22nd ANNUAL REPORT

of the 

Pacific Northwest Electric Power and Conservation

 Planning Council

Submitted to the

Committee on Energy and Natural Resources

United States Senate 

Committee on Energy and Commerce

United States House of Representatives

and

Committee on Resources

United States House of Representatives

October 1, 2001 through September 30, 2002

Northwest Power Planning Council

851 S.W. Sixth Avenue

Suite 1100

Portland, Oregon 97204

503-222-5161

Toll Free: 800-452-5161

www.nwcouncil.org

The Northwest Power Planning Council was established pursuant to the Northwest Power Act of 1980 

(Public Law 96-501) by the states of Idaho, Montana, Oregon, and Washington. The Act authorized the 

Council to serve as a comprehensive planning agency for energy, fish, and wildlife policy in the Columbia 

River Basin, and to involve the public in its decisionmaking.

This annual report has been developed pursuant to Section 4(h)(12)(A) of the Northwest Power Act. The 

Council’s bylaws, which include its organizational structure, practices, and procedures, are available to the 

public. Please request document 2003-01 or visit our web site: www.nwcouncil.org.
JUDI DANIELSON 

CHAIR

Idaho

Jim Kempton

Idaho

NORTHWEST POWER PLANNING COUNCIL

851 S.W. SIXTH AVENUE, SUITE 1100

PORTLAND, OREGON 97204-1348

TOM KARIER

VICE-CHAIR

Washington

Frank L. Cassidy Jr.

“Larry”

Washington 

Gene Derfler

Oregon

Melinda S. Eden

Oregon

Fax:

503-820-2370

Phone:

503-222-5161

1-800-452-5161

Internet:

www.nwcouncil.org

Ed Bartle�

Montana

John Hines

Montana

January 2003

To the Citizens of the Pacific Northwest:

In 2002, the Northwest Power Planning Council began work on the next version of 

its Northwest Power Plan and laid the foundation for future fish and wildlife planning at the 

tributary, or subbasin, level in the Columbia River Basin. The Council also drafted a set of 

amendments to its Columbia River Basin Fish and Wildlife Program concerning operations of 

dams on the mainstem Columbia and Snake rivers, based in large part on recommendations of 

the region’s fish and wildlife agencies and Indian tribes.

The Council and the Bonneville Power Administration collaborated on a public process 

to investigate options for the future of the federal power marketing agency, and the Council 

worked closely with federal fish and wildlife agencies to incorporate recovery planning for 

threatened and endangered species with the Council’s Columbia basinwide effort to protect and 

enhance all fish and wildlife that have been affected by hydropower dams.

These are important tasks for the region, where the impacts of the energy crisis of 2000/

2001 linger in the form of electricity rate hikes and a stagnant economy, and where protection 

of fish and wildlife is a public priority. The Council works to balance fish and wildlife 

protection and enhancement with the need for an adequate, efficient, economical, and reliable 

power supply, providing Northwest citizens an opportunity unique in the nation to participate 

in, and influence, regional decisionmaking.

This annual report to Congress provides an overview of the Council’s work in Fiscal 

Year 2002. We look forward to continuing to build effective partnerships among states, fish 

and wildlife agencies, Indian tribes, stakeholder groups, Bonneville, the region’s electric 

utilities, and others who have interests in matters regarding fish, wildlife, and energy in the 

Columbia River Basin.

Sincerely,

Judi Danielson

Chair
THE NORTHWEST POWER PLANNING COUNCIL 9

POWER PLANNING ISSUES 11

The Fifth Northwest Power Plan 11

RTO West 13

Energy Conservation 14

Future of the Bonneville Power Administration 15

Power System Analyses 16

Energy Legislation 18

FISH AND WILDLIFE ISSUES 19

Project Funding Decisions and Issues 19

Mainstem Amendments to the Fish and Wildlife Program 20

Subbasin Planning 22

Artificial Production of Fish 24

Endangered Species Act Issues 25

Other Fish and Wildlife Issues 26

PUBLIC INVOLVEMENT 29

COUNCIL BUDGET 31

MORE INFORMATION 33

COMMENTS OF THE BONNEVILLE POWER ADMINISTRATION 35

COUNCIL MEMBERS (2002) AND OFFICES 37

Table of Contents
9 22nd Annual Report to Congress

The Council is an agency of the states of Idaho, 

Montana, Oregon, and Washington, and was created as 

an interstate compact agency by the legislatures of the 

four states following President Jimmy Carter’s approval 

of the Pacific Northwest Electric Power Planning and 

Conservation Act in December 1980. The Council’s first 

meeting was in April 1981.

The Northwest Power Act gives the Council three 

distinct responsibilities: 1) to assure the region an 

adequate, efficient, economical, and reliable electric 

power supply; 2) to prepare a program to protect, 

mitigate, and enhance fish and wildlife of the Columbia 

River Basin that have been affected by the construction 

and operation of hydropower dams; and 3) to inform 

the Pacific Northwest public about energy and fish and 

wildlife issues, and involve the public in its decisionmaking. This annual report is organized around the 

Council’s three key responsibilities.

There are eight Council members — two from each state 

— appointed by the governors. A list of Council members 

and their office locations is at the end of this report. 

The Northwest Power Planning Council
22nd Annual Report to Congress 10 
11 22nd Annual Report to Congress

The Fifth Northwest Power Plan

The Northwest Power Act of 1980 requires the Council 

to prepare a 20-year plan to assure the Pacific Northwest 

an adequate, efficient, economical, and reliable power 

supply while also protecting, mitigating, and enhancing 

fish and wildlife of the Columbia River Basin that have 

been affected by hydropower dams. The Act requires the 

Council to review the plan at least every five years. The 

current power plan, the Council’s fourth, dates to 1998. 

In Fiscal Year 2002, the Council began work on the Fifth 

Northwest Power Plan. The current schedule calls for 

completing the plan in mid-2003.

After consultations with the Bonneville Power Administration, electric utilities in the region, state utility 

commissions, environmental organizations, and other 

interested parties, the Council identified nine issues to 

address in the Fifth Northwest Power Plan. Many of 

these issues are in response to the region’s experience 

during the energy crisis of 2000-2001. They are:

Incentives for development of new generation:

How can adequate levels of new development 

be assured in a competitive wholesale power 

marketplace, where wholesale prices — and price 

signals to developers — fluctuate?

Increasing the price-responsiveness of demand 

for power:

Demand for most commodities drops as the price 

of the commodity rises, limiting how high prices 

rise. But retail electricity rates typically change 

relatively slowly in response to changes in wholesale 

power prices. Consequently, demand does not 

respond quickly to high wholesale prices and has 

little disciplining effect on market prices. We are 

investigating how retail demand could be made more 

responsive to wholesale prices in ways that are both 

effective and acceptable to consumers.

Sustaining an economically efficient investment in 

energy efficiency:

In recent years, utility investments in conservation 

followed a roller-coaster pattern, investing at far lower 

than cost-effective levels when wholesale market 

prices were low and then scrambling to catch up 

when market prices skyrocket. Does it make sense 

for the region to sustain these investments at costeffective levels, and if so, how can we assure that the 

investment happens?

Assessing power supply adequacy and market 

performance:

The energy crisis of 2000-2001 demonstrated 

the value of having accurate, timely information on 

power supply and market performance, yet much 

of this information is considered proprietary in the 

competitive marketplace. How can this information 

be provided in a sufficiently timely manner to help 

decisionmakers ensure the power supply remains 

adequate, reliable, and affordable?

Hydroelectric system operations and the impacts 

on migrating fish:

The drought of 2000-2001 forced trade-offs 

that improved the power supply at the expense of 

salmon and steelhead migrating between freshwater 

spawning areas and the Pacific Ocean. Are there 

ways to ensure equitable treatment of fish and power 

interests, and are there system-operating strategies or 

incentives that would minimize unnecessary impacts 

on fish?

Transmission:

High-voltage transmission policy and planning 

are critical to maintaining an adequate, efficient, 

economical, and reliable power supply. From the 

Council’s perspective, it is important that least-cost 

planning and implementation apply to transmission as 

well as to generation of power.

