[Federal Register Volume 62, Number 194 (Tuesday, October 7, 1997)]
[Notices]
[Pages 52354-52359]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26500]



[[Page 52354]]

-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Bureau of Reclamation


Review of Existing Coordinated Long-Range Operating Criteria for 
Colorado River Reservoirs (Operating Criteria)

AGENCY: Bureau of Reclamation, Interior.

ACTION: Reissue of Notice of Proposed Decision Regarding the Operating 
Criteria

-----------------------------------------------------------------------

SUMMARY: The purpose of this action is to provide public notice that 
the Secretary of the Interior (Secretary) proposes no change to the 
existing Operating Criteria as a result of the current review process. 
The current review has been conducted as an open public process, 
including formal consultation with the seven Colorado River Basin 
States (Basin States). The results of the review indicate that 
modification of the Operating Criteria is not justified at the present 
time.
    The original Federal Register notice was published on August 27, 
1997 (62 FR 45440). Due to requests from interested parties and 
agencies, the comment period has been extended by the Bureau of 
Reclamation.

DATES: All written comments relevant to this proposed decision must be 
received by close of business, October 17, 1997.

ADDRESSES: Interested parties should send comments or questions to 
Bruce Moore, Bureau of Reclamation, 125 South State Street, Room 6107, 
Salt Lake City, Utah 84138-1102, telephone (801) 524-3702, or Jayne 
Harkins, Bureau of Reclamation, P.O. Box 61470, Boulder City, Nevada 
89005, telephone (702) 293-8190.

SUPPLEMENTARY INFORMATION: The public review process began with a 
Federal Register notice published on August 20, 1996 (61 FR 43073), 
announcing the review of the Operating Criteria and inviting comments 
during the 60 days following the notice. On October 31, 1996, another 
Federal Register notice (61 FR 56246) was published announcing two 
public consultation meetings and extending the comment period an 
additional 30 days. On November 4, 1996, a Fact Sheet containing 
information about the Operating Criteria review and an invitation to 
the public consultation meetings was sent to known and anticipated 
interested parties and agencies, and governor-designated 
representatives of the Basin States, inviting their participation.
    Comments from the two Federal Register notices were received from 
18 respondents. The comments were reviewed by the Bureau of Reclamation 
for identification and analysis of the issues. Public consultation 
meetings were held on November 18, 1996, and December 2, 1996, to 
discuss the identified issues and answer questions from all interested 
parties. A set of all comment letters received was provided to any 
interested party requesting a copy. After the public consultation 
meetings, the analyses of the issues were revised to reflect any 
information resulting from the two meetings. That information was then 
sent to all interested parties and participants in a March 1997 
newsletter entitled the River Review.
    In response to requests, another public consultation meeting and an 
additional 45-day comment period were announced in the Federal Register 
on March 28, 1997 (62 FR 14942). On April 4, 1997, a letter from the 
Reclamation Team Leader containing the preliminary results of 
Reclamation's analysis on each major issue area and an invitation to 
attend the next public consultation meeting was sent to all 18 
respondents, governor-designated representatives of the Basin States, 
and any others who had attended meetings or expressed an interest in 
the review of the Operating Criteria. On April 22, 1997, a final public 
consultation meeting was conducted to discuss the preliminary analyses.
    As required by Pub. L. 90-537, formal consultation with the 
representatives of the seven Basin States, and other parties and 
agencies as the Secretary may deem appropriate, was conducted in the 
context of public consultation meetings on three separate occasions: 
November 18, 1996; December 2, 1996; and April 22, 1997.
    Following analysis of comments received as a result of this notice, 
any proposed federal action will be evaluated by Reclamation to 
determine the appropriate National Environmental Policy Act (NEPA) 
compliance. After that process has been completed, the final 
Secretarial decision will be published in the Federal Register.

Background

    The Operating Criteria, promulgated pursuant to Section 602 of 
Public Law 90-537 (43 U.S.C. 1552), were published in the Federal 
Register on June 10, 1970. The Operating Criteria provide for the 
coordinated long-range operation of the reservoirs constructed and 
operated under the authority of the Colorado River Storage Project Act, 
the Boulder Canyon Project Act, and the Boulder Canyon Project 
Adjustment Act for the purposes of complying with and carrying out the 
provisions of the Colorado River Compact, the Upper Colorado River 
Basin Compact, and the Mexican Water Treaty.
    Previous reviews of the Operating Criteria were initiated in 1975, 
1980, 1985, and 1990. They resulted in no changes to the Operating 
Criteria. Prior to 1990, reviews were conducted primarily through 
meetings with and correspondence among representatives of the seven 
Basin States and Reclamation. Because the long-range operation of the 
Colorado River reservoirs is important to many agencies and 
individuals, in 1990, through an active public involvement process, 
Reclamation expanded the review of the Operating Criteria to include 
all interested stakeholders. A team consisting of Reclamation staff 
from Denver, Colorado; Salt Lake City, Utah; and Boulder City, Nevada, 
was organized to conduct the 1990 review. For the 1995 review, 
Reclamation staff from Salt Lake City, Utah, and Boulder City, Nevada, 
followed the same public process.
    The scope of the review has been consistent with the statutory 
purposes of the Operating Criteria which are ``to comply with and carry 
out the provisions of the Colorado River Compact, the Upper Colorado 
River Basin Compact, and the Mexican Water Treaty.'' Long-range 
operations generally refer to the planning of reservoir operations over 
several decades, as opposed to the Annual Operating Plan (AOP) which 
details specific reservoir operations for the next operating year.

Synopsis of Review Results

    Many of the issues raised during the review are more properly dealt 
with during the development of the AOP. These include annual surplus 
determinations in the Lower Basin; the probability of spills from Lake 
Powell, including the release of beach/habitat building flows from Glen 
Canyon Dam; storage equalization between Lakes Powell and Mead; and 
factors for determining 602(a) storage.
    The Operating Criteria were purposely designed to be flexible so 
that during the development of the AOP, variations in hydrologic 
conditions and changing demands for water use, including environmental 
demands and possible mitigation measures, could be accommodated. The 
process for developing the AOP is open to the public and all interested 
parties.
    Reclamation regularly applies the NEPA process to activities 
constituting a major federal action significantly affecting the quality 
of the human environment. The appropriate level of

[[Page 52355]]

NEPA compliance for the review of the Operating Criteria will be 
determined by Reclamation. At this time, Reclamation recommends 
preparation of a NEPA categorical exclusion document for this review.
    With respect to other environmental issues, Reclamation is in 
various stages of consultation with the Fish and Wildlife Service under 
Section 7 of the Endangered Species Act on most Colorado River mainstem 
facilities. When a Section 7 consultation results in the Service 
providing Reclamation with specific recommendations such as specific 
flow recommendations to remove or prevent jeopardy to listed species or 
their critical habitat, they are incorporated into Reclamation's 
operations, and if appropriate, included in the AOP.
    Reclamation has programmed and expended funds for fish and wildlife 
mitigation and enhancement for impacts associated with previous 
activities where appropriate. Reclamation will continue to use this 
approach. Any changes associated with the long-range Operating Criteria 
will also be evaluated to determine if there are any mitigation 
requirements or enhancement opportunities.
    Regarding the issue of water marketing and banking, Reclamation has 
initiated a rule making process focused on water banking in groundwater 
aquifers or off-mainstem storage reservoirs in the Lower Basin. This 
administrative rule is considered a responsibility of the Secretary of 
the Interior and focuses only on the three Lower Basin states. 
Reclamation believes that water marketing and banking would not require 
a change to the current Operating Criteria, as this issue lends itself 
to the AOP process.
    Throughout the course of the review of the Operating Criteria, 
Reclamation has encouraged public participation and developed a 
thorough administrative record. Based on the results of the review and 
the analysis of public comments, it is proposed that the Operating 
Criteria not be modified at this time.

Analysis of Issues

Issue #1: Application of the Administrative Procedure Act (APA)

Background
    The APA was signed into law in 1946 by President Truman. The 
purposes of the Act are: (1) to require agencies to keep the public 
informed on organization, procedures and rules, (2) to provide for 
public participation in the rule making process, (3) to prescribe 
uniform standards of conduct for rule making and adjudicatory 
proceedings, and (4) to restate the law of judicial review. The law 
primarily deals with rule making. The definition in the law of a rule 
in part is as follows: ``* * * the whole or part of an agency statement 
of general or particular applicability and future effect designed to 
implement, interpret, or prescribe law or policy or describing the 
organization, procedure, or practice requirements of an agency. * * *'' 
Rule making has two parts, formal and informal.
Analysis and Response
    The Coordinated Long-Range Operating Criteria is a document 
generated from a requirement in the 1968 Colorado River Basin Project 
Act. It describes how the Secretary of the Interior will meet some of 
the commitments under the Act. The review of the Coordinated Long-Range 
Operating Criteria is not a rulemaking exercise and is therefore not 
subject to the rulemaking provisions of the APA.
    Nevertheless, the Bureau of Reclamation is encouraging full public 
participation in this process and has developed a thorough 
administrative record of this review.

Issue #2

    Surplus declarations are referenced in the 1964 Supreme Court 
decree (Arizona v. California) and are a part of the 1970 Criteria for 
Coordinated Long-Range Operation of Colorado River Reservoirs. The 
decree apportions surpluses (50 percent to California, 46 percent to 
Arizona, and 4 percent to Nevada), while the Operating Criteria define 
surpluses as existing when there is sufficient storage in Lake Mead to 
supply greater than 7.5 million acre-feet (MAF) for Lower Basin 
consumptive uses. Guidelines for determining when surplus conditions 
exist have never been formally adopted.
Background
    In the past, Reclamation has performed computer modeling studies of 
alternative surplus guidelines to determine the effects of various 
levels of surplus use. Because the shortage risks of surplus use 
(Arizona) fall on other than the benefactor (California), impacts and 
differences in risks of future shortages and reservoir drawdown have 
been keenly debated. All modeling strategies have as their foundation 
the principle of reducing system spills by allowing greater use in the 
Lower Basin, thus drawing down the reservoirs and thereby avoiding 
flood control releases. This greater drawdown then allows the high 
flows of flood years to be captured by the reservoir system. While the 
amount of system spills is thus reduced, the degree of drawdown affects 
the risk of shortages to users during possible future drought 
conditions. Resolving the balance between risk of shortages and spills 
is the heart of the surplus issue.
    Until 1996, Lower Basin consumptive uses were less than their 
allocation of 7.5 MAF, and California uses were met through unused 
apportionments of Arizona and Nevada rather than surplus declarations. 
However, with the implementation of the Arizona groundwater banking 
program, total Lower Basin use now exceeds 7.5 MAF and water above this 
amount can only be delivered through surplus declarations.
    The 1996 Annual Operating Plan (AOP) committed to meet all 
reasonable beneficial consumptive uses, and later in the year when the 
annual Lower Basin use was greater than 7.5 MAF, a surplus was 
declared. The 1997 AOP contains an explicit determination of surplus, 
based on the current hydrologic situation and a lack of impacts from 
this single decision. As a result of 1997 system flood control 
operations and hydrologic conditions, the 1998 AOP will almost 
certainly contain an explicit surplus determination.
    However, these determinations have relied solely on an annual 
examination of reservoir conditions in the Colorado River Basin rather 
than specific, long-term strategies which examine the potential for 
problems in the future. Drought periods in the basin can extend for 
many years and with the large volume of reservoir storage, many years 
could be required before negative impacts of surplus determinations are 
observed. Much of the current debate is focused on the risk of certain 
things happening in the future.
Analysis and Response
    The comments received addressed three key topics relating to 
surplus determinations: (1) the establishment of guidelines, (2) the 
forum for establishing these guidelines, and (3) how surpluses will 
affect the probability of spills from Lake Powell.
    Establishment of Guidelines.--The comments all agreed that surplus 
and shortage guidelines should be established, but varied in how firm 
or detailed these guidelines should be. The most flexible approach 
would be the annual determination of surplus/normal/shortage conditions 
through the AOP process, deciding on the condition of the reservoir 
system on a year-by-year basis. The most rigid approach would be the 
revision of the Operating Criteria to include specific guidelines which 
then

