MEMORANDUM

To: Tim Allen; USFWS, NWR System, Branch of Air Quality

From: Greg Wingfield, Mike George; USFWS NEFO

RE: Nebraska Draft Regional Haze State Implementation Plan

Date: December 22, 2010

This responds to your request for review of Nebraska’s Draft Regional Haze State Implementation Plan. In your e

- mail of December 6, 2010, you specifically asked for our opinion on: (a) “the merits of [NDEQ] arguments” and (b) “are there options for utilizing the water and still maintaining ESA prot ection”.

The arguments given by NDEQ have some merit. However, the Platte River Recovery Implementation Program (PRRIP) inherently provides options to offset consumptive use that results in depletions to the river and jeopardizes endangered species. Add itionally, it appears much of the information provided in NDEQ’s plan represents a worst

- case scenario when describing offsets to water used by the Nebraska Public Power District (NPPD). While not inaccurate, the information tends to overstate implicatio ns of any new water use by NPPD.

The statements in the plan regarding Nebraska state water law, the Cooperative Agreement that resulted in the PRRIP, and the ensuing commitments of the State of Nebraska via its participation in the PRRIP appear correct. The PRRIP was developed knowing that it would be untenable to prevent all new water uses. Thus, the approach was to devise ways to provide for

the water

- dependent needs of listed species while accommodating new uses. The method of accommodating uses is complex and detailed; methods are delineated in the respective states’ and federal agencies’ New Depletions Plans. In essence, there is an obligation to provide offsets for water uses above and beyond a 1997 baseline use. For your reference we are attac hing PRRIP document language pertaining to accommodating new uses from the PRRIP’s purpose statement (attachment A, item 4 in bold) and from a description of the elements for overall PRRIP implementation (attachment A, item 3 in bold).

Basically, the dra ft haze plan represents Nebraska’s water resources expert, the Nebraska Department of Water Resources (NDWR), advising its sister agency, NDEQ, that the environmental impacts to ESA

- listed species from the act of mitigating environment impacts to air quali ty are onerous. Specifically, NDNR has indicated that “placing this additional demand on the basin jeopardizes Nebraska’s ability to meet commitments made to other states and the federal government ...” (page 53 ). Achieving the ESA recovery objectives of t he PRRIP will be a challenging endeavor and it is in the Service’s interests to see Nebraska succeed. Thus we understand the basis of their position and advice to NDEQ (i.e. our conclusion that their argument has some merit) . H owever, i t appears the figur es and calculations used to describe offset needs and compare them to other needs/obligations may portray a worst

- case scenario.Memorandum

- Tim Allen

December 2 2 , 2010 Page 2 of 3

The draft haze plan omits several important considerations. First, offset needs for the PRRIP and IMPs may be able to be me t concurrently or synergistically; the plan only hints at this by stating that these needs “may not necessarily be mutually exclusive”. The plan fails to note that the majority of the remaining 50,000

- 70,000 AF of PRRIP 1 st Increment water objective will likely be met by re

- timing (re

- regulating) existing water supply from times when target flows are exceeded to times of shortage (i.e. not solely by obtaining “new” water via conservation or acquisition of existing water rights). Further, any commitment of the parties to proceed toward obtaining the estimates of water listed for a 2 nd and 3 rd Increment is speculative, at best. While the Service has calculated an average annual shortage to targets of approximately 430,000 AF, there is no certainty that futu re PRRIP increments will include an objective to achieve this magnitude of reduction to shortages. If such commitments are made, undoubtedly the three states would each contribute; because the plan is silent on this, one might assume incorrectly that

it w ould only be Nebraska’s hardship to find the water.

Also, the example offset

- driven acreage retirements provided by Twin Platte NRD likely do not represent the approach NPPD would take. The example uses an array of north/south sections immediately west o f GGS so the stream depletion factors (SDF) vary widely (from 15 to 96%) and average 56%. There is no explanation or justification for this. Entities looking either to secure offsets (e.g. Central Platte NRD in their existing water banking program) or se cure new supply for river flows (e.g. PRRIP as part of the 50,000

- 70,000 shortage reduction objective) are targeting irrigated land with higher SDFs. Presumably NPPD would use a similar approach, when possible, resulting in less acreage retired from irrig ation. Accordingly, economic impacts from irrigated acreage retirements would be reduced proportionately. Finally, some of the statements about the economic impacts infer that NPPD would acquire the land in fee title, not just the water right for retireme nt (e.g. the $88,000,000 total cost for land acquisition).

It does not appear the plan has sufficiently considered all potential, feasible sources for this amount of water. You might want to get clarification on whether there are exceptions to the

well

- d rilling moratorium in the Twin Platte NRD. Are there any industrial or commercial large capacity wells that could be acquired as part of the water supply or retired as part of the offsets? Are there potential deep

- well ground water sources outside of the hydrologically connected area, but much closer (and much less expensive) than the example source of piping water from the Missouri River that is referenced? It almost seems like the Nebraska parties could be taking the approach of “where there is a will there is a way”, similar to how new agricultural, commercial or industrial water users would investigate possible sources to accommodate their needs (e.g. ethanol plants).

In summary, there is no question any new depletions to central Platte River flows w ould require offsets. Because of this, there is the possibility that accelerating actions to achieve air quality improvements would weaken Nebraska’s ability to meet its PRRIP obligations to improve Platte

River flows on schedule. But we do not believe t hat it automatically follows that air quality improvements cannot be pursued because Nebraska simply could not do both.Memorandum

- Tim Allen

December 2 2 , 2010 Page 3 of 3



### Attachment A

Ex c erpts from Program document sections on purpose and elements

.

PROGRAM PURPOSES

A. The purpose of this Program is to implement certain aspects of the U.S. Fish and Wildlife Service’s (FWS’) recovery plans for the target species that relate to their associated habitats by providing for the following:

1. securing defined benefits for the target species and their associated habitats to assist in their conservation and recovery through a basin

- wide cooperative approach agreed to by the three states and DOI;

2. providing ESA compliance2 for existing and new water related activitie s3 in the

Platte River basin4;

3. helping prevent the need to list more basin associated species pursuant to the ESA;

4. mitigating the adverse impacts of new water related activities on (1) the occurrence of FWS target flows (as described in Section III. E.1.a.) and (2) the effectiveness of the Program in reducing shortages to those flows, such mitigation to

occur in the manner and to the extent described in Section III.E.3 and in the approved depletions plans; and

5. establishing and maintaining an organizationa l structure that will ensure appropriate state and federal government and stakeholder involvement in the implementation of the Program.

PROGRAM ELEMENTS

A. General Description

1. Elements. The Program has three elements: (1) increasing streamflows in th e central Platte River during relevant time periods through reregulation and water conservation/supply projects; (2) enhancing, restoring and protecting habitat lands for the target species; and (3) accommodating new water related activities in a

manner co nsistent with long

- term Program goals.