Power Planning Issues
22nd Annual Report to Congress 12 

The value of, and barriers to, power resource 

diversity:

One of the lessons of the energy crisis of 

2000-2001 is the importance of managing the risk 

associated with volatile electricity prices and their 

underlying fuel prices. One way of mitigating that risk 

is through resource diversity. The Fifth Power Plan 

will assess the value of resource diversity, identify the 

barriers to achieving it, and suggest ways in which 

they might be overcome.

Climate change risks to the power system:

Climate change poses a risk to the power system, 

both in terms of its potential effect on hydroelectric 

generation, and in the possible effects of policies that 

might be put in place to address the climate change 

issue. The Council will assess these impacts and 

alternatives for managing the inherent risk.

The Council invited public comment on these issues. 

Here is a synopsis of the advice we received from the 

public about how to address the issues in developing the 

power plan: 

1. Don’t spend a lot of time on transmission, except 

for assessing energy conservation, demand 

management, and distributed generation as 

alternatives to transmission investments.

2. Don’t try to solve global climate change issues, but 

consider climate change impacts as a source of 

risk to the power supply.

3. Describe and make sense of the recent energy 

crisis — what did we learn, and how might we 

avoid the same problems in the future?

4. Develop a vision for the future of the power 

industry in the region.

5. Address the future of Bonneville, particularly with 

regard to energy conservation, fish and wildlife 

mitigation, and the federal power system.

As we developed the list of issues to address in the 

next power plan, we also made progress on developing 

the tools we will use in developing the plan. In Fiscal 

Year 2002, the Council completed two important tasks 

that will provide information necessary for the power 

plan. One was a draft forecast of future fuel prices 

for power plants in the Northwest, and the other was 

a draft forecast of future demand for electricity in the 

region. These forecasts will be used in analyses for 

the power plan.

Fuel price forecasts affect the expected costs of future 

electricity generation. Through their effects on generation 

costs, fuel price forecasts also largely determine the 

future expected prices of electricity.

In the Pacific Northwest, hydropower, coal, and 

natural gas are the three primary fuels for generating 

electricity, accounting collectively for 93.7 percent of 

the generating capacity in the region. Hydropower 

dams provide 70 percent of this capacity (33,473 

megawatts); coal-fired power plants provide 14.6 

percent (6,992 megawatts); and power plants fueled 

by natural gas provide 9.1 percent (4,351 megawatts). 

The Council’s fuel price forecasts for coal and natural 

gas include a range of possible prices, from low to 

high. However, the portion of the resource mix fueled 

by natural gas is increasing rapidly. Natural gas is 

expected to be the predominate fuel for new generation 

in the years ahead.

For natural gas, the Council’s medium forecast shows 

prices gradually increasing from $2.70 per million Btu in 

2002 (in 2000 dollars) to $3 by 2005 as new gas-fired 

plants come online in the region, and then increasing 

at an average annual rate of 0.5 percent through 2025. 

This is a slightly lower growth rate than the Council 

forecast in its 1998 Power Plan, but the base gas price is 

considerably higher than earlier forecasts. 

Growth in demand for power follows trends in 

population and employment, and both increased during 
13 22nd Annual Report to Congress

the past decade. Early in Fiscal Year 2002, the Council 

compared the demand forecast in the 1998 Power 

Plan to actual figures for recent years and discovered 

that, with very few exceptions, the Council’s economic 

forecasts for demographics and employment are 

adequately predicting actual figures. Electricity sales 

data appeared to be tracking the medium forecast values 

in the 1998 Plan.

The Council released its demand forecast for the Fifth 

Power Plan for public comment in August 2002.

RTO West

The Council, a member of the Western Electricity 

Coordinating Council, has an ongoing interest in the 

development of an efficient and effective wholesale 

power market, and in the development of a transmission 

system that will best support that market. The Council’s 

staff has actively participated in the discussions 

leading up to the proposal for RTO West, both through 

workgroups and through the Regional Representatives 

Group. The Council was an alternate member of this 

group, representing the Committee on Regional Electric 

Power Cooperation, a group of Western state and 

provincial regulatory commissions and energy offices. In 

addition, the Council’s staff participates in the Western 

Market Interface Committee, a standing committee of the 

Western Electricity Coordinating Council.

The Council has invested a great deal of effort in 

understanding the issues confronting transmission 

systems in the West, and in helping RTO West develop 

a proposal that can address those issues while also 

accommodating the physical and legal differences that 

make the Northwest unique. Resolving these issues 

is essential to the Council’s statutory responsibility to 

help assure the Northwest of an adequate, efficient, 

economical, and reliable power supply.

Transmission in the West and the Northwest is 

becoming stressed by the demands of the competitive, 

wholesale electricity market, notably through the 

increasing volume of transactions and the dynamic, 

shifting patterns of generation and load. However, 

transmission problems in the region are not so 

overwhelming at this time to preclude consideration of 

improvements to RTO West or alternatives to it. The costbenefit analysis for RTO West so far only shows small 

quantified economic benefits when corrected for apparent 

errors, the Council commented. For at least one state, 

Montana, the results of the analysis are negative.

In May 2002, the Council commented to the Federal 

Energy Regulatory Commission on the RTO West Stage 

2 compliance filing by the eight utilities and Bonneville, 

which collectively propose to form RTO West. The Council 

commended the filing parties for their efforts to develop a 

proposal for the Northwest that satisfies the Commission’s 

requirements for regional transmission organizations.

But the Council also commented that the very 

significant institutional and policy changes necessary for 

the formation and operation of a regional transmission 

organization may carry costs and risks that are not 

fully understood at the present time. Some Council 

members believe that because of the magnitude of 

the changes involved, there is a strong likelihood that 

adverse unintended consequences will occur as a result 

of implementing RTO West. At the same time, they 

believe that because of the Commission’s push for the 

formation of regional transmission organizations, more 

incremental approaches to solving the problems facing 

the region’s transmission system have not received 

adequate attention. Other Council members believe 

that the problems with the existing transmission system 

will not be solved in a timely or adequate fashion for the 

long term without resorting to a regional transmission 

organization along the lines of RTO West.

Accordingly, the Council has not reached consensus on 

overall support for RTO West. However, the Council did 

offer specific comments on the Stage 2 filing, including:
22nd Annual Report to Congress 14 

• The Commission needs to accommodate legitimate 

Northwest differences addressed in the filing.

• It is appropriate to protect existing rights holders 

for an extended period of time.

• Any RTO West planning backstop authorities should 

include the authority to implement any least-cost 

action identified by the planning process, not just 

transmission expansion as currently proposed for 

three of the four potential backstop areas.

• Recent revelations of manipulation of the California 

power market underscore the importance of an 

independent market monitoring function with 

timely access to all relevant information, as well 

as the importance of a rapid response by the 

Commission and other appropriate agencies to 

evidence of market failure or abuse brought to 

their attention by the market monitoring unit. The 

Council believes the Commission’s proposed 

market monitoring unit would be overly restrictive 

regarding access to data by agencies responsible 

for responding to allegations of market abuse. 

The Council is continuing to participate in the 

development of RTO West.

Energy Conservation

The Northwest Power Act treats energy conservation 

as a resource in the region’s power supply. That is, 

a megawatt conserved through improved energy-use 

efficiency is the same as a megawatt generated.

The Act requires the Council to give priority to costeffective resources in developing and periodically 

amending the Northwest Power Plan. Conservation is 

given highest priority in the Act among resources to meet 

the region’s future demand for power, and the Act also 

requires the Council to set forth a general scheme in the 

power plan for implementing conservation. Conservation 

is so important, in fact, that the Act authorizes a 10 

percent cost-effectiveness “bonus” for conservation in 

comparison to other resources. 

Ever since its first power plan in 1983, the Council 

has promoted conservation as a resource, including 

the development — required by the Act — of model 

conservation standards that today are embodied 

in building codes throughout the Northwest. The 

Council continues to analyze the cost of conservation 

compared to other resources to meet the region’s 

future energy demand.

According to the Council’s current analyses, the 

potential for continued efficiency improvements remains 

high in the three main sectors of electricity consumption 

— residential, industrial, and commercial. In the 

residential sector, most of the conservation potential is 

in appliances such as water heaters, improved building 

codes, and in new home construction. We are working 

to improve our data bases on 1) the market penetration 

of increased-efficiency appliances; and 2) the market 

penetration of energy-efficient building practices in new 

construction. In the industrial sector, there is a great 

deal of potential in plant-specific process changes, such 

as improved-efficiency motors, lights, and compressors. 

We are working to estimate the market penetration of 

premium motors and other improved-efficiency electrical 

devices. In the commercial sector, we see continued 

potential in building climate controls, lighting, and plugin devices — all of which could be addressed through 

incentive programs by utilities. We are also working to 

improve our information about energy usage in existing 

commercial buildings in the Northwest. The commercial 

sector represents some of the greatest opportunities 

for improved efficiency in electricity use. Unfortunately, 

some of our most current information on existing 

buildings dates to the late 1980s, although we have 

information on new construction that is more current. 

The Council, working with Bonneville and the Northwest 

Energy Efficiency Alliance, has initiated a survey of 
15 22nd Annual Report to Congress

commercial buildings in the Northwest to better capture 

their potential for energy savings. 

The energy crisis of 2000-2001 demonstrated the 

need for a regional comprehensive energy efficiency 

strategy, and the Council and Bonneville are working 

together in the context of the Fifth Power Plan to develop 

a regional strategy to capture all the cost-effective energy 

efficiency in the region.

As a first step in identifying and clarifying the region’s 

conservation potential and costs, in Fiscal Year 2002 the 

Council established an interim conservation achievement 

goal — one that will be further clarified in the Fifth 

Northwest Power Plan — of acquiring 100 megawatts 

of new conservation per year over the next three to four 

years. According to the Council’s analyses, that much 

conservation is available at a maximum levelized cost of 

3 to 4 cents per kilowatt-hour, and most of that at 3 cents 

or less. This is less than the full cost of power from a 

new combustion turbine, but more than the current price 

of power on the wholesale market. 

Development of conservation costing up to 3 

cents per kilowatt-hour would have an annual cost of 

approximately $220 million, and this cost could be spilt 

between the customers who benefit directly from the 

conservation measures and the remainder of a utility’s 

ratepayers. This is significantly more than what the 

region spent in the late 1990s, but less than what was 

spent “playing catch up” during the Western energy crisis. 

At least 50 percent of this amount is already incorporated 

in utility commitments to the Northwest Energy Efficiency 

Alliance, Bonneville’s Conservation and Renewables 

Discount and Conservation Augmentation budget, and 

the Oregon Energy Trust. The cost estimate also does 

not include the commitments of investor-owned utilities 

outside of Oregon, or those of major public and municipal 

utilities in the region.

In a discussion paper released for public comment 

in December 2001, the Council referred to the 300 

megawatts of conservation acquisition as “building an 

efficiency power plant.” Three hundred megawatts 

of conservation is the equivalent of 300 megawatts 

of new generation (the average new natural gas-fired 

power plant is about 270 megawatts in size), and the 

conservation and generation would take the same 

amount of time to construct — about three years.

Importantly, the interim conservation goal, which was 

adopted by the Council in January 2002, challenges the 

region’s utilities to further diversify the Northwest power 

supply. The Council recognizes that the region’s utilities 

are stressed by the aftermath of the 2000-2001 energy 

crisis. But sustained commitment to conservation is an 

important goal in light of the region’s experience during 

the recent energy crisis, when the price of electricity rose 

to levels never seen before in the Northwest. 

The Council believes that by stabilizing the region’s 

investment in conservation and other demand-side 

resources, we can reduce our overall demand for power, 

and lessen the impact of future periods of reduced supply 

and volatile prices.

Future of the Bonneville Power Administration

In 2002, the Council and Bonneville initiated a 

regional discussion to determine how Bonneville might 

market and distribute federal hydropower after 2006, 

when most of its current power sales contracts expire. 

This effort was prompted by four key issues that need to 

be resolved in the near future:

First, the direct-service industries (DSIs) in the region 

currently have a five-year commitment for power from 

Bonneville. The industries see their access to costbased federal power as an important economic factor in 

operating their plants, and they have asked for certainty 

regarding their sources of power after 2006 so that they 

can make investment decisions. 
22nd Annual Report to Congress 16 

Second, a group of public and private utilities in the 

Northwest developed a document they call the Joint 

Customer Proposal. It sets out a scheme for marketing 

the power from the Federal Columbia River Power 

System and modifying Bonneville’s regional role. The 

customers propose that Bonneville transfer to the 

region’s utilities much of the responsibility for providing 

additional electricity needed to meet load growth in the 

future. Currently, Bonneville supplies all of the power 

requested by its customers, even if that means buying 

power on the wholesale market. The proposal is an 

attempt to settle a lawsuit that challenges the Residential 

Exchange Settlement Agreement. That agreement 

provides benefits to residential and small farm customers 

of the region’s investor-owned utilities. While the Council 

does not speculate here on the outcome of the lawsuit or 

the success of the Joint Customer Proposal, the Council 

believes it is important that any resolution of the lawsuit, 

particularly as it regards Bonneville’s future role in the 

region, be consistent with the region’s long-term vision 

for Bonneville, whatever that may be. This is important 

to the utilities that receive residential exchange benefits, 

too, because Bonneville will decide how much electricity, 

or financial benefits, the utilities receive under their 

existing subscription settlement agreements.

Third, some utilities and independent power 

producers wish to make decisions soon regarding 

investments in existing and new power plants, which 

could require capital funding. These investments are 

necessary to ensure that the region has the necessary 

power supply to support a healthy economy. However, 

capital often can be difficult to secure without clear 

evidence of future customers and the ability to serve 

them. These entities would like an understanding 

of what power supply role Bonneville will play in the 

wholesale marketplace after 2006.

Fourth, if Bonneville continues to supply power 

for loads greater than the capability of the existing 

federal system after 2006, it will need to begin making 

arrangements soon for augmenting the federal system. 

Bonneville and the Council conducted a series of 

public meetings in September 2002 around the Northwest 

to seek advice on the development of a creative and 

sustainable approach to the sale of power from the 

FCRPS, while ensuring that Bonneville continues to 

provide long-term benefits to the region. The Council 

and Bonneville accepted written comments on the Joint 

Customer Proposal and also encouraged others to 

submit their own proposals. All options for the future 

of Bonneville were open for discussion, from major 

modifications to how Bonneville currently sells power, to 

smaller adjustments of existing power sales contracts. 

Based on the information presented in the public 

meetings, as well as other information and analysis, the 

Council completed its recommendations for Bonneville’s 

consideration in December 2002. The recommendations 

are posted on the Council’s website, www.nwcouncil.org.

Bonneville anticipates a more formal public process in 

2003 to develop and discuss its own draft proposal. This 

would be followed by a decision, most likely in late 2003.

Power System Analyses

During the energy crisis of 2000-2001, the Council 

periodically analyzed the reliability and adequacy of the 

regional power supply. These reports provided timely, 

objective, and expert analysis of the evolving crisis, and 

distinguished the Council as a credible source to guide 

decisionmaking to help avoid, or at least soften, future 

crises. Many of the issues that will be addressed in the 

Fifth Northwest Power Plan, discussed earlier in this 

annual report, arose from the region’s experiences during 

the energy crisis.

In October 2001, as the crisis appeared to be waning, 

and precipitation — the source of “fuel” for most of the 

region’s electricity generation — appeared to be returning 

to normal levels, the Council issued its final analysis 
17 22nd Annual Report to Congress

of the crisis and near-term forecast of power system 

reliability. In short, the Council predicted the Northwest 

would have an adequate electricity supply through the 

winter of 2001-2002 thanks to actions taken in 2001 to 

increase the supply and reduce demand for power.

The analysis noted that power plants capable of 

generating more than 900 megawatts — nearly enough 

for the city of Seattle — were added to the region’s power 

supply in 2001, demand for power fell 20 percent during 

the year, and hydroelectric storage reservoirs had filled to 

normal levels by the late fall. But the Council also noted 

that the improved outlook came at a cost to the region’s 

economy and environment. For example:

• A large portion of the demand reduction was in 

industries responding to high power prices and the 

economic recession, and that translated to lost jobs.

• Temporary power generators, most of them 

burning diesel, helped boost the energy supply, 

but also polluted the air more than other types of 

power plants.

