team is scheduled to report its findings and make recommendations to the Board in September.

I have been fortunate to serve with fellow Board members who share my desire

to build a forward-thinking, well-managed organization. The record is one of

progress through initiatives that challenge the innovative potential of the people at

TVA. As always, our most valuable resource is the dedicated force of professionals

and skilled people who continue to build on TVA’s legacy of service.

Their work has earned TVA national awards and recognition for quality improvements and innovative approaches to reduce costs. Since joining the Board in July

1993, one of my top priorities has been to ensure that TVA is effectively supporting

economic growth by producing a competitive and reliable supply of power for the

Tennessee Valley.

Briefly, here are some of the steps that we have taken:

We adopted TVA’s first integrated resource plan that analyzes TVA’s options for

meeting the energy needs of the Tennessee Valley for the next 25 years.

We completed our nuclear construction program by bringing two units into service

and making a decision to cancel completion of three other nuclear units. These actions brought to a close 28 years of nuclear construction.

We adopted an aggressive fiscal management plan that has allowed us to cap

TVA’s debt below the limit authorized by Congress. As a result, TVA will not increase its debt this year for the first time in 35 years. The next step is the adoption

of a plan now being formulated that will enable TVA to begin reducing its debt.

We have kept power rates stable for the eighth, ninth and tenth consecutive years

by maintaining a strong emphasis on controlling costs and improving efficiency.

Keeping power rates steady has contributed to the growth of our region and the nation’s economy.

POWER SYSTEM PERFORMANCE

Last year, TVA ranked second lowest in production costs among the 50 largest

electric utilities in the nation. While keeping costs under control, our power system

has continued to set new performance and efficiency records and maintain the reliability that our customers expect. In January, TVA met its highest demand ever for

electricity on a single day, providing our customers with 26,670 megawatts. This

past year, the TVA power system generated a record of almost 149 million megawatt-hours of electricity.
23

Mr. Chairman, when I and TVA Chairman Crowell were here 3 years ago, this

committee expressed concern about the performance of our nuclear program. I want

to take this opportunity to report that our nuclear program is now performing at

a high level, in both safety and productivity.

Last year, TVA became the first utility to bring two nuclear units into service at

the same time. This included the start of commercial operation for Unit I at Watts

Bar. The unit’s performance ranks among the best-ever for a first-year plant. A recent assessment by the Nuclear Regulatory Commission places it in the top 25 percent of all nuclear units in the United States. Overall, in the past 2 years, nuclear

production costs are down 40 percent and nuclear generation is up 50 percent. I also

want to point out that when I joined the Board, two nuclear units were on the Nuclear Regulatory Commission’s watch list for increased attention. Today, no TVA

units are on the list.

The power system is able to set new performance records and hold rates steady

because we have an excellent management team that emphasizes safety, quality,

and efficiency. In the past 3 years, we also focused on keeping TVA’s staffing levels

competitive. In 1994 we completed a major voluntary downsizing that reduced the

workforce by 2,600 positions and saved more than $100 million annually.

Despite major workforce reductions, there has been no significant change in minority representation, which remains at almost 12 percent. In 1995, we set a goal

of 40 percent women and minorities among new hires, and we exceeded that goal

by reaching 54 percent. Collectively, our emphasis on improving performance is

keeping TVA at the forefront of efficiency in government and the utility industry.

Equally important to the success of TVA’s power system are the relationships we

maintain with our customers. During my first 18 months on the Board, I visited

with each of the 160 local utilities served by TVA, and I have worked to address

their concerns as the Board moves forward to meet the challenges of deregulation.

ENVIRONMENTAL RECORD

Mr. Chairman, earlier I said that TVA has compiled a progressive environmental

record. We are conducting an aggressive Clean Water Initiative that includes work

to increase the amount of dissolved oxygen in the tailwaters below our dams, and

a comprehensive effort to reduce the amount of ground pollution that reaches our

streams through runoff. The record includes TVA becoming the first utility to join

the Department of Energy’s Climate Challenge program. This is a voluntary program to reduce greenhouse gas emissions. Under TVA’s commitment, we will avoid

producing 22.7 million tons of greenhouse emissions, which is the largest voluntary

reduction by a U.S. utility. Overall, TVA has spent more than $2 billion on air pollution controls and spends more than $350 million per year to meet clean air standards.

In the coming era of deregulation, I am confident that TVA can provide leadership

in meeting environmental quality and reliability commitments while keeping the

price of electricity as an economic advantage for the nation. I look forward to playing a role in achieving this vital mission.

ECONOMIC DEVELOPMENT

When I joined TVA, one of the major areas that needed attention was economic

development. Over the years, it had become a fragmented effort with no clear internal lines of responsibility and no clear accountability for results. Using my experience as the State Commissioner of Economic and Community Development for Tennessee, I made economic development my personal priority.

In the past 3 years, I am proud to report that economic development at TVA has

been transformed from a collection of random grants into a system of loans focused

on creating jobs and new growth. Overall, four major branches of economic development work were consolidated into one organization that works to create jobs and

to earn a return-on-investment for TVA. By creating a revolving loan fund for economic development rather than issuing grants TVA is making economic-development investments that make business sense. Since 1994, the loan funds have been

used to help leverage more than $1 billion in new capital investments and have directly supported the growth of 300 companies that will employ more than 12,000

people.

I would like to conclude by emphasizing that I am committed to seeing TVA operate as a business and as an effective public agency that is working to strengthen

the economy of the region and the nation. I have spent my life in the Tennessee

Valley, first as a private citizen who owned a successful business, and now as a public servant who believes that government can also be operated as a successful business. With your approval, I will continue working to operate TVA as a business that
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generates value for its customers and earns a return-on-investment for the United

States of America.

