Alternative 2. Adjust the wildlife mitigation proposals so that only a specified portion of the 

 mitigation is funded by the region's ratepayers. Amend the proposals into the program 

 accordingly. 



Approach 



Section 4(h)(8)(B) of the Northwest Power Act states in part that "consumers of electric 

 power shall bear the cost of measures designed to deal with adverse impacts caused by the 

 development and operation of electric power facilities and programs only." Some argue that 

 because most of the federal dams are multipurpose projects and most of the project features 

 causing impacts to fish and wildlife serve all project purposes, hydroelectric power purchasers are 

 not obligated to pay for all fish and wildlife impacts caused by the project but only for the 

 hydroelectric share of those impacts. 



If the Council accepts this view and determines that the ratepayers should not be held 

 accountable for 100 percent of the mitigation, it could adjust the mitigation proposals by some 

 allocation method and amend that decision into the fish and wildlife program. This type of action 

 would be similar to the decision made by the Council for the Hungry Horse and Libby dams wildlife 

 mitigation plans. 



In its decision on the Hungry Horse and Libby mitigation plans, the Council used the 

 Congressional repayment formula to determine the ratepayer obligation. The Council also has 

 used this formula as one method to determine the oercentage of basinwide salmon and steelhead 

 losses attributable to hydroelectric development Simply stated, the Congressional repayment 

 formula shows how Congress determined the cost of a dam should be repaid (in percent of total 

 returnable dollars from the plant investment). While several other methods for determining 

 ratepayer responsibility are available, most discussions have centered around the Congressional 

 repayment formula and the Corps/Bureau Joint Cost Allocation which uses the Separable Costs- 

 Remaining Benefits (separable costs) method. This separable costs method assigns project 

 costs to individual project purposes. The allocation is based on the costs directly attributable to an 

 individual project purpose (e.g., a powerhouse, which is part of the dam only in order to generate 

 power) plus a share of joint costs (e.g., the cost of the dam, which serves all project purposes). 

 The joint costs are allocated in proportion to the planned benefits of each individual project 

 purpose. 



^8J In their estimates of salmon and steelhead losses, the Council estimated anadromous fish run 

 size reduction due to "dam losses." The Council multiplied the dam loss figure by the 

 average percent of hydropower purpose of dams to obtain a loss figure attributable to the 

 hydropower system. While the Council looked at several allocation methods, