NMFS Policies Panned at Pasco Hearing
 Fall Harvest in Full Swing
 Judge Says NMFS Can't Bypass ESA Over Fall Harvest Concerns
 Feds OK More Fall Fishing
 BPA Extends Comment Period on Future Fish Options
 NMFS POLICIES PANNED AT PASCO HEARING
Hundreds of farmers and growers from eastern Washington showed up last week at a Congressional field hearing in Pasco, WA for testimony about fish and federal water policy. The purpose of the hearing was to collect comments on two subjects; NMFS' implementation of the Endangered Species Act and a legislative proposal, H.R. 4335, that would take ESA salmon responsibilities away from the National Marine Fisheries Service and give them to the US Fish and Wildlife Service.
Several members of the House Resources Committee took time out from their Congressional recess to hear from federal officials, fish scientists, irrigators and environmentalists. But the Sept. 2 hearing was clearly the setting for airing election year agendas as well.
Rep. Richard Pombo (R-CA), who chaired the proceedings, sat in for committee chair Don Young (R-AK), and used the venue to announce that it was time to fix the Endangered Species Act because "it was broken for people and broken for wildlife." He said any changes to the law should reduce the burden on local residents.
Minority committee member Carlos Romero-Barcelo (D-P.R.) told the participants that the law isn't going away, but the object of its reauthorization is "to make it better for people and the species." He said transferring any ESA authority from one agency to another could slow recovery. He added that the fishing industry was already on record opposing the bill.
Congressman Doc Hastings (R-WA), who represented most of the audience, took issue with the present law, including use of the "distinct population segment" in administration of the ESA. He called for a closer look at the entire life cycles of protected populations. "Why are Upper Columbia River steelhead listed as endangered and not the sockeye salmon of the Okanogan River?" Hastings asked. "Both populations must travel hundreds of miles and pass the same dams. Is it ocean conditions, the timing of harvests, their path through the Northern Pacific, the temperature of the river, the depth of migration that protects them from predators, or something else entirely? We need to find out and coordinate our approach accordingly, if it is even possible."
Hastings also said he would be interested to hear why NMFS has not required an "incidental take" permit for each commercial fisherman for every endangered salmon caught and killed. He told the group that more local input is needed to develop a salmon recovery plan for the whole basin and pointed to the mid-Columbia HCP as an example of such a success.
Congresswoman Linda Smith (R-WA) said she wanted to know whether individuals would have to give up property rights when the ESA is applied to them. She said allowing the federal agencies to take control of water was the "same as taking our rights."
States Criticize NMFS' Negotiating Style
The politicians heard from three panels on certain aspects of NMFS' salmon recovery policy. The big item--and the reason several hundred people showed up--was discussion of the amount of water the agency has called for to help fish migrate downstream every year, and its policy for "zero net loss" of water withdrawals in the mainstem Columbia and Snake rivers.
Washington state House speaker Clyde Ballard (R-Wenatchee) testified that NMFS water policy challenged the authority of the state. He called it an "absurd resource policy."
Later in the hearing, Ballard told the committee that in dealings with NMFS, the state has been treated as a threat. "They are literally treating us as if we were their prisoners, and that's wrong."
Ballard's counterpart from Oregon, Rep. Lynn Lundquist, said negotiating with NMFS over forest practices and other activities that affected fish was like having "a gun at your head." He pointed out that after the agreement over coho restoration was reached with his state and the feds, NMFS proposed strict new guidelines for the timber industry that would reduce the amount of harvestable forests by over 40 percent.
Another Washington legislator, Rep. Dave Mastin (R-Walla Walla), said the federal fisheries agency "has been a major impediment to restoring habitat." He told the House committee to do what it takes in Congress to see if NMFS is hindering salmon restoration.
Oregon state Senator Ted Ferrioli said the NMFS draft on forest practices is an example of an agency "clearly out of control" and urged passage of the bill to remove ESA jurisdiction from NMFS.