RESPONSES BY JOHNNY HAYES TO ADDITIONAL QUESTIONS FROM SENATOR INHOFE

Question 1. As you mentioned in your prepared testimony, the Tennessee Valley

Authority currently receives appropriated funding for both the Environmental Research Center and the economic development programs. What percentage of these

program funds are derived from sources other than direct Congressional appropriations? In addition to these appropriated funds, what other funding (both Federal

and otherwise) does the TVA receive for environmental programs?

Response. Sixty-four percent of Economic Development’s annual funding comes

from power program funds. Fifty-two percent of the Environmental Research Center’s funding in FY97 is projected to come from sources other than direct Congressional appropriations.

In addition to the $106 million that TVA receives from direct Federal appropriations, additional funding is received for particular environmental programs including:

• Natural Resource Stewardship—$35,000 cost share from the Tennessee Wildlife

Resources Agency, the state of Alabama, and the U.S. Fish and Wildlife Service for

operation of dewatering area pumping stations.

• River Action Teams—TVA partners with other agencies, local governments, and

individuals to achieve environmental successes in its Clean Water Initiative. Often

times agency funds are pooled to evaluate, develop, and implement action plans to

address water quality problems in the Valley. As an example, TVA is leading an

effort to improve water resource conditions in the Hiwassee basin that includes five

other Federal agencies, three state agencies, and several local governments. Other

examples include funding from the U.S. Geological Survey to perform environmental

evaluations in the upper-Tennessee basin, from the Environmental Protection Agency (EPA) to conduct environmental evaluations, and from state agencies for habitat

enhancement efforts. Total annual funding received for these activities is less than

$200,000.

Question 2. In addition to these appropriated funds, what other Federal subsidies

benefit the TVA?

Response. TVA does not receive any Federal subsidies. The Federal appropriations

that TVA receives each year are used solely for its nonpower programs. TVA’s electric operations are totally financed from ratepayer revenues.

Question 3. As you mentioned in your testimony, the TVA is studying ways to

phase out its ‘‘tax-supported-non-power programs.’’ If these programs are phased

out, is the TVA considering the disposition of physical assets purchased or supported with Federal taxpayer dollars?

Response. TVA’s proposal recommends that the Appropriations Task Force study

ways in which Federal appropriations could be discontinued to TVA after FY98. The

proposal suggests that the study will look at transferring responsibilities for essential programs to other agencies. It also directs the Task Force to review programs

that could be discontinued after FY98. The proposal does NOT recommend the

elimination of essential public services or the discontinuation of programs that Congress and/or the public deem desirable.

The Task Force may in the report of its study describe transfer of lands and facilities to other local, state or Federal agencies. Decisions for the ultimate use of TVA

physical assets purchased or supported with Federal taxpayer dollars requires

NEPA review and Congressional approval.

Question 4. I understand a task force has been created to study elimination of

these non-power programs. What are some of the preliminary proposals as to what

to do with these programs? In your testimony, you mention shifting their responsibilities to other agencies. Does this simply shift the Federal financial burden to

another agency rather than the TVA?

Response. The Appropriations Task Force has had two meetings and is currently

framing the issues that will be presented for public consultation. There are no preliminary proposals although the public consultation workshops may discuss the

tradeoffs in efficiencies among potential alternative public service providers. We currently don’t have any estimates of what it would cost other agencies to perform essential integrated resource management services. If other Federal agencies become

the service provider, there would be a financial burden for the cost of providing

those services.
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Question 5. Critics of the TVA have argued that Federal appropriations indirectly

subsidize the power programs. Private producers, for example, may have to absorb

more costs as a precondition to their FERC license. Other utilities provide economic

development and environmental services without Federal assistance. Does this place

the TVA at a unique competitive advantage in the event of utility deregulation?

Response. Federal appropriations are not used, directly or indirectly, to subsidize

TVA’s power program. The responsibilities and costs incurred by TVA in conducting

its hydropower and environmental activities are comparable to investor-owned utilities and are funded by power revenues. TVA, in accordance with the provisions of

the TVA Act, allocates the costs of operating its hydro facilities based on the benefits received by the power and nonpower programs. TVA’s power program also conducts economic development activities and TVA has proposed to end all appropriations funding for economic development. TVA has no competitive advantage relative

to other utilities.

RESPONSES BY JOHNNY HAYES TO ADDITIONAL QUESTIONS FROM SENATOR CHAFEE

Question 1. Mr. Hayes, we met a few weeks ago and discussed the strong role that

the TVA has played in the Tennessee Valley boosting the economy of the TVA region. Times are changing and it appears that the agency is making a big push to

streamline and to operate more like a business than a Federal agency. While I think

the proposal to eliminate Federal funds for TVA programs is a good start, there is

still the larger problem of the $28 billion dollar debt. Can I get a commitment that

if confirmed, you will pursue a substantial and expeditious reduction of this debt?

Response. Yes. We are confident that TVA will be able to make substantial reductions in its debt over the next several years. In fact, for the first time in 35 years,

TVA will not increase its debt in fiscal year 1997. This is now possible because we

have completed the major nuclear construction work required to bring two nuclear

units into service in fiscal year 1996, and taken actions to control costs in all areas

of TVA. TVA plans to meet its future power needs by entering into arrangements

such as partnerships, and purchase agreements with others, which will reduce capital requirements for new capacity.

Question 2. Please describe TVA’s major environmental accomplishments over the

last 31⁄2 years. If confirmed, what additional environmental accomplishments do you

hope to advance during your next term?

Response. Highlights of Accomplishments:

In 1996, TVA celebrated the completion of our ambitious river system aeration program that significantly increases the dissolved oxygen content in

tailwaters below TVA’s hydropower dams. This ambitious and totally voluntary

program to improve aquatic habitat was paid for with power funds as an act

of environmental responsibility for the impacts of TVA’s dams on fisheries,

water quality and aquatic vegetation.

