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Under federal law, the expense of salmon recovery can fall to national 

 taxpayers or Northwest ratepayers. If consumers of Bonneville Power 

 Administration electricity who benefit from the dams pay for the 

 implementation of drawdowns. Northwest ratepayers would see their bills 

 go up by less than 5 percent total — in all likelihood, phased in at 1/2 

 percent annually over a decade. For capital expenditures of this type, BPA 

 can borrow from the U.S. Treasury and amortize costs over a 50-year 

 repayment schedule. The $1.3 billion capital cost of the entire Lower Snake 

 Reservoir drawdown program — annualized at $122.5 million — would 

 translate to less than a 5 percent hike in current BPA wholesale electricity 

 rates. 



These cost figures are "worst case" numbers provided by the Corps 

 and BPA. In any case, a one-time 5 percent increase in wholesale electricity 

 rates — phased in over several years — simply does not represent any serious 

 threat to the Northwest economy. Typically only half of BPA wholesale 

 electricity rate hikes pass through to retail prices. 



As an interim measure, lesser degrees of flow augmentation can offer 

 no small benefit to migrating juvenile salmon, and can proceed without 

 undue economic impact. However, approaching levels comparable to 

 reservoir drawdowns, flow augmentation would sap hydropower generation 

 and irrigation agriculture — costs which come with every salmon migration 

 season. According to a blue-ribbon report from an Economics Technical 

 Committee sponsored by the National Marine Fisheries Service, costs for 

 reservoir drawdowns would roughly split between one-time capital 

 investments and operating expenses, while the price for flow augmentation 

 fails entirely in operating costs borne year after year. (See Tfeible 1 .) 



Among Other Benefits. Drawdowns and Salmon Recovery Would Boost 

 Ek:onomic Productivity and Jobs Creation Locally and Regionally 



Because impacts can be successfully mitigated with such a modest 

 increase in electricity rates, testing and implementation of Lower Snake 

 reservoir drawdowns would only add to the regional and local economies. 

 With drawdowns, the region's consumers of BPA power would make a one- 

 time investment in fish passage rather than pay every year for less effective 

 and less reliable flow augmentation. Drawdowns then would position the 

 Pacific Northwest for a future of sustainable fish and electricity production. 



Locally the drawdowns would create new jobs. In a preliminary 

 estimate, the U.S. Army Corps of Engineers believes that 40 percent of the 

 $1.3 billion expense associated with modifications of the four dams — or 

 approximately $520 million — would go to construction labor. This 

 investment would produce nearly 20.000 new job-years at the dams, and the 

 multiplier effect of this new income would spur significant economic growth 

 in the Lower Snake River area. 



Drawdowns Oflfer Greatest Promise — Page 5 