Fish Survival Benefits Questioned
When the issue went back to water, Dr. James Anderson from the University of Washington told the committee that NMFS has tried to justify flow augmentation to help juvenile salmon migration "qualitatively." But with "no numbers on things," he said, "we have been misled, inadvertently, in most cases."
Anderson said the flow augmentation policy provides for about a one percent survival benefit for spring chinook, rather than the 1,000 percent increase needed to recover the stocks.
With fall chinook, things are more complicated, according to Anderson. He said some new analysis that relates fish size to survival could mean that increasing flows will actually harm fish by forcing them to migrate too soon.
Anderson pointed out there is a big difference in effectiveness of water withdrawals from tributaries to the mainstem rivers. He said a blanket endorsement for more flow "leads to unrealistic expectations on what flows can do for fish." His remarks drew wide applause.
Congressman Pombo asked Anderson why NMFS used the strategy, and he replied that the agency decision was based more on politics than science, explaining that NMFS is made up of two cultures--one scientific, and the other management-oriented--that balances social and economic factors in decision-making.
Rep. Linda Smith (R-WA) asked Anderson if ocean conditions are the major factor affecting salmon recovery. He replied that the ocean was one of the major factors, but dams, hatcheries, and flow are others. He said there is a "ray of hope" that ocean conditions are getting better for the region's fish, with signs of mild increases in some Northwest runs and decreasing Alaska production that could mean a shifting climatic regime.
Smith asked if flow augmentation would improve salmon runs. Anderson said it had "very little impact on fish." There are better ways to spend resources, "especially since there are so few fish in the river, because most of them are barged." In the end, Anderson said transporting fish works fairly well, and that the strategy has probably kept some stocks from going extinct.
NMFS regional administrator Will Stelle told the committee that his agency faces major challenges with scientific uncertainty--"I can't tell you how much I would love to have clear cut science"--but he said NMFS decisions are based on the agency's best scientific judgment. As for HB 4335, Stelle said NMFS opposes it. He said it would "take years for the dust to settle" if ESA responsibilities are shifted down from one agency to another, and that it would constitute a major disruption to salmon recovery efforts.
The Value of Salmon
Stelle was followed by Trout Unlimited spokesman Jeff Curtis, who said the region is in a crisis situation and that his group opposes the bill. With many stocks in "an extinction profile," Curtis said Trout Unlimited endorses a Three Sovereigns "type" process for river governance--and also called for breaching the lower Snake dams. "To those who believe salmon are icons, it's worth it," Curtis said.
Other testimony had a more quantitative bent. Consultant Darryll Olsen told the committee that simply giving up the unproven flow augmentation program would save the region $50 million to $70 million a year. Citing a "white paper" he recently prepared with help from the University of Washington and Harza Northwest that used NMFS' own data to conclude that augmenting flows in the spring provided no measurable benefits to fish, he said the NMFS strategy is mis-allocating large volumes of water in the West. In fact, his analysis showed the fish agency's flow targets couldn't be met all the time, even in average water-years, with or without irrigation, because the basin simply cannot provide enough water.
Irrigator Bob Hale spoke of his experience with the fish agency's "zero net loss" water policy when he and several other farmers joined together to develop property with existing water rights in eastern Oregon, but were refused a pumping permit. "Basically, NMFS is taking existing state water rights from landowners in order to create theoretical benefits for fish that cannot be measured in reality."
By turning him down, Hale said NMFS made faulty use of a draft report from the Bureau of Reclamation. "Based upon our discussions with the Bureau of Reclamation staff, we believe NMFS knowingly misused and misinterpreted the Bureau's data to reach the result it wanted to reach politically in issuing the Inland opinion."
Rep. Smith called the refusal to grant Inland a permit "a taking," and asked NMFS administrator Stelle if his agency's action could override state water rights. Stelle said he had authority to regulate flows at the federal dams.
"Is that an abrogation of state water rights? Smith asked.
"No," said Stelle. "NMFS is not abrogating state water rights."
