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[Senate Hearing 112-129]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 112-129

                         WATER AND POWER BILLS

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON
                                     

                           S. 500                                S. 715

                           S. 802                                S. 997

                           S. 1033                               S. 1047

                           S. 1224                               S. 1225

                               __________

                             JUNE 23, 2011

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

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           MIKE LEE, Utah
BERNARD SANDERS, Vermont             RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan            DANIEL COATS, Indiana
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire        JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota                DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                JEANNE SHAHEEN, New Hampshire, Chairman

RON WYDEN, Oregon                    MIKE LEE, Utah, Ranking
TIM JOHNSON, South Dakota            JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           DANIEL COATS, Indiana
BERNARD SANDERS, Vermont             JOHN HOEVEN, North Dakota
DEBBIE STABENOW, Michigan            DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee

    Jeff Bingaman and Lisa Murkowski are Ex Officio Members of the 
                              Subcommittee

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Barlow, Richard J., First Selectman, Town of Canton, 
  Collinsville, CT...............................................    19
Blumenthal, Hon. Richard, U.S. Senator From Connecticut..........     3
Katz, John, Deputy Associate General Counsel, Federal Energy 
  Regulatory Commission..........................................    17
Lee, Hon. Mike, U.S. Senator From Utah...........................     3
Payne, Grayford F., Deputy Commissioner for Policy, 
  Administration and Budget, Bureau of Reclamation, Department of 
  the Interior...................................................     7
Shaheen, Hon. Jeanne, U.S. Senator From New Hampshire............     1
Udall, Hon. Mark, U.S. Senator From Colorado.....................     5

                               Appendix I

Responses to additional questions................................    31

                              Appendix II

Additional material submitted for the record.....................    41

 
                         WATER AND POWER BILLS

                              ----------                              

                        THURSDAY, JUNE 23, 2011

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:33 p.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeanne Shaheen 
presiding.

           OPENING STATEMENT OF HON. JEANNE SHAHEEN, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Good afternoon, everybody. Hopefully that 
woke you all up. I want to call to order this hearing before 
the Water and Power Subcommittee and welcome everyone here this 
afternoon.
    Senator Lee, our ranking member, we think is on his way, 
but we'll go ahead and begin since we have Senator Blumenthal 
here, and we know he has a very busy schedule.
    Today's hearing involves 8 bills that are pending before 
the subcommittee. The bills cover several different aspects of 
our water and power jurisdiction. Some of the bills are similar 
to bills that we heard during the last Congress, and others 
we're hearing about for the first time today.
    The bills we're covering today are: S. 500, the South Utah 
Valley Electric Conveyance Act, relating to facilities in Utah; 
S. 715, the Collinsville Renewable Energy Promotion Act, 
relating to a hydroelectric project in Connecticut; S. 802, the 
Lake Thunderbird Efficient Use Act of 2011, addressing water 
supply needs in Oklahoma; S. 997, the East Bench Irrigation 
District Water Contract Extension Act, relating to a water 
supply contract in Montana; S. 1033, to authorize the Secretary 
of the Interior to participate in the city of Hermiston, 
Oregon's water recycling and reuse project; S. 1047, the 
Leadville Mine Drainage Tunnel Act of 2011, addressing a 
situation in Colorado; S. 1224, the Bureau of Reclamation Fish 
Recovery Programs Reauthorization Act of 2011, which supports 
water supply projects in Wyoming, Utah, Colorado, and New 
Mexico; and S. 1225, the Fort Sumner Project Title Conveyance 
Act, relating to an irrigation project in New Mexico.
    I look forward to hearing about these bills.
    Now that Senator Lee has arrived, I'll ask if he has any 
opening comments.
    Senator Lee.
    [The prepared statements of Senators Lieberman and 
Inhofe follow:]

    Prepared Statement of Hon. Joseph Lieberman, U.S. Senator From 
                         Connecticut, on S. 715

    Thank you, Madame Chairman. I am grateful for the 
opportunity to provide a statement in support of this important 
legislation, and I am pleased that the Subcommittee saw fit to 
invite the distinguished First Selectman of Canton, 
Connecticut, Richard Barlow, to testify on behalf of this 
legislation.
    In April, I, along with my colleague Senator Blumenthal, 
reintroduced legislation that would expedite the remaining 
regulatory process and minimize the costs of obtaining the 
final FERC permits for reactivating the two Collinsville Dams. 
Representative Chris Murphy has introduced companion 
legislation in the House. The Upper and Lower Collinsville Dams 
are two inactive masonry hydroelectric dams owned by the 
Connecticut Department of Environmental Protection and located 
two miles apart on the Farmington River in the central 
Connecticut communities of Canton, Burlington, and Avon.
    Following FERC's termination of a previously awarded 
license as a result of failure by a private developer to 
commence construction, the town of Canton approached the 
delegation with the idea to have the licenses reinstated and 
transferred to the town of Canton. The town would then work 
with the towns of Avon and Burlington. With the reactivation 
and repowering of these dams, they could provide municipally 
operated power, eventually generating around 2 megawatts of 
electricity, which is enough power to generate around 2,000 
homes in the nearby communities.
    Not only would this legislation accelerate the 
reinstatement of the FERC licenses, but it would also direct 
FERC to conduct a supplemental Environmental Assessment on both 
dams. These new assessments are supported by various river 
groups, including American Rivers and the Lower Farmington 
River/Salmon Brook Wild and Scenic Study Committee, as they 
would pave the way for improvements in fish passages at both 
dams.
    This legislation was the product of careful and inclusive 
negotiations between the Congressional delegation, affected 
communities, the state Department of Environmental Protection, 
and local and national environmental groups. It is 
representative of an important effort to provide clean, 
renewable energy in an environmentally sustainable way, all 
with local support.
    I am privileged to support this legislation along with my 
colleagues Senator Blumenthal and Representative Murphy. At a 
time of rising energy prices, the legislation will help make 
the Farmington River Valley more energy independent, while at 
the same time providing for safer passage for the fish that are 
so important to the area. Thank you, Madame Chairman.
                                ------                                

 Prepared Statement of Hon. James M. Inhofe, U.S. Senator From Oklahoma

    I am writing to thank you for holding a hearing on S. 802 
in the Subcommittee on Water and Power in the Committee on 
Energy and Natural Resources. The Lake Thunderbird Efficient 
Use Act of 2011 is an important piece of legislation to me and 
many Oklahomans.
    This bill allows the Central Oklahoma Master Conservancy 
District to import and store non-project water into Lake 
Thunderbird, if the Secretary of the Interior determines there 
is enough capacity to do so. Allowing additional water to be 
stored at Lake Thunderbird would help increase municipal and 
industrial supplies for the cities served by the District, 
which include Norman, Midwest City, and Del City.
    It will ensure greater access to water supplies for a 
growing metropolitan area. Over the last decade, the Norman 
area grew by 15%, making it one of the fastest growing areas in 
the state of Oklahoma. As this area continues to grow there 
will be a greater need for access to the water supplies to the 
Lake Thunderbird reservoir. Fortunately, no funds need be 
expended to accomplish this goal. It will cost the taxpayers 
nothing.
    I respectfully ask that the bill be favorably reported 
fromt he Subcommittee to the full Committee on Energy and 
Natural Resources. I further ask for swift Committee 
consideration so the bill can be allowed to pass the Senate. 
Thank you for your attention to this matter.

       STATEMENT OF HON. MIKE LEE, U.S. SENATOR FROM UTAH

    Senator Lee. Thank you, Senator Shaheen. It's a pleasure to 
be here today, and I thank you for chairing this hearing on a 
number of water and power measures, one of which is integral to 
my home state of Utah, S. 500, the South Utah Valley Electric 
Conveyance Act. I've co-sponsored this bill with my colleague, 
Senator Hatch, from Utah.
    Similar to the legislative hearing that we held last month, 
all of the bills before us today address many of the issues 
that we'll be examining over the next few years in the 
subcommittee, and those issues include opportunities to improve 
the storage and transfer amongst various different water users; 
different approaches to resolve jurisdictional issues among 
Federal agencies to avoid duplication both in cost and in 
efforts; and opportunities to improve our power supplies, which 
is always important to Americans, and especially so right now.
    So while the underlying purpose of each bill before us 
today may be different, each of these bills attempt in some way 
or another to identify tools to help ensure that our water and 
our power facilities are safe and reliable and are being 
managed effectively.
    I thank the Federal witnesses for their presence here today 
and their participation. Thank you, Senator Shaheen, for 
conducting this hearing. I look forward to the testimony we'll 
be hearing.
    Senator Shaheen. Thank you very much, Senator Lee.
    Senator Udall has also arrived and would like to make a 
statement, but he has said he's fine with Senator Blumenthal 
going first.
    So, Senator Blumenthal, we're delighted you're here. I'm 
especially delighted you're here to have somebody speak to an 
Eastern water issue, as opposed to just the West.
    So at this time, we'd like you to go ahead and testify.

      STATEMENT OF HON. RICHARD BLUMENTHAL, U.S. SENATOR 
                        FROM CONNECTICUT

    Senator Blumenthal. Madam Chairwoman, I'd be happy to yield 
to Senator Udall. If he's on a tight schedule and he wants to 
make a quick statement, I'm happy to have him go first.
    Senator Udall. I'd love to hear the senator talk about the 
Eastern waters.
    Senator Shaheen. Good. Please go ahead, Senator Blumenthal.
    Senator Blumenthal. Thank you.
    First of all, thank you to Chairwoman Shaheen and to 
Ranking Member Lee for giving me this opportunity to testify 
today.
    I think all the members of this panel, but most 
particularly Senator Shaheen will have sympathy for the cause 
that I bring to this committee because she has done such 
wonderful work on renewable energy in the neighboring state of 
New Hampshire. Indeed, I am here to advocate for a bill that 
would enable the Federal Energy Regulatory Commission to 
reinstate the license necessary for the Town of Canton, 
Connecticut to operate 2 hydroelectric dams on the Farmington 
River.
    I know that New Hampshire probably has dams like this one 
that once provided electric power to a thriving axe factory on 
the Farmington River, and the factories that it once served 
have gone silent, but we have an opportunity to ensure that the 
Collinsville dams are once again able to provide clean, 
renewable energy to families and businesses along the 
Farmington River.
    I want to thank in particular Senator Lieberman, who is an 
author of S. 715. He's unable to be here today, but I know he 
shares my strong support for this legislation.
    I also want to thank First Selectman Dick Barlow of Canton, 
who is here today. He's been a champion of this issue. He is a 
former 3-year public servant at the Department of Environmental 
Protection in the State of Connecticut, and he's worked 
tirelessly to promote cooperative, municipally owned sources of 
clean, renewable energy for Connecticut communities such as 
Canton, Avon, and Burlington, which will be served by these 
hydroelectric dams.
    Very simply and briefly, Chairman Shaheen, this bill will 
enable the Upper and Lower Collinsville Dams, which have been 
dormant since the 1960s, to have their licenses reinstated by 
the Federal Energy Regulatory Commission. They were granted 
licenses for a former owner in 2001. The licenses were renewed 
at the end of their-year period for 2 years and then revoked, 
in effect, in 2007, at the end of a 6-year period because the 
then-private developer was essentially inactive in going 
forward, and the state legislature in Connecticut passed the 
necessary statutes to operate the 2 dams and in effect transfer 
their ownership to the Town of Canton, which now seeks to 
operate them, and that's why we're here today, to enable Canton 
to have those licenses that are necessary, to reinstate them so 
that they can go forward.
    I want to make very clear, there are conditions that would 
be followed. First of all, the normal environmental process, 
including environmental assessments that are necessary, and 
also a comment period for any interested party would go forward 
in the course of FERC's reinstating these licenses.
    The reason that the hydro, the small hydropower exemption 
cannot be relied upon here is simply that the time and expense 
necessary to go through it, and the authority necessary for it 
to proceed expeditiously we believe can best be created by this 
Congress through the legislation, and there is precedent for 
the Congress having done exactly what we're asking it to do 
through this measure.
    In 2003, the 108th Congress adopted a measure reinstating 
the FERC license for a similarly sized, small hydroelectric dam 
in Stuyvesant, New York. I recognize we don't have any senator 
from New York here today, but similarly the inactive license 
there had been held by a private firm and transferred to a 
public entity.
    So I'm here today very simply to ask this subcommittee and 
then the committee as a whole to approve this measure so that 
the Town of Canton can have a reinstated license to provide 
clean, renewable energy to a number of towns, communities, 
small businesses in the area on the Farmington River. Thank you 
very much.
    [The prepared statement of Senator Blumenthal follows:]

      Prepared Statement of Hon. Richard Blumenthal, U.S. Senator 
                            From Connecticut
                               on s. 715
    Thank you, Chairman Shaheen and Ranking Member Lee for allowing me 
to testify today. I also would like to thank Senator Lieberman, the 
author of S. 715. He is unable to be here today, but I know that he 
shares my strong support of this legislation and its goal of allowing 
the town of Canton, Connecticut to operate two hydroelectric dams on 
the Farmington River. I would also like to recognize a witness 
appearing in the second panel, First Selectman Dick Barlow of Canton. 
He has been a champion of this issue and has worked tirelessly to 
promote a cooperative, municipally-owned source of clean renewable 
energy for the Connecticut communities of Canton, Avon and Burlington.
    S. 715 will allow the residents of Connecticut's Farmington Valley 
to take two existing, but inoperative, hydroelectric dams and use them 
to provide clean, renewable energy for hundreds of Connecticut 
homeowners. The legislation has no direct cost to the federal 
government.
    The Upper and Lower Collinsville dams have been dormant since the 
1960s. The licenses previously issued by FERC to operate these dams are 
currently inactive, and this legislation would allow FERC to reinstate 
them and transfer them to the town of Canton, Connecticut, for 
operation, after a thorough environmental review and public comment 
period.
    The State legislature has already passed legislation to operate 
these two State-owned dams, but Federal legislation is also needed to 
restore their operation.
    By allowing FERC to review and reinstate a terminated set of 
existing licenses, we can move this project forward, while also 
ensuring that FERC's licensing process remains rigorous and that the 
environment of the Farmington River is protected. This legislation 
requires FERC to undertake its normal environmental review process and 
also requires FERC to provide an opportunity for comment by any 
interested parties prior to taking any action on the licenses.
    S. 715 was drafted with the cooperation of FERC and state and local 
stakeholders, including the towns of Canton, Burlington, and Avon, the 
local watershed organization, the local Wild & Scenic River Study 
Committee, and the state Department of Environmental Protection. 
Support among affected stakeholders is bipartisan and nearly universal. 
There is broad agreement that these dams can be a great source of 
renewable energy in the heart of Connecticut.
    In their heyday, these two small dams were used to provide 
electrical power to a thriving axe factory nearby. And although the 
factories have gone silent, we have an opportunity today to ensure that 
the Collinsville Dams are once again able to provide clean, renewable 
energy to the families and businesses along the Farmington River.
    Thank you for allowing me to testify today, and I welcome your 
questions.

    Senator Shaheen. Thank you, Senator Blumenthal.
    Did you have any questions for the Senator?
    We appreciate your testimony, and I think we will go ahead 
and call the second panel up at this point.
    While you're coming forward, Senator Udall, can we ask you 
to go ahead and make your statement?
    Senator Blumenthal. Thank you.
    Senator Shaheen. Thank you.

          STATEMENT OF HON. MARK UDALL, U.S. SENATOR 
                         FROM COLORADO

    Senator Udall. Thank you, Senator Shaheen. Thank you, 
Ranking Member Lee, for giving me a piece of time just to 
comment on a piece of legislation I have before the 
subcommittee, and that's S. 1047, the Leadville Mine Drainage 
Tunnel Remediation Act of 2011.
    I think, as the committee staff certainly knows, we've got 
a mine drainage tunnel in Leadville, Colorado that's been the 
source of some considerable worry for the surrounding community 
for some time; in fact, for, over 30 years.
    The Leadville Mine Drainage Tunnel is owned and operated by 
the Bureau of Reclamation. It overlaps with the California Gold 
Superfund site where the Environmental Protection Agency is 
cleaning up historic mine waste. I'd like to add an incidental 
note here. The EPA just recently announced that it plans to 
delete one of the operable units of this Superfund site from 
the National Priorities List. This is really encouraging news, 
and I want to commend the EPA for their ongoing clean-up work.
    Back to the tunnel. In 2007 and 2008, there was a collapse 
in the Leadville Mine Drainage Tunnel that blocked the tunnel, 
and then that caused a tremendous amount of water to build up. 
Had that water pressure caused a blowout of the tunnel, it 
would have been truly catastrophic because the community of 
Leadville and then the entire Arkansas River Basin would have 
been at risk from millions of gallons of water contaminated 
with mine waste.
    The Bureau of Rec and the EPA took emergency actions that 
eventually stabilized the situation, but in the process we had 
concerns that the Bureau lacked the necessary authority to 
implement a permanent solution. So in short, Madam Chairwoman, 
in the process of addressing what was literally physical 
blockages within the tunnel, we found there were legal 
blockages as well.
    So the legislation I've introduced again in this Congress 
clarifies that the Bureau has the authority to treat this water 
that's diverted into the tunnel and, if necessary, to expand 
the treatment plant that's already onsite to treat any 
additional water.
    It also requires the Bureau to maintain the structural 
integrity of the tunnel to prevent a similar situation from 
occurring in the future.
    Last, it creates a framework for a cooperative action among 
the Federal agencies, particularly the Bureau of Reclamation 
and the EPA, at the tunnel.
    I want to say I'm reassured by the Bureau's 2008 risk 
assessment that found the tunnel poses no immediate danger, and 
I'm also reassured by the EPA's new clean-up plan for the site 
that should reduce the amount of contaminated water that's 
entering the tunnel in the first place.
    But I want to ensure that such favorable conditions 
continue into the future, and that's what this legislation is 
designed to do. By resolving the question of legal authority 
and responsibility for the tunnel once and for all, it's my 
hope that the people of Leadville will have an additional 
measure of certainty that the Federal Government will maintain 
safe conditions at the tunnel in perpetuity.
    Now, I've been negotiating with the Bureau and the EPA over 
the past year to allay as many of their concerns with the bill 
as possible. I have to say--I want to be respectful, but I want 
to be firm--that this issue is long overdue for resolution, and 
the people of Leadville deserve at least that from us.
    I'm an eternal optimist. I know this is a good bill, I know 
the Senate would approve it, and I want to continue to work 
with the administration to understand their remaining 
objections.
    Madam Chair, if you'd indulge me, I want to just comment on 
another piece of legislation before the committee. That's 
Senator Bingaman's Bureau of Reclamation Fish Recovery 
Program's Reauthorization Act of 2011. I'm pleased and proud to 
be a co-sponsor of the legislation. It is critical legislation. 
It ensures that 2 exemplary conservation programs continue to 
benefit the Upper Basin of the Colorado River, which Senator 
Lee and I both are residents of the Upper Basin of the Colorado 
River.
    These are 2 highly successful programs. They are model 
collaborative efforts between the Federal Government, States, 
tribes, environmental interests and water users. It expires, 
the authorization does, at the end of this year. So Senator 
Bingaman's legislation simply extends that authorization. I 
want to thank him for introducing the bill. I look forward to 
working with him.
    Again, Chairwoman Shaheen, Ranking Member Lee, thanks for 
making a little time for me to participate. Thank you.
    Senator Shaheen. Thank you very much, Senator Udall.
    Now we'll go to our panel. Here with us this afternoon we 
have 2 witnesses from the administration.
    The first is John Katz, who is an attorney from the Federal 
Energy Regulatory Commission. Mr. Katz will testify regarding 
S. 715, the Collinsville hydropower bill.
    We also have Grayford Payne, who is the Deputy Commissioner 
for Policy, Administration and Budget from the Bureau of 
Reclamation.
    Thank you both for being here.
    To speak to the Collinsville bill, we also have Mr. Richard 
Barlow from the Town of Canton, Connecticut.
    So thank you for being here, as well.
    Mr. Payne, I'm going to ask if you would begin by 
summarizing your written testimony, and we've actually allotted 
10 minutes for you, Mr. Payne, because you're going to be 
addressing so many of these bills. When we hear from Mr. Katz 
and Mr. Barlow, we're not going to give you 10 minutes. We will 
ask that you limit your remarks to about 5 minutes.
    So if you would like to begin, Mr. Payne.

STATEMENT OF GRAYFORD F. PAYNE, DEPUTY COMMISSIONER FOR POLICY, 
ADMINISTRATION AND BUDGET, BUREAU OF RECLAMATION, DEPARTMENT OF 
                          THE INTERIOR

    Mr. Payne. Thank you, Madam Chairman, Chairwoman. 
Chairwoman Shaheen and members of the subcommittee, I'm 
Grayford Payne. I'm the Deputy Commissioner of Policy, 
Administration and Budget at the Bureau of Reclamation. I'm 
pleased to provide the Department of the Interior's view on 7 
bills before the subcommittee today: S. 500, S. 802, S. 997, S. 
1033, S. 1047, S. 1224, and S. 1225. My written statements have 
been submitted for the record.
    Let's begin with S. 500, which I understand you are a co-
sponsor of, Senator Lee. The South Utah Valley Electric 
Conveyance Act directs that the Secretary of the Interior shall 
convey and assign components of the Strawberry Valley Project 
Electric Distribution System to the South Utah Valley Electric 
Distribution District.
    The Department supports the transfer contemplated in this 
bill and has 2 straightforward revisions to recommend. First we 
recommend Section 3(a) changes, the phrase ``the Secretary 
shall convey'' to be changed to ``the Secretary is authorized 
to convey,'' thereby allowing for the completion of the 
necessary public input and scoping pursuant to the National 
Environmental Policy Act.
    The second language change should add to state that the 
District should hold the United States harmless to any claims 
arising from the 1986 sale of the distribution system and from 
actions under this legislation.
    My written statements provide more details which we can 
discuss further. Meanwhile, we look forward to moving this 
transfer to the point where the Department can support the 
legislation.
    S. 802, Lake Thunderbird Efficiency Use Act, authorizes the 
Secretary of the Interior to allow the storage and conveyance 
of non-Project water at the Norman Project in Oklahoma. The 
Department supports this bill.
    Under the current law, Reclamation does not have the 
authority to approve storage of non-Project water because the 
purchased water does not originate from the Lake Thunderbird 
watershed. It requires authority--if the required authority was 
in place, Reclamation could approve a water service contract 
and provide the means for the action to move forward. The 
Department supports this legislation.
    S. 997, the East Bench Irrigation District Water Contract 
Extension Act, authorizes the Secretary of the Interior to 
extend a contract for water services between the United States 
and the East Bench Irrigation District. The Department supports 
S. 997.
    The District's water service contract with Reclamation was 
first executed in 1958 and expired in 2005. Pursuant to state 
law, execution of a new contract between the United States and 
any Montana irrigation district requires a state court to 
create.
    In 2006, the District filed a petition with the court 
seeking confirmation of the execution of their new proposed 
renewed contract with Reclamation. For reasons described in my 
written testimony, no court decree confirming the 2006 contract 
has been issued. So the contract is not binding until the court 
confirmation is secured. Therefore, the District is seeking 
authorization under this legislation to extend the 1958 
contract.
    S. 997 would extend the contract for 4 years or until a new 
contract is executed and still defer to the court to take up 
the issue again at the time of its choosing. The Department 
supports this legislation because it would allow water service 
to the District to continue and protect the rights for contract 
renewal while the court confirmation process is given time to 
complete.
    S. 1033, the city of Hermiston, Oregon Water Recycling and 
Reuse Project, would amend the Reclamation Wastewater and 
Groundwater Study and Facilities Act, commonly called Title 16, 
to authorize the Secretary of the Interior to participate in 
the design, planning and construction of permanent facilities 
needed to reclaim and reuse water in the city of Hermiston, 
Oregon. The Department cannot support this bill.
    We recognize that the water reuse is an essential tool in 
stretching the limited water supply in the West. However, given 
that there are already 53 authorized Title 16 projects and 
numerous competing demands on Reclamation's budget, the 
Department cannot support the authorization of new Title 16 
projects at this time.
    Reclamation will, however, continue to work with project 
proponents to evaluate the completeness of feasibility studies 
of their projects.
    S. 1047. The Department last testified before the 
subcommittee on legislation related to the Leadville Mine 
Drainage Tunnel in June 2010, and prior to that in April 2008. 
Since the last Congress, the sponsor has continued to refine 
the specific language of this bill and incorporate references 
to new information from the EPA and the Colorado Department of 
Public Health and Environment regarding the new management 
actions at the Superfund site.
    S. 1047 is consistent with the Department's ongoing 
commitment to ensure that the Leadville Mine Drainage Tunnel 
poses no threat to public safety and the environment. The 
Department supports the revisions made to the bill to date, and 
looks forward to working with the committee on further 
refinements to clarify remaining concerns as described in my 
written testimony.
    Two left.
    S. 1224. Turning to S. 1224, the Bureau of Reclamation Fish 
Recovery Program Reauthorization Act of 2011. The Department 
strongly supports the Upper Colorado River Endangered Fish 
Recovery Program and the San Juan River Recovery Implementation 
Program and twice testified before the 111th Congress in 
support of similar legislation. However, we do not support the 
language of S. 1224 as introduced.
    The Upper Colorado River Endangered Fish Recovery Program 
and the San Juan River Recovery Program shall share the dual 
goal of recovering populations of endangered fish while water 
development continues to meet current and future human needs. 
Public Law 106-392 expressly authorized and capped the use of 
$6 million per year of Colorado River Storage Project 
hydropower revenues from Glen Canyon Dam and other Colorado 
River Storage Project facilities to support the base funding 
needs of the program through 2011.
    The bill as introduced could be interpreted to place the 
burden on annual appropriations requested by Reclamation. These 
programs have been nationally recognized for their cooperative 
approach to recovering aquatic native fish species, avoiding 
litigation, and providing Endangered Species Act compliance to 
Federal and non-Federal water users. Should the annual 
appropriations not materialize, Endangered Species Act 
compliance for 2,100 water projects and more than 3 million 
acre feet of depletion will be in jeopardy.
    Finally, 1225. S. 1225 would authorize the Secretary of the 
Interior to convey title to all of the work of the Fort Sumner 
Project to the Fort Sumner Irrigation District. Although the 
Department supports the potential transfer of the facility in 
the future, we cannot support this legislation as it is written 
today due to many unresolved issues.
    Reclamation and Fort Sumner Irrigation District are in the 
midst of a collaborative process to ensure that we identify and 
address all the operational, fiscal, environmental and other 
issues that arise. We need to resolve these issues before the 
Department can support S. 1225.
    Additionally, because Reclamation has not yet had the 
opportunity to complete a public process, we cannot say that S. 
1225 would have either a negative or a positive impact on 
stakeholders.
    We are committed to continuing to work with the District 
and the committee to reach an agreement that will satisfy the 
needs of both the United States and the District.
    This concludes my statement. On a personal note, as you 
know, I'm relatively new at Reclamation, so I'll do my best to 
answer all the questions the subcommittee may have, but I may 
need to get back to you in writing, and I appreciate your time. 
I'm happy to answer all your questions. Thanks.
    [The prepared statement of Mr. Payne follows:]

   Prepared Statement of Grayford F. Payne, Deputy Commissioner for 
Policy, Administration and Budget, Bureau of Reclamation, Department of 
                              the Interior
                               on s. 1224
    Madam Chairman and members of the Subcommittee, I am Grayford 
Payne, Deputy Commissioner for Policy, Administration and Budget at the 
Bureau of Reclamation (Reclamation). I am here today to provide the 
views of the Department of the Interior (Department) on S. 1224: the 
``Bureau of Reclamation Fish Recovery Programs Reauthorization Act of 
2011.'' The Department strongly supports the Upper Colorado River 
Endangered Fish Recovery Program and San Juan River Recovery 
Implementation Program and twice testified before the 111th Congress in 
support of legislation related to S.1224. However, the Department does 
not support the language of S. 1224 as introduced. We would like to 
work with the Congress to find a mutually acceptable funding mechanism 
for this program.
    The Upper Colorado River Endangered Fish Recovery Program and San 
Juan River Basin Recovery Implementation Program (Programs) share the 
dual goals of recovering populations of endangered fish while water 
development continues to meet current and future human needs. Program 
actions provide Endangered Species Act compliance for more than 2,100 
federal, tribal, and non-federal water projects depleting more than 3.7 
million acre-feet of water per year in the Colorado and San Juan rivers 
and their tributaries. The Programs, authorized by Public Law 106-392, 
as amended, were established under cooperative agreements in 1988 
(Upper Colorado) and 1992 (San Juan). Program partners include the 
states of Colorado, New Mexico, Utah, and Wyoming; the Bureau of 
Reclamation, Western Area Power Administration, U.S. Fish and Wildlife 
Service, Bureau of Land Management, National Park Service, and Bureau 
of Indian Affairs; Native American tribes; environmental organizations; 
water users; and power customers.
    Public Law 106-392 expressly authorized and capped the use of $6 
million per year (indexed for inflation) of Colorado River Storage 
Project (CRSP) hydropower revenues from Glen Canyon Dam and other CRSP 
facilities to support the base funding needs of the Programs through 
2011. Base funding is used for program management, scientific research, 
fish population monitoring, fish stocking, control of non-native fish, 
and operation and maintenance of capital projects. The bill, as 
introduced, could be interpreted to place the burden of providing 
annual base funding for anything other than operation and maintenance 
of capital projects and monitoring on annual appropriations requested 
by Reclamation. Given Reclamation's extensive water supply, 
conservation, and mitigation activities, this program would have to 
compete with other Reclamation priorities for funding.
    These Programs have been nationally recognized for their 
cooperative approach to recovering aquatic native fish species, 
avoiding litigation, and providing Endangered Species Act compliance to 
federal and non-federal water users. Should the annual appropriations 
not materialize, Endangered Species Act compliance for 2,100 water 
projects and more than 3 million acre-feet of depletions will be in 
jeopardy.
                                 ______
                                 
                               on s. 500
    Madam Chairman and Members of the Subcommittee, I am Grayford 
Payne, Deputy Commissioner for Policy, Administration and Budget at the 
Bureau of Reclamation (Reclamation). I am pleased to provide the views 
of the Department of the Interior (Department) regarding S. 500, 
legislation authorizing the transfer of the Federal portion of the 
Strawberry Valley Project Electric Distribution System to the South 
Utah Valley Electric Service District (District). Reclamation supports 
the title transfer contemplated by this bill and recommends revisions 
be made to the bill, which I describe below.
    The Strawberry Valley Project (Project) is one of Reclamation's 
earliest projects, and all Federal obligations associated with the 
Project are fully repaid. Reclamation developed hydropower generation 
from the beginning because electricity was required to build the 
Project. Early in the Project's history, Reclamation transferred the 
operation and maintenance of most of the Project, including the Power 
System, to the Strawberry Water Users Association (Association).
    The Strawberry Valley Project Power System has three parts: the 
powerplants are the Generation System, the high-voltage lines running 
from the powerplants to the substations are the Transmission System, 
and the low-voltage lines running from the substations to the customers 
are the Distribution System.
    In 1986, the Association spun off the District--creating an 
independent service district with the capability to operate and 
maintain the Transmission and Distribution Systems. At the same time, 
the Association proposed selling the Distribution System to the 
District. Reclamation approved the proposed sale on the condition that 
the Association not transfer any Federal facilities. At the time, 
Reclamation required that the sale be limited to those portions of the 
Distribution System owned by the Association--those parts that were not 
completed as part of the original Strawberry Valley Project; 
constructed with Strawberry Valley Project revenues; and constructed on 
Federal lands or interests in lands. The District paid approximately 
$2.7 million for the non-Federal portions of the Distribution System. 
Reclamation approved the sale.
    In 1986, Reclamation, the Association, and the District believed 
that most of the Distribution System was non-Federal. Later, it was 
determined that this was not accurate.
    The 1940 Repayment Contract between the United States and the 
Association states clearly that all additions to the Power System are 
Federal facilities; little or none of the Distribution System was owned 
by the Association. The District is chagrined at having paid the 
Association for facilities it did not receive. The purpose of this Act 
is to convey to the District what all parties believed the District 
acquired in 1986.
    The Act would likely have little effect on operation of the 
Strawberry Valley Project. The District would receive fee interest in 
those Federal lands on which the Distribution System is the only 
Federal feature. On Federal lands sharing both Distribution System and 
other Strawberry Valley Project facilities, the legislation grants the 
District an easement for access to perform maintenance on the 
Distribution System fixtures. This provision preserves the interest of 
the United States and the public in the other Strawberry Valley Project 
facilities. As for the rest of the Project, the organizations would 
remain responsible for operating and maintaining the Generation System 
and the Transmission System on behalf of the United States.
    Because the Strawberry Valley Project is a paid-out Reclamation 
project, there is no outstanding repayment obligation associated with 
it. For this reason, the Act does not require any payment from the 
District in exchange for title to the Distribution facilities. In 
addition, the Act eliminates Reclamation's obligations to oversee the 
maintenance of the Distribution System and to administer the associated 
lands. The result may be a slight reduction in Reclamation 
expenditures.
    The change in ownership under the bill will be relatively invisible 
to the public. Because the District has been operating and maintaining 
the Distribution System for several years, the public will witness a 
change in ownership but should not experience any change in operation. 
The Act will eliminate uncertainty about ownership and obligations 
associated with the Distribution System--which will likely lead to more 
efficient and effective operation of the Distribution System.
    The Department recognizes that there are benefits to be achieved by 
the proposed title transfer and has worked closely and cooperatively 
with the interested parties. Before the Department can support S. 500, 
we recommend two revisions: First, Section 3(a), directing that ``the 
Secretary . . . shall convey and assign'' the facilities to be 
transferred, should be changed to ``the Secretary . . . is authorized 
to convey and assign'', thereby allowing for completion of the 
necessary public input and scoping pursuant to the National 
Environmental Policy Act (NEPA). And second, language should be added 
to state that the District shall hold the United States harmless for 
any claim arising from the 1986 sale of the Distribution System and 
from actions under this legislation.
    In recent days, we have had discussions with the District about 
accelerating the NEPA process and making modifications to the 
legislation to address the concerns described in this testimony. As 
such, I am confident that we can work with the District, Senator Hatch, 
Representative Chaffetz, and the Subcommittee to reach our goal of 
supporting this legislation and transferring title to these facilities 
in a timely manner.
                               on s. 802
    Madam Chairman and members of the Subcommittee, I am Grayford 
Payne, Deputy Commissioner for Policy, Administration and Budget at the 
Bureau of Reclamation (Reclamation). I am pleased to present the views 
of the Department of the Interior (Department) on S. 802, a bill to 
authorize the Secretary of the Interior to allow the storage and 
conveyance of non-project water at the Norman Project in Oklahoma. For 
reasons I will discuss below, the Department supports this bill.
    Lake Thunderbird, located on the Little River in central Oklahoma, 
was constructed as part of the Norman Project for municipal and 
industrial water supply, flood control, recreation, and fish & wildlife 
purposes. The Central Oklahoma Master Conservancy District (District) 
operates the Norman Project under contract with the United States. The 
District holds all Project water rights and currently provides water to 
the member cities of Norman, Del City and Midwest City.
    The Lake Thunderbird watershed experienced a major drought between 
2005 and 2006 which resulted in unprecedented low lake levels. Shortly 
thereafter, the District and Reclamation jointly determined that the 
stored water supply in the lake would require augmentation in the 
future to meet demands of the member cities during potential 
reoccurring drought periods.
    S. 802 would facilitate a proposal by the District to purchase raw 
water from the City of Oklahoma City in times of drought and store it 
in Lake Thunderbird to augment the yield of the reservoir. The water 
would come from Atoka Reservoir in southeast Oklahoma, which is owned 
and operated by Oklahoma City. Oklahoma City conveys this water 
approximately 100 miles through the existing Atoka pipeline which 
crosses the Lake Thunderbird watershed just upstream of the reservoir. 
The District and Oklahoma City would tap the Atoka pipeline and 
construct a short pipeline to Lake Thunderbird. Because the purchased 
water does not originate within the Lake Thunderbird watershed, 
Reclamation does not have authority to approve this action. If S. 802 
were enacted, Reclamation could approve a water service contract and 
provide the means for the action to move forward.
    The Department supports this legislation because: (1) Reclamation 
has confirmed an immediate and critical water need exists; (2) studies 
conducted in 2010 indicate that Lake Thunderbird can be used to store 
up to 4,600 acre feet of non-project water, if and when space is 
available, with no adverse impacts to operations, the environment, 
recreation, and the local economy; (3) the action would be carried out 
solely by the District at no cost to the Federal government; and (4) 
based on a well attended public meeting in 2009 and on comments 
received on the environmental compliance document, the proposed action 
is generally supported by interested parties and no known opposition 
exists.
                               on s. 1047
    Madam Chairman and Members of the Subcommittee, I am Grayford 
Payne, Deputy Commissioner for Policy, Administration and Budget at the 
Bureau of Reclamation (Reclamation). I am pleased to provide the views 
of the Department of the Interior (Department) on S. 1047, the 
Leadville Mine Drainage Tunnel Act of 2011.
    The Department last testified before the Subcommittee on 
legislation related to the Leadville Mine Drainage Tunnel (LMDT) in 
June of 2010, and prior to that, in April of 2008. Since the last 
Congress, the sponsor has continued to refine the specific language of 
this bill, and incorporated reference to new information from the U.S. 
Environmental Protection Agency (EPA) and the Colorado Department of 
Public Health and Environment (CDPHE) regarding new management actions 
at the California Gulch National Priority List (Superfund) Site, which 
overlies the LMDT. S. 1047 is consistent with the Department's ongoing 
commitment to ensure that the LMDT poses no threat to public safety and 
the environment. The Department supports the revisions made to the bill 
to date and looks forward to working with the Committee on further 
refinements to clarify remaining concerns.
    The bill has been substantially improved to address the concerns 
raised by the Department related to reimbursement and liability. In our 
previous testimony, the Department was particularly concerned that the 
bill could have been understood to create a liability for Reclamation 
where none currently exists. S. 1047 ameliorates these concerns by 
appropriately identifying ongoing responsibilities of the Secretary of 
the Interior. S. 1047 contains new language not found in previously 
introduced versions of the Leadville Mine Drainage Tunnel Act.\1\ In 
particular, Section 3 of S. 1047 acknowledges the multi-agency nature 
of efforts underway at Leadville, and authorizes the Department to 
enter into agreements with other entities for reimbursement in the 
event of improvements or expansion of the treatment plant in Leadville. 
The bill language authorizes an agreement to cover costs for ``any 
necessary capital improvement'' as well as costs associated with 
``flows that are conveyed to the treatment plant,'' including surface 
water. We note that the Department interprets section 3 to affirm 
existing discretionary authority to improve or expand the treatment 
plant as well as to allow the Secretary to enter into reimbursement 
agreements with other entities with respect to the treatment plant.
---------------------------------------------------------------------------
    \1\ The Committee-reported version of S. 3404 during the 111th 
Congress was amended to include reimbursement language that is similar 
to the language found in this session's S. 1047; however, the 
reimbursement language was not part of S. 3404 at the time Reclamation 
testified on the bill on June 9, 2010.
---------------------------------------------------------------------------
    We continue to assert that the language in Section 2 of the bill, 
which calls on the Secretary of the Interior to ``take any action 
necessary to maintain the structural integrity of the [LMDT],'' does 
not take into consideration Reclamation's 2008 Risk Assessment on the 
LMDT. The Assessment's purpose was to evaluate the stability and assess 
the risk associated with the LMDT. The Risk Assessment utilized a 
similar process to the one Reclamation uses to assess risk at its dams, 
a model that is an international standard for conducting risk 
assessments. The Risk Assessment's independent peer review confirmed 
that it is highly unlikely that a sudden release of water could occur 
from either a blockage in the LMDT, or through the bulkheads installed 
in the tunnel. Moreover, the Risk Assessment concluded that even if an 
existing natural blockage in the upper part of the LMDT failed rapidly, 
a sudden release of water through the lower blockage and bulkheads is 
unlikely. In 2008, Reclamation also worked cooperatively with the EPA 
and CDPHE to install additional drainage capability into the LMDT. We 
have also held several public meetings with residents living in the 
Village at East Fork and others in the Leadville area to convey 
Reclamation's findings that the LMDT is safe, and have continued an 
active dialogue with the EPA during the agency's revision of the 
proposed remedy for Operable Unit 6 (OU6) of the California Gulch 
National Priority List (Superfund) Site, which lies above the LMDT. We 
agree with the remedy selected in EPA's amended Record of Decision, 
published in 2010, which would implement actions to avoid diversion of 
water into the LMDT. Recent studies conducted by EPA conclude that 
using the mine workings and the LMDT to convey water cannot be relied 
on for the long term, and that it is neither cost effective nor 
efficient to treat diluted acid rock drainage this way in perpetuity. 
We have also had very productive interactions with Senator Mark Udall's 
office and the Subcommittee on this legislation, and we appreciate 
those discussions.
    We recognize the desire of Congress to assure the residents of 
Leadville and the Village at East Fork that Reclamation will continue 
to manage its facilities appropriately, and be accountable. This 
legislation essentially codifies these ongoing actions for the long 
term.
                               on s. 1225
    Madam Chairman and members of the Subcommittee, I am Grayford 
Payne, Deputy Commissioner for Policy, Administration and Budget at the 
Bureau of Reclamation (Reclamation). I am pleased to provide the views 
of the Department of the Interior (Department) regarding S. 1225, which 
would authorize the Secretary of the Interior to convey title to all of 
the works of the Fort Sumner Project (including the diversion dam, 
easements, ditches, laterals, canals, drains, and other rights) to the 
Fort Sumner Irrigation District (FSID).
    Reclamation was able to work from draft versions of this bill to 
formulate testimony in the days leading up to this hearing. Because the 
language has only recently been finalized for introduction this past 
week as S. 1225, this statement will speak to the major provisions, 
while some of the bill's language is still being analyzed. At this 
time, the Department believes consideration or enactment of S. 1225 is 
premature.
    The FSID has been a good partner in assisting Reclamation with 
difficult Endangered Species Act (ESA) issues on the Pecos River. 
Although the Department supports the potential transfer of this 
facility in the future, it cannot presently support this legislation as 
it is written due to many unresolved issues involved in such a 
transfer, as described below. Reclamation and the FSID are in the midst 
of a collaborative process to ensure that we identify and address all 
of the operational, fiscal, environmental, and other issues that arise. 
However, at this time, that process is not complete and thus title 
transfer of these facilities should not move forward until completion 
of that process.
Title Transfer Process
    Over the past ten plus years, the Bureau of Reclamation has had an 
opportunity to work on a number of title transfer proposals. It has 
been our experience that the more on-the-ground coordination and work 
we accomplish before the legislative process, and the more issues that 
we can resolve in advance, the faster the legislative process will go 
and as importantly, the faster we can successfully implement the 
legislation to get the lands and facilities transferred. While some 
have thought that moving to the legislative phase quickly would speed 
up the process, it has been our experience that we are more effective 
when we scope out, identify, and reach agreement on all issues prior to 
initiating the legislative process.
    In this case, while we have taken some steps toward that 
collaborative process, we have several steps to go and it is our hope 
that Reclamation, together with the FSID and other stakeholders (such 
as the State of New Mexico and potentially other water users in the 
Pecos River system) can work through that process.
    Currently, there are two Reclamation projects on the Pecos River: 
the Carlsbad and Fort Sumner Projects. The Fort Sumner Project was 
developed by private interests at the turn of the last century. It was 
reconstructed and rehabilitated by Reclamation in the 1950s. 
Reclamation and the FSID executed a contract in 1948 to provide for the 
repayment of construction costs to rehabilitate the project. The FSID 
has an annual repayment obligation of about $54,500 with an outstanding 
balance of approximately $652,000.
    The FSID holds a senior water right for not more than 100 cubic 
feet per second from the natural flow of the Pecos River. Reclamation 
must bypass the FSID's water through Sumner Reservoir prior to storing 
water for the Carlsbad Project. Over the past ten years, Reclamation 
has consulted with the U.S. Fish and Wildlife Service (Service) to 
ensure that Federal actions are not jeopardizing the existence of the 
Pecos bluntnose shiner or adversely modifying its critical habitat 
located below FSID's diversion dam. In these consultations, Reclamation 
has committed to the Service to keep the Pecos River from becoming 
intermittent. A significant cause of drying on the Pecos is due to the 
FSID diverting its senior water right. The only way Reclamation has 
been able to keep the Pecos River flowing is by purchasing water from 
willing sellers and by paying the FSID not to divert water through a 
forbearance agreement.
    In August 2009, Reclamation and FSID entered into a mutually 
beneficial agreement whereby FSID would forbear the diversion of up to 
2,500 acre-feet of water annually for ten years when they would 
otherwise be in priority. Instead, this water goes into Sumner Lake 
reservoir where it is stored and delivered for Reclamation to prevent 
intermittency of flows on the Pecos River in compliance with the 2006 
biological opinion. Reclamation pays FSID $60,000 annually plus $20 per 
acre-foot for the water. In addition to the forbearance of this water, 
FSID agreed to pursue ESA Section 10 consultation with the Service and 
Reclamation agreed to assist them in this process. Also in this 
agreement, FSID indicated their desire to take title to the facilities 
and Reclamation agreed to work with them on that process. The 
forbearance agreement further provides that the annual payments of 
$60,000 from Reclamation to FSID will cease upon passage of title 
transfer legislation. To date, this has been a mutually beneficial 
agreement. The forbearance water has afforded Reclamation with an 
additional tool to meet the biological opinion to ensure that the Pecos 
River does not run dry.
    Therefore, initiating title transfer and the completion of the 
Section 10 process with the Service are closely interconnected 
processes. It is the Department's view that we cannot complete the 
title transfer without completing the Section 10 process.
    As currently drafted, S. 1225 makes limited reference to the 
scoring or valuation issues that are important issues in title 
transfers. Section 5 requires the forgiveness of FSID's repayment 
obligation to the United States that was agreed upon by contract when 
the construction and rehabilitation of the facilities were undertaken. 
Consequently, as currently crafted, this would result in a financial 
loss to the U.S. Treasury. We note that this would trigger the need for 
consideration of fiscal impacts under the Statutory Pay-As-You-Go Act 
of 2010.
    While Reclamation and the FSID have had some initial discussions 
about how to address this issue in an equitable manner, there has been 
no resolution and a significant amount of work needs to be done on this 
issue. One of the key unresolved issues is the terms of the ESA Section 
10 agreement to be developed between FSID and the U.S. Fish and 
Wildlife Service. This agreement will have a bearing on the valuation, 
whether we would need to have a forbearance agreement after the title 
transfer, and whether we would need to buy water to meet the current 
ESA obligations on the Pecos River.
    Because Reclamation has not yet had the opportunity to complete a 
public process to determine whether other interested citizens of New 
Mexico have concerns or interests in the proposal, we cannot with any 
certainty say that the title transfer proposed by S. 1225 would have 
either negative or positive impacts on other stakeholders. As part of 
the National Environmental Policy Act process, Reclamation would 
typically undertake a public scoping or outreach process to solicit the 
views of the public. It is our hope that we will have the opportunity 
to complete that process before the legislation is enacted so that 
Reclamation and FSID can collaboratively address any concerns up front 
or in the terms and conditions of the title transfer.
    Before agreeing to title transfer, the FSID and the Service need to 
enter into a habitat conservation plan under Section 10 of the ESA. 
Reclamation can assist in this process and facilitate a plan and an 
agreement between the FSID and Service; but after completing Section 10 
compliance, Reclamation will need to re-consult with the Service on its 
continued operations on the Pecos. This and other environmental 
compliance measures need to be completed before finalizing title 
transfer.
    Lastly, Reclamation is unsure of the intent behind the language in 
Section 7 which references ``future benefits from the Reclamation 
Fund.'' We are interested in discussing this language further with the 
Subcommittee.
    Currently, while the Department views the Fort Sumner Project as a 
goodcandidate for title transfer, legislation should await completion 
of the crucial and interconnected steps summarized above. To make 
determinations of the fiscal impact to the United States, the benefit 
to the public, and the responsibilities for environmental compliance, 
FSID and the Service, with Reclamation's support, need to complete the 
process outlined in Section 10 of the ESA before title transfer occurs. 
Once we complete that process, we will have a better understanding of 
the necessary and appropriate terms and conditions associated with this 
title transfer. However, at this time, the Department believes this 
legislation is premature and would raise concerns about impacts on the 
U.S. Treasury as discussed above.
                               on s. 997
    Madam Chairman and Members of the Subcommittee, I am Grayford 
Payne, Deputy Commissioner for Policy, Administration and Budget at the 
Bureau of Reclamation (Reclamation). I am pleased to provide the views 
of the Department of the Interior (Department) on S.997, the East Bench 
Irrigation District Water Contract Extension Act. The Department 
supports S. 997.
    Reclamation's Clark Canyon Dam and Reservoir are located in 
southwest Montana and supply irrigation water under contract to the 
East Bench Irrigation District (EBID). EBID's water service contract 
with Reclamation was first executed in October 1958 and expired on 
December 31, 2005. Pursuant to Section 1 of the Act of May 15, 1922 (42 
Stat. 541), Section 46 of the Omnibus Adjustment Act of 1926 (44 Stat. 
649), and Section 85-7-1957, Montana Code Annotated, execution of a new 
contract between the United States and any irrigation district requires 
a Montana 5th District Court decree.
    In 2006, EBID filed a petition with the court seeking court 
confirmation of the execution of their new proposed renewed contract 
with Reclamation. A hearing was convened on December 14, 2006, in 
Dillon, MT. One party appeared and filed an objection to the 
confirmation proceedings. The parties involved in this court 
confirmation case have filed various petitions and motions with the 
court. The court issued an order on April 26, 2007, in response to 
EBID's petition to dismiss the objection, dismissing some of the 
counterclaims filed by the objectors, but continuing with other 
counterclaims. No trial date has been set for this case and as a 
result, no court decree confirming the 2006 contract has been issued.
    Additionally, prior year appropriations bills have extended the 
contracts for terms of up to two years. EBID remains concerned about 
losing their right to renew their 1958 contract if it is allowed to 
expire prior to securing a court decree of the renewed 2006 Contract. 
For this reason they are pursuing extension of the 1958 contract versus 
relying on a temporary water service contract.
    Under current law, the 2006 contract is not binding on the United 
States until court confirmation is secured. A final decree from the 
court confirming the 2006 contract has not occurred. Therefore, EBID is 
seeking authority under S. 997 to extend the 1958 contract. S. 997 
would extend the contract for four years (to December 31, 2013) or 
until a new contract is executed, and still defer to the court to take 
up the issue again at a time of its choosing. The Department supports 
this legislation because it would allow water service to the EBID to 
continue and protects the right for contract renewal while the court 
confirmation process is given time to be completed.
                               on s. 1033
    Madam Chairman and Members of the Subcommittee, I am Grayford 
Payne, Deputy Commissioner for Policy, Administration and Budget at the 
Bureau of Reclamation (Reclamation). I am pleased to provide the views 
of the Department of the Interior (Department) on S. 1033, the City of 
Hermiston, Oregon, Water Recycling and Reuse Project. For reasons I 
will discuss below, the Department cannot support the bill.
    S. 1033 would amend the Reclamation Wastewater and Groundwater 
Study and Facilities Act (Public Law 102-575, 43 U.S.C. 390h et seq.), 
commonly called Title XVI, to authorize the Secretary of the Interior 
to participate in the design, planning, and construction of permanent 
facilities needed to reclaim and reuse water in the City of Hermiston, 
Oregon. The project is being implemented by the City of Hermiston.
    The City of Hermiston (City), located in north central Oregon, is 
one of the largest communities within Reclamation's Umatilla Project 
area. The project proposed by the City includes upgrades and 
construction at their existing wastewater treatment facility and 
construction of a delivery system that would deliver recycled water to 
the West Extension Irrigation District. This recycled water would be 
used by the District to irrigate agricultural lands. By 2031, it is 
estimated that this proposed project would provide the District with an 
approximate 2,034 acre-feet of drought resistant water supply during 
the irrigation season. The current total estimated cost for this 
project is approximately $25.8 million.
    In January 2010, the City of Hermiston submitted their feasibility 
report to Reclamation for review under the Title XVI program. In April 
2010, Reclamation's review team completed the review and made the 
certification that the proposed project ``Meets Requirements'' as 
defined under section 1604 of Public Law 102-575, as amended.
    The City and Reclamation's Pacific Northwest Region are continuing 
to coordinate on actions that are necessary to be complete prior to 
implementation of the proposed project. This includes activities such 
as finalization of the determination of the project sponsor's financial 
capability, entering into a land use agreement since the delivery pipe 
is to cross Reclamation land, and entering into a permit to accept the 
delivery of this water into the canal.
    S. 1033 would authorize the City of Hermiston's project under Title 
XVI for Federal funding not to exceed 25 percent of the total cost of 
the project.
    While the Department supports efforts to increase local water 
supplies and increase recycled water use, this project would compete 
for funds with other needs within the Reclamation program, including 
other Title XVI projects currently under construction. In general, the 
Department supports the Title XVI Reclamation and Reuse program. The 
2012 budget request includes funding for the Department's WaterSMART 
Program, of which Title XVI is an important element. Specifically, the 
2012 budget request includes $29 million for the Title XVI program. 
This represents a significant increase over funding levels for the 
program in recent years.
    As part of this total, the Department is requesting $23.4 million 
to fund Title XVI projects selected through a competitive funding 
opportunity process which uses criteria finalized in 2010 to identify 
activities most closely aligned with Title XVI statutory and program 
goals. Reclamation plans to invite sponsors of Congressionally 
authorized Title XVI projects to submit applications for funding under 
the program and will review and rank proposals against those criteria 
to identify projects for funding, subject to appropriations in fiscal 
year 2012. A similar procedure was used this year to identify projects 
for 2011 funding, which were announced last month. The remaining $5.6 
million of the Title XVI request is to continue funding projects 
currently underway and for program administration.
    We recognize that water reuse is an essential tool in stretching 
the limited water supplies in the West, and I believe the FY 2012 
budget request on top of $140 million in American Recovery and 
Reinvestment Act funding for Title XVI has demonstrated the emphasis 
placed by this Administration on this Program. However, given that 
there are 53 already authorized Title XVI projects and numerous 
competing mission priorities and demands on Reclamation's budget, the 
Department cannot support the authorization of new Title XVI projects 
or extensions of existing authorized cost ceilings. Reclamation will, 
however, continue to work with project proponents to evaluate the 
completeness of feasibility studies of their projects.
    Madam Chairman, this concludes my written statement.

    Senator Shaheen. Thank you very much, Mr. Payne.
    Before we go to questions, I'm going to ask if our other 2 
witnesses would also testify.
    So, Mr. Katz, would you like to go ahead?

   STATEMENT OF JOHN KATZ, DEPUTY ASSOCIATE GENERAL COUNSEL, 
              FEDERAL ENERGY REGULATORY COMMISSION

    Mr. Katz. Thank you, Chair Shaheen, Ranking Member Lee. As 
Chair Shaheen noted, I am representing the Federal Energy 
Regulatory Commission, but as a member of the Commission staff, 
my views are my own and do not necessarily represent those of 
the Commission or any individual commissioner.
    As Senator Blumenthal summarized, S. 715 involves an 
instance of a project that was licensed by the Commission to a 
private developer, the license for which was subsequently 
terminated by the Commission as required by the Federal Power 
Act because the developer did not commence construction of the 
project within the times authorized by the Commission, which 
were the maximum timeframes allowed by the Federal Power Act.
    S. 715 would allow but not require the Commission to 
reinstate the license for these projects following preparation 
of an environmental assessment and the provision of a period 
for public notice and comment; and if the Commission so chose 
to reinstate the project licenses, would require the Commission 
to transfer those licenses to the city of Canton.
    As I explained in my testimony, Chairman Wellinghoff and 
the past several chairmen of the Commission have had a policy 
of not opposing reinstatement bills where the total timeframe 
for the commencement of construction was no longer than 10 
years from when the project was originally licensed.
    The reason for this policy essentially is to avoid site 
banking, that is where an individual developer retains but does 
not develop a site for an unduly lengthy period of time; to 
avoid staleness of the environmental record; and to avoid the 
impacts on competition that might be felt if a site was not 
available to be competed for by any entity that might be 
interested.
    In the case of this bill, site banking is not an issue 
because the original entity that held the licenses, the Summit 
Hydro Development Corporation, is no longer involved. The 
project, if transferred, would be transferred to the city of 
Canton, which is a different entity. So site banking is not a 
concern here.
    With regard to the environmental impacts, the bill 
specifically mandates that if the Commission reinstates the 
license, it must do an environmental analysis to determine 
whether there have been any changed environmental impacts, and 
further provides that the Commission may impose any conditions 
necessary to deal with such impacts.
    With respect to impacts on competition during the time 
since the license has been terminated, the Commission is aware 
of no other entity than the Town of Canton that has expressed 
any interest in developing this project. Therefore, that does 
not particularly appear to be an issue here.
    In light of the foregoing, I make a slight exception to my 
statement about not representing the Commission or any 
commissioners in that Chairman Wellinghoff has authorized me to 
say that because of the factors I've analyzed, he does not 
oppose the proposed legislation. Thank you.
    [The prepared statement of Mr. Katz follows:]

  Prepared Statement of John Katz, Deputy Associate General Counsel, 
                 Federal Energy Regulatory Commission,
                               on s. 715
    Chair Shaheen, Ranking Member Lee, and Members of the Subcommittee
    My name is John Katz, Deputy Associate General Counsel for Energy 
Projects, Federal Energy Regulatory Commission. I appreciate the 
opportunity to appear before you to discuss S. 715. As a member of the 
Commission's staff, the views I express in this testimony are my own, 
and not those of the Chairman (other than as specifically noted below) 
or of any individual Commissioner.
I. Background
    On February 23, 2001, the Commission issued original licenses to 
Summit Hydropower for the 373 kilowatt (kW) Upper and the 920 kW Lower 
Collinsville Hydro Projects, to be located at the Upper and Lower 
Collinsville Dams on the Farmington River, in Hartford County, 
Connecticut.
    Section 13 of the Federal Power Act requires that licensees 
commence project Construction by the deadline established in the 
license, which may be no longer than two years from the date of license 
issuance. The Commission may extend the deadline once, for no longer 
than two additional years. If construction does not timely commence, 
section 13 requires the Commission to terminate the license by written 
order.
    Consistent with section 13, Article 301 of the licenses for the 
Collinsville Upper and Lower Hydroelectric Projects required the 
licensee to commence project construction within two years. On November 
26, 2002, at the licensee's request, the Commission issued the maximum 
allowable two-year extension, moving the commencement of construction 
deadline to February 23, 2005.
    Summit did not commence project construction by the deadline. 
Accordingly, by letter dated November 2, 2007, the Commission gave 
Summit notice of probable termination of the licenses. Summit did not 
reply to the notice. By order issued December 4, 2007, the Commission 
terminated the project licensees. The licensee did not seek rehearing 
of the termination order, which therefore became final on January 3, 
2008.
II. S.715
    S.715 would authorize the Commission to reinstate either or both of 
the licenses for the Upper and Lower Collinsville Projects and to 
extend for two years the commencement of construction deadline for the 
projects. Should the Commission reinstate either or both licensees, the 
bill requires the Commission to transfer the license or licensees to 
the town of Canton, Connecticut. These actions are to be taken within 
270 days of the date of enactment of the bill.
    In addition, S.715 requires the Commission to complete, within 180 
days of the date of enactment of the bill, an environmental assessment 
of the projects, updating, to the extent necessary, the analysis 
performed in the previous licensing proceeding. The Commission is to 
provide for a 30-day public comment period, consider any comments that 
are received, and, based on the environmental assessment and the 
comments, incorporate in the project license or licensees such terms 
and condition as the Commission deems necessary. Chairman Wellinghoff 
and the last several Commission Chairmen have taken the position of not 
opposing legislation that would extend the commencement of construction 
deadline no further than 10 years from the date that the license in 
question was issued. Where proposed extensions would run beyond that 
time, there has been a sense that the public interest is better served 
by releasing the site for other public uses.
    In this instance, the proposed extensions would run at least two 
years beyond 10 years from when the licenses for the Upper and Lower 
Collinsville Projects were issued. However, to Commission staff's 
knowledge, in the three and one-half years since the project licenses 
were terminated, no entity has sought to develop the projects or 
proposed other uses for the project sites. Moreover, because S.715 
specifically provides for the preparation of an updated analysis, 
staleness of the environmental record, which can be of concern in cases 
of this type, will not be an issue. In consequence, I am authorized to 
state that Chairman Wellinghoff does not oppose S.715. Also, I 
anticipate that the Commission staff should be able to meet the 
deadlines established by S.715, assuming that the town of Canton is 
able to timely supply any information staff needs and that a need does 
not arise to engage in consultation under the Endangered Species Act, 
or to deal with other, similar matters, the timing of which is not in 
the Commission's control.
    I would be pleased to answer any questions you may have.

    Senator Shaheen. Thank you, Mr. Katz.
    Mr. Barlow.

   STATEMENT OF RICHARD J. BARLOW, FIRST SELECTMAN, TOWN OF 
                CANTON, CANTON, COLLINSVILLE, CT

    Mr. Barlow. Good afternoon, Chairwoman Shaheen, Ranking 
Member Lee. My name is Richard J. Barlow, and I'm the First 
Selectman of the Town of Canton, Connecticut. We're not a city. 
We're a small town, 10,125 residents, located on the Farmington 
River in the northwest portion of the State of Connecticut.
    I appreciate the opportunity to appear before you to 
support S. 715, the Collinsville Renewable Energy Promotion 
Act. The Town would like to acknowledge the co-sponsors of this 
bill, Senators Lieberman and Senator Blumenthal, both of which 
I had the pleasure of working with extensively when they were 
Attorneys General of the State of Connecticut, and both of them 
have been great champions for the environment, and they 
certainly continue that tradition within the Senate, and I 
appreciate that on a personal note.
    With the support of Representative Murphy, similar 
legislation was passed last session by the House of 
Representatives. Currently a companion bill, H.R. 1353, is 
before the House of Representatives this session.
    The Collinsville Hydro Project would reactivate 2 
hydroelectric facilities known as the Upper Collinsville Dam 
and the Lower Collinsville Dam, originally constructed by the 
Collins Company, one of the Nation's first manufacturers of 
axes, machetes, and other cutting tools. The facilities were 
constructed in the early 19th Century and served to provide 
power for the company operations until the mid-1960s, when, 
unfortunately, they went out of business and relocated to 
Central America.
    In 1965, the Connecticut Power Company, the Connecticut 
Light and Power Company acquired the facilities and dams. That 
was in the time of cheap nuclear energy, and they didn't want 
the competition. They deactivated the facilities. Worse than 
that, they scuttled them. Not only did they take the generating 
equipment out, but they took cutting torches and cut the 10-
inch solid shafts going down to the turbines just to make 
certain that any future use of the facility would be extremely 
difficult. Then after deactivating the facilities and removing 
the generating equipment, they gifted the dams and their 
liabilities to the State of Connecticut.
    The Town of Canton, in partnership with the Metropolitan 
District Commission, a Hartford-area drinking water and sewer 
authority, attempted to reactive the dams in the 1980s. While 
that attempt failed, the data they developed in part served as 
the basis for an application by a private company which 
successfully obtained a FERC license in 2001. My written 
testimony did say 2003. I'd like to point out it was 2001. 
Unable to reach agreement on a lease for the dams and possible 
other reasons, the licensee failed to start construction. In 
December 2007, after a notice of revocation, FERC did, in fact, 
revoke the licenses for the project.
    At that time, the Town of Canton began to consider 
reactivating the facilities. That action resulted in the Town 
filing for a preliminary FERC license on August 6, 2008. The 
Lower Dam is actually in the towns of Avon and Burlington, and 
the Town of Canton has solicited their participation to develop 
and operate that portion of the project. FERC issued by order a 
preliminary license to the Town of Canton on January 8th, 2009.
    Understanding that Congress has in the past reinstated and 
transferred licenses to other parties, the Town began working 
with our Congressional delegation to seek the reissuance of the 
final license to the Town of Canton. After extensive 
consultation with stakeholders, including local environmental 
groups and the State Department of Environmental Protection, 
Representative Murphy and Senator Dodd submitted bills to 
accomplish that task. Unfortunately, the Senate did not approve 
the bill in the last session.
    Since that time, the Town has established an advisory 
committee, and we're well on our way toward working on ways to 
develop the project which we feel is an important part of the 
culture and heritage of a small New England community. It's a 
way to improve the environment by providing fish passage at the 
dams which the State does not have the resources to do, and 
also a way to provide a source of clean green energy which will 
reduce our dependence on energy sources.
    We clearly understand that generating less than 2 megawatts 
will not answer our energy needs, but we feel that the Town 
will be meeting the majority of its needs, and we think that 
that's an important thing to do. We've done a number of other 
activities over the last several years to secure licenses. We 
just recently passed in the State of Connecticut a virtual 
metering bill which will also aid in the economics of the 
project.
    I appreciate your support for this and would be happy to 
try to answer any questions you may have.
    [The prepared statement of Mr. Barlow follows:]

   Prepared Statement of Richard J. Barlow, First Selectman, Town of 
                        Canton, Collinsville, CT
                               on s. 715
    Chairman Shaheen and Members of the Subcommittee on Water and Power 
my name is Richard J. Barlow and I am the First Selectman of the Town 
of Canton, as small town of 10,125 residents located on the Farmington 
River in northwestern Connecticut. I appreciate the opportunity to 
appear before you to support S. 715, a bill to reinstate and transfer 
certain hydroelectric licenses and extend the deadline for commencement 
of construction of certain hydroelectric projects (the Collinsville 
Renewable Energy Promotion Act). The Town would like to acknowledge the 
co-sponsors of this bill, Senators Lieberman and Blumenthal. With the 
support of Representative Murphy similar legislation was passed last 
Session by the House of Representatives. Currently, a companion bill, 
HR. 1353 is before the House of Representatives this Session.
    The Collinsville Hydro Project will reactivate two hydroelectric 
facilities known as the Upper Collinsville Dam and the Lower 
Collinsville Dam originally constructed by the Collins Company, one of 
the nation's first manufacturers of axes, machetes, and other cutting 
tools. The facilities were constructed in the early 19th century and 
served to provide power for the Company operations until the mid 1960s 
when their operations were relocated to Central America. In 1965 the 
Connecticut Light & Power Company acquired the facilities and dams. 
They then deactivated the facilities, removed the generating equipment 
and gifted the dams to the State of Connecticut.
    The Town of Canton in partnership with the Metropolitan District 
Commission, a Hartford area drinking water and sewer authority, 
attempted to re-activate the dams in the 1980s. While that attempt 
failed, the data they developed in part served as the basis for an 
application by a private company which successfully obtained a FERC 
license in 2003. Unable to obtain an agreement from the State to lease 
the dams and possibly for other unknown reasons the licensee failed to 
start construction. In January 2008 after issuance of a notice to 
revoke the licenses to which the licensee did not respond, FERC did, in 
fact, revoke the license for the project.
    At that time, the Town of Canton began to consider re-activating 
the facilities. That action resulted in the Town filing for a 
preliminary FERC license on August 6, 2008. The Lower Collinsville Dam 
is actually in the Towns of Avon and Burlington and the Town of Canton 
has solicited their participation to develop and operate that portion 
of the Project. FERC issued by order a preliminary license to the Town 
of Canton on January 8, 2009.
    Understanding that Congress has in the past reinstated and 
transferred licenses to other parties the Town began to work with our 
Congressional delegation to seek the reissuance of the final license to 
the Town of Canton. After extensive consultation with stakeholders 
including local environmental groups and the State Department of 
Environmental Protection Representative Murphy and Senator Dodd 
submitted bills to accomplish that task. Unfortunately last Session the 
Senate did not take action on the proposed legislation before 
adjournment.
    Since that time, the Town has established an advisory committee to 
define the Project. The Town envisions the Project as a way to re-
establish a part of the culture and heritage of our community, a way to 
improve the environment by providing fish passage at the dams and, of 
course, an opportunity to provide a source of clean, green energy which 
will reduce our dependence on foreign energy sources.
    Clearly, at a generating capacity of less than two mega watts, the 
Project is not the answer all our nation's energy needs, but it will 
provide the Towns with a source to meet the majority of their public 
facility needs.
    In the past two years, the Town has been successful in obtaining 
State legislation requiring the State Commissioner of Environmental 
Protection to provide the Towns access to the dams for the purposes of 
hydroelectric power generation with the provision that fish passage be 
established. The Town has considered fish passage to be an important 
component of the project development. Without this project, the State 
would not be able to provide the monies to accomplish that task. Local 
environmental groups have recognized that the State does not have 
monies to accomplish fish passage by construction of fish ladders or 
the breeching of the dams.
    The Connecticut General Assembly, just this past month, enacted 
legislation to allow for municipalities to use virtual net metering for 
clean energy projects. This action, which the Town of Canton 
championed, greatly increases the potential to make the Project 
economically feasible. The State of Connecticut has also recently 
established a funding program for clean energy projects which the Town 
expects to pursue.
    In the last year with $50,000 in funding from the Connecticut Clean 
Energy Fund the Town was able to contract with a consultant who 
performed a preliminary feasibility study of the Project. With the 
ability to use virtual net metering the Project has reached a point 
where the Towns may expect a modest return on their investment in the 
initial years of operation.
    In closing I thank the Subcommittee for the opportunity to testify 
before you. I would be happy to try to answer any questions you may 
have regarding our Project.

    Senator Shaheen. Thank you very much. We have a lot of 
small towns in New Hampshire with selectmen, too, so we 
appreciate your being here.
    Mr. Barlow. The Senator is one up from the Attorney 
Generals. I went down. So I don't know what that means, but----
    Senator Shaheen. That's OK. We're glad you're here.
    I have some questions, most of them for Mr. Payne relative 
to the bills, nothing difficult, too difficult anyway, and I'll 
just take these pretty much in the order in which your 
testimony was given.
    On S. 500, which is the South Utah Valley Electric Service 
District, I suspect Senator Lee may have some questions or 
comments on this one. But your testimony indicates that 
Reclamation supports this bill, but that modifications should 
be made to some of the language--I think you mentioned 2 
places--before we move forward.
    Is Reclamation committed to working with the District and 
the committee on those changes to the bill? Can you help us 
with that?
    Mr. Payne. Yes, Reclamation is very committed to working to 
get this resolved.
    Senator Shaheen. Thank you. On S. 802, the storage of non-
Project water in Lake Thunderbird in Oklahoma, I assume the 
Department supports this bill in part because there are no 
additional costs to the Federal Government. How will the costs 
of the additional storage be computed, and what agreements will 
be necessary to ensure that any costs to the Federal Government 
are recovered?
    Mr. Payne. Right now, the costs associated--right now there 
are about 4,600 acre feet of water that the District will 
purchase from the Atoka Reservoir up in Oklahoma City. They 
will not charge for that additional water but any water above 
the 4,600 the region has said that they will get into contract 
negotiations with the District to come up with what the charged 
cost should be for that water.
    Senator Shaheen. So you're comfortable with that?
    Mr. Payne. Yes, at this point. Yes, we are.
    Senator Shaheen. OK. Reclamation recently received an 
appropriation of $121,000 to evaluate the feasibility of 
storing additional water at Lake Thunderbird. Can you tell me 
if that process has been completed, and are there any remaining 
steps that need to be taken to allow the District to move 
forward with the storage of additional water?
    Mr. Payne. That process actually has been completed, and 
the water that was looked at, the water that was to be brought 
in, everything was favorable, and they have had a public 
scoping with the community, and it's been very favorable there, 
too.
    Senator Shaheen. So once the scoping is done, what needs to 
happen then?
    Mr. Payne. I think that, at that point in time, then the 
whole process, we just have to get the authorization to be able 
to allow us to be able to bring in non-Project water, and then 
we're all set, and then they will start the development of a 
small--I think it's a thousand-foot pipeline that will be a 
feeder off of an existing pipeline that's coming out of Lake 
Atoka that actually goes through this watershed, and they'll 
just feed off of that pipeline.
    Senator Shaheen. OK. Thank you.
    S. 997, the East Bench Irrigation District Water Contract 
Extension. To your knowledge, is the current delay in moving 
forward with approval of the new contract only a result of the 
Montana court process, or is it the fault of either the local 
water district or the Bureau of Reclamation?
    Mr. Payne. It's neither the fault of the Bureau nor of the 
water district. This is just a process that the 5th District 
Court of Montana has, and my discussions with the region and 
the area office is it's just been a backlog.
    Senator Shaheen. Great. So would Reclamation be supportive 
of a contract extension for longer than 4 years if the court 
process ends up extending beyond 2013?
    Mr. Payne. I'm not sure. I feel the way we--we feel that we 
have talked, and the District--actually, the 5th District Court 
is making a very concerted effort to get this backlog completed 
within the next 3 years, and the word we're hearing is that 
they're on a fast track to get all this done. That's why we 
felt that the 4 years would probably be fine, but I can get 
back to you with a written statement about your question.
    Senator Shaheen. That would be great.
    Mr. Payne. Thank you.
    Senator Shaheen. S. 1033, city of Hermiston, Oregon Water 
Recycling Project. I think Senator Wyden may be coming, but 
there are a few questions that I have relative to this 
legislation. You indicated that the Department opposes the 
legislation. Is the primary objection that you have that Title 
16 has been too popular and that you don't have the sufficient 
appropriation in order to meet all of the funding requirements 
for previously authorized projects?
    Mr. Payne. Currently we have 53 authorized projects 
already, and so that is one of our issues. We've gone through a 
deliberate competitive process to bring these projects on. So 
this project, while it's a worthy project, has not gone through 
our competitive process, and if it was to be wedged into this 
line, it would then compete with projects that have already 
gone through a competitive process and the funding was there.
    So it--did I answer it?
    Senator Shaheen. I have a couple of follow-up questions, 
but my time is out.
    You want me to go ahead?
    Given that, and given obviously the current tight budget 
situation that we're in, what advice would you have for project 
proponents who have met all the requirements, they have good 
water recycling projects to go forward, but they're not going 
to be able--under that scenario that you've laid out, they're 
not going to be able to get Reclamation support?
    Mr. Payne. You know, Senator, I am not that versed in Title 
16, and so I'd appreciate if I could just get back to you with 
in writing.
    Senator Shaheen. Sure. That would be great.
    I have another follow-up question that you can get back to 
us with a written response, as well, and that is what is the 
status of Reclamation's review of Title 16 funding backlog, and 
have you determined which authorized projects will not be going 
forward and which projects have not yet even met the 
feasibility requirements?
    Mr. Payne. Yes we will thank you.
    Senator Shaheen. So, Senator Lee.
    Senator Lee. Thank you for joining us, and thank you, 
Senator Shaheen.
    Mr. Payne, I've got a couple of questions, one in 
particular related to S. 500. The change that you proposed, the 
first change that you proposed involves changing the language 
that we've got from essentially ``the Secretary shall convey 
and assign'' to essentially ``the Secretary is authorized to 
convey and assign.'' This is a difference. It does make a 
difference. It makes a difference in much the same way that if 
my wife said, ``Mike, take out the trash, you shall take out 
the trash and do the dishes,'' that means something different 
than ``Mike, you may take out the trash and do the dishes.'' 
Those are 2 different things, aren't they?
    So if we change the language in this, it seems to me that 
it's less likely to happen unless it's phrased in mandatory 
terms. As I understand it, we've had this issue come up a 
number of times since I think the early 1990s, and sometimes 
the language in the end has followed more or less the model 
that you've prescribed, and sometimes it has remained with the 
``shall'' language.
    Can you tell me, do you have sort of a thumbnail sketch 
idea about what the ratio is on how many times we might have 
used ``shall'' versus ``is authorized to''?
    Mr. Payne. Actually, no, Senator, I don't. I don't have a 
thumbnail on that.
    Senator Lee. But you're aware that we've used both.
    Mr. Payne. I'm assuming we have, right.
    Senator Lee. It's my understanding that every time we use 
the ``shall'' language, it's a little bit more likely that 
whatever we're wanting to have happen actually happens, and 
that it happens in a relatively short period of time. Has that 
been your experience?
    Mr. Payne. My short time here, I can't tell the answer to 
that. You know, I've been here 8 months. So I do not have an 
answer.
    Senator Lee. But to your knowledge, it's not incorrect.
    Mr. Payne. It may not be incorrect.
    Senator Lee. OK.
    Mr. Payne. I do know that we're very committed to having, 
to making this transfer happen.
    Senator Lee. Right. If you're committed to having it 
happen, I assume that it wouldn't be a problem to use the 
shall'' language, just like it wouldn't be a problem for me, if 
I intended anyway to do the dishes and take out the trash, for 
my wife to use the word ``shall.''
    I want to make clear, by the way, since she's not here to 
defend herself, she rarely uses the language ``shall.''
    [Laughter.]
    Mr. Payne. For me, it's used a lot at home, with 3 
daughters.
    [Laughter.]
    Senator Lee. Yes, and that's important.
    For whatever that's worth, it doesn't seem to me to be a 
very good idea, if we want something to happen, to say ``may'' 
rather than ``shall,'' which is essentially what you're asking 
us to do.
    OK. Turning to S. 1033, Reclamation has indicated that its 
efficiency performance measure goal for the Title 16 program is 
to reduce the average annual Federal cost per acre foot for 
Title 16 water from about $18,173 per acre foot to about $1,200 
per acre foot. But taking into account construction inflation 
costs and other limitations, is an increase in efficiency along 
this order, is it reasonable? Is it feasible?
    Mr. Payne. I'm--based on my discussions with our Title 16 
experts, I feel it is. I think that our issue is that we're 
early in the phase and we need to get further down the road 
with more projects so we can see the return, so we can see 
where--because it's very early in this whole phase of whether, 
to see those numbers go down.
    Senator Lee. OK.
    Mr. Payne. That's probably not quite the answer you want, 
but I can get back to you with more written testimony about 
what their projections are on those numbers.
    Senator Lee. That might be helpful, if you could just sort 
of let us know what assumptions were or were not built into 
that.
    Mr. Payne. Absolutely.
    Senator Lee. Thank you.
    Then on S. 1224, what's the current timetable, or can you 
identify a current timetable and outlook for recovery of the 
affected species in the Upper Colorado Basin and in the San 
Juan Basin?
    Mr. Payne. We've been told by our regional people that 
should be in 2023 according to estimates.
    Senator Lee. OK; 2023? Now, if Congress were to fail, for 
whatever reason, to reauthorize this program, what would be the 
likely impact on the development rights along the Colorado 
River?
    Mr. Payne. I know that if you fail to authorize this 
program, I don't quite have an answer for that. I'm not quite 
sure where you're coming from on that answer.
    Senator Lee. Just--OK. I'm trying to assess what would 
happen to water rights along the Colorado generally if we were 
to do that, if that would cause broader problems, but we can 
probably talk about that offline at some point.
    I think that pretty well covers what I need to go over with 
you. Yes. Thank you very much.
    Mr. Payne. Thank you.
    Senator Shaheen. Thank you, Senator Lee.
    I will go back and actually follow up a little bit also on 
the fish recovery programs reauthorization act. Am I correct in 
assuming that the only reason Reclamation doesn't support S. 
1224 is because it does not include mandatory spending? That's 
a double negative, but I think you got my----
    Mr. Payne. I, you know----
    Senator Shaheen [continuing]. Intent.
    Mr. Payne. Right now we use the net power revenues that we 
get from our power projects there to be able to fund this 
project, and taking away that ability to use these direct funds 
and having to go to the appropriated dollars would then put a 
strain on our appropriated dollars given the tight budgets, and 
whether we'd be able to find the money or not to be able to 
fund what we think is a worthy project is what the issue is.
    Senator Shaheen. But wouldn't going forward with an 
authorization of funding still be better than allowing that 
authorization to expire? So going forward with the bill as it 
is, even given the concerns that you've expressed, be 
preferable to nothing?
    Mr. Payne. I think it may be preferable, but I'd like to 
get back to you on that question.
    Senator Shaheen. OK.
    Mr. Payne. Give you a detailed understanding of that. It's 
a fairly complicated subject.
    Senator Shaheen. Does Reclamation have suggestions for 
programs to cut or revenues to generate so that the legislation 
can move forward in the way that you would like?
    Mr. Payne. We prefer the language that was I think proposed 
in the prior--we'd like to be able to continue with the process 
the way it currently is, where we can use our net revenues from 
this project.
    Senator Shaheen. Secretary Salazar submitted a required 
report to Congress last year and indicated that the Department 
would like to explore cost saving measures for the programs. 
Have--has that effort begun, and are there cost saving efforts 
that would ensure base funding needs continue to be met?
    Mr. Payne. I also need to get back to you on that.
    Senator Shaheen. OK.
    Mr. Payne. I apologize for that.
    Senator Shaheen. That's fine. Submit all of those questions 
for you.
    To go back to the Leadville Mine Drainage Tunnel Act, does 
Reclamation support moving forward with this bill as 
introduced, or are there specific changes that Reclamation is 
recommending?
    Mr. Payne. Reclamation supports the bill as it's been 
revised. We feel that Senator Udall's office has worked really 
hard on improving this legislation and responding to the issues 
that we had previously had, and so we very much appreciate 
those discussions and work and all the work that's gone into 
that.
    I think the real issue is that we need to get together as 
an administration, the administration has to get together and 
kind of work this all out among ourselves about what our issues 
are and how we can all support this.
    Senator Shaheen. So when you said that the department 
supports the bill with revisions, you're not suggesting that 
the revisions that you would like to see are reflected in the 
current bill that's before the committee? You're suggesting 
that there need to be additional revisions?
    Mr. Payne. I think that we need to get together with the 
other, like EPA and the rest of them, get us all in a room and 
come up with some consensus on this whole issue and where we 
all stand. That's pretty much what I know about the bill.
    Senator Shaheen. OK. Thank you.
    Mr. Payne. We will provide you, if you'd like, a little 
detail on that.
    Senator Shaheen. I think that would be very helpful for the 
committee.
    Mr. Payne. Thank you.
    Senator Shaheen. On the Fort Sumner project conveyance, S. 
1225, in 2009 Reclamation entered into a forbearance agreement 
with the Fort Sumner Irrigation District and agreed to support 
language in the title transfer legislation which would relieve 
the District's repayment. Is Reclamation committed to working 
with the District to ensure that it can meet its commitment to 
purchase sufficient water from the District to equal the value 
of the repayment amount?
    Mr. Payne. We are committed to working with the District on 
that issue.
    Senator Shaheen. Does Reclamation have specific 
recommendations for how to address the financial loss that your 
testimony suggests may be present? Isn't the amount of loss 
given what you just said in the control of Reclamation because 
it's dependent on the rate that Reclamation pays the District 
for water in the future?
    Mr. Payne. We're currently in negotiations on the terms and 
conditions with the Fort Sumner Irrigation District to work all 
that out to see if we can come with--so we can get to the point 
where we see that it's favorable financially for the United 
States.
    Senator Shaheen. S. 1225 authorizes Reclamation to transfer 
title once NEPA and all other necessary conditions have been 
met.
    Mr. Payne. Correct.
    Senator Shaheen. So the bill is subject to an agreement 
governing the transfer process that Reclamation has already 
negotiated with the District; correct?
    Mr. Payne. Yes.
    Senator Shaheen. So under those circumstances, aren't 
Reclamation's process concerns addressed, and why is it not 
appropriate to go ahead and move forward with this bill?
    Mr. Payne. We still feel that the negotiations of the terms 
and conditions, that the results of those negotiations need to 
be embedded in the bill so everybody understands what the 
concerns are and what all the parties' responsibilities are. 
That's really where we're coming from.
    Senator Shaheen. But given that it took 2 years for 
Reclamation to move forward with the title transfer, can you 
assure the District that Reclamation will continue to move this 
process forward?
    Mr. Payne. Yes. We're very committed. We've talked to the 
region as well as the area office. I think in the past we did 
have some turnover there, and we are working very diligently to 
get this done. We're very supportive, and we're willing to help 
them get through the Section 10 process and so forth. So we do 
definitely want to help get this moving along.
    Senator Shaheen. OK. Thank you.
    Senator Lee?
    Senator Lee. Thank you. I've got a couple of technical 
lingering questions just related to the funding mechanism 
contemplated in S. 1224. But because those get fairly far into 
the weeds, if it's OK, I may just submit one or 2 of those 
questions in writing and we'll deal with it that way.
    Mr. Payne. I appreciate that.
    Senator Lee. Thank you very much.
    Senator Shaheen. Thank you, Senator.
    I have only a couple of questions for Mr. Katz and Mr. 
Barlow.
    Mr. Katz, your testimony indicates that FERC does not 
oppose S. 715 even though the legislation would violate the 
previously held position that FERC does not support extensions 
of time to develop hydroelectric projects for more than 10 
years after the date of the original license. Does this mean 
that there's been a shift in FERC's position on these matters, 
or do the particular circumstances in this case warrant some 
kind of a special consideration?
    Mr. Katz. Senator Shaheen, there has not been a shift in 
the Chairman's position from that he's previously taken or the 
other chairmen of the agency, as I understand it. The 
circumstances which I discussed take this essentially outside 
this policy and make it a different type of case as far as 
Commission staff is concerned.
    Senator Shaheen. Great. Similarly, this bill would 
substitute a new licensee for the previous licensee. Is that 
standard practice for FERC to support that outcome, or again, 
is this part of the unique circumstances in this case?
    Mr. Katz. It's a relatively unusual circumstance. Typically 
when there are reinstatement bills, the project is reinstated 
to the original licensee. But under the circumstances of this 
case, the Commission does not--or the Chairman has authorized 
me to say that he does not oppose this legislation.
    Senator Shaheen. OK. How did the timeline specified in the 
bill compare to the timelines that FERC would ordinarily follow 
for processing an application?
    Mr. Katz. The timelines are fairly consistent with what 
Commission staff thinks can be done. As I said in my testimony, 
I do add one caveat, which is that Commission staff will need 
to gather more information. It may need to look to the town--
forgive me for elevating you to a city--the Town of Canton for 
that information, and it's also conceivable that issues would 
arise involving the Fish and Wildlife, either Federal or state 
agency, that might take more time to resolve. But absent that 
sort of thing occurring, Commission staff feels that those 
timelines are reasonable.
    Senator Shaheen. Great. Has FERC received any notice from 
the prior licensee, Summit Hydro, regarding the current efforts 
to redevelop the hydropower at the location?
    Mr. Katz. I don't believe so. I think there were times 
earlier on, years ago, when Summit Hydro may have opposed that, 
but I checked the record before I came here and I don't think 
there's anything within the last few years in that regard.
    Senator Shaheen. Good. Would the Collinsville Project be 
eligible for small hydropower exemptions because the power 
generated at those sites will be less than 5 megawatts?
    Mr. Katz. I believe that's the case, but there are other 
qualifications that apply that I'm not certain of. But, yes, I 
believe they would qualify for that exemption.
    Senator Shaheen. OK. Perhaps, Mr. Barlow, you could answer 
that question.
    Mr. Barlow. If I could, Senator. I'd like to refer to an 
order granting re-hearing issued May 19, 2011. It was for a 
project in Troy, Vermont. The project number is 13381-002. In 
part, the license was reestablished after the hearing, but in 
the finding number 11 of the FERC hearing commissioners, they 
said ``Therefore, on a prospective basis, we conclude that 
projects where the power house is located no further than 500 
feet from the project dam.'' In this case, it was a dam in a 
pen stock, and the power house was not actually sitting on the 
dam.
    What they said is, ``Therefore, on a prospective basis, we 
conclude the projects where the power house is located no 
further than 500 feet from the project dam which derive a 
significant portion of head from the dam will qualify for a 5-
megawatt exemption.'' In the case of the Lower Collinsville 
Dam, we're 650 feet distance between the power house and the 
dam. So I would offer that based on this recent decision, that 
we probably would not qualify for an exemption.
    Mr. Katz. Senator, if I might just add----
    Senator Shaheen. Yes, go ahead.
    Mr. Katz. What the Commission has previously said is that 
where a project is small and non-controversial, there really is 
not much, if any, additional requirement or burden placed on an 
entity to get a regular license, as opposed to a 5-megawatt 
exemption license. So we would hope that we could work with the 
town if indeed the licenses are reinstated to make the process 
as painless and inexpensive as possible.
    Senator Shaheen. I'm sure the town will appreciate that.
    Mr. Barlow. We do.
    Senator Shaheen. It sounds like this is a project that will 
be very beneficial to the Town of Canton, and that you have 
been successful so far at least in working with FERC to move 
this application forward.
    Mr. Barlow. If I might add, in response to their comments 
about needing further information on environmental assessments, 
we have received a grant from the State of Connecticut 
Department of Environmental Protection for $100,000 to do a 
management study of the upper impoundment, which is the most 
significant one, and the results of that will be coming out 
within the fall. So that will provide information on both the 
aquatic community, the resources there, and the recreational 
issues that could be of help in their study.
    Senator Shaheen. Great. A final question. Has the town 
heard from the previous license holder, Summit?
    Mr. Barlow. There has been protracted discussions over a 
period of time, nothing recently. They initially wanted us to 
support them in a re-license and then purchase the rights from 
them. We have gone out to bid to have a preliminary feasibility 
study done. They had an opportunity to use the expertise they 
had developed over their application submission and to have put 
a proposal in for those consulting services. They chose not to 
do that. So we think that they have had an opportunity to 
participate, and they haven't.
    Senator Shaheen. OK. Thank you.
    Senator Lee, do you have other questions?
    Senator Lee. Nothing further. Thank you.
    Senator Shaheen. I have no other questions. If there's no 
further testimony, Mr. Payne, we appreciate your marathon 
responses on all of those pieces of legislation and thank all 
of the witnesses who are here this afternoon.
    The testimony and written submissions from today's 
witnesses will be part of the official hearing record, and 
we'll keep the record open for a period of 2 weeks to receive 
additional statements. So, Mr. Payne, you'll have lots of time 
to respond to those questions.
    For the information of the senators and their staffs, 
questions for the record are due by close of business tomorrow.
    So, with that, the hearing is adjourned.
    [Whereupon, at 3:32 p.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

    Responses of Grayford F. Payne to Questions From Senator Shaheen
                                 s. 997
    Question 1. Would Reclamation be supportive of a contract extension 
for longer than four years if the Court process ends up extending 
beyond 2013? If not, why not?
    Answer. Yes, Reclamation would be supportive of a contract 
extension for longer than four years if the Court process extends 
beyond 2013. Reclamation has committed to continue to negotiate the 
renewal of the 1958 contract with East Bench Irrigation District and 
supports a contract extension until the Court decree is issued. 
Legislation or the Montana Court decree are necessary in order to 
ensure that the contract remains valid.
                                s. 1033
    Question 1. What is the status of Reclamation's review of the Title 
XVI program funding backlog? Have you determined which authorized 
projects will not be going forward? Which projects have not yet met the 
feasibility requirements?
    Answer. The survey of sponsors of authorized Title XVI projects was 
developed during the fall of 2010 and conducted in the spring of 2011 
to avoid conflict with deadlines for submission of FY 2011 funding 
applications. Responses from most sponsors were received in April 2011. 
Reclamation continues to work with some project sponsors to clarify 
responses where necessary. However, at this point we believe that nine 
of the 53 authorized Title XVI projects have no plans requiring funding 
in FY 2011, FY 2012, or FY 2013 and can be said to be ``inactive'' at 
this time. These are:

   Central Valley Water Recycling Project, Utah;
   City of West Jordan Water Reuse Project, Utah;
   Kalaeloa Seawater Desalination Project, Hawaii;
   Lahaina Wastewater Reclamation Facility, Hawaii;
   Lakehaven Water Reclamation and Reuse Project, Washington;
   Las Vegas Area Shallow Aquifer Desalination Project, Nevada;
   San Joaquin Area Water Recycling and Reuse Project, 
        California;
   Truckee Watershed Reclamation Project, Nevada; and
   Willow Lake Natural Treatment System Project, Oregon.

    None of the projects listed above has yet met Title XVI feasibility 
study requirements, although the Las Vegas Area Shallow Aquifer 
Desalination Project is a demonstration project not subject to Title 
XVI feasibility study requirements. In addition, the sponsor of one 
other project, the Cucamonga Valley Water Recycling Project in 
California, has met Title XVI feasibility study requirements but we 
understand does not plan to move forward with its project as currently 
authorized and plans to seek authorization for a revised project 
instead.
    In addition to the projects listed above, three authorized projects 
expected to move forward in the next few years have not yet met Title 
XVI feasibility study requirements:

   City of Pasadena, California;
   Kealakehe Water Recycling Project, Hawaii; and
   Phoenix Metropolitan Water Reuse Project, Arizona.

    One other authorized Title XVI project, the Southern California 
Desert Region Integrated Water and Economic Sustainability Plan, has 
met Title XVI feasibility study requirements for a portion of the 
project but will likely include additional feasibility studies in the 
future.
                                s. 1047
    Question 1. Does Reclamation support moving forward with this bill 
as introduced or are there specific changes Reclamation is 
recommending?
    Answer. Reclamation and the Department support the revisions made 
to the bill and affirmed this in written testimony, citing the 
sponsor's adoption of language to address previous concerns related to 
reimbursement and liability. We understand the objective of this 
language is to affirm existing discretionary authority to improve the 
Reclamation-owned treatment plant at Leadville, as well as broaden 
authority to enter reimbursement agreements with other entities for 
further improvements to the tunnel or treatment plant upon mutual 
agreement on funding responsibility.
                                s. 1224
    Question 1. Although Section 9107 of the 2009 Omnibus Public Lands 
Management Act extended the deadlines for several sections of the 
legislation authorizing the Bureau of Reclamation to fund programs to 
implement the Upper Colorado and San Juan Endangered Fish Recovery 
Programs, that legislation did not extend the authority to utilize 
power revenues for ``base funding'' activities. Does Reclamation have 
sufficient authorization to continue those activities after 2011 or is 
additional authorization beyond 2011 necessary?
    Answer. Reclamation believes there is sufficient legal authority to 
use appropriated dollars for base funding activities of the Programs. 
Enactment of S. 1224 would provide a more explicit statutory authority 
in this area but does not include an annual indexed ceiling as is 
currently the case with P.L. 106-392.
                                s. 1225
    Question 1. Your testimony indicates the bill may result in a 
financial loss to the Treasury. Please describe the basis for that 
opinion. Does Reclamation foresee a way to structure an agreement with 
the District so that the Treasury remains whole?
    Answer. Yes. Section 5 of the bill terminates repayment revenues 
being collected by Reclamation for repayment of the Fort Sumner 
Reclamation Project, and Section 6(a) terminates a portion of the 
funding being paid by Reclamation to the Fort Sumner Irrigation 
District (FSID) for the purchase of water for endangered species 
habitat. The bill does not terminate the Forbearance Agreement nor the 
obligation of the United States therein to continue to purchase water 
for mitigation of the environmental impacts of FSID's diversions 
through 2019. Since the repayment stream for the Fort Sumner project is 
greater than the funding from Reclamation to the FSID for water, 
Reclamation identified a potential financial loss to the Treasury under 
Sections 5 and 6 of the bill. Through negotiations underway with the 
FSID, Reclamation is working to formalize a Memorandum of Agreement in 
order to determine responsibility for mitigation of FSID's diversions, 
and thereby prevent any financial loss to the Treasury under the bill. 
Recognition of a resolution of this could be included in an explicit 
amendment to the bill.
    Question 2. How does the potential need to acquire water to meet 
Endangered Species Act requirements impact the repayment obligations 
associated with the Fort Sumner Project?
    Answer. The need to acquire water to meet the Endangered Species 
Act (ESA) does not have any direct relationship with the repayment 
obligations associated with the Fort Sumner Project. It is only through 
the title transfer legislation that these processes have become linked.
      Responses of Grayford F. Payne to Questions From Senator Lee
                                 s. 500
    Question 1. Has there been a title transfer of a reclamation 
facility done administratively?
    Answer. No. Pursuant to the Reclamation Act of 1902, the Bureau of 
Reclamation has no general authority which would permit the transfer of 
title to Reclamation facilities through an administrative procedure. As 
a result, unless specifically authorized, no title transfers can be 
completed without a specific Act of Congress. However, in order to 
complete the title transfers in a timely and efficient manner, 
Reclamation has developed an administrative process to negotiate the 
terms and conditions of each title transfer at the local level, taking 
into consideration the local concerns and issues that are relevant. 
Once Reclamation and the transferee reach an agreement under the 
administrative process, both parties work with Congress to enact the 
necessary legislation to effectuate the agreement. The purpose of this 
process, which was originally developed in 1995, and then updated in 
2006 as part of Reclamation's Managing for Excellence effort, is to 
efficiently and collaboratively facilitate title transfers in a 
consistent and comprehensive way. This process, as articulated in the 
Framework for the Transfer of Title, is structured such that interested 
non-Federal entities may work with and through Reclamation to identify 
and address all of the issues that will enable the title transfer to 
move forward in an open and transparent manner. One of the important 
ways to ensure that all of the issues and local concerns are addressed 
is through completion of the process required under the National 
Environmental Policy Act (NEPA). This ensures that the public has an 
opportunity to have their views heard and addressed, which can limit 
unanticipated obstacles when the legislative process begins.
    Question 2. Please describe the number of transfers that have 
occurred, both administratively, and directed congressionally. In 
addition, please identify the transferred projects that included 
language that the Secretary shall convey the project to the interested 
parties.
    Answer. Bureau of Reclamation has transferred title to 27 projects 
or parts of projects across the west pursuant to various Acts of 
Congress. Of those 27 projects, 15 included language that required the 
Secretary to convey the project pursuant to the conditions of the 
legislation. It is important to note, however, that in many of those 
transfers which were completed between about 1997 and 2004, which 
included the language ``shall convey'' in the legislation, the public 
processes required under NEPA were completed and the terms and 
conditions were publicly negotiated prior to the legislation being 
enacted. Consequently, the underlying concern that was raised in my 
testimony on S. 500--that the public be given the opportunity to raise 
and have concerns addressed prior to enactment--was addressed in those 
situations. As an aside, this concern was raised in testimony by the 
Department of the Interior for those bills at that time and the issues 
were addressed successfully.
    Question 3. Does the Bureau of Reclamation anticipate any change of 
use in the transferred facilities described in the bill?
    Answer. No, as far as we understand, Reclamation does not 
anticipate any change of use in the transferred facilities described in 
this bill. Because the District has been operating and maintaining the 
Distribution System for several years, the public will witness a change 
in ownership but should not experience any change in operation. The Act 
will eliminate uncertainty about ownership and obligations associated 
with the Distribution System--which will likely lead to more efficient 
and effective operation of the Distribution System.
                                 s. 802
    Question 1. Would implementing this bill cost any money? Would the 
bill result in any additional water supply?
    Answer. Enactment of S. 802 would not result in any cost to the 
Federal government. All costs associated with importation of non-
project water into Lake Thunderbird would be borne by the Central 
Oklahoma Master Conservancy District and its member cities.
    Implementation of S. 802 would allow the Central Oklahoma Master 
Conservancy District to store non-project water in Lake Thunderbird as 
a means to fulfill its existing contractual M&I water deliveries to 
project beneficiaries during periods of severe drought. The existing 
water supply contract quantities were based on Reclamation's May 1961 
Definite Plan Report (DPR) which assumed integration of groundwater 
production with the operation of the Norman Project. Conditions have 
changed, including lower Environmental Protection Agency (EPA) 
standards for acceptable Arsenic levels, and supplemental groundwater 
supplies which were expected to be available during periods of severe 
drought appearing to no longer be adequate. Implementation of this 
legislation could provide a means for the District to continue to 
fulfill its contractual water deliveries through severe drought 
periods.
                                 s. 997
    Question 1. Is there a legislative precedent for extending this 
contract? If so, how many times has it been extended legislatively?
    Answer. Yes, this contract was extended through two prior 
appropriations bills: Public Law 108-447 in the 108th Congress and 
Public Law 110-161 in the 110th Congress.
    Question 2. Would a delay in extending the contract cause any short 
or long-term problems? If so, please describe them.
    Answer. Yes, a delay in extending the contract could result in the 
contract expiring and the East Bench Irrigation District losing the 
legal right to renew granted to them in the 1958 Contract.
                                s. 1033
    Question 1. Beyond the certification of the feasibility study, 
where in the process is the city and the BOR for determining Federal 
environmental compliance actions, water contracts, determination of the 
project sponsor's financial capability and so on?
    Answer. Reclamation has completed the Federal environmental 
compliance actions required under NEPA and Endangered Species Act, 
which were necessary prior to a Reclamation Title XVI action (i.e., 
discharge of City of Hermiston's reclaimed water into the West 
Extension Main Canal). Reclamation's Columbia-Cascades Area Office and 
Umatilla Field Office staff are continuing to work through 
implementation issues associated with:

          a. construction, operations, and maintenance of the City's 
        pipeline and associated facilities which will be located on 
        Reclamation owned fee title land, (a Reclamation license has 
        been agreed to and is currently being signed by all parties); 
        and
          b. the City's discharge of reclaimed water into Reclamation's 
        West Extension Main Canal (a Reclamation permit to discharge 
        recycled water into the canal is currently in draft and being 
        discussed among the parties).

    Reclamation staff continues to work with the City to finalize the 
permit to discharge reclaimed water into the West Extension Main Canal. 
According to a letter from the Oregon Department of Environmental 
Quality to the City dated June 29, 2011, the issue of the City 
discharging Class A water into the canal was resolved, which appears to 
clear up the remaining issue with the permit language.
    Reclamation made a favorable determination on the City's financial 
capability to meet the non-Federal portion of the project on August 17, 
2011. All necessary financial information has been provided by the City 
and is being reviewed by Reclamation.
    Question 2. What is the status of the survey of authorized Title 
XVI projects that the BOR requested from project sponsors last fall?
    Answer. The survey of sponsors of authorized Title XVI projects was 
conducted in the spring of 2011, after deadlines for submission of FY 
2011 funding applications. Responses from most sponsors were received 
in April 2011. Reclamation continues to work with some project sponsors 
to clarify responses where necessary. However, at this point we believe 
that enough information has been gathered to determine the general 
status of each of the 53 authorized Title XVI projects as explained 
above.
    Question 3. Did you survey all Title XVI projects, or just those 
that have not received funding?
    Answer. Reclamation gathered information about all 53 authorized 
Title XVI projects. A small number of projects for which Reclamation 
already had current information were excluded from the survey.
    Question 4. What were the results of the survey?
    Answer. As a result of survey responses, at this point we believe 
that nine of the 53 authorized Title XVI projects have no plans 
requiring funding in FY 2011, FY 2012, or FY 2013 and can be said to be 
``inactive'' at this time. In addition, the sponsor of one other 
project, the Cucamonga Valley Water Recycling Project in California, 
does not plan to move forward with its project as currently authorized 
and plans to seek authorization for a revised project instead. Twenty-
five authorized Title XVI projects are either currently under 
construction or are expected to seek additional funding in FY 2012 or 
FY 2013. Finally, 18 authorized projects have now received their full 
amount of Federal funding.
    Question 5. Specifically, how many projects are no longer feasible 
or are no longer seeking funding?
    Answer. As set forth above, nine of the 53 authorized Title XVI 
projects have no plans requiring funding in FY 2011, FY 2012, or FY 
2013 and can be said to be ``inactive'' at this time and one other does 
not plan to move forward with its project as currently authorized and 
plans to seek authorization for a revised project instead.
    Question 6. How many remain ``active'' (and how do you define 
active)?
    Answer. Twenty-five authorized Title XVI projects are either 
currently under construction or are expected to seek additional funding 
in FY 2012 or FY 2013. Those projects could be said to be ``active'' on 
that basis.
    Question 7. How many would you consider to be ``inactive'' or 
perhaps no longer viable?
    Answer. See Response to Question No. 5, above.
    Question 8. What will be the agency's strategy if it does not get 
the lump sum funding for Title XVI project funding, as depicted in the 
FY2012 Budget?
    Answer. In FY 2012, Reclamation is requesting $23.4 million in 
funding to be awarded via a competitive funding opportunity, and $5.4 
million in funding for six specific Title XVI projects identified for 
funding previously. Reclamation's process to identify projects for FY 
2012 funding will be similar to the process used in FY 2011, including 
the use of criteria developed in 2010, and awards will be subject to FY 
2012 Congressional appropriations. If competitive funding is not 
included in final appropriations, Reclamation will move forward with 
modifications to financial assistance agreements to allocate any 
funding provided for the six projects listed in the budget request.
    Question 9. How long might project sponsors expect to wait for 
project funding under the proposed new system?
    Answer. The obligation and expenditure of any appropriations to 
Title XVI project sponsors--whether identified through a funding 
opportunity or included specifically as part of appropriations--
requires a valid financial assistance agreement between Reclamation and 
the project sponsor, as well as the submittal of reimbursement forms by 
the project sponsors, before funding can be released. In FY 2011, 
projects identified for award through Reclamation's funding opportunity 
were selected in May, once appropriations were available. Reclamation 
expects to obligate funding for each identified project by the end of 
FY 2011--or about four months after the selection of each project.
    Question 10. What has been the experience in using the funding 
criteria thus far?
    Answer. Projects identified for the award of FY 2011 appropriations 
through Reclamation's funding opportunity were announced by Reclamation 
on May 23, 2011, once appropriations were made available. Eight 
projects were selected for construction and will together leverage 
$11.3 million in Federal funds to complete a total of $99 million in 
construction activities. The use of a funding opportunity afforded 
project sponsors a chance to communicate to Reclamation the expected 
benefits of each project--how each project can be expected to 
contribute to water supply sustainability, benefits to the environment 
and water quality, and any contributions to increased energy efficiency 
in the delivery of water, among others. We believe the process has been 
successful at allowing Reclamation to prioritize the projects that most 
closely match program goals for funding through a process that is 
transparent to all potential applicants and the public.
    Question 11. Reclamation has stated that its ``efficiency'' 
performance measure goal for the Title XVI program is to reduce the 
average annual Federal cost per acre-foot for Title XVI water from 
approximately $1,873 a/f (FY2012 cost) to $1,200 per acre foot (by 
2016). Given construction inflation costs and other limitations, is an 
increase of this magnitude a realistic goal? What are the assumptions 
underpinning this estimate and how does Reclamation plan to achieve it?
    Answer. Reclamation calculates the referenced performance measure 
goal by estimating the amount of water expected to be delivered by all 
Title XVI projects in a given year and also estimating the cumulative 
amount of Federal funding expected to be provided to all projects by 
that point in time (i.e., program funding since 1992). Many projects 
have received significant Federal funding but are under construction 
and do not yet contribute water deliveries toward the goal. As those 
additional Title XVI projects are completed, the total annual acre-feet 
of reclaimed water through the program is projected to increase--from 
313,152 acre-feet of deliveries in 2012 to 529,429 acre-feet of 
deliveries in 2016. In other words, the average total Federal cost per 
acre-foot today includes a significant amount of funding that will not 
result in water deliveries for several years. We anticipate that once 
those deliveries are included in the calculation, the average cost per 
acre-foot of reclaimed water will be lower than the current figure.
                                s. 1047
    Question 1. Please describe the work that the BOR has conducted, as 
it relates to the safety of the Leadville tunnel. Do you believe it is 
the obligation of the Bureau of Reclamation to be the lead Federal 
agency?
    Answer. Beginning in 2007, Reclamation began a Risk Assessment of 
the Leadville Mine Drainage Tunnel (LMDT) in response to concerns in 
the community about perceived dangers posed by water blockages inside 
the tunnel. The assessment's purpose was to evaluate the stability and 
assess the risk associated with the LMDT. When initial findings were 
available, they were independently peer reviewed. The Risk Assessment 
utilized a similar process to the one Reclamation uses to assess risk 
at its dams, a model that is an international standard for conducting 
risk assessments. The independent peer review confirmed Reclamation's 
analysis that it is highly unlikely that a sudden release of water 
could occur from either a blockage in the LMDT, or through the 
bulkheads installed in the tunnel. Moreover, the assessment concluded 
that even if an existing natural blockage in the upper part of the LMDT 
failed rapidly, a sudden release of water through the lower blockage 
and bulkheads is unlikely. When the Risk Assessment was published in 
the early Fall of 2008, it was posted on the Internet and distributed 
to the media. Reclamation conducted three public meetings and sought 
public comment on the findings. We remain confident in the value of the 
Risk Assessment and the validity of its findings. As the owner of the 
LMDT, Reclamation is the lead Federal agency for the specific facility.
    Question 2. If additional work is needed, do you believe the BOR 
should be the lead agency, as it relates to any public safety and 
environmental issues that may arise?
    Answer. Insofar as the LMDT and the water treatment plant are 
Reclamation facilities, the Department agrees that Reclamation is the 
lead Federal agency for any public safety or environmental issues that 
may arise that are unique to those facilities.
    Question 3. If not, who should be the lead Federal agency, as it 
relates to the operations of the tunnel, and any costs associated with 
additional mitigation, if necessary.
    Answer. As stated above, insofar as the LMDT and the water 
treatment plant are Reclamation facilities, the Department agrees that 
Reclamation is the lead Federal agency for any public safety or 
environmental issues that may arise that are unique to those 
facilities. If additional improvements to the LMDT or expansion of the 
treatment plant are recommended by other beneficiaries or by agencies 
involved at Leadville, Reclamation supports the language in S. 1047 
providing the Secretary with the authority to enter into negotiations 
with those entities for voluntary cost sharing agreements for those 
improvements.
    Question 4. Please describe the role that the BOR has played at 
other superfund sites, in addressing water related issues. Is this a 
core mission of the BOR?
    Answer. Reclamation is not active at other superfund sites, and 
remediation of environmental contamination is not a core mission of 
Reclamation as defined by the Reclamation Act of 1902 and subsequent 
authorities.
    Question 5. Does Reclamation have any intention of walking away 
from the project?
    Answer. No. Reclamation maintains title to the LMDT and treatment 
plant, and requests annual appropriations for operation of the plant. 
As provided in Public Law 102-575, Reclamation is responsible for the 
operation and maintenance of the treatment plant, and is also committed 
to ensuring that waters discharged from the treatment plant do not 
violate Federal and state law.
    Question 6. Is the Leadville Treatment plant going to be part of 
your budget in the foreseeable future? If yes, to what extent?
    Answer. Yes. As stated above, pursuant to Public Law 102-575 
Reclamation is responsible for the operation and maintenance of the 
treatment plant, and is also committed to ensuring that waters 
discharged from the treatment plant do not violate Federal and state 
laws and regulation. The FY 2012 request for operation and maintenance 
at the LMDT was $4,652,000.
                                s. 1224
    Question 1. Please describe the potential effect on overall Federal 
budgetary resources if this bill is authorized.
    Answer. S. 1224 authorizes the Program to use appropriated dollars 
and allows the current express authority for the use of Colorado River 
Storage Project hydropower revenues under Section 3(d) of Public Law 
106-392 to expire. This could increase pressure on Reclamation's 
existing budget. The use of appropriated dollars is within existing 
authorities. If S. 1224 were to be enacted, funding for these programs 
would have to compete with other Reclamation priorities and programs.
    Question 2. If the program is not extended, or if extended, not 
fully funded by the Bureau of Reclamation, what would be the likely 
impact on water users within the basin?
    Answer. As stated in testimony, Program actions provide Endangered 
Species Act compliance for more than 2,100 Federal, tribal, and non-
Federal water projects depleting more than 3.7 million acre-feet of 
water per year in the Colorado and San Juan rivers and their 
tributaries. Without the Program's activities, reinitiation of ESA 
Section 7 consultations may be required by Federal agencies, resulting 
in an assortment of potential new recommendations for water users 
obliged to comply with reasonable and prudent alternatives in existing 
and potentially updated biological opinions. Given Reclamation's 
extensive water supply, conservation, and mitigation activities, this 
program would have to compete with other Reclamation priorities for 
funding in this environment.
    Question 3. Does the Administration support recovery through 
reliance on hydro reoperations that impact the generation of clean, 
renewable hydropower?
    Answer. Yes. The Administration supports the continued use of power 
revenues to support the Recovery Programs. Under the Upper Colorado and 
San Juan Recovery Programs Reclamation works with the FWS, WAPA and 
power consumers to minimize impacts to hydropower generation while 
achieving flow regimes which are compatible with endangered species 
recovery. Flow regimes are one component of a comprehensive overall 
strategy to achieve recovery.
    Question 4. What is the current timetable and outlook for recovery 
of these species in the Upper Colorado and San Juan Basins?
    Answer. The table that follows outlines the downlisting and 
recovery of species in the Upper Colorado and San Juan Basins. These 
estimates are based on the best scientific information available and we 
believe the goals are achievable.

------------------------------------------------------------------------
                        Species                         Downlist  Delist
------------------------------------------------------------------------
Colorado Pike Minnow                                     2013     2020
Humpback Chub                                            2016     2019
Razorback Sucker                                         2020     2023
Bonytail Chub                                            2020     2023
------------------------------------------------------------------------

    Question 5. How will you know when recovery has taken place?
    Answer. The Recovery Goals for the species specify the population 
demographic criteria that must be met along with the threats to the 
species and their habitat that must be addressed. The Programs are 
conducting monitoring activities to determine when these criteria are 
met.
    Question 6. Since the program began, have your goals changed on 
what you would determine recovery to be?
    Answer. For the most part the demographic criteria and species 
threats specified in the Recovery Goals have remained essentially 
constant although they are reviewed and updated on a periodic basis.
    Question 7. Does the Administration have this funding request 
included in its current budget request? (If not, what would be the 
implications to the Program beginning in October 1, 2011?)
    Answer. Reclamation does not have funding included in the 
appropriations budget request but does have the funding included as 
part of the Revenues budget submission in FY2012 and beyond as a 
placeholder in the event that continued funding occurs through power 
revenues. If these Programs are not funded there is a potential for re-
opening existing Biological Opinions and loss of Satisfactory 
Sufficient Progress Determinations by FWS.
     Responses of Grayford F. Payne to Questions From Senator Wyden
                                s. 1033
    Question 1. Mr. Payne, your written testimony today is that the 
Bureau recognizes the importance of water re-use projects like the 
Hermiston project. Your testimony also states that the Bureau agrees 
that the Hermiston project meets all of the requirements of Title XVI. 
However, you stated today that the Bureau does not support S. 1033 
because there are already 53 authorized projects and you don't want any 
additional projects competing for funding with those already authorized 
projects. You seem to take this position regardless of whether the 
additional projects are more meritorious or even if the existing 
projects are feasible. It is my understanding that a number of the 53 
authorized projects have not, in fact, completed the feasibility review 
and determination that the Hermiston project has completed. Is that 
correct? If so, please provide a list of all of the previously 
authorized projects that have not yet completed a feasibility study and 
been determined to qualify for Title XVI. For each of those projects, 
also provide the total estimated cost of the project and the share that 
would funded by the Bureau under Title XVI.
    Answer. It is correct that a number of authorized Title XVI 
projects have not yet met Title XVI feasibility study requirements. 
Because total estimated cost is not available for many projects that 
have not yet completed feasibility studies, the share subject to 
Federal funding through the Title XVI program can be recorded as the 
maximum authorized cost share under P.L. 102-575. The following is a 
summary of projects that have not yet met Title XVI feasibility study 
requirements:

   Central Valley Water Recycling Project, Utah ($20 million 
        Federal cost share);
   City of West Jordan Water Reuse Project, Utah ($20 million 
        Federal cost share);
   Kalaeloa Seawater Desalination Project, Hawaii ($20 million 
        Federal cost share);
   Lahaina Wastewater Reclamation Facility, Hawaii ($20 million 
        Federal cost share);
   Lakehaven Water Reclamation and Reuse Project, Washington 
        ($20 million Federal cost share);
   Las Vegas Area Shallow Aquifer Desalination Project, Nevada 
        ($20 million Federal cost share);
   San Joaquin Area Water Recycling and Reuse Project, 
        California ($20 million Federal cost share);
   Truckee Watershed Reclamation Project, Nevada ($20 million 
        Federal cost share);
   Willow Lake Natural Treatment System Project, Oregon ($20 
        million Federal cost share);
   City of Pasadena, California ($50 million estimated project 
        cost; $12.5 million Federal cost share);
   Kealakehe Water Recycling Project, Hawaii ($18 million 
        estimated project cost; $4.5 million anticipated Federal cost 
        share); and
   Phoenix Metropolitan Water Reuse Project, Arizona ($20 
        million Federal cost share).

    One other authorized project, the Southern California Desert Region 
Integrated Water and Economic Sustainability Plan, has met Title XVI 
feasibility study requirements that cover a portion of the project but 
will likely include additional feasibility studies in the future. That 
project has an estimated cost of $95 million, including a $20 million 
Federal cost share.
    Question 2. I understand that resources are scarce, but from a 
management perspective what would be wrong with the Bureau prioritizing 
the Title XVI projects based on their merits? Why should a project 
that's already been shown to be feasible be excluded because others 
simply got to front the line before they did?
    Answer. The Title IVI program is part of the Department's efforts 
through WaterSMART to secure and stretch water supplies for use by 
existing and future generations. Reclamation has, in fact, recently 
established a process to prioritize authorized Title IVI projects for 
funding. In 2010, Reclamation developed funding criteria to identify 
projects that most effectively stretch water supplies and contribute to 
water supply sustainability; address water quality concerns or benefit 
endangered species; incorporate the use of renewable energy or address 
energy efficiency; deliver water at a reasonable cost relative to other 
water supply options; and that meet other important program goals. In 
FY 2011, Reclamation incorporated those criteria into a funding 
opportunity announcement and invited eligible project sponsors to apply 
for funding. Proposals were then evaluated against those criteria to 
identify project phases for funding. Eligibility was limited to 
authorized projects that had either completed an approved feasibility 
study or submitted a feasibility study for review by the application 
deadline. Reclamation will not provide construction funding for any 
Title XVI project unless a feasibility study has been approved for that 
project. Reclamation plans to allocate Title XVI Commissioner's Office 
funding through a similar process in FY 2012.
     Responses of Grayford F. Payne to Questions From Senator Udall
                                s. 1047
    Question 1. In your testimony on S.1047, the Leadville Mine 
Drainage Tunnel Act of 2011, you stated that ``the Department 
interprets section 3 to affirm existing discretionary authority to 
improve or expand the treatment plant as well as to allow the Secretary 
to enter into reimbursement agreements with other entities with respect 
to the treatment plant.'' Please expand upon what authority the 
Department believes it has with respect to performing alterations to 
the treatment plant, including expansion of the treatment plant. Also, 
please expand upon what authority the Department believes the Secretary 
has to enter into reimbursement agreements for services at the 
treatment plant and performing alterations to the treatment plant.
    Answer. The Department relies primarily on the language found in 
Title VII of Public Law 102-575 as authority for its activities at 
Leadville. Those authorities relate to design, construction, operations 
and maintenance of the treatment plant and the rehabilitated portion of 
the LMDT, up to the engineered bulkhead installed at Station 4 +66 (466 
feet up tunnel from the portal).
    Section 705 directs that the treatment plant ``shall be designed 
and constructed to treat the quantity and quality of effluent 
historically discharged from the Leadville Mine Drainage Tunnel.'' 
However, we do not interpret that language to explicitly preclude the 
plant from treating surface waters diverted into the LMDT by U.S. EPA, 
as is done via the Marian Shaft using an existing reimbursement 
agreement with U.S. EPA.
    Finally, with respect to cost sharing authorities, the Economy Act 
(31 USC 1535) and existing Public Law 102-575 Section 708(c) provide 
authority to the Secretary for reimbursement or cost-sharing 
agreements. However, the existing statutory language in P.L. 102-575 is 
not as broad as the two new authorities found in Sections 3 and 4 of S. 
1047. The Department interprets Section 3 of S. 1047 as authorizing 
cost-sharing agreements for an increase in any operation, maintenance, 
replacement, capital improvement, or cost that is necessary as a result 
of the expansion of the existing treatment plant due to an agreement 
``with any other entity or government agency''. These other entities 
could be the state of Colorado, a municipal subdivision or county, or 
other entity. Separately, the Department interprets Section 4 of S. 
1047 as authorizing cost sharing agreements with U.S. EPA or other 
entity or government agency, that are conditioned upon the EPA's 
issuing a new or amended Record of Decision for Operable Unit 6 of the 
California Gulch Superfund site for the improvement or expansion that 
would be undertaken with the funding. Because of its use of the term 
``agreement,'' and by conditioning the transmittal of any funding on 
specific recommendations from the funding entity, the Department 
interprets S. 1047's language as preserving the discretion of any and 
all participating entities.
                                 ______
                                 