[[Page 52356]]

would be applied each year to produce a determination.
    Flexible guidelines have the advantage of being easily modified as 
consumptive use demands and hydrologic conditions change throughout the 
basin. For some parties, near-term surpluses could be more liberal than 
when Upper Basin uses increase and the likelihood of surplus deliveries 
are reduced. Flexible guidelines could be adopted without the more 
formal process of incorporating guidelines into the Operating Criteria.
    Modifying the Operating Criteria to include surplus guidelines 
offers the advantage of clearly specifying under what conditions 
surpluses would be declared. All interests would then understand 
exactly what impacts could be expected under ranges of hydrologic 
conditions. Contingency plans could be implemented to mitigate adverse 
impacts and agreements could be formed to help meet consumptive use 
demands during non-surplus periods.
    Forum for Establishing Guidelines.--Most commentors felt that the 
AOP would be the most appropriate mechanism for preparing surplus/
shortage guidelines. The less formal nature of the AOP meetings was 
viewed as positive for attempting to resolve this difficult issue. 
However, the issue has been addressed for the last five years in the 
AOP meetings, and no definite guidelines have been produced.
    Probability of Spills from Lake Powell.--The release of beach/
habitat building flows from Glen Canyon Dam was a contentious topic 
during the completion of the Glen Canyon Dam Environmental Impact 
Statement. The 1968 Colorado River Basin Project Act directed the 
Secretary of the Interior to avoid anticipated spills while the 1992 
Grand Canyon Protection Act directed the Secretary to operate the dam 
to improve the environmental conditions in the Grand Canyon. In 1995, 
an agreement was reached between interested parties which attempts to 
meet the intents of both the 1968 and 1992 Acts by providing these high 
flows during high reservoir storage conditions when required for dam 
safety purposes.
    Surplus determinations which explicitly drop the level of Lake Mead 
and through equalization drop the level of Lake Powell would likely 
reduce the probability of these powerplant bypasses. Commentors 
responded with concern for this possibility recommending that if 
surpluses were declared, measures should be taken to keep the 
probability of bypasses the same as at the present. The impacts of high 
spring flows are currently believed to be very important and this 
potential effect should be addressed as surplus guidelines are 
developed.
    The Bureau of Reclamation believes that surplus/shortage criteria 
should (1) be specific guidelines that can be used to predict 
measurable effects in the future, (2) be developed through the AOP 
process, and (3) include a discussion of the potential effects on Lake 
Powell spills along with possible mitigation measures.