• Reduced water spills at Columbia and Snake river 

dams increased the amount of stored hydropower, 

but also likely took a toll on migrating salmon 

and steelhead by forcing those that could not be 

collected for barge transportation downriver to go 

through turbines.

The October analysis concluded there was less 

than a 1 percent probability of power deficits during the 

winter. That was a vast improvement over the 12 percent 

probability of deficits the Council had predicted just six 

months earlier.

 According to the analysis, the impact of drought 

reduced the region’s hydropower supply by about 4,000 

megawatts – nearly enough power for four Seattles. 

During the winter of 2000-2001, the Council had warned 

that the region’s deficit could worsen significantly by the 

end of 2001 unless emergency actions were taken.

Through the winter and into the spring of 2001, the 

region responded in many ways. Construction of new 

power plants was accelerated, both in the Northwest and 

in California. That boosted the Northwest power supply 

and also made more power available to the Northwest 

from the Southwest. Water spills at Snake and Columbia 

river dams to assist fish migration were reduced, and that 

had the effect of increasing water storage for hydropower. 

The region also significantly reduced its demand for 

power. Most of that reduction came from buybacks of 

load from industrial customers, but some of the reduction 

was in industries that responded to high power prices 

and the developing recession by cutting production and, 

in some cases, going out of business. Citizens helped 

ease the energy crisis by increasing the efficiency of their 

power usage through actions such as installing compact 

fluorescent light bulbs, turning down electric water 

heaters, and simply using less electricity in response to 

rate hikes imposed by their utilities. It was estimated 

that as much as 300 megawatts may have been saved 

through these actions alone.

The result was that the region reduced its demand 

for power by about 4,000 megawatts, compared to the 

previous year. That was a 20 percent reduction. The 

increased power supply, coupled with reduced demand 

and relatively mild summer weather, allowed the region 

to avoid brownouts and blackouts in 2001. In hindsight, 

the Council’s prediction in June 2001 of a 12 percent 

probability of deficits by the winter might have been 

too conservative. But given the inherent uncertainty of 

forecasting power supplies in a system dominated by 

hydropower, it is the Council’s preference to encourage 

cautious operations.

Today, demand for power remains below pre-energy 

crisis levels. It is important to note that nearly threequarters of the 4,000-megawatt reduction in regional 

power demand was attributable to the idled Northwest 

aluminum industry and several other large industrial 

plants, according to the Council’s October 2001 
22nd Annual Report to Congress 18 

analysis. Since then, there has been some recovery. 

Information for November 2002, the latest date for 

which information was available at the time this report 

was finalized, shows regional power loads are about 

1,000 megawatts above November 2001 levels but still 

2,357 megawatts below the Council’s forecast in the 

last power plan.1 The direct-service industries have not 

recovered, generally speaking. Three aluminum plants 

were operating partially in late 2002 for between 600 

and 800 megawatts of demand. That compares to the 

direct-service industry load of 2,588 average megawatts 

in July 2000 — prior to the energy crisis. The Council 

suspects that other large industrial plants remain 

shut down in response to the lagging economy, but 

corroborating information was not available.

The Council continues to monitor the reliability and 

adequacy of the regional power supply.

Energy legislation

The Council monitors energy legislation being 

developed in Congress and, from time to time, comments 

to members of the Northwest congressional delegation. 

In Fiscal Year 2002, the Council commented in support 

of extending and modifying the federal renewable energy 

incentives. In January, the Council commented in 

support of a five-year extension of the renewable energy 

production tax credit and reauthorization of the renewable 

energy production incentive, also for five years. The 

Council commented that a five-year extension would 

be sufficient to encourage sustained development 

of renewable resources, minimize rushed planning, 

complete projects that are under construction, and allow 

resource development to be better timed to need. The 

Council also said that limiting the extension to five years 

would provide an opportunity to review the performance 

of the program and the need for continuation in light 

of future technology, the power market, and fiscal, 

regulatory, and environmental conditions.

The Council annually submits recommendations to 

the Northwest delegation and Congressional committees 

pertaining to federal funding needs for fish and wildlife 

activities in the Columbia River Basin. The relevant 

agencies include the U.S. Army Corps of Engineers, 

Bureau of Reclamation, NOAA Fisheries (formerly the 

National Marine Fisheries Service), U.S. Fish and Wildlife 

Service, and the U.S. Forest Service.

1 Temperature-adjusted loads: November 2001: 18,589 megawatts; November 2002: 19,497 megawatts. Fourth Power Plan estimate for 

November 2002: 21,854 megawatts. 
19 22nd Annual Report to Congress

Project Funding Decisions and Issues

Fish and wildlife budget:

At the beginning of Fiscal Year 2002, the Council 

adopted a provisional start-of-year budget for Bonneville 

funding of projects in the Columbia River Basin Fish and 

Wildlife Program of $152.7 million. This amount allowed 

projects that had not yet been through provincial reviews 

to be renewed at previously approved budget levels 

with a 3.4 percent inflation adjustment. The provisional 

budget confirmed the previously approved budgets for 

projects in the Columbia Gorge, Intermountain, and 

Mountain Columbia provinces, and based renewal 

budgets for projects in the other provinces on budgets 

approved by the Council in Fiscal Year 2001.

The start-of-year budget was reviewed by members 

of the Columbia Basin Fish and Wildlife Authority, 

their comments were consolidated, and most were 

incorporated into the budget.

In December 2001, the Council convened a threehour, public roundtable discussion about Bonneville’s 

future fish and wildlife funding commitments. 

Representatives of utilities, Bonneville, and the state, 

federal, and tribal fish and wildlife agencies took part. 

Earlier that month, Bonneville Administrator Steve Wright 

said that during the current rate case period, 2002-2006, 

the agency’s target in the expense category of the direct 

program budget would increase from $100 million to $150 

million. The expense spending target under the six-year 

fish and wildlife funding memorandum of agreement that 

expired at the end of Fiscal Year 2001 was $100 million. 

In the capital category of the direct program budget, 

Wright said spending would increase from $27 million, 

the figure in the memorandum of agreement, to $36 

million during the current rate case period.

As the fiscal year progressed, however, Bonneville’s 

financial situation worsened and, in a July 2002 open 

letter to customers and constituents, Wright said it 

appeared Bonneville would end the current fiscal 

year “with only a small financial cushion in the form 

of reserves.” As a result, the agency is conducting “a 

substantial effort to look at our revenues and expenses 

for the 2003-2006 period,” according to the letter. In 

December, Wright informed the Council that Bonneville 

could spend no more than $139 million on fish and 

wildlife in Fiscal Year 2003. Subsequently, the Council 

and Bonneville worked together to determine project 

budgets, identify expenditures to-date, and develop a 

plan for managing expenditures during the remainder of 

the fiscal year to fit within the spending limit. The Council 

made its recommendations to Bonneville in a letter dated 

February 21, 2003.2 The Council has not reviewed 

budgets for 2004-2006.

Fish and Wildlife Issues

2 In the letter, which is posted on the Council’s website, www.nwcouncil.org, the Council cautioned that not all programs at Bonneville are equal, 

and so proportionate, agency-wide cuts of all programs would be unfair to those like the fish and wildlife program that respond to legal mandates. 