Our business management system developed over the last 3 years has benefited the environment by incentivizing measurable improvements and increases

in activities that improve environmental standards at plants across the Valley.

To name a few: we voluntarily removed all underground storage tanks; we’ve

increased the recycling of coal byproducts and are transferring those technologies to the private sector for environmental improvements in surrounding

industries; we’ve invested in low polluting burners around the Smoky Mountains; we’ve initiated pilot programs for burning coals more efficiently; and we

have a very successful environmental training program that has consistently decreased the cumulative impacts of small, polluting events that would require remedial action.

Next Term Accomplishments

In my next term I would continue to serve as a steward of the Tennessee Valley

by ensuring continued integration of resource management activities and the current balance of outputs and environmental protection. Any disaggregation of the resource management system would negatively impact the whole of the River basin.

I will ensure the continued, voluntary initiation of activities that improve the efficiency with which we use fuel resources, and will support continuation of the successful Clean Water Initiative and the River Action Teams that promote watershed

health. I would also lead the Shoreline Management Initiative to a successful conclusion by implementing the first comprehensive shoreline management policy on

any major American river. The development standards outlined in this policy will

chart a course for balanced river front development for the foreseeable future. In

addition, I would like to see the environmental research and technology develop-
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*The Committee may not be aware that TVA was the lead contractor in the wholly successful

decontamination and decommissioning of the Rocky Mountain Arsenal nerve gas plant in Colorado.

ment at the Environmental Research Center transferred as widely as possible

through partnerships and sales of unique environmental and resource management

services.*
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TESTIMONY BY JUDITH M. ESPINOSA PRESIDENTIAL NOMINEE TO THE

MORRIS K. UDALL FOUNDATION BOARD OF TRUSTEES

Mr. Chairman and Members of the Committee, I am honored to appear before you

as a nominee for a position on the board of trustees of the Morris K. Udall Foundation. I am Judith M. Espinosa, from Albuquerque, New Mexico where I serve as the

Acting President of the Alliance for Transportation Research Institute at the University of New Mexico.

The Morris K. Udall Foundation was established by the Congress in 1992, in

honor of Congressman Udall and his lifelong work in the beneficial use, enjoyment,

and exploration of our nation’s natural resources. The trustees are appointed to set

the priorities of the programs outlined by Congress when Public Thaw 102–259 was

passed creating the Foundation. Congress charged the Foundation and its trustees

with increasing awareness and understanding amongst our citizens of the ‘‘* * *

role of the environment, public lands and resources in the development of the

United States.’’ Truly, this was a recognition by our legislative leadership of the importance of our environmental and natural resources to the sustainability of our national assets and the responsible use of them by those who follow us.

It is significant to me that you are considering my nomination today, because I

have dedicated most of my professional activities to work in the health sciences, environmental/public health sectors, natural resources conservation, and environmental protection program administration. I now serve on the Board of the National

Wildlife Federation, the largest grassroots conservation organization in the United

States founded in 1936. NWF stands for a balanced approach between the need to

use our natural resources for the benefit of our people and the need to conserve

them for future generations. I believe that Congressman Udall took this same approach in his public work in environmental policy; I will be proud to sit as a trustee

on the Foundation to carry on this message.

Of importance in carrying forth the purposes of the Foundation as enumerated by

Congress is the scholarship and fellowship awards given to graduate and undergraduate students in our colleges and universities. Utilizing our student population

to ‘‘* * * identify critical environmental issues * * * ’’ and provide educational outreach through their work is the legacy which we leave for the sustainability of our

environmental assets.

Throughout my career, a good deal of my volunteer time has been spent in the

recruitment of students into environmental health, policy and science fields. Most

of my mentoring with students has been within disadvantaged and ethnically diverse communities in New Mexico and California. So, I was particularly pleased to

see that Native American and Alaska Native health care issues were a strong part

of the Foundation’s work. To sit as a trustee on the Udall Foundation, which rewards excellence for students with interests in environmental policy and sciences,

will allow the foundation to utilize my skills and knowledge in promoting future environmental stewards. My experience in working with ethnically diverse and nontraditional students will serve to provide a distinct view on the scholarship and academic awards provided through the Foundation.

One of the most exciting activities which the Foundation promotes is environmental conflict resolution. Federal, state, and tribal agencies have been increasingly

involved in lawsuits challenging their regulatory actions. How much better to resolve the differences out of the courtroom where only one party is the winner and

move to a mediation process built around recognizing the needs and values of all

parties involved. Congressman Udall was a consensus builder, and the Foundation

will carry on this approach to environmental disputes and issue resolution. I endorsed this approach of reaching a mediated consensus during my tenure as New

Mexico’s Environment Secretary. As Chair of both the Water Quality Commission

and the Hardrock Mining Commission, regulations were adopted only after several

months of negotiations between over six different state agencies and most of the

large industries and businesses in the state. I used public comment and participation as a tool to direct both the state’s policy framework and compliance criteria for

the regulated industry. My experience with conflict resolution processes will be a

compliment to the Foundation Board of Trustees future plans to develop forums for

resolving issues critical to our country’s use of its natural resources.

Mr. Chairman, I thank you for this wonderful opportunity to present my testimony before the Committee. I will be pleased to answer any questions you may

have.
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RESPONSE BY JUDITH M. ESPINOSA TO ADDITIONAL QUESTION FROM SENATOR

CHAFEE

Question. One of the missions of the Udall Foundation is environmental conflict

resolution. If confirmed, how do you plan to utilize your experience and interests

to contribute to this important mission?

Response. I believe that one of the most important functions of the Udall Foundation is the promotion of environmental conflict resolution. Increasingly we have seen

federal, state and tribal governments challenged on their environmental or natural

resources regulatory actions in courts of law. While these challenges may have a legitimate basis to bring a legal action, we must begin to provide a forum whereby

the parties can resolve their differences out of the court room and into a resolution

process built around recognizing the values and needs of all parties.