Issue #3

    Section 602(a)(3) of the 1968 Colorado River Basin Project Act 
discusses the quantification of a reservoir storage volume in the Upper 
Basin. This storage is intended to supplement the unregulated flow of 
the Colorado River at Lees Ferry during drought periods as part of the 
1922 Colorado River Compact deliveries to the Lower Basin. The intent 
of this provision is to avoid impairment of Upper Basin consumptive 
uses.
Background
    The 1968 Act contains several provisions which can be viewed as 
accomplishing the intent of the Article III (e) provision of the 
Colorado River Compact, that of the Upper Basin not withholding water 
that the Lower Basin requires for consumptive use demands. Through a 
combination of avoiding spills, equalizing storage between Lakes Powell 
and Mead, and the 602(a) storage volume, Upper Basin water was to be 
transferred to Lake Mead for use in the Lower Basin. When Upper Basin 
storage falls below this 602(a) storage level, storage equalization 
provisions of the 1968 Act are disregarded.
    By statute, the 602(a) storage volume was to be quantified taking 
into account historic stream flows, the most critical period of record, 
and probabilities of water supply. Since the purpose of this storage is 
to help provide Lower Basin deliveries, it is quantified as the 
difference between depleted flow at Lees Ferry and the Lower Basin 
delivery requirements over some period of drought. Upper Basin 
depletion levels significantly affect the storage calculation. Using 
the most critical period of natural flow, the 602(a) volume is 
currently estimated to be about 10 million acre-feet, which includes 
preservation of the 5.2 million acre-feet minimum power pool in Lake 
Powell. In the future, when Upper Basin consumptive uses increase, it 
has been assumed that Lake Powell could be completely drained to 
provide Lower Basin deliveries.
    Controversy exists regarding the probability attached to the 
depleted flow assumptions with respect to both the rarity of the 
critical flow period and the projected depletion increases in the Upper 
Basin. These are the principle reasons that 602(a) storage has never 
been formally determined and agreed to by the Basin States. However, in 
the computer modeling of long-range operations of the reservoir system, 
some estimate or procedure must be used to model this portion of the 
applicable statutes. Currently, the Bureau of Reclamation uses the 
observed critical 12-year period (1953-1964) as the basis for the 
storage calculation. Reflecting the lack of a formal determination, 
each year's Annual Operating Plan has contained language stating that 
current reservoir storage in Upper Basin reservoirs exceeds the storage 
required under Section 602 under any reasonable range of assumptions 
which may be applied. The current Upper Basin depletion level is the 
prime reason that this statement is true.
Analysis and Response
    The relationship between the 602(a) volume and surplus/shortage 
criteria has been raised in previous Annual Operating Plan discussions. 
Some parties have argued that both less or more severe drought periods 
should be used in the modeling, thus changing the Upper Basin risk of 
shortages.
    Formally specifying or changing the risks associated with the 
602(a) storage level will likely require a legal opinion on the issue 
of avoiding impairment of Upper Basin consumptive uses. Since these 
uses presently do not significantly restrict Lower Basin surpluses and 
require much less than full Lake Powell storage to meet Lower Basin 
deliveries, this issue perhaps is not ripe for resolution. Reclamation 
recommends delaying implementing guidelines or changing the current 
602(a) modeling assumptions until current assumptions or practices 
create unacceptable impacts.

Issue #4a

    The Bureau of Reclamation should conduct an environmental analysis 
under the National Environmental Policy Act (NEPA) of any changes to 
the Operating Criteria.
Background
    Letters of comment to the Operating Criteria review expressed 
concern over the long-term effects of the Operating Criteria on 
downstream resources as it relates to cumulative effects and spill 
frequency. Several letters indicated that the current Operating 
Criteria do not give equal consideration to environmental and 
recreational resources, and instead focus only on

[[Page 52357]]

