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Question 10: BPA has been forced by the Endangered Species Act, as well as the 1980 [act], 

 to provide certain flows for endangered salmon in the Columbia'Snake River 

 System In its budgets, BPA classifies these mandated fish flows as "foregone 

 revenue" and attributes it to the Fish and Wildlife budget. Many observers 

 (including Justice Marsh) have questioned this accounting practice Is this 

 practice appropriate'' What river management baseline does BPA use to 

 estimate "foregone revenues"? Did the 1980 Act, or the enforcement of the 

 Endangered Species Act, change this baseline? 



Answer: We wish to point out that BPA has not been forced to provide flow, but, rather 



has been required to provide certain amounts of storage in upstream reservoirs 

 that is used by fisheries interests to augment lower river stream flows. BPA 

 considers the baseline for river operations to be prior to the 1980 Act. The 

 Act created the mitigation requirement for Fish and Wildlife. All new 

 programs which benefit fish and wildlife and have a cost to BPA ratepayers are 

 included in BPA's estimate offish and wildlife costs. 



Changing hydrosystem operations to benefit fish does have a cost, generally, in 

 terms of power purchases and foregone revenues, which must be recovered 

 from BPA ratepayers BPA includes this cost in its budget because we 

 consistently deal with questions about what causes rate increases. 



Water Budget and flow augmentation are not reflected in the Division of Fish 

 and Wildlife budget To the extent that flow augmentation is met, the 

 purchases are out of the Power Purchase budget. BPA uses Pacific Northwest 

 Coordination planning as its baseline. From the planning process rule curves 

 are developed for reservoir operations. The Federal Hydro system uses these 

 rule curves as it baseline for operations. 