        Responses of John Katz to Questions From Senator Shaheen
                               on S. 715
    Your testimony indicates that FERC does not oppose S. 715 even 
though the legislation would violate the previously held position that 
FERC does not support extensions oftime to develop hydropower projects 
for more than 10 years after the date of the original license.
    Question 1a. Has there been a shift in FERC's position on these 
matters, or do the particular circumstances in this case warrant some 
kind of special consideration?
    Answer. I do not believe that there has been any shift in Chairman 
Wellinghotl's position regarding extension bills. As I testified, the 
factors that have caused concern to Chairman Wellinghoff and previous 
chairmen have been whether an extension involves site banking, whether 
there is a negative impact on competition in hydropower development, 
and whether the environmental record for the project in question is 
stale. These concerns do not arise with respect to the Collinsville 
projects because (1) the project is not being held by the prior 
licensee, but rather is being transferred to another entity which has 
not previously had the chance to develop the project, (2) in the time 
since the project license was terminated, the Commission is not aware 
of other entities beside the Town of Canton seeking to develop the 
project site, and (3) the bill requires the Commission to complete an 
environmental assessment updating the environmental record to the 
extent necessary.
    Question 1b. Similarly, this bill would substitute a new licensee 
for the previous licensee. Is it a standard practice for FERC to 
support that outcome?
    Answer. To my knowledge, because a legislative substitution of one 
licensee for another is so rare, the Commission does not have a 
standard practice with respect to taking a position on such 
legislation. I am only aware of one previous instance, Section 315 of 
P.L. 107-137, involving the Stuyvesant Falls Project No. 2696, in which 
Congress required such an outcome. I do not believe that then-Chairman 
Wood expressed support for that legislation.
    Question 1c. How do the deadlines specified in this bill compare to 
the timeframes that FERC would ordinarily follow for processing an 
application? Would moving forward with this bill save the Town any 
time?
    Answer. S. 715 would require the Commission to reinstate and 
transfer the licenses for the Collinsville Project within 270 days of 
the date of enactment. The timeframes that the Commission requires to 
process a filed application vary widely, depending on the complexity of 
the case, whether it is contested, and how much time federal and state 
resource agencies take to issue any necessary conditions and approvals. 
The 270-day deadline established in the bill is consistent with the 
time frames for a case that is not complex, not contested, and does not 
involve significant time for agency action. Moving forward with the 
bill might save the town time compared with filing a new application, 
again dependent on the factors I have mentioned, particularly the 
amount of time it would take resources agencies to act with regard to a 
new application.
    Question 2. What notice has FERC received from the prior licensee, 
Summit Hydro, LLC, regarding the current efforts to redevelop 
hydropower at this location?
    Answer. To the best of my knowledge, Summit Hydro, LLC has not made 
any filing with the Commission in the last several years regarding the 
current efforts by the Town of Canton to redevelop the Collinsville 
Projects.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

   Statement of Ed Brookshier, City Manager, City of Hermiston, OR, 
                               on S. 1033
    Madam Chairman Shaheen and Members of the Subcommittee, thank you 
for holding this hearing and allowing me to testify in support of 
S.1033 that will authorize the Bureau of Reclamation to participate in 
the construction of the City of Hermiston Water Recycling Project. My 
name is Ed Brookshier and I am the City Manager for the City of 
Hermiston, Oregon. I wish to publicly thank Senator Ron Wyden for 
introducing this important piece of legislation that is crucial to the 
City's reclamation and reuse of its municipal wastewater. This 
reclamation effort will provide high quality recycled water for reuse 
as a source of irrigation supply. The City's recycled water production 
is estimated to be 3,600 acre-feet annually, of which 1,800 Acre-feet 
will supply irrigation and 1,800 acre-feet will be discharged to the 
Umatilla River in winter. This new partial source of drought proof 
irrigation water will provide an added supply to the Bureau of 
Reclamation owned and locally operated West Extension Irrigation 
District (WEID).
    The City is in the process of negotiating an easement license with 
the Bureau of Reclamation for the recycled water pipeline that will 
deliver the recycled water to the WEID Main Canal. This license allows 
the City to construct and operate the recycled water pipeline for a 
period of 25 years with the ability to extend the license based on 
mutual agreement of the Bureau of Reclamation and the City. The City is 
also in the process of negotiating the permit to discharge the recycled 
water to the irrigation canal. This permit will establish the water 
quality criteria and operating conditions for the recycled water 
discharge to the irrigation canal. The Bureau of Reclamation and the 
City are meeting to finalize this agreement in June 2011 and it is 
anticipated that the final permit will be signed in August 2011. A 
comprehensive feasibility study has been completed on the project and 
the Bureau of Reclamation has certified that it meets the requirements 
to be eligible for the Bureau's Title XVI Water Recycling Program.
    Hermiston, Oregon is a progressive, growth-oriented urban center 
with a total trade area population of 320,900. Located in a relatively 
dry section of the state of Oregon, positioned between the Cascade 
Mountains to the west and the Blue Mountains to the East, Hermiston is 
placed in a unique geographical area that offers an extended growing 
season and a variety of agricultural crops and products. The immediate 
Hermiston area has been able to diversify its economy with food 
processing, cold storage and warehousing and distribution facilities.
    The benefits of developing a high quality source of recycled water 
followed by its use as a source of irrigation are numerous and extend 
to: The West Extension Irrigation District, the City of Hermiston, The 
Confederated Tribes of the Umatilla Indian Reservation and the region 
as a whole.
    The West Extension Irrigation District benefits from this project 
by obtaining an additional source of supply, which is both high in 
quality and drought proof. Since water is delivered to the District, 
energy required for pumping is also reduced by approximately $13,000 
annually. In addition, the 1,800 acre-feet of irrigation water provided 
annually will supply water to 600 acres, reducing the demand on the 
District's surface water supply sources. Finally, this added source of 
partial irrigation water improves the District's operational 
flexibility.
    The City of Hermiston benefits primarily through meeting its 
upcoming National Pollutant Discharge Elimination System Permit 
(NPDES), which is currently being negotiated with the Oregon Department 
of Environmental Quality (ODEQ). The City has received support for this 
project at the highest levels of ODEQ and has been promised that the 
resources will be made available to complete the permitting process by 
early 2012. This permit requires the City to both develop high-quality 
recycled water and remove its discharge from the Umatilla River 
continuously from April 1 to October 31 of each year. The West 
Extension Irrigation District provides the long term, multi-farm 
discharge option that allows the City to remove its discharge from the 
River during this period of each year. If the City is unable to 
discharge to the District it will be in continuous violation of current 
temperature standards and periodic violation of the ammonia standard 
contained within the City's NPDES Permit. Secondary benefits to the 
City include a reduction in energy cost from reduced pumping, estimated 
to be $42,000 annually, and the certainty that this solution, though 
expensive, will provide service for decades to come.
    The Confederated Tribes of the Umatilla Indian Reservation will 
also benefit from development of high-quality recycled water throughout 
the year. These benefits include a significant improvement in the 
quality of recycled water discharged to the Umatilla River in winter, 
further protection of sensitive salmonid habitat during summer when the 
recycled water is used for irrigation in lieu of River discharge, 
increased environmental monitoring at the recycled water treatment 
facility and the long-term nature of this solution.
    The region as a whole also benefits from treatment that develops 
high-quality recycled water. This water source is protective of the 
environment in both summer and winter and provides an added source of 
irrigation supply to agriculture, which is the backbone of the 
Hermiston economy. The City is planning on beginning construction of 
the Recycled Water Plant in early 2012 to take advantage of a very 
competitive construction-bidding environment. This effort will have an 
immediate economic impact to our local economy as much needed jobs will 
be created through an infrastructure project of this size. More 
importantly, the addition of the new and reliable water source created 
by this project will have a profound long-term impact to the farming 
industry in our area, which faces an uncertain future due to dwindling 
water supplies.
    Madam Chairman, while I understand and appreciate the strict 
budgetary limitations that your Committee and Congress as a whole are 
faced with, I believe that the Hermiston Recycled Water facility is a 
worthwhile federal investment due to the numerous federal objectives 
that will be advanced through this project. Combined with the serious 
regulatory issues the City of Hermiston is faced with and the need for 
added drought proof sources of recycled water in the Hermiston Area for 
irrigation, it is essential that we complete construction of this 
project in a timely manner. The City has secured the necessary local 
matching funds for this project and is prepared to contribute 75 
percent of the total project cost. Federal participation in this 
endeavor is vital to ensure that this becomes a reality.
                                 ______
                                 
    Statement of Richard D. Moore, Mayor of Payson City, Payson, UT
 on s. 500, s. 715, s. 802, s. 997, s. 1033, s. 1047, s. 1224, s. 1225
    I appreciate the opportunity to submit this statement for the 
record in support of S. 500, the South Utah Valley Electric Conveyance 
Act. My name is Richard Moore and it is my privilege to serve as Mayor 
to the best little town in Utah, Payson City. Payson was incorporated 
as a city on January 21, 1853 and has a present day population of 
around 18,500 residents. Payson is one of the fastest growing 
communities in Utah.
    I want to also thank Senator Orrin Hatch and Senator Mike Lee for 
introducing this important legislation. S. 500 would direct the 
Secretary of the Interior to convey and transfer title to those 
portions of the electrical distribution system that are owned by the 
United States, including the land on which those facilities are 
located. It will also provide license and use of shared power poles and 
access to lands where distribution facilities are located. SESD's 
electrical distribution system overlaps land and system fixtures that 
are still owned by the United States. Consolidation of ownership and 
service will create an opportunity for savings that will eventually 
lower rates to all our customers and make the maintenance and expansion 
of the system more efficient.
    Payson has historically been a farming community. Principal crops 
have been grass hay, which the pioneers found growing wild when they 
arrived, lucerne (alfalfa), and grains such as wheat, barley, oats, and 
corn; beets, potatoes, and onions and fruit such as apples and 
cherries. Cattle, sheep, and hogs are also raised in the area. 
Gradually we have attracted businesses and new industry. Over recent 
years, we have attracted manufacturing plants for motor homes, campers 
and trailers, and fiberglass boats. As the area grew and Payson needed 
to annex more land for homes and businesses, Payson has worked to find 
adequate water and electricity. Additional water will become available 
following the construction and Central Utah Project Bonneville Unit, 
which promises to deliver new supplies of water to our area when the 
Utah Lake System of pipelines is completed.
    Electrical customers in Payson City boundaries are generally served 
as retail customers of Payson Power and Light Department whose mission 
has been to serve the residents of Payson with safe, efficient and 
reliable power, at the most economical cost. We receive a portion of 
our power over SESD distribution lines. Recently, the Payson City 
Council approved an inter-local agreement to integrate our city power 
functions with SESD. This agreement will avoid a duplication of service 
in the area surrounding Payson city. We have found that if we don't 
work together it is detrimental to the growth of the community.
    SESD serves the areas outside the South Utah County cities and 
delivers power to us for delivery inside our city boundaries. Payson 
has concluded that we need to consolidate all our electric distribution 
operations to avoid duplication of service and capitalize on 
inefficiency. S. 500 will be a tremendous help to accomplish this goal 
because it will consolidate the mish mash of ownership over miles of 
distribution lines throughout the south county. There are costs and 
inefficiencies resulting from this unconsolidated patchwork quilt 
ownership pattern. For example, when property is annexed into Payson 
City, the city is required to buy out all of SESD'S facilities and pay 
lost revenues for 10 years and pay severance costs. After this 
requirement has been completed, then the developer is required to 
install new facilities as per Payson Power Department's standards.
    By joining together and utilizing the efficiencies of employees, 
equipment, inventory, resource management and all other aspects of a 
power system optimization management plan we can reduce costs to our 
customers and residents. In addition, we lower costs to businesses 
seeking to relocate or developers planning to annex into Payson City. 
Consolidation will create an opportunity for future businesses to 
locate in Payson without expensive upfront costs. We fully support S. 
500 as it will help us achieve these goals to stimulate growth and job 
creation in our area.
                                 ______
                                 
  Statement of Blair R. Hamilton, Chairman of the Board of Directors, 
              South Utah Valley Electric Service District
 on s. 500, s. 715, s. 802, s. 997, s. 1033, s. 1047, s. 1224, s. 1225
    I am grateful to be able to submit this statement in support of S. 
500, the South Utah Valley Electric Conveyance Act. My name is Blair 
Hamilton and I serve as Board Chairman of South Utah Valley Electric 
Service District (SESD). I want to also thank Senator Orrin Hatch and 
Senator Mike Lee for introducing this important legislation. SESD was 
formed by the Utah State legislature to deliver electricity to the 
unincorporated rural communities in south Utah County including the 
cities of Elk Ridge and Woodland Hills. SESD also provide service to 
many customers in the cities of Payson, Salem, Spanish Fork, Santaquin 
and Mapleton.
    SESD's electrical distribution system overlaps land and system 
fixtures that are still owned by the United States. S. 500 would direct 
the Secretary of the Interior to convey and transfer title to those 
portions of the electrical distribution system that are owned by the 
United States, including the land on which those facilities are 
located. It will also provide license and use of shared power poles and 
access to lands where distribution facilities are located. S. 500 will 
help to provide certainty to SESD as it continues to make improvements 
to the system and operate and maintain what is in place today.
    On April 7, 1986, the Strawberry Water Users Association conveyed 
by sale to SESD both ownership and operation of the entire electric 
distribution system. The SESD electric distribution system was 
originally built as part of the Strawberry Valley Project, which was 
completed by June 30, 1922. The Strawberry Valley Project was one of 
the earliest Bureau of Reclamation irrigation projects to develop 
hydroelectric energy. Original project features included Strawberry Dam 
and Reservoir, Indian Creek Dike, Strawberry Tunnel, two diversion 
dams, three power plants, a main canal system, and a portion of the 
lateral system. Electric power from these facilities was used to 
construct the Strawberry Tunnel and Dam. Two of the power plants were 
constructed by the Strawberry Water Users Association (Association). 
Approximately 4,000 kilowatts of power are developed in three power 
plants on the project and are delivered through transmission lines to 
our distribution system. Today, most of the water conveyance features 
of the Strawberry Valley Project have been integrated into the 
Bonneville Unit of the Central Utah Project.
    Historically, the Strawberry Water Project was governed by a 1926 
Repayment contract between the Bureau of Reclamation and the Strawberry 
Water Users Association, which was amended on November 20, 1928 and 
again on October 9, 1940. This Repayment agreement transferred 
responsibility to the Association for the operation and maintenance of 
the power system, which included power generation, transmission and 
distribution facilities. The Repayment contract did not transfer title 
to any of these facilities to the Association, which remained in the 
name of the United States. On August 8, 1972, the Office of the 
Solicitor stated in an opinion that the United States owned those 
portions of the power system constructed with project revenues or that 
``became fixtures on the lands to which title was in the United 
States.'' An additional Solicitor's Opinion dated August 14, 1985 
clarified further that:

          Title was reserved in the United States to all project 
        property (including the power system) as of the time of the 
        1940 contract, but title was not reserved in the United States 
        to such additions to the project (including additions to the 
        power system) as were made after the 1940 contract unless the 
        additions became fixtures on the lands to which title was in 
        the name of the United States or unless it was expressly 
        provided in connection with and approval sought from the 
        Secretary.''

    Despite this clarification, it is difficult to determine exactly 
which parts of the system are owned by the United States and which are 
now owned by SESD. There remains no dispute that the United States 
retains title to those portions of the distribution system constructed 
prior to 1940 with Strawberry Valley Project revenues or that are 
located on lands titled to the United States. However, from a practical 
standpoint, there has been increased uncertainty regarding where 
project revenues were spent for either construction of or improvements 
to the electric distribution system. Much of the electric distribution 
system was constructed on easements over private lands owned by 
Association members. This creates significant operational challenges as 
SESD complies with the Operation and Maintenance Agreement.
    Furthermore, Reclamation and SESD just concluded a new agreement 
whereby SESD agrees to operate and maintain the federal portions of the 
SESD distribution system. The agreement requires SESD to assume a 
number of special responsibilities regarding maintenance or 
improvements to the federally owned portions of the system. The 
agreement recognizes that it is not presently possible to determine 
with certainty which portions of the system are owned by the United 
States and contemplates a further need to inventory the distribution 
system to ascertain ownership. Reclamation estimates it will take years 
to accurately determine which portions were constructed prior to 1940, 
with project revenues or are located on federally owned lands. This 
places a significant cost burden on SESD and Reclamation.
    In order to resolve these complications, SESD has been working with 
the Bureau of Reclamation and it was suggested that transferring title 
is the right approach.
    Although we are not seeking to transfer a water project, we believe 
that this transfer is consistent aspects of the Framework for the 
Transfer of Title Bureau of Reclamation Projects of August 7, 1995. 
That policy document outlines six criteria for the title transfer of 
uncomplicated, single purpose reclamation projects or features and 
although it was drafted primarily to apply to water projects.
    They are as follows:

          1) The Federal Treasury, and thereby the taxpayer's financial 
        interest, must be protected.
          2) There must be compliance with all applicable State and 
        Federal laws.
          3) Interstate compacts and agreements must be protected.
          4) The Secretary's Native American trust responsibilities 
        must be met.
          5) Treaty obligations and international agreements must be 
        fulfilled.
          6) The public aspects of the project must be protected.

    By transferring the federally-owned portion of the SESD electric 
distribution system, S. 500 will not only simplify SESD's ability to 
operate and maintain this system, but it will provide mutual benefits 
to Reclamation by transferring once and for all legal responsibility 
for the system to SESD.
    Again I want to thank you for the opportunity to submit this for 
the record.

                                  

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