traditional water and power uses. To incorporate consideration of all 
resources and impacts of the Operating Criteria, the commentors 
recommended that the Operating Criteria be evaluated through 
application of NEPA.
Analysis and Response
    Reclamation regularly applies the NEPA process to activities 
constituting a federal action, and agrees that compliance with NEPA 
would be required for any proposed changes to the long-range Operating 
Criteria that are discretionary Federal Actions (Chapter 3.1 of the 
NEPA Handbook). The appropriate level of NEPA compliance will be 
determined by Reclamation for this review of the Operating Criteria.
    NEPA regulations require that each agency promulgate agency-
specific guidelines to supplement the Council on Environmental 
Quality's general regulations (40 CFR Parts 1500-1508). These 
classifications list those actions that: (1) have a significant impact 
on the environment (requiring preparation of an environmental impact 
statement); (2) those which are categorically excluded from the EIS 
process (for which a categorical exclusion (CE) is prepared); and (3) 
those which fall in between (1) and (2) and will usually require the 
preparation of an environmental assessment (EA). As a result of the 
analysis contained in an EA, either an EIS or a Finding of No 
Significant Impact (FONSI) is prepared by the agency.
    The key issue in whether NEPA documentation is needed regarding 
this 5-year review is whether there is a Federal action or Federal 
discretion associated with this review. If no Federal action is being 
proposed or taken by Reclamation, no NEPA documentation would be 
required. While no changes are being proposed as the result of this 
review, Reclamation is making a decision in proposing no change. 
Because of this, Reclamation concludes that preparation of a NEPA 
compliance document is appropriate. Reclamation recommends that a 
Categorical Exclusion be prepared pursuant to Departmental Instructions 
516 DM 2, appendix 1.7, which provides that a CE may be prepared for 
routine and continuing government business, including such things as 
supervision, administration, operations, maintenance and replacement 
activities having limited context and intensity; e.g. limited size and 
magnitude or short-term effects.

Issue #4b

    The Operating Criteria should recognize the need to preserve and 
recover endangered species dependent upon the quantity, quality, and 
pattern of release.
Background
    Construction and operation of water storage and delivery facilities 
on the Colorado River and its tributaries are recognized as factors 
contributing to the decline of certain fish and wildlife species which 
have been listed as threatened or endangered by the Fish and Wildlife 
Service (Service). Storing water during the spring runoff decreases the 
natural spring flow, and releasing water later in the year for 
consumptive use raises the base flow. These types of changes in the 
hydrograph have removed spawning cues, effected water temperature, 
clarity, the food base, and fluvial geomorphology. Physical alteration 
from riverine to extensive reservoir environments has occurred causing 
further change to habitat for these species and resulted in the 
establishment of exotic species of fish, wildlife, and plants that 
directly compete with listed species and their habitat. The control of 
natural flood cycles and development of the floodplain for agriculture 
and other purposes has significantly changed or eliminated original 
habitats in and along extensive parts of the lower Colorado River. The 
success of efforts to recover endangered species are often thought to 
be dependant on restoring the natural hydrograph to the degree 
possible. Commentors are concerned that if provisions for releases 
designed to recover endangered species are not incorporated into the 
Operating Criteria, changes to operations will not be implemented.
Analysis and Response
    Reclamation is in various stages of consultation with the Service 
under Section 7 of the Endangered Species Act on most mainstem 
facilities. Conservation plans and recovery programs are also a large 
part of Reclamation activities in operation of the Colorado River. 
Operation of these facilities for endangered species would remain 
consistent with the original intended purpose of the project in 
accordance with the implementing regulations of the Endangered Species 
Act. When a Section 7 consultation results in the Service providing 
Reclamation with specific flow recommendations or other alternatives to 
remove or prevent jeopardy to listed species or their critical habitat, 
they are incorporated into Reclamation's operations, and if 
appropriate, are included in the Annual Operating Plan of the 
particular facility which was the subject of the consultation. 
Operations remain consistent with the ``Law of the River,'' water 
service contracts, and other legal obligations. Examples of facilities 
where consultation has been completed are Flaming Gorge Dam on the 
Green River in Utah, Glen Canyon Dam on the Colorado River in Arizona, 
and several features of the Colorado River Front Work and Levee System 
Program on the last 270 miles of the Colorado River in the United 
States.
    Reclamation and the Service recently completed formal Section 7 
consultation on lower Colorado River operations and maintenance (Lake 
Mead to the Southerly International Boundary with Mexico), and are 
engaged in ongoing consultation for Navajo Reservoir operations on the 
San Juan River in Colorado, and Aspinall Unit operations on the 
Gunnison River in Colorado. The Department of the Interior signed a 
Memorandum of Agreement in August 1995 that was further described in a 
Memorandum of Clarification and most recently a joint Participation 
Agreement to develop a long-term (50 year) Lower Colorado River Multi-
Species Conservation Program (MSCP) from Lees Ferry to the Southerly 
International Boundary with Mexico. The overall objective of the MSCP 
is to develop a plan which would conserve and protect more than 100 
listed and sensitive species within the Colorado River and its one 
hundred-year flood plain, and to the greatest extent consistent with 
law, accommodate current and future water and power operations.
    Reclamation continues to undertake and pursue efforts for 
conservation and recovery of fish and wildlife and associated critical 
habitat under specific project authorities such as Section 8 of the 
Colorado River Storage Project Act and the Grand Canyon Protection Act. 
In addition, Reclamation has significant ongoing conservation and 
recovery efforts under the authority of Section 7(a)(1) of the 
Endangered Species Act. For example, the Lake Mohave Native Fish 
Rearing Program in the Lower Colorado River Basin continues to collect 
and rear wild larval razorback and bonytail chubs for release back into 
Lake Mohave to maintain the primary adult population and genetic pool 
for these species. Voluntary refinements to river operations have also 
been implemented when possible to benefit endangered species (i.e., 
management of reservoir levels in Mohave for endangered fish). The 
Upper Colorado River Recovery Implementation