I have held several professional public service positions that were primarily regulatory in nature. As Secretary of Transportation for New Mexico, my Department

had primary authority for collection of fees/taxes from the highway and aviation

user communities. Enforcement of regulations on heavy vehicles and trucks was a

major duty. Flexibility in the operation of our agency’s regulatory structure was a

strong policy of mine as Transportation Secretary. I negotiated a new scheme of vehicle permitting and operation with the oil and gas industry, mining industry and

other owners of heavy vehicles. A simpler and more efficient scheme of permitting

and user fees was devised which is currently in use today.

I also have endorsed a conflict resolution approach as the Manager of the inspection/maintenance program in Bernalillo County. When I took the position, the City

of Albuquerque and the County were under US EPA sanctions for non-compliance

with Clean Air Act standards. I negotiated and designed a new vehicle emission program between the City of Albuquerque, the County of Bernalillo and several hundred businesses which would be doing the inspections under the regulatory scheme.

It was accepted by EPA as a very progressive program in this region.

As New Mexico’s Environment Secretary and chair of both the NM Water Quality

Control Commission and the NM Hardrock Mining Commission, regulations were

adopted only after several months of negotiations between several state agencies

and most of the large industries and businesses in the state. The NM Hardrock

Mining Law, when being adopted by the Legislature, has been an extremely contentious process. The use of a mediated regulatory scheme left all the parties with a

hand in setting the compliance framework.

I have often used public comments and participation as a tool to direct the state’s

policy framework and set compliance criteria for the regulated industry. I am a big

believer in the need of a public agency to allow for meaningful public input into a

process which directly affects them—including the resolution of conflicts.

My direct experiences with conflict resolution and negotiated solutions will be a

compliment to the Udall Foundation Board as they plan for the possibilities of developing an institute for environmental conflict resolution which could be utilized

by federal agencies. I know that the Chairman of the Board has called upon the

strengths of several of the Trustees to forward the activities of the Foundation

which Congress set forth. I would offer my considerations for development of the

policies underlying the way conflict resolution should be approached with diverse

parties. Over the years I have experienced what has worked and what has failed

in a mediated framework. I believe that ‘‘lessons learned’’ from others who have

used certain techniques and methods is usually a good evaluation setting for developing conflict resolution policies. I look forward to being able to utilize my background and my personal ‘‘lessons learned’’ for the benefit of the Foundation’s activities.

Throughout my career I have taken, what I believe to be, a nonpartisan approach

to the solution of problems and issues encountered by the agencies which I managed. And, although I have been a political appointee, those affiliations did not play

a part in the work I was entrusted to do for the protection of the environment and

the sustainable use of our natural resources. I believe that the endorsements I received from both of my Senators will attest to my objective resolutions of regulatory

conflicts which I have encountered. I thank both Senator Dominici and Senator

Bingaman for their kind words of support for my nomination, and thank them also

for recognizing my ability to provide a nonpartisan approach to environmental issues.

Thank you for this opportunity to discuss this question.
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PREPARED STATEMENT OF D. MICHAEL RAPPOPORT, ASSOCIATE GENERAL MANAGER

FOR PUBLIC & COMMUNICATIONS SERVICES OF THE SALT RIVER PROJECT (SRP)

Mr. Chairman, Members of the Committee, my name is David Michael Rappoport

of Paradise Valley, Arizona and I am Associate General Manager for Public & Communications Services of the Salt River Project (SRP), a public utility providing electricity and water to much of the Metropolitan Phoenix area. In that capacity I am

responsible for community, corporate and government relations as well as communication, consumer and education services.

Prior to joining SRP in 1973, I was employed by The National Association of Electric Companies in Washington, DC and before that served as a Legislative Assistant

to former California Representative, Craig Hosmer and the late Congressman Rogers C.B. Morton of Maryland.

Thank you for this opportunity to present myself as a Presidential nominee for

the position of Trustee of the Morris K. Udall Scholarship and Excellence in National Environmental Policy Foundation and to share a few observations with you

about the Foundation’s achievements today.

I would also like to express my appreciation to Senator John McCain and Senator

Jon Kyl for their letters on my behalf to the Committee. If appropriate, I request

that they be included in the record.

My association with Mo Udall extends back nearly thirty years to a time when

he was instrumental in building support for the Central Arizona Project, a major

water supply system of energy, pumping and canal facilities. It continued through

public policy activities involving land use planning, surface mining and reclamation,

Indian water rights, the safety of Federal dams and several wilderness proposals.

In the early years, the interests I represented were not always in total agreement

with the positions so effectively advocated by Mo. But for most of our association,

I was among the many who supported his leadership on a variety of issues of national import. In later years, I had the good fortune to either chair or serve on one

of Mo’s Business Advisory Committees, Energy and Water Task Forces as well as

several of his re-election committees. And, like so many others, I came to admire

his sense of civility, his ability to fashion consensus and above all, his integrity and

commitment to public service.

Mr. Chairman, when Congress established the Udall Foundation, it gave special

tribute to these qualities. Specifically, in 1992 Congress authorized to be appropriated $40 million to the Morris K. Udall Scholarship and Excellence in National

Environmental Policy Trust Fund. About half of that amount has been appropriated

to date. The funds are administered by the Foundation to, among other things:

• Increase awareness of the importance of the Nation’s natural resources;

• Establish a Program for Environmental Policy Research and Environmental

Conflict Resolution in the Udall Center located at the University of Arizona;

• Develop resources to train professionals in the fields of environmental, Native

American and Alaska Native health care and tribal public policy; and

• Award scholarships, fellowships, internships and grants for study in fields

related to the environment, Native American and Alaska Native policy.