If cut too far, Bonneville runs the risk of not meeting its statutory obligations, the Council advised. Bonneville asked for immediate cuts in project 

budgets, but the Council took a different approach, arguing that arbitrary cuts would undermine the work that the Council had collaboratively 

completed with tribes, governors’ offices, watershed groups, state and federal agencies, and other interested parties over the last three years in 

the provincial review process. Instead, the Council scrutinized every project in the program and identified work that needs to be done in 2003, 

and opportunities for work that could be pushed into future years. The Council also made clear that its recommendations are only for 2003, not for 

future years. Before budgets for those years can be addressed, the Council wrote, Bonneville must decide two important issues: 1) whether it will 

impose an annual budget process on the program or continue with the multiple-year process that has been in place, and working successfully, for 

several years; and 2) whether it will use its capital borrowing authority for land purchases. For 2003, the Council identified $114.6 million in direct 

program expenses. Coupled with $22 million in “placeholder” expenses, which includes the costs of subbasin planning, research, monitoring and 

evaluation required by the 2000 Biological Opinions and Bonneville’s $12.1 million internal fish and wildlife overhead, the total spending would be 

$137 million in 2003. This assumes that Bonneville accepts the Council’s recommendations to capitalize about $20 million in land purchases and 

defer some work into future years. The Council noted in its letter that Bonneville’s fish and wildlife overhead costs have risen 61 percent since 

2001, a rate of expansion the Council said is difficult to accept. The Council also expressed concern for the burden ratepayers are shouldering, 

and urged Bonneville to continue searching for spending reductions. 
22nd Annual Report to Congress 20 

Recommendations of projects to implement 

the program:

In Fiscal Year 2002, the Council approved funding 

packages for projects to implement the fish and wildlife 

program in the Columbia Plateau, Blue Mountain, and 

Mountain Snake provinces. The Council recommended 

$34.6 million in projects for the Columbia Plateau 

Province, which includes southern Washington and 

central and northern Oregon. That amount is for Fiscal 

Year 2002; outyear funding (Fiscal Years 2003 and 2004) 

is for similar amounts. Major tributaries of the Columbia 

River in the Columbia Plateau Province include the 

Yakima, Walla Walla, Umatilla, John Day, and Deschutes 

rivers. The Council also approved a total of $36.3 million 

in Fiscal Year 2002 funding, and similar amounts in the 

coming two years, for projects in the Blue Mountain and 

Mountain Snake provinces.

Many of the projects recommended by the Council 

address biological opinion requirements, and so the 

Council’s program and the biological opinion are 

integrated in this regard. The Council recommended 

20 ongoing projects and eight new projects in the Blue 

Mountain province totaling $12.4 million in Fiscal Year 

2002. Major tributaries in this province include the 

Grande Ronde and Imnaha rivers, and Asotin Creek. 

The Council also recommended 38 ongoing projects and 

21 new projects in the Mountain Snake province totaling 

$23.9 million in Fiscal Year 2002. Major tributaries in this 

province include the Clearwater and Salmon rivers.

Bonneville funding of projects on federal land:

In February 2002, Bonneville proposed a policy that 

would prescribe new requirements and procedures for 

funding habitat improvement projects on federal lands. 

Bonneville asked for the Council’s assistance in making 

the proposed policy available for review and comment 

throughout the region. The Council discussed the matter 

at its meetings in March, April, and May, and facilitated a 

review and comment period using its website.

The proposed policy generated a large volume 

of public comment, most of it negative. The Council 

analyzed the proposal and found it to be overly broad and 

unfocused. The proposal also did not clearly address 

Endangered Species Act implementation or biological 

opinion implementation, and appeared to ignore the 

scientific or biological merit of potential projects, instead 

focusing on dividing costs and responsibilities. The 

policy also did not appear to be justified under the 

Northwest Power Act; nor did it appear to be consistent 

with the other federal agencies’ understanding of the 

2000 Biological Opinions.

Consistent with comments from others, notably the 

Bureau of Land Management, the Council drafted an 

alternative that would make cost-sharing a requirement, but 

also would leave flexibility to structure the size and nature of 

the cost share as circumstances, opportunity, and purpose 

dictate. The Council also offered to help Bonneville develop 

a policy consistent with the recommendations of the Council 

and others who commented.

Mainstem Amendments to the Fish and 

Wildlife Program

In October 2000, the Council adopted a set of 

amendments to the fish and wildlife program to begin 

what eventually will be a complete revision of the 

program. In that first phase, the Council reorganized the 

program around a comprehensive framework of scientific 

and policy principles. The program amendments in 2000 

set the stage for subsequent phases of the program 

revision when the Council will adopt more specific 

objectives and action measures that are consistent with 

the framework elements already adopted.

An important part of the program is a coordinated 

plan for the mainstem Columbia and Snake rivers. 

The mainstem plan will contain specific objectives and 

action measures for the federal river and dam operating 

agencies and others to implement in the mainstem 
21 22nd Annual Report to Congress

Columbia and Snake rivers, including dam operations to 

protect, mitigate, and enhance fish and wildlife affected 

by the hydrosystem, as required by the Northwest Power 

Act. The plan may include, as appropriate, objectives 

and measures for water management, flow regimes, 

spill, reservoir elevations, water retention times, adult 

and juvenile passage modifications at mainstem dams, 

fish transportation, systemwide coordination, protecting 

and enhancing mainstem spawning and rearing areas, 

and operational requirements to protect resident fish 

and wildlife. Like the 2000 Program, the mainstem 

amendments will include a vision, biological objectives, 

and strategies to achieve the objectives.

In March 2001, the Council requested proposals for 

elements of the mainstem plan that were accepted through 

late June, and posted on the Council’s website for public 

comment. In Fiscal Year 2002, the Council worked to 

prepare draft mainstem amendments that address issues 

developed from the proposals, and that are based on the 

recommendations and public comments we received.

Mainstem operations are essentially directed by the 

hydrosystem biological opinions issued by the NOAA 

Fisheries and the U.S. Fish and Wildlife Service. The 

Council’s mainstem plan does not need to mirror the 

operations required by the biological opinions, but to be 

relevant it should recommend river operations that meet 

biological opinion requirements while also protecting 

those fish and wildlife that are not listed species. Based 

on the amendment proposals and comments on them, 

the Council staff developed an initial set of mainstem 

amendments based on three key elements:

1. A set of principles and considerations for what 

it means to treat the mainstem as habitat in the 

Council’s habitat-based fish and wildlife program, 

and to make decisions that benefit all fish and 

wildlife important to the Council’s program and its 

biological objectives, not just Endangered Species 

Act-listed species. At times, this may drive the 

Council to recommend operations that are different 

than biological opinion operations in order to 

protect non-listed species.

2. A set of recommendations for addressing research, 

monitoring, and evaluation priorities and activities 

in the mainstem, and making better decisions 

based on that information.

3. Recommendations for managing the hydrosystem 

in a manner that assures an adequate, efficient, 

economical, and reliable power supply while also 

providing appropriate conditions for fish and wildlife.

The initial draft was informed by two special analyses. 

One was a Council staff analysis of the impact of the 

mainstem amendment proposals on the operation of 

the hydrosystem, and the other was an independent 

review of current scientific knowledge about fish survival 

in the mainstem rivers. The latter analysis, conducted 

by Dr. Albert Giorgi and his associates at the firm of 

BioAnalysis, Inc., was reviewed by the Independent 

Scientific Advisory Board to further inform the Council 

about mainstem fish survival science.

Later, the initial draft was revised by Council members 

and their staffs. The Council planned to release that 

version for public comment in the fall of 2002.

The schedule for completing the amendments 

deserves special mention. The Council issued its request 

for mainstem amendment proposals in March 2001 and 

asked that they be submitted by June 15 of that year. 

Because the Northwest Power Act directs the Council to 

adopt or reject recommendations to amend the program 

within one year of the date the recommendations are 

due, the Council should have prepared a draft for public 

comment, reviewed the comments, made appropriate 

changes in the draft, and adopted or rejected the 

amendments by June 15, 2002.

In the spring of 2002, the Council determined it 

would not be able to meet that date. Columbia River 

power system operational issues in the last year were 
22nd Annual Report to Congress 22 

extraordinary. These issues diverted the attention of the 

Council and relevant staff from being able to give the 

level of attention to the mainstem plan recommendations 

that they deserved. More importantly, this meant that 

the Council, staff, and the public needed more time than 

usual to understand general power system planning 

issues in the context of the energy crisis of 2000-2001.

However, the Council did not procrastinate. The 

members and staff worked consistently on the mainstem 

plan recommendations and related mainstem issues 

since receiving the recommendations. Because the 

mainstem amendment process could not be completed 

by mid-June 2002, the Council decided to extend the 

statutory completion date by a few months. The Council 

released draft amendments for public comment in 

October 2002 and planned to complete the rulemaking in 

March 2003.

Subbasin Planning

For planning purposes, the Council divided the 

Columbia River Basin into 11 ecological provinces, which 

are groups of geographically proximate subbasins with 

similar species, climate, and environmental conditions. 

Among the 11 provinces are a total of 62 subbasins. 

The Council intends to develop plans for each of these 

subbasins and amend them into the program.