[[Page 52358]]

Program, with an annual budget exceeding $7 million, and the San Juan 
River Basin Recovery Implementation Program are other examples.
    Reclamation will continue to plan and implement initiatives for 
protection of endangered species and associated critical habitat on a 
project-specific basis as described, with the goal of integrating these 
actions to the greatest degree possible to address ecosystem level 
needs. Where appropriate, initiatives such as the Glen Canyon Adaptive 
Management Program and the MSCP will be considered and incorporated 
into future Annual Operating Plans and Section 7 consultations, as 
appropriate.

Issue #4c

    Funding for mitigation of negative impacts to fish and wildlife 
resources should be provided.
Background
    Modification of river flows due to the operation of projects 
authorized by the Colorado River Storage Project Act has impacted fish, 
wildlife, and their habitats through reduction or elimination of 
overbank flooding, channelization, water depletions, and changes in 
water quality. These projects produce revenue primarily through power 
production. Commentors are concerned that sufficient funds be made 
available for mitigation activities.
Analysis and Response
    Reclamation, like all federal agencies, must have both 
authorization and appropriations to undertake actions and incur debt. 
In the Upper Colorado River Basin, Section 8 of the Colorado River 
Storage Project Act authorizes and directs the Secretary of the 
Interior to investigate, plan, construct, operate, and maintain 
facilities to improve conditions for and mitigate losses of fish and 
wildlife. Funds authorized by this section of the Act are 
nonreimbursable and nonreturnable, and therefore must be appropriated 
by Congress. Section 5(a) specifies that the Basin Fund will not be 
applied to Section 8 (fish and wildlife mitigation). The Grand Canyon 
Protection Act states that power revenues may be used for activities 
designed to conserve the environment downstream from Glen Canyon Dam, 
but does not exclude the use of other funding mechanisms.
    Mitigation and enhancement activities are typically identified and 
proposed on a project-by-project basis through project planning and 
environmental compliance. Reclamation has programmed and expended funds 
for fish and wildlife mitigation and enhancement for impacts associated 
with previous activities where appropriate. Most often these activities 
are identified in Fish and Wildlife Coordination Act Reports and 
National Environmental Policy Act documents. Reclamation will continue 
to use this approach. Since no changes are being proposed, there is no 
specific mitigation or enhancement necessary for this action. 
Reclamation will continue to comply with NEPA and other appropriate 
environmental laws in identifying, planning, and carrying out 
mitigation and enhancement activities.