Mr. Chairman, it was a particular privilege to be appointed by President Clinton

in 1994 as one of the first Foundation Trustees. As Chair of the Management Committee, I can assure you that the Udall Fund and Foundation are committed to educating a new generation of young Americans.

The Foundation’s 1996 Annual Report, submitted with my testimony, notes that

some $19 million appropriated by Congress has been invested in public debt securities to produce a revenue stream of nearly $1.5 million. These earnings—and I

would respectfully point out that only the interest on this investment and such

other funds and services as may be received in accordance with the law—are used

to carry out Foundation purposes.

On behalf of the Foundation’s Board of Trustees, it is a pleasure for me to report

that to date the Udall Foundation:

• Awarded scholarships in 1996 to 55 outstanding college juniors and seniors

from 38 states and Puerto Rico. These scholars were selected from among 300 students nominated by the faculties of colleges and universities nationwide. Each received up to $5,000 for 1 year to cover tuition, fees, books and room and board. The

Foundation anticipates awarding 70 undergraduate scholarships and 2 graduate fellowships in 1997.

• Implemented the first summer internship program for Native American students who served in U.S. House and Senate offices as well as in the White House.

We are hopeful of expanding that program this summer as well.

• Sponsored a major seminar at the University of Arizona on Environmental

Health issues in the U.S.—Mexico Boarder Region and will fund the 1997 Environ-
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mental Conflict Resolution in the West Conference, again in conjunction with the

Udall Center.

In sum, the Foundation’s purpose and plan is best captured by Mo’s own words

of a few years ago:

‘‘America is never done like a poem or a painting * * *’’

I am sure he believes, as do we, that the Foundation is well on the way to helping

future generations care enough to change things. I would welcome the opportunity

to serve a second term as a Udall Foundation Trustee to continue to help meet that

challenge.

Mr. Chairman, that concludes my statement. I am prepared to answer any questions the Committee may have at this time.

Thank you.
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STATEMENT OF MAJ. GEN. ROBERT B. FLOWERS, COMMANDER AND DIVISION

ENGINEER, LOWER MISSISSIPPI VALLEY DIVISION, U.S. ARMY CORPS OF ENGINEERS

Mr. Chairman and Members of the Committee, I am honored to appear before you

as the nominee for president and member of the Mississippi River Commission.

Mr. Chairman, I would like to make a brief statement about the Mississippi River

Commission, the Mississippi River and Tributaries (MR&T) project, and my qualifications for the position for which I have been nominated.

The Mississippi River Commission, established by an Act of Congress on June 28,

1879, consists of seven members, all of whom are appointed by the President of the

United States subject to confirmation by the Senate. Three members are Corps of

Engineers officers, one of whom serves as president; one member is from the National Oceanic and Atmospheric Administration; and three members are from the

civilian sector, two of whom must be civil engineers. The geographic area addressed

by the Commission is generally described as the Mississippi River and its tributaries below the confluence of the Ohio River near Cairo, Illinois.

From its inception in 1879, the Commission has been charged with the vital task

of planning and implementing a program of flood damage reduction projects and

navigation improvements on the Mississippi River. More recently, project purposes

have been expanded to include environmental restoration. This task continues to be

conducted in concert with the myriad of political institutions, individuals, and public

entities which have major interests in seeing that the water resources needs and

opportunities of the Mississippi Alluvial Valley are evaluated, planned, designed,

constructed, and maintained.

The Mississippi River Commission also is responsible for the oversight and management of the Mississippi River and Tributaries project, which was authorized by

the Flood Control Act of May 15, 1928. While the MR&T project covers portions of

seven states, it receives water from all or part of 31 states and part of two Canadian

provinces, or roughly 41 percent of the contiguous United States. Effective planning,

design, construction, and operation of the widespread and complex MR&T project

have been assisted greatly by the Commission’s active consultation with the public,

particularly on its semiannual lower Mississippi River inspection trips, and by the

high degree of professionalism that has been developed in its staff.

The MR&T project is truly of national significance. For example, a major flood on

the lower Mississippi River would have catastrophic effects on the inhabitants of the

Mississippi Valley and the economy of the Nation were it not for the protection provided by the levees and other flood control works throughout the project area. Many

have noted that the comprehensive project on the lower river provided for passage

of major floods in 1973, 1983, and other years without the extensive damage suffered in the upper river area during the 1993 flood event.

In addition, the navigation features of the project are essential to maintaining the

river for shipping import and export commodities between inland ports and world

markets. In short, the navigation features of the MR&T project are essential in

peace time and vital to our national defense in times of emergency.

In regards to my personal qualifications, I am a 1969 graduate of Virginia Military Institute with a Bachelor’s Degree in Civil Engineering, while also earning a

Master’s Degree in Civil Engineering in 1976 from the University of Virginia. In addition, I am a graduate of the Command and General Staff College and the National

War College.

I have served more than 27 years in the uniformed service as an Army Engineer.

My experiences in the civil works function of the Corps of Engineers date back to

1976 when I served as a field engineer and research project manager in the Portland District in Portland, Oregon. Since August 1995, I have served as Commander

of the Lower Mississippi Valley Division and also as chairman of the Mississippi

River Commission.

As Commander of the Lower Mississippi Valley Division and while working with

the Mississippi River Commission, I have had command and oversight of the largest

civil works mission in the U. S. Army Corps of Engineers. The civil works mission

of the lower valley includes management of the Mississippi River from Hannibal,

Missouri, to the Gulf, and tributaries to the Mississippi through that reach of the

river. I provide command and control of Army Engineer Districts at St. Louis, Memphis, Vicksburg, and New Orleans. Management of the lower Mississippi River has

required close coordination and understanding of the civil works functions of the

Corps in divisions upstream, including the Missouri River Division, the North

Central Division, and the Ohio River Division.

I have also served in several military assignments. Most recently I served in a

temporary assignment to Bosnia from January 3 through March 17, 1996, as the
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deputy chief of staff for Engineering (Forward), U.S. Army Europe, and was responsible for the U.S. Forces construction in the Theater of Operations.

Some of my other major past assignments include Assistant Division Commander,

2nd Infantry Division, Eighth U.S. Army, South Korea; Deputy Commanding General and Deputy Assistant Commandant, U.S. Army Engineer Center; Assistant

Commandant and Director of Training, U.S. Army Engineer School; and Commander of the 20th Engineer Brigade (Combat) (Airborne Corps) in Fort Bragg,

North Carolina, where I served during Operation Desert Shield and Desert Storm.

If confirmed to the position, Mr. Chairman, I would look forward to playing a key

role in the continual improvement of the MR&T project and applying the best of

modern practices in water resources engineering. I would also look forward to being

president of a Commission that focuses not only on the traditional roles of safely

passing the Mississippi River Basin floodwaters to the Gulf of Mexico, plus providing a safe and dependable navigable waterway, but also recognizes the nation’s environmental awareness and incorporates environmental restoration as a function of

the MR&T project.

Mr. Chairman, for your information, I have attached a complete biography on myself and a current list of members of the Mississippi River Commission.

Mr. Chairman, that completes my prepared statement, and I would be pleased to

respond to any questions.
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RESPONSES BY MAJ. GEN. FLOWERS TO ADDITIONAL QUESTIONS FROM SENATOR

CHAFEE

Question 1. Please discuss in a little more detail the primary functions of the Mississippi River Commission (MRC) and outline the major ongoing projects and objectives of the Commission for this fiscal year and Fiscal Year 1998.

Answer. Sir, the Commission, since it was established in 1879, has been responsible for navigation, flood control, and other resource development on the Mississippi

River. In the Flood Control Act approved 15 May 1928, the Congress authorized a

comprehensive project for control of floods and other purposes on the Mississippi

River and its tributaries, extending from Cape Girardeau, Missouri, to the Head of

Passes below New Orleans, Louisiana. The Act provided that the Mississippi River

and Tributaries (MR&T) project be implemented by the Mississippi River Commission. A primary function of the Commission is to oversee implementation of the authorized project. The 1928 Act directed the Commission to make inspection trips of

such frequency and duration as will enable it to acquire firsthand information as

to conditions and problems germane to flood control and navigation and on such inspections trips conduct public hearings for persons affected by or interested in such

problems. The Commission is charged in law to ‘‘recommend policy for development

of details and carrying out the work of the adopted project.’’ The Commission considers and recommends the general character and types of work to be used in construction of the project, advises on operation and maintenance of completed project features, and recommends annually the program of work to be undertaken during the

following fiscal year.

Although the MR&T project is currently 85 percent completed, there is much work

remaining to be done to stabilize the Mississippi River Channel, complete the main

stem flood control system, and complete work on tributary flood control and environmental projects. Of 2,059 miles of levee on the Mississippi and Atchafalaya Rivers,

346 miles are too low to carry the project design flood and 147 miles are in need

of measures to eliminate the risk of levee failure from underseepage.

In Fiscal Years 1997 and 1998, we will continue construction on the main line

Mississippi River and Atchafalaya Rivers. This entails bringing levees up to grade

and working to stabilize riverbanks for the purposes of flood control and navigation.

We also are continuing with flood control and environmental improvements on tributary basins. We are continuing to purchase lands and easements in the

Atchafalaya Basin to preserve natural environmental values of this vast and unique

area and to provide some public access. Operation and maintenance of completed

work are now costing about $130 million per year. For Fiscal Year 1997 Congress

appropriated $310 million for the project including operation, maintenance, and construction. The President’s budget for Fiscal Year 1998 includes $266 million for the

MR&T project. Based on funding levels proposed by the administration, construction

of the project is now projected to extend into year 2031.

Question 2. Under the Army’s proposal for restructuring the Corps of Engineers,

the entire Mississippi River Valley would come under the jurisdiction of one division

with its headquarters located in Vicksburg, Mississippi. What advantage do you see

from this restructuring and what impact will it have on the work and responsibilities of the Commission?

Answer. Sir, the Division Restructuring Plan, approved by the Secretary of the

Army to be implemented beginning 1 April 1997, will place the upper Mississippi

under command and control of the Lower Mississippi Valley Division—to be renamed the Mississippi Valley Division. The Division will include the engineer districts at St. Paul, Minnesota, and Rock Island, Illinois, in addition to the districts

at St. Louis, Memphis, Vicksburg, and New Orleans. The realignment will allow improved coordination of work throughout the length of the Mississippi River and will

provide for improvement in management of flood flows as well as planning, improvement, and operation of the inland navigation system.

The reorganization will not directly affect the responsibilities of the Commission.

The Commission, when formed in 1879, was authorized to function on the Mississippi River ‘‘between the Head of Passes near its mouth to its headwaters.’’ From

the beginning of the Commission in 1879, the Commission has been authorized to

make and review surveys and examinations, including topographical, hydrographical, and hydrometrical investigations, and serve as advisors on improvements

to provide navigation and prevent destructive floods over the entire length of the

river.

The restructuring will allow for more effective involvement of the Commission as

advisors on Corps work in the upper Mississippi Basin should their involvement be

considered beneficial. From time to time prior to 1928, the Congress authorized and
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funded specific projects to be implemented under direction of the Commission on

both the upper and lower reaches of the Mississippi River.

In 1928 when the Congress authorized the massive Mississippi River and Tributaries project, which is still under construction, that project became the primary

focus of the Commission. In recent years, the Congress has not directed that any

projects in the upper Mississippi Basin be implemented under the oversight of the

Commission. Ongoing and future projects in the Rock Island and St. Paul Districts

will continue to be under the construction general program of the Corps, just as the

current construction general work is now conducted, unless the Congress and the

Administration authorizes work to be accomplished under direction of the Mississippi River Commission.

Question 3. As we approach the 21st century, is there a continuing need for the

MRC? Do you see an advantage for the Commission to have jurisdiction over the

entire Mississippi River Valley?

Answer. Sir, the primary focus of the Commission over the past several years has

been implementation and operation of the MR&T project which extends from Cape

Girardeau, Missouri, to the Head of Passes below New Orleans, Louisiana. The

MR&T project is a multi-billion dollar project which has been under development

since 1928 with construction scheduled to extend into the 21st century, to 2031, at

proposed funding levels.

This extremely complex project requires many difficult and often controversial decisions on sequencing and prioritizing the various elements, taking into account

technical engineering considerations as well as resource constraints and environmental, social, and political considerations.

The Commission, with the public meetings and other coordination activities, provides a valuable service in promoting understanding of problems and concerns of the

affected public and conveying to the public an understanding of the project and its

operation.

Given the budgetary and manpower constraints now faced by the Federal Government and the added complexity to the projects by environmental and other concerns,

the value of the Commission is even greater today than it has been in the past.

Perhaps the greatest value of the Mississippi River Commission in the lower river

area has been to facilitate cooperation between the Federal and local interests in

the river basin in consideration of all the needs and opportunities for flood control,

navigation, and environmental preservation. I believe that the Commission, with its

unique mix of military and civilian membership, could contribute significantly in addressing the various interests in the upper Mississippi River Basin and certainly

could improve coordination of issues affecting the entire Mississippi River Valley.

Question 4. Traditionally, the MRC has been involved in flood control and navigation but it recently expanded its project purposes to include environmental restoration. Please highlight for me what environmental restoration efforts you have under

way as part of the Mississippi River and Tributaries project. What impediments

exist to conduct additional and necessary environmental restoration?

Answer. Sir, the Commission has increased emphasis on maintaining and restoring the environment as the MR&T project is implemented. During the past several

years, the Commission has implemented a number of environmental initiatives into

the planning, construction, and operation of the Mississippi River and Tributaries

project. Although the Commission considers flood control and navigation as high-priority initiatives, I am sure the Commission will take every available opportunity to

maintain and restore environmental values as well.

Over the past several years, the Commission has recommended to the Congress

a number of modifications of the project, specifically for the purpose of preserving

and enhancing environmental resources in the lower Mississippi Valley and is in the

process of implementing a number of the authorized modifications. Among the more

significant environmental features are the purchase of lands and easements and the

development of water management units in the vast and unique wetland areas in

the Atchafalaya Basin and construction of freshwater diversion structures to improve fisheries and reduce wetland loss due to subsidence along coastal Louisiana.

Water control structures to benefit waterfowl and fisheries have been and are being

developed in several tributary projects, including the Yazoo and St. Francis Basin

in Mississippi and Arkansas, and construction of erosion control facilities in the

Yazoo Basin.

Channel stabilization works such as dikes and revetments have been specifically

designed to improve fisheries in the Mississippi River and protect the Interior Least

Tern, an endangered species of bird found on the lower river. Borrow pits, where

material is taken to construct earth levees, have for several years been designed for

use as fisheries and waterfowl habitat. Over the past several months, we have initi-
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ated efforts to redesign borrow areas and employ construction techniques to avoid

and minimize the use of wetlands and the taking of bottom land hardwoods for borrow areas.

The primary impediment to additional environmental work is generally the same

impediment as for other works, the availability of funds. With additional funding,

purchase of lands and easement and other environmental development in the

Atchafalaya Basin could be accelerated as well as environmental preservation and

restoration work throughout the valley.

Authorization of an Environmental Management Program on the lower Mississippi River as currently exists on the upper Mississippi would provide greater opportunity for environmental work on the lower Mississippi River.

Question 5. The Water Resources Development Act (WRDA) of 1996 included some

important environmental provisions. What efforts do you have underway to implement these provisions in the Mississippi River Valley?

Answer. Sir, WRDA 1996 contains several important environmental provisions we

are implementing. The following is a summary of several provisions and our efforts

to implement them.

Subpart c of Section 202 requires that before construction is initiated for a local

flood control project that involves Federal assistance, the non-Federal interest shall

agree to participate in and comply with Federal flood plain management and flood

insurance programs. The requirement for a Flood Plain Management Plan will reduce damages from recurring flood events and in many instances will assist in preserving environmental values of natural flood plains.

Section 202 also contains provisions related to vegetation management of levees.

We are utilizing methods to enhance the wildlife value of vegetative plantings as

part of levee maintenance.

Section 204 expands the scope of Section 1135 of WRDA 1986 by extending the

limits of action from the immediate project site to other locations that may have

been affected by the construction or operation. The Lower Mississippi Valley Division is aggressively pursuing the Section 1135 Authority, and we expect to request

funding using the provisions of Section 204 this year.

Section 206 authorizes small aquatic ecosystems restoration projects up to $5 million Federal cost each, with an annual limitation of $25 million for the program.

The Section 206 projects are to be accomplished generally as the Section 1135 process is outlined. At the field level, we would welcome an expansion of small restoration projects; however, initial program implementation is subject to appropriation of

$2 million in Fiscal Year 1998.

Section 207 allows the use of a disposal method that is not the least-cost option

if the non-Federal sponsor consents and if the incremental costs are reasonable in

relation to environmental benefits, including creation of wetlands and shoreline. The

Division has supported beneficial use of dredged material and seeks opportunities

to create new wetlands or enhance their value using this natural resource. This legislation would allow the Corps to select disposal methods beneficial to the environment rather than the least-cost option and provides us with a new tool to evaluate

dredge and disposal projects.

Section 212 authorizes the Secretary of the Army to undertake investigations of

innovative technologies that may lead to work under existing authorities or to recommendations for additional authorities. Fiscal Year 1998 funding of $1 million has

been requested at the Washington level to initiate this provision. Initial focus of

work will be in the development of cost-effective technologies and protocols for contaminated bottom sediment remediation associated with Corps navigation projects;

development and demonstration of a state-of-the-art Watershed Management Support System, including advanced data acquisition and management systems, geoecophysical models, and decision support technologies; and development of technologies and guidance to support the. Environmental Protection Agency (EPA)

Brownfields economic revitalization initiatives associated with Corps civil works

projects. We welcome the development of these technologies which will assist us in

accomplishing our planning, construction, and operational requirements.

Section 221 amends Section 22 of WRDA 1974 to expand the area in which the

Corps is authorized to assist states and bring the full expertise of the Corps to bear

on local problems. The section allows the Corps to include watershed and ecosystem

planning. We look forward to assisting states with increased efforts and to use the

talents of our environmental planners to solve local problems. Each District Engineer will see that the states for which he is responsible receive prompt and professional planning services. We have and will continue to place responsibility and encourage our Districts to contact and work with states to make this program more

successful.
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Section 232 requires that the Corps consider measures to preserve and enhance

scenic and aesthetic qualities in the vicinity of civil works projects. Planning and

policy guidance dealing with scenic and aesthetic resources has been in force for

many years. Our engineers and planners are trained in analyzing and incorporating

scenic and aesthetic values into our constructed landscapes. Incorporating environmental quality in project design is an important goal of the civil works program.

Besides the numerous recreation areas at our lakes, perhaps our most well-known

aesthetic feature is the flood wall in New Orleans which was designed such that

many people wander in and out of the wall and do not even realize its function.

Landscape architects on our District staffs assure the latest techniques are incorporated into our projects to achieve positive contributions to scenic and aesthetic

quality.

Section 234 is a general authority and allows the Corps to accept and expend

funds from other Federal agencies or international organizations to carry out interagency and international support. Although we have not yet received specific budget

guidance on Section 234, the Division is very active in supporting interagency efforts. The Division staffs a full-time person with the Gulf of Mexico Program Office

at the Stennis Space Center; is currently the Chair of Coastal America, Gulf Regional Implementation Team; and is executing the Coastal Wetlands Planning, Protection, and Restoration Act (CWPPRA) in coastal Louisiana with multiple Federal

and state interests. We fully support and participate in the Upper Mississippi River

Navigation Study and are developing information to begin to address the hypoxia

issue, a mission we view as consistent with our new responsibility for the Mississippi River. We are active in supporting the Department of State and other international environmental efforts. We have hosted guests from the Near and Far East

and have sent key staff to South America, China, and Japan to assist those countries in their water resource problems.

Section 532 modifies the CWPPRA to provide for a reduced non-Federal share of

restoration projects to 10 percent in calendar years 1996 and 1997. This provision

will not increase the Federal share of the CWPPRA projects as the Federal share

is dependent on a fixed amount from the small-engine tax. The decreased cost share

will apply to CWPPRA Priority Lists 5 and 6. To date, 68 projects have been authorized on five project priority lists. As the Federal agency with lead responsibility, we

have and will continue to assure that this vital restoration program is given top priority.

Question 6. What impact do you expect the flooding in the Ohio River Valley to

have on the Lower Mississippi River Valley? What measures are you taking/have

been taken to prepare for possible future flooding?

Answer. Sir, runoff from the Ohio River flooding into the lower Mississippi River

has resulted in record flood stages on the lower Mississippi River for this time of

the year. Flood stages are higher than they were at this time of the year in 1927

when the record flood occurred which resulted in authorization of the MR&T project.

The MR&T project is operating as designed. In March, we began initial preparation

in case we might need to operate the floodway at New Madrid, Missouri. Fortunately, the stages began to recede so that operation of the floodway has not been

necessary and unless we have additional heavy rainfall, will not be necessary. The

Bonnet Carre Floodway above New Orleans was opened on 17 March to relive possible flooding and avoid levee failure in the vicinity of New Orleans. It has been

necessary to do some emergency work to raise levees in some areas where grades

are deficient and to control underseepage at many locations.

Although the project is functioning as designed to protect against flood levels experienced so far this year, there is extensive flooding in unprotected areas, and several areas protected by private levees which are not a part of the Federal systems

are requiring extensive flood fighting.

The 1997 flood experience points to the necessity of continuing construction on the

project as rapidly as resources permit as it is obvious that the project at the current

stage of completion cannot safely pass the project design flood or even the record

flood experienced in 1937.

We are hopeful that the river will continue to recede over the next few weeks

prior to the normal period of higher floods in mid-April and May.

Question 7. What role will the Commission expect to play in defining future U.S.

flood control policy?

Answer. Sir, there are many divergent opinions concerning the proper role of the

Nation in flood control. Generally, it is my view that the Federal Government’s responsibility should be to provide for the needs of people when local governments

cannot or will not meet those needs.
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Flood control needs on the Lower Mississippi River, extending into seven states

and resulting from runoff from 41 percent of the United States, constitute an obvious national interest. Local governments could never have achieved the development

of the comprehensive project without the engineering expertise of a Federal agency

such as the Corps of Engineers and under the oversight of a group such as the Mississippi River Commission, which facilitates input from both Federal and local interests in implementation of the project.

The Mississippi River Commission is charged by law to recommend to the Chief

of Engineers policies for implementing the Mississippi River and Tributaries project.

The Administration over the years and the Congress have continued to recognize

the unique nature and national interest in the improvement and maintenance of

flood control and navigation systems on the Mississippi River. The continued existence and support of the Presidentially appointed Commission and confirmation by

the Senate are evidence of the unique nature of the Mississippi River. Generally,

the Commission is not considered as having a significant role in the establishment

of national flood control policy as it is applied to more localized projects.
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