Subbasin plans will be developed by the Council 

in collaboration with state and federal fish and wildlife 

agencies, Indian tribes, and local citizens who have 

knowledge about fish, wildlife, and environmental 

conditions in the subbasins. The Council will require 

that the plans be consistent with the vision, biological 

objectives, and strategies adopted by the Council. 

Subbasin plans will address all fish and wildlife in the 

Columbia River Basin, including Endangered Species 

Act-listed species, and will be the basis for review and 

funding of most fish and wildlife projects to implement 

the program.

Administrative structure and budget:

In Fiscal Year 2002, the Council approved a 

master contract with Bonneville for subbasin planning, 

which establishes an administrative structure and 

contract process. In order to ensure the greatest 

accountability, tracking, and coordination while still 

providing the planners within each state some flexibility, 

the administrative structure approved by the Council 

includes three levels: subbasin (level 1), statewide/

provincial/tribal (level 2), and regional (level 3). The 

Council’s administrative staff, with assistance from the 

fish and wildlife staff and the legal staff, will administer 

all subbasin planning contracts. In Fiscal Year 2002, 

Bonneville established a budget of $15 million for the 

first two years of subbasin planning. 

Council management of the contracts will give 

Bonneville a single point of responsibility for contract 

issues. It will also allow the Council to ensure that 

program goals and policies are being supported through 

direct contract management. The Council will rely on 

the statewide/provincial/tribal coordination groups to 

help track and monitor progress on the contracts and 

provide information to assist the Council in managing 

contract issues.

As they are developed, subbasin plans will be 

reviewed by a panel of independent scientists to ensure 

they include scientifically appropriate goals, objectives, 

and strategies, and that alternative management 

responses have been adequately considered.

Incorporating federal agency responsibilities into 

subbasin planning:

In Fiscal Year 2002, the Council began the preliminary 

work that will be needed to develop subbasin plans. 

The Council worked with Bonneville to reach an 

understanding of how subbasin plans will address the 

needs of listed species and nonlisted species. While as 

of yet, there is no unified plan to coordinate ESA recovery 

efforts and the Council’s program, Bonneville and the 
23 22nd Annual Report to Congress

Council agreed that locally developed subbasin plans 

will provide the priorities, scientific rationale, and context 

for offsite mitigation requirements in the 2000 Biological 

Opinions for the Federal Columbia River Power System. 

In a December 2001 letter to the Council, Bonneville 

Administrator Steve Wright said that completion of the 

subbasin plans will focus and integrate fish and wildlife 

needs, and that it is in the region’s best interest to work 

within the subbasin planning process to develop a 

collaborative, unified, and implementable approach that is 

scientifically, legally, and financially sound. He suggested 

specific activities that would facilitate integration of the 

Council’s program with those of the federal biological 

opinions on hydropower operations, including developing:

• A set of regional criteria for research, monitoring, 

and evaluation;

• Criteria for prioritizing ESA measures within the 

Council’s program;

• A crediting mechanism for action taken under the 

Council’s program and the biological opinions; and

• Subbasin plans that address ESA recovery 

planning efforts.

Meanwhile, the Council and NOAA Fisheries discussed 

a collaborative approach to recovery planning that would 

address ESA and Northwest Power Act requirements. In 

May 2002, NOAA Fisheries Regional Director D. Robert 

Lohn told the Council that it is the agency’s belief that the 

Council’s program, if well-integrated with state, tribal, and 

federal planning efforts, is critical for achieving recovery 

of threatened and endangered salmon and steelhead 

in the Columbia River Basin. Lohn noted that the 2000 

Biological Opinion relies on subbasin plans to identify and 

prioritize specific actions needed to recover listed salmon 

and steelhead in tributary and estuary habitats, and to 

provide context for determining how much benefit is likely 

from each action or set of actions.

The agency expects subbasin plans to include actions 

to implement the biological opinion’s offsite mitigation 

actions in the Reasonable and Prudent Alternatives 

(RPA). Specifically, subbasin planning should provide 

for RPA habitat actions 149 through 163; and the harvest 

and hatchery RPA actions 164 through 178 that pertain 

to, and require, local planning and management. Lohn 

said the NOAA Fisheries also expects subbasin plans to 

incorporate research, monitoring, and effective strategies 

and actions, particularly those described in RPA actions 

179, 180, and 183.

The biological opinion requires recovery goals for 

all listed salmon populations in the Columbia Basin by 

2003 (Action 179). The biological opinion also requires a 

finding that the federal agencies are on schedule to meet 

offsite mitigation standards (biological opinion section 

9.5.2.2). The Council and NOAA Fisheries worked 

closely in Fiscal Year 2002 to develop a technical guide 

for subbasin planning so that Council-approved subbasin 

plans can meet biological opinion requirements and, 

therefore, help form the basis of ESA recovery plans.

Interim rebuilding targets for ESA-listed species:

In Fiscal Year 2002, the Council worked with NOAA 

Fisheries as its Interior Columbia Technical Recovery 

Team developed interim rebuilding targets for listed 

populations. In April 2002, NOAA Fisheries forwarded to 

the Council interim abundance and productivity targets 

that the federal agency plans to replace at a later date 

with recovery goals. Phase One of the recovery planning 

effort will develop rebuilding targets and recovery goals; 

Phase Two will develop policies based on those targets 

and goals. NOAA Fisheries will collaborate with the 

Council in implementing Phase Two, as the federal 

agency believes this effort must be part of, or at least fully 

coordinated with, subbasin and watershed planning, and 

state recovery board efforts that already are under way.
22nd Annual Report to Congress 24 

Artificial Production of Fish

In Fiscal Year 2002, the Council continued to make 

progress in evaluating the purpose and goals of all fish 

hatcheries in the Columbia River Basin. The Artificial 

Production Facility/Program Review and Evaluation 

(APRE) is being carried out by a committee of fish 

experts appointed by the Council. The goal of the APRE 

is to implement the policies and recommendations of 

the 1999 Artificial Production Review, which Congress 

directed the Council to conduct with the assistance of the 

Independent Scientific Advisory Board (this is a panel 

of 11 scientists who advise both the Council and NOAA 

Fisheries). Recommendations for new hatchery policies, 

goals, and objectives that are developed through the 

APRE process would be implemented through subbasin 

plans in the Council’s fish and wildlife program.

The APRE will supply artificial production data and 

information to subbasin planners and assist with the 

completion of, and coordination with, Endangered 

Species Act and biological opinion activities related 

to fish production. The APRE will review more than 

300 resident and anadromous fish artificial production 

programs in the Columbia Basin, and also assist 

NOAA Fisheries in developing its Hatchery Genetic 

Management Plans, which are intended to provide ESA 

coverage for hatchery programs.

The APRE work began in July 2002 in the Columbia 

Gorge ecological province and will proceed through 

the other 10 provinces to an anticipated conclusion in 

June 2003.

Independent economic analysis of fish hatcheries:

As a first step toward developing a cost-effectiveness 

review process for proposals to build new fish hatcheries 

in the Columbia River Basin, a panel of independent 

economists reported to the Council on the costs of 

rearing and releasing fish, based on a review of eight 

hatcheries in the Columbia River Basin. According to the 

report, the cost of rearing fish ranges from a low of about 

eight cents per fish to a high of about $2.60 per fish, but 

the cost per surviving adult fish, particularly those that 

are harvested, is vastly higher. That is largely because 

many more fish are released from hatcheries than return 

as adults.

The Independent Economic Analysis Board (IEAB), 

which is headed by Daniel Huppert of the University 

of Washington, studied a sample of hatcheries that 

differed in the type of facility and in their geography. The 

eight facilities ranged from the mouth of the Columbia 

River, near Astoria, to the upper reaches of salmon 

and steelhead distribution in the Columbia River Basin 

near Leavenworth, Washington; and east to the upper 

Salmon River of Idaho. Annual costs for the hatcheries 

ranged from $527,000 at the Priest Rapids hatchery in 

Washington to $5.25 million for the Nez Perce Tribal 

Hatchery in Idaho. The Nez Perce hatchery costs are 

estimates, as the facility is under construction. The 

Council released the IEAB hatchery analysis for public 

review in August.

Cost-effectiveness information could help 

decisionmakers analyze fish harvest regulations as well 

as the cost-effectiveness of hatcheries and their specific 

purposes. The economists believe that an analytical 

approach, if expanded with a broader hatchery cost 

database than currently is available, could be used to 

screen new artificial production proposals as long as the 

goals for each new facility are clear and quantifiable. 

Developing clear goals for Columbia Basin hatcheries is 

one task of the APRE.

While the decision to build a new hatchery does not 

rest solely on economics, a cost-effectiveness analysis of 

a proposed new hatchery compared to existing facilities 

and their known costs could help the Council and other 

decisionmakers select projects that provide biological 

benefits at the lowest cost to the public. The hatchery 

program database that will be developed through the 

APRE process will be useful in developing an analytical 
25 22nd Annual Report to Congress

tool for evaluating the cost-effectiveness of future 

hatchery proposals.

Endangered Species Act Issues

As noted in the section on subbasin planning, 

under its 2000 Biological Opinion on hydropower 

operations, NOAA Fisheries expects the Bonneville 

Power Administration, the Corps of Engineers, and the 

Bureau of Reclamation to meet their ESA obligations in 

part through offsite mitigation. NOAA Fisheries believes 

that the Council’s subbasin plans will be a substantial 

component of offsite mitigation. The 2000 Biological 

Opinion regarding operation of the Federal Columbia 

River Power System will rely on the plans to identify and 

prioritize specific actions needed to recover listed salmon 

and steelhead in tributary and estuary habitats, and to 

provide context for determining how much benefit is likely 

from each action or set of actions.

The federal agencies’ one-year plan for implementing 

the biological opinion embraces projects developed 

through the Council’s provincial review and project 

selection process as meeting various requirements 

of the biological opinion. As subbasin plans are 

developed, they will direct project selection and, 

therefore, implementation of the Council’s program.

The Council has worked with Bonneville and NOAA 

Fisheries to ensure that the Council’s project review and 

selection process addresses the reasonable and prudent 

alternatives (RPAs) in the biological opinion. In fact, the 

Council intentionally accelerated the provincial review 

process schedule when those reviews began in 2000 in 

order to address concerns from Bonneville and NOAA 

Fisheries that the Council process could not act quickly 

enough to meet biological opinion implementation needs. 

As a result, in Fiscal Year 2002 project reviews and 

recommendations were completed in the Columbia 

Plateau, Blue Mountain, and Mountain Snake provinces, 

and the Council recommended that Bonneville fund a 

number of proposed projects to implement the off-site 

RPAs of the biological opinion.

Meanwhile, the Council sought guidance from the 

federal agencies about whether the recommended 

projects are meeting the objectives of the biological 

opinion, and whether there are RPAs that should be 

addressed through additional proposals or modifications 

to existing proposals. The Council recommended 

projects to provide riparian buffers, water leases, and 

protection of currently productive habitat that should 

meet the goals of the biological opinion. Some of these 

resulted from a special project solicitation coordinated 

through the Council’s program in response to the 

emergency hydropower actions in 2001 (this was the 

“Action Plan” solicitation). 

In a related matter, in Fiscal Year 2002 the Federal 

Habitat Team, which is working to coordinate habitat 

conservation efforts among federal agencies, began 

to identify and propose solutions to overcoming 

institutional and technical impediments to implementing 

the federal Basinwide Salmon Recovery Strategy. 

According to the NOAA Fisheries, this included working 

with the Council to develop subbasin and watershed 

assessments and plans that provide sufficient context 

to maximize the benefit of the strategy’s conservation 

programs and actions.

Like the federal agencies, the Council recognizes 

the importance of coordinating biological opinion 

implementation with the ongoing programs of the states 

and tribes. This is significant in implementing the 

research, monitoring, and evaluation measures of the 

biological opinion, but also is important in meeting its 

hatchery and habitat requirements.

The NOAA Fisheries recognizes the importance of 

collaborating with state and tribal governments and 

the Council in addressing RPAs, even though such 

collaboration can be difficult to achieve. The agency 

expressed support for a more focused effort to improve 
22nd Annual Report to Congress 26 

collaboration through implementation of the Council’s fish 

and wildlife program and other regional processes. 

Other Fish and Wildlife Issues

Fish Passage Center Board of Directors:

The Council’s 2000 Fish and Wildlife Program calls 

for the continued operation of the Portland-based 

Fish Passage Center, which was created through the 

Council’s program and is funded through the program 

by Bonneville. The Fish Passage Center provides 

technical support for fish and wildlife agencies and 

tribes in planning and implementing operation of 

the Columbia and Snake river hydroelectric system, 

specifically carrying out the flow and passage mitigation 

measures of the fish and wildlife program and the 2000 

Biological Opinion.

The 2000 Program states that the “Council will 

establish and appoint an oversight board for the Fish 

Passage Center, with representation from the National 

Marine Fisheries Service, the tribes, the Council and 

others, to provide policy guidance and assure regional 

accountability and compatibility with the regional 

data management system.” In Fiscal Year 2002, the 

Council appointed a seven-member board with the 

following members:

1) One Council representative

2) One member representing the National Marine 

Fisheries Service

3) One member representing upper Columbia River 

Basin tribes

4) One member representing lower Columbia River 

Basin tribes

5) One non-tribal member representing fish and 

wildlife managers

6) One member from the independent scientific 

community 

7) Two members from the public at large

The new oversight board replaced and assumed 

the duties of the previous board. The Council directed 

the new board to help define a Fish Passage Center 

statement of work, which will be presented to the Council 

for review and approval. The Council also asked the 

new board to increase the transparency and public 

accountability of Fish Passage Center operations. The 

Council anticipates that ultimately the Columbia Basin 

Fish and Wildlife Authority will assume operation of, and 

provide staff support for, the Board.

Crediting wildlife habitat benefits against 

estimated losses:

The construction and operation of hydroelectric 

dams affected wildlife as well as fish in the Columbia 

River Basin. Congress recognized this in the Northwest 

Power Act and directed the Council to address wildlife 

as well as fish in the Columbia River Basin Fish and 

Wildlife Program. The 2000 Fish and Wildlife Program 

treats habitat as an ecosystem that includes both fish 

and wildlife.

The program includes estimates of wildlife losses 

attributable to hydropower construction, but there is no 

agreement on the full extent of wildlife losses due to 

the operation of the hydrosystem, nor has there been 

agreement on how to credit wildlife benefits resulting 

from habitat acquisitions and improvements through 

the Council’s program. Despite this disagreement, 

hundreds of thousands of acres of wildlife habitat 

have been acquired and improved, and the Council 

estimates that about 40 percent of the estimated 

losses have been mitigated.

The primary dispute regarding the full extent of losses 

and crediting for mitigation is between the Council and 

Bonneville. To address the dispute, the Council created 
27 22nd Annual Report to Congress

a subcommittee of Council members to provide policy 

direction to the staff in discussing the crediting dispute 

with Bonneville staff. Those discussions continued in 

Fiscal Year 2002.

Data management:

The Council continues to work with fish and wildlife 

agencies and tribes to improve fish and wildlife data 

management. In Fiscal Year 2002, the Council approved 

a memorandum of agreement with the NOAA Fisheries 

that committed the two agencies to a cooperative 

approach to plan and develop an information system for 

the Columbia River Basin. The information system will 

help both agencies meet their mandates in federal law.

The agreement committed the agencies to develop 

solutions to certain information system problems within 

six months of signing the agreement, a blueprint for 

the new system within a year, and implementation 

of the new system within three years. The project is 

using a collaborative process involving entities with 

a broad array of science, management, decisionmaking, and public outreach interests in the region to 

evaluate current information management approaches 

and identify future needs. From this research, a clear 

understanding of gaps in the ability of current efforts to 

meet future needs will be gained, and recommendations 

for improvement developed.
22nd Annual Report to Congress 28 
29 22nd Annual Report to Congress

One of the Council’s primary tasks is to fulfill 

the directive of the Northwest Power Act to inform 

Northwest citizens about regional energy and fish and 

wildlife issues, and to involve them in the Council’s 

activities. Section 2(3) states a purpose of the Act 

is “to provide for the participation and consultation 

of the Pacific Northwest states, local governments, 

consumers, customers, users of the Columbia River 

System (including federal and state fish and wildlife 

agencies and appropriate Indian tribes) and the public 

at large within the region” in the Northwest’s planning 

for electrical power and protection of fish and wildlife 

resources. Section 4(g)(1) of the Act requires the 

Council to develop “comprehensive programs” to ensure 

public involvement and to “inform the Pacific Northwest 

public of major regional power issues.”

To involve the public, the Council arranges 

consultations and public hearings to discuss and 

explain key issues, and also gathers public comments 

at these meetings and through mail, e-mail, and 

telephone contacts. To inform the public, the Council 

produces a newsletter as well as special informational 

materials, media briefings, and several types of news 

releases. The Council also regularly updates its website 

(www.nwcouncil.org) and uses other approaches to 

inform interested citizens about fish, wildlife, and energy 

issues. The Council conducts all its regular meetings and 

committee meetings in public.

In Fiscal Year 2002, the Council continued these 

activities. The Council produces a newsletter, Council 

Quarterly, and a variety of special publications that 

are intended to support Council activities or provide 

information about the energy and fish and wildlife issues. 

In 2002, one of the Council’s special publications was the 

“Pocket Guide,” which includes facts and figures about 

the Columbia River.

The Council also joined with Bonneville to conduct a 

series of public meetings on the future of Bonneville after 

the current power sales contracts expire in 2006. The 

Public Involvement

Council and Bonneville believe that important questions 

about Bonneville’s future should be addressed now, far in 

advance of the next five-year rate period, to seek regional 

opinions about the future of the agency and, if Bonneville 

determines to change its current policies, to give surety 

to Bonneville’s customers. Key issues for discussion 

are how Bonneville’s power should be divided among 

the region’s electric utilities, and whether Bonneville’s 

direct-service industrial customers, primarily Northwest 

aluminum smelters, should continue to have access to 

the federal power supply, and under what conditions.

The Council developed its own recommendations for 

Bonneville’s future following the public meetings.
22nd Annual Report to Congress 30 
31 22nd Annual Report to Congress

In 1997 the Council agreed with Bonneville to make 

budget cuts totaling approximately $5.4 million over 

four years, Fiscal Years 1998 through 2001. At that 

time, it was anticipated that the Council’s role would 

diminish in power planning and fish and wildlife program 

development. Much of the Council’s budget cuts in 1997 

were based on those predictions.

Instead, the Council’s role and workload has increased 

substantially. Electricity industry restructuring is far from 

being fully implemented and as a result, the Council 

continues to be heavily involved in regional power 

resource planning, hydrosystem operations analysis, 

energy system reliability and adequacy forecasting, and 

conservation resource development. In addition, the 

Council has increased accountability for fish and wildlife 

spending, and implemented a new project selection 

process, including site review at the province level by the 

Independent Scientific Review Panel. The Council is also 

guiding the development of subbasin plans throughout 

the region, and is amending its fish and wildlife program. 

In short, the Council has an enhanced role and new 

responsibilities in the region for fish and wildlife restoration.

These proposed budgets reflect increased contracting 

needs in the Power Division during development of 

the Fifth Northwest Power Plan in Fiscal Year 2003, 

and illustrate the Council’s efforts to contain costs by 

absorbing inflationary increases over the next two 

years. The Council’s Fiscal Year 2003 revised budget 

of $8,493,000 is $154,000 higher (1.8 percent) than the 

current year 2002 budget of $8,339,000. The proposed 

Fiscal Year 2004 budget of $8,499,000 is $6,000 higher 

(0.08 percent) than the revised Fiscal Year 2003 budget.

This budget was adopted at the August 13-14, 2002, 

Council meeting.

Council Budget
22nd Annual Report to Congress 32 
33 22nd Annual Report to Congress

More Information

For additional details about the Northwest Power 

Planning Council’s activities, budget, meetings, 

comment deadlines, policies, or bylaws, call 1-800-452-

5161 or visit our web site at http://www.nwcouncil.org. 

Copies of our publications are available at the web site 

or by calling the toll-free number above. All Council 

publications are free.
22nd Annual Report to Congress 34 
35 22nd Annual Report to Congress

Comments of the Bonneville Power Administration

Department of Energy

Bonneville Power Administration

P.O. Box 3621

Portland, Oregon 97208-3621

December 19, 2002

In reply refer to: DR-7

Mr. Frank L. Cassidy, Jr., Chairman

Northwest Power Planning Council

851 SW Sixth Avenue, Suite 1100

Portland, OR 97204

Dear Mr. Cassidy:

Thank you for the opportunity to review and comment on the Northwest Power Planning 

Council’s (Council) 22nd Draft Annual Report. Our editorial comments were provided under 

separate cover.

The Council can certainly point to a number of significant contributions to the region over 

the past year. In particular, Bonneville Power Administration (BPA) appreciates your leadership 

in the Provincial Review Process. Your initiatives to integrate Endangered Species Act 

implementation requirements of the Federal Columbia River Power System (FCRPS) with 

the broader objectives of the Council’s Fish and Wildlife Program have taken the region much 

further down the road toward a unified plan for fish recovery. 

We also want to thank the Council for working with us on proposals for how BPA will market 

power and distribute costs and benefits of the FCRPS in the Pacific Northwest after 2006. 

The public meetings that we jointly sponsored this summer and fall yielded valuable input from 

a wide range of stakeholders. We look forward to review and consideration of the Council’s 

specific proposals on our Post-2006 decision, and working with you as we make these important 

decisions that will affect the region for many years to come. 

Finally, we have watched with interest the Council’s work toward mainstem rulemaking this 

year. The Council has the unique responsibility among regional interests to balance the needs of 

fish and wildlife with its obligation to ensure an economic and reliable power supply. As such, 

the Council’s mainstem rulemaking is an important comprehensive review of the biological 
22nd Annual Report to Congress 36 

and policy implications of hydrosystem actions. We anticipate that the final mainstem 

rulemaking will receive careful consideration in Biological Opinion implementation planning.

Thank you for your leadership, your contribution to the region, and your support during this 

past year. I look forward to continuing our strong and effective working relationship in the 

coming year.

Sincerely,

(Sgd.) Stephen J. Wright

Stephen J. Wright

Administrator and

Chief Executive Officer

cc:

Northwest Power Planning Council Members

Mr. Steve Crow, Executive Director, NWPPC
37 22nd Annual Report to Congress

IDAHO MONTANA

Judi Danielson, Vice Chair Ed Bartlett

Jim Kempton John Hines

450 W. State (UPS and DHL only) Capitol Station

Box 83720 Helena, Montana 59620-0805

Boise, Idaho 83720-0062 Telephone: 406-444-3952

Telephone: 208-334-6970 Fax: 406-444-4339

Fax: 208-334-2112

OREGON WASHINGTON

Eric Bloch (replaced by Melinda Frank L. “Larry” Cassidy, Jr., Chair

Eden in January 2003) Vancouver:

851 S.W. Sixth Avenue, Suite 1020 c/o Flo -Rite Products

Portland, Oregon 97204 P.O. Box 2187

Telephone: 503-229-5171 Vancouver, WA 98668

Fax: 503-229-5173 Telephone: 360-693-6951

Fax: 360-699-4093

John Brogoitti (replaced by Gene Derfler 

in November 2002 ) Tom Karier

Northwest Power Planning Council W. 705 First Avenue, MS-1

11 S.W. Byers Avenue Spokane, WA 99201-3909

Pendleton, Oregon 97801 Telephone: 509-623-4386

Telephone: 541-276-0657 Fax: 509-623-4380

Fax: 541-276-0995 

Olympia Office:

Telephone: 360-902-2302 or 2306

Fax: 360-902-2319

1111 Washington Street Southeast, Fifth Floor

Mail Stop 43200

Olympia, WA 98501-1091

CENTRAL OFFICE 

851 S.W. Sixth Avenue, Suite 1100 Executive Director: Steve Crow

Portland, Oregon 97204 Power Division Director: Dick Watson

Telephone: 503-222-5161 Fish and Wildlife Director: Doug Marker

Fax: 503-820-2370 Public Affairs Director: Mark Walker

Toll Free: 1-800-452-5161 General Counsel: John Shurts

Administrative Officer: Jim Tanner

Council Members (2002) and Offices