Issue #5

    Is there a need to change the Operating Criteria.
Background
    The Operating Criteria are to accomplish the objectives of Section 
602(a) of the Colorado River Basin Project Act. Modification of the 
Operating Criteria can be done by the Secretary of the Interior '' * * 
* as a result of actual operating experiences or unforeseen 
circumstances * * * to better achieve the purposes specified in 
[Section 602(a) of the Colorado River Basin Project Act].''
    Commentors stated that they believe ``* * * there are no conditions 
resulting from actual operating experiences or unforeseen 
circumstances, since the last review, that justify the need to modify 
the existing Criteria,'' and that the reservoirs have been operating 
satisfactorily under the present Operating Criteria. These comments 
support not changing the criteria at this time.
    Others stated that we are entering a new era and that the Operating 
Criteria should be changed to reflect different circumstances and 
concerns. The Lower Basin States have reached their annual 
apportionment of 7.5 million acre-feet for consumptive use. 
Environmental and recreational issues have increased in value in the 
eyes of the public. There were also those who stated that the Operating 
Criteria need to be changed to include specific guidelines that allow 
the Secretary of the Interior to make surplus, shortage, and normal 
determinations. These comments all support a need for change.
Analysis and Response
    The Operating Criteria provide guidelines for the operation of 
Upper Basin Reservoirs and Lake Mead. Specific operational needs are 
not detailed in the Operating Criteria. The specific needs have, in the 
past, been addressed in the Annual Operating Plan development process.
    The Operating Criteria may be modified from time to time as a 
result of actual operating experiences or unforeseen circumstances. 
With the issues of surplus and flood control in our current operations 
and possibly emerging over the next several years, the operational 
experiences needed to determine if changes to the Operating Criteria 
are necessary will be acquired. Under the present Operating Criteria, 
surpluses have been declared for use in the United States as well as in 
Mexico.
    With the above in mind, the evaluation of operational experiences 
over the next several years will determine whether or not to change the 
Operating Criteria. But in the interim, the recommendation is not to 
change the Operating Criteria.

Issue #6

    Water marketing and banking.
Background
    Several years ago the Bureau of Reclamation advanced draft 
regulations for administering Colorado River water entitlements in the 
Lower Basin States of Arizona, California, and Nevada. The draft 
regulations contained provisions for water banking and water marketing 
in the Lower Basin. Because there was not consensus with the states 
regarding the draft regulations, they have been held in abeyance while 
the three states attempt to reach some agreement on numerous issues, 
including water marketing and banking. This negotiation process among 
the states is continuing. Many people believe that some form of water 
banking and marketing will be essential to meeting future water needs 
in the Lower Colorado River Basin.
Analysis and Response
    Reclamation has initiated a rule making process focused on water 
banking in groundwater aquifers or off-mainstem storage reservoirs in 
the Lower Basin. This administrative rule is considered a 
responsibility of the Secretary of the Interior under the Boulder 
Canyon Project Act, and focuses only on the three Lower Basin States. 
Reclamation continues to work with the states and to encourage them to 
cooperatively develop a proposal for water marketing and banking in the 
Lower Basin.
    Reclamation believes that the limited water marketing and banking 
currently under consideration would not require a change to the current 
Operating Criteria.
Proposed Decision
    The Department has considered issues arising from the review of the 
Operating

[[Page 52359]]

Criteria. After a careful review of the issues, solicitation of 
involved party's responses to Reclamation's analysis, and consultation 
with the Governor's representatives of the seven Basin States, the 
Department proposes no modifications to the Operating Criteria at this 
time.

    Dated: October 1, 1997.
Stephen V. Magnussen,
Acting Commissioner, Bureau of Reclamation.
[FR Doc. 97-26500 Filed 10-6-97; 8:45 am]
BILLING CODE 4310-94-P