When pressed by Smith, Stelle said Olsen's report had been reviewed by NMFS and referred to an inter-governmental group responsible for fish passage issues. He said that so far, the group has not adopted any of Olsen's recommendations. Olsen said he has never received any formal response from NMFS regarding his white paper.
Rep. George Nethercutt (R-WA) of the House Appropriations Committee sat in on the hearing and told the group that Stelle's testimony was revealing because it showed, by the way the agency treated Olsen's report, that "the federal government is always right." He called it the "height of arrogance."
Olsen testified that the NMFS BiOp and latest supplement for steelhead has completely ignored the latest PIT-tag research. He said the agency has created a double standard for science. Stelle told the committee he would be glad to share the agency's review of flow/survival relationships.
Rep. Hastings also asked Stelle for a written response from NMFS "as to state water rights." Stelle said he would provide it by Oct. 1. Responding to a question from Rep. Pombo about when the region will see some improvement in salmon stocks, Stelle said it won't turn around on any one factor. He pointed to Anderson's earlier testimony that the ocean is a "huge issue."
"If the ocean turns around, I'm optimistic," Stelle said.
Sierra Club Supports Dam Breaching
A third panel included Sierra Club spokesman Jim Baker, who was grilled heavily by the committee, especially after announcing that his group was "reluctantly" in support of breaching dams on the lower Snake. He said the Sierra Club had taken that position because NMFS has failed to provide even minimum protection for fish.
Dick Erickson of the East Columbia Irrigation District, based in Othello, WA, opposed the NMFS flow policy because it has stopped further development of the Columbia Basin Project, which presently irrigates over 600,000 acres. Congress has mandated it to provide water for over a million acres. He said the area is on the threshold on a "no-growth scenario" and that NMFS is using its ESA authority to further an agenda of dam removal and "single purpose mainstem flows."
Irrigation consultant Fred Ziari said the "reactionary" NMFS water policy violates state water laws and wasn't based on any meaningful or defendable analysis. "We watch with bewilderment," said Ziari, "how the National Marine Fisheries Service and an army of other federal agencies, have totally abandoned the cooperative spirit of working with local officials and the resource users. At the same time, it has wasted billions of dollars of Northwest ratepayers' money with nothing to show for it."
The next day, the committee headed to Boise, where Idaho constituents also got a chance to grill Stelle. -Bill Rudolph
 FALL FISHERY OPENS ON COLUMBIA
With thousands of chinook entering the Columbia River every day, the fall commercial gillnet fishery opened for both tribal and non-tribal fishermen on Aug.25. Non-treaty fishermen got one night to fish below Bonneville dam, while above the dam, the tribal fishery (Zone 6) opened for five days and was scheduled to re-open Sept. 1 for another five days.
Non-treaty fishermen gillnetted a small area below the dam, where 17 boats reportedly took part, averaging close to 100 fall chinook per boat. One happy fisherman said they were all bright fish bound for the Hanford Reach; no lower river tules--fall chinook who call Bonneville pool home--were in evidence yet. The fishermen may get another crack at the fish soon.
Tribal fisherman had landed nearly 16,000 fall chinook by Sept. 1, when state fisheries officials yellow-flagged the sports fishery over ESA concerns, a move that got federal judicial wheels grinding later that week when district court judge Malcolm Marsh agreed with Oregon and Washington states' argument and would not approve a harvest agreement between NMFS and the tribes because it failed to consider the "unambiguous statutory mandate" of the ESA. In his Sept. 3 ruling Marsh said the federal government seemed more concerned "with what the tribes are willing to accept in reductions to their fall commercial harvest than they are with the needs of the listed species."
Both states filed a memorandum on Sept. 1 opposing the NMFS-tribal agreement because it had been reached without a biological opinion. Federal attorneys told Marsh that if a BiOp were issued on the tribal fall fishery, the government would probably have to declare the fish in jeopardy and shut doen the fishery. The states' sports fishery in the Columbia was proceeding without a harvest BiOp on steelhead as well, but agency officials were prepared to close it down in the middle of the Labor Day weekend, ostensibly to protect steelhead. However, the sports fishery had almost reached its projected catch of ESA-listed Snake River fall chinook and the fishery would have to be closed soon, anyway.
A long meeting on Sept. 4 ended when NMFS promised a letter to fish managers that approved the sport fisheries to stay open through Sept. 12. NMFS administrator Will Stelle said, "We expect the tribal fisheries to remain open during this period as well." On Sept. 8 the agency announced it would have a biological opinion on harvest impacts to ESA-listed steelhead by the end of the week.
By Sept. 7, more than 88,000 fall chinook had passed the dam, with more than 36,000 salmon counted in the previous seven days. Fish managers expect more than 150,000 falls from the Hanford Reach stock to return. Almost 67,000 steelhead, 13,383 of them wild, have been counted as well.
Later-running steelhead destined for Idaho, known as the B run, are larger fish and are expected to face bigger losses from the fishery because of their size. Tribal fishermen are allowed to sell steelhead, while non-tribal fishermen are not.
Agency fish managers expect tribal fishers to catch more than 21,000 fall chinook by Sept. 5, a harvest that is estimated to include 155 listed Snake River fall chinook and nearly 1,600 listed wild steelhead (405 B's).
Non-tribal fishermen will be allowed about 9,400 fall chinook, which means fish managers expect them to catch about 40 listed Snake chinook and 150 wild steelhead (including 10 B-run fish).
This year's prediction calls for about 39,000 wild steelhead to pass Bonneville, which includes 7,700 to 9,000 B-run fish. That's far short of the present escapement goal for wild steelhead counted at the dam, which is currently 75,500 fish--62,200 A's and 13,300 B's.
When escapement goals for wild steelhead are not met, the fish plan that governs tribal harvest calls for a 15 percent harvest impact on A's and a 32 percent rate on B-run fish. Earlier this year, NMFS pushed for a reduction that would have effectively cut harvest rates of the listed B run to around seven percent. When a planned net exchange program to provide tribal fishermen with larger mesh nets fell through, a compromise over mesh size was agreed upon. Fish managers figure the impact will translate into a 15 percent harvest rate on the later running steelhead, while allowing the tribes to target the plentiful fall chinook heading for Hanford.
Part of the funding is planned for monitoring and evaluating the fishery--and to that end, 1,000 fall chinook may still be radio-tagged this year and followed upstream. Another study designed to examine how much mortality fish might incur from encounters with nets without being caught met with stiff opposition from the tribes. BPA also wanted some of the funding to pay for more law enforcement, and to gather information on the number of nets and their mesh size to help with future net exchanges. But some fish managers were balking at that as well. -B. R.
 JUDGE SAYS NMFS CAN'T CIRCUMVENT ESA OVER FALL HARVEST
Federal district court judge Malcolm Marsh on Sept. 3 denied a motion by lower Columbia tribes and the National Marine Fisheries Service to harvest steelhead without a biological opinion. They wanted the judge to adopt a stipulated agreement for steelhead harvest and production management for the 1998 Columbia River treaty Indian fall season fisheries.
Fish agencies from Oregon, Washington and Idaho opposed the federal and tribal motion. They were unwilling to allow continued steelhead fishing without a NMFS biological opinion and a finding that said continuing to fish would not jeopardize B-run steelhead that are listed as a threatened species.
Oregon and Washington moved to close their sport fisheries in the middle of the Labor Day holiday if NMFS did not comply with the Endangered Species Act. "The issue is centered on the requirements of the Endangered Species Act," said Jim Greer, Director for the Oregon Department of Fish and Wildlife. He said the ESA required a biological opinion from NMFS before his agency could authorize a fishery that might impact a listed species.
"We are not going to allow a fishing season if doing so would violate the ESA," said Steve Sanders, Oregon assistant attorney general. "The ODFW Commission is supportive of the legal action and directed the agency to be on the side of the fish. Our point is to protect the fish, not deprive the tribes of any fishing opportunity," he added.
Justice Department attorney Fred Disheroon told Marsh that it may have been impossible for NMFS to issue a non-jeopardy opinion for the fishery. According to Disheroon, the states, tribes and NMFS could not reach agreement about steelhead harvest under the Columbia River Fish Management Plan, the court-ordered plan created by the U.S. v. Oregon case. He said a reduction in harvest by the tribes had been negotiated, but if a biological opinion had been issued by NMFS, the "best estimate is it would be a jeopardy decision" for the steelhead.
Judge Marsh asked Disheroon: "You are not looking for a biological opinion; you don't want one because it would cause conflict between the ESA and treaty fishing?" Disheroon said, "Yes, we are trying to avoid that..."
"This is an action of the Department of Justice to settle a disagreement and is not subject under the ESA," answered Disheroon. Marsh asked how Disheroon expected to avoid triggering the Endangered Species Act. "The federal government made a deliberate decision to not follow the ESA process," said Disheroon.
The states claimed that NMFS was negotiating an agreement with the tribes rather than working on a biological opinion that would allow the states to continue fishing. The states had opened a commercial and sport fishery below Bonneville Dam and a sport fishery above the dam without a biological opinion. Using this example, Disheroon told the judge that the states had no standing in this matter because they completed their fishery and waited until the last moment to make their claim.
Judge Marsh then asked Disheroon why the feds didn't stop the states from fishing. Disheroon replied that officials thought agreement would be reached among all parties in July, but that didn't happen.
However, when Marsh asked the states why they opened the fishery without a biological opinion, Oregon attorney Barbara Gazeley said it was a mistake. The states argued that they were led along by NMFS, since the agency said there would be an agreement and that NMFS would approve the fishers.
In an Aug. 31 letter to NMFS, ODFW director Jim Greer and Larry Peck, acting director of WDFW, told regional administrator Will Stelle that "Without warning, your agency has apparently refused to follow through with its legal obligation to produce a biological opinion. As a result, the states have no choice but to prepare to close all non-treaty fisheries on the Columbia River..."
In his court order, Judge Marsh made the following observations: "...the federal government has acknowledged that if it were to issue a biological opinion on the proposed fall fishery, it would probably have to issue a jeopardy opinion. The government has also acknowledged that to reach a no-jeopardy opinion would, in all likelihood, effectively shut down the tribal fall commercial harvest."
The tribes argued that the states' ESA concerns were unfounded because the ESA does not apply to the Tribes' treaty interests. But Marsh said in his order, "The federal government and Tribes have simply asked that I sign off on a settlement agreement to which the state parties do not agree. This stipulated agreement would allow the Tribes to have an incidental harvest upon listed Group B steelhead of 15-20%. The agreement says nothing about whether these impacts would avoid jeopardy under the ESA or whether they would adequately conserve listed steelhead under some other set of standards. While the Tribes argued that it should be the states' burden to show that the proposal threatens conservation, I find that...it is the federal government and Tribes' burden to show the absence of a conservation concern or threat of jeopardy. The parties have not cited, nor have I been able to find any authority which would permit a stipulation or settlement agreement to take the place of a biological opinion. Once the government determined that the proposed action will likely jeopardize the listed steelhead, it was beyond prudence to then claim that the Act (ESA) no longer applies."
Marsh said "in good conscience" he couldn't sign the agreement. "The court's primary concern has been with the long-term preservation of the listed species and my decisions have been made with that central concern in mind.. While I am highly sensitive to the importance of the Tribes' treaty fishing rights, I am also mindful of the fact that no one will be fishing if the resource is depleted to the point of extinction."
Marsh had stern words for the federal government, saying that it "appears to be more concerned with what the Tribes are willing to accept in reductions to their fall commercial harvest than they are with the needs of the listed species. Federal agencies may not circumvent...the ESA simply to avoid more difficult issues or to appease one interested party at the expense of others. The federal and Tribes' motion to approve their stipulation...is DENIED." -Bill Bakke
 NMFS FINDS WAY TO KEEP COLUMBIA RIVER FISHERIES OPEN
In a tedious seven-hour meeting of the Columbia River Compact last Friday, fish agencies and tribes found a way to go fishing after federal judge Malcolm Marsh had refused to OK an agreement between tribes and the federal government the day before (See above story).
The fisheries re-opened after a federal attorney found a clause in the Endangered Species Act that allowed NMFS to approve a fishery without producing a biological opinion or making a determination about whether such a fishery was likely to jeopardize listed steelhead.
In a draft letter, Will Stelle, NMFS regional administrator, cited section 7(d) of the ESA to allow for a fishery. "...NMFS has determined that authorizing the fisheries through September 12 would be within the scope of the activities permitted to proceed during a consultation, and thus these limited fisheries would not violate the ESA."
The tribal harvest impact on listed B-run steelhead is estimated to be 6.9 percent for the period Sept.6-12, just within the range NMFS had suggested in an April 18 letter to the tribes, in which Stelle said his agency's reasoning found that B-run harvest rates should be limited to a maximum of five percent to seven percent for all mainstem fisheries.
Lower Columbia tribes and NMFS found themselves in a tight spot after Judge Marsh refused to accept their proposal to go fishing without following conditions of the ESA and implementing protective measures for listed steelhead.
"We are below the seven percent impact on the tribal and sport fishery, the level that NMFS says is in an acceptable range," Tim Weaver, attorney for the Yakama Indian Nation, said at the Columbia River Compact hearing. "So can't we open a fishery through next week?"
But representatives from Washington and Oregon said they needed a biological opinion to proceed, so the Compact was not willing to set a season without one from NMFS. Weaver countered, "If you get an informal opinion, isn't that enough?" But Washington fisheries official Guy Norman said the Compact needed a written statement that the fisheries wouldn't cause jeopardy.
On the conference call, the feds said they had found a way to allow a fishery without doing a biological opinion and a jeopardy declaration on the listed fish. It was section 7(d) of the ESA, which would allow a fishery if it did not preclude any "reasonable and prudent alternatives." At that point, state and tribal attorneys rushed out of the room to confer in private.
In the vacuum created by the exodus of the attorneys, Compact representatives called upon the public for comment. Liz Hamilton, representing the sport fishing tackle manufacturers, said the Labor Day weekend is "our biggest weekend, and millions of dollars are on the line." A representative of Northwest Steelheaders, a fishing organization, asked the Compact to keep the fishery open for seven more days.
Cecil Jams, a member of the Yakama Indian Nation, made the point that fishermen on the lower Columbia were getting more money for their fish than tribal fishermen and he wanted this corrected. He said wholesale fish buyers were paying tribal fishermen 50 cents per pound for bright chinook, 10 cents per pound for tule chinook, and 20 cents per pound for steelhead.
The tribes were then called upon to comment. Yakama tribal attorney Weaver said the tribes were proposing a fishery under US v. Oregon standards. "We do not believe there is a conservation problem for a fishery that fits in below the seven percent harvest impact on B Run steelhead."
The attorneys returned and advised compact representatives to require a signed letter from NMFS that would allow them to approve a fishery until Sept. 12th. When that letter was promised, Norman made the motion to go fishing.
NMFS regional adminstrator Will Stelle issued a statement on Sept. 4 that said to be consistent with the provisions of the ESA, Washington and Oregon sport fisheries, as well as the tribal fishery, should remain open until Sept. 12. He said his agency would consult with the parties to produce a BiOp.
But Stelle got an argument from the Columbia River Alliance, a coalition of river users, who sent a letter to Commerce Secretary William Daley asking him to investigate the federal action that allowed the harvest and sale of an endangered species. The CRA said section 11 of the ESA gives Daley the power to assess monetary penalties and recommend criminal prosecution for "knowing" violations, with fines up to $50,000.
That same day, Stelle announced a steelhead harvest BiOp for both sports fishermen and the tribes would be completed by the end of the week. "The court made it very clear that in making any management decisions regarding salmon fishing, our first priority must be to the steelhead," Stelle said in a Sept. 8 press release. -Bill Bakke
 BPA EXTENDS COMMENT PERIOD ON FISH OPTIONS, EXPANDS FUNDING PRINCIPLES
The extended deadline for comments on BPA future fish funding options ended last Friday, Sept. 4--two weeks after the initial Aug. 21 deadline. BPA said the extra time was meant to give interested parties an opportunity to review an updated analysis of fish funding options, along with a revised set of fish and wildlife funding principles. While the updated analysis hasn't changed significantly from the earlier version, the principles have been expanded and made more specific.
Rob Walton of the Public Power Council said BPA didn't circulate the new principles until last Wednesday afternoon; Thursday evening, PPC was still working on its comments. But Walton said the principles "went from general to more specific and our concerns rose accordingly."
Of special concern to the PPC is principle six, which says "BPA will adopt an approach that is flexible in order to respond to a variety of different fish and wildlife cost scenarios." Under that principle, the agency has listed two bullets: one indicates BPA's goal will be to have "35 percent to 45 percent of its post-2001 power sales, including secondary sales, in contract terms of three years or less, in short-term surplus sales, and/or in cost-based indexed rates."
"There's a big difference in a three-year cost-based rate and a three-year indexed rate," Walton said. PPC is opposed to the concept of indexed rates for preference sales and perhaps in general, he said.
Paul Norman, BPA vice president of power marketing, said the indexing items included in the bullets are only ideas at this time. But while "it is not a winning customer service strategy to force customers to buy" for shorter time periods, Norman said it's something Bonneville has wanted to implement as a way to stagger contract expiration dates and thereby avoid some of the problems that have resulted with all of the agency's current power sales contracts ending at the same time.
"We want people to comment on the principles," Norman added. BPA intends to live with the principles it sets up; the question is, "are these the right principles?" Bonneville doesn't know what its fish and wildlife cost obligations are going to be after 2001, Norman said, but the agency needs to proceed with subscription and a rate case; the principles are meant to provide an answer to that dilemma.
Basic Principles Expanded
The first principle states that BPA will take into account the full range of potential fish and wildlife costs.
In setting its rates, the agency will incorporate the range of $438 million to $721 million in its revenue requirement using a method that calculates probabilities across a range of costs in the same way the agency treats other cost and revenue uncertainties. But due to uncertainties over fish and wildlife decisions, BPA will give equal weight to each of the 13 scenarios outlined in its analysis of fish funding options (See related story in NW Fishletter 63).
The second principle indicates BPA will "demonstrate a high probability of Treasury payment in full and on time over the five-year rate period." And given the range of potential fish and wildlife costs, the third principle states that Bonneville will design rates and contracts that will "position Bonneville to achieve similarly high Treasury payment possibility for the post-2006 period by building reserve levels and through other mechanisms."
At the same time, principle four says BPA will minimize rate impacts on Pacific Northwest power and transmission customers, while principle five indicates the agency will adopt rates and contract strategies that are easy to implement and administer.
The final principle lists a range of mechanisms BPA will use to achieve the first six principles. The specific mix will be determined in the rate case and subscription process, but the mix chosen will meet the first six principles.
Among the mechanisms listed are internal cost reduction efforts, use of BPA's existing authorities for stranded cost recovery, "seeking more robust authorities legislatively," selling subscription products on staggered contract terms (principle 6), adding a cost recovery adjustment clause to subscription contracts, charging some customers an option fee for increased price predictability after the initial contract period, cost-based indexed pricing and using reserve balances carried into the 2002-2006 rate period from the prior period.
BPA spokeswoman Dulcy Mahar said the agency is planning to present the principles to the Clinton Administration at a meeting in DC in mid-September. "The principles were an attempt to reach a consensus to give a foundation to a fish funding agreement," she said. They represent a radical departure from earlier rate cases, Mahar pointed out, which set a single budget figure for fish costs. "What we're trying to do is balance rate predictability for customers against the need to keep fish funding options open for decisions that won't be made until late 1999." -Jude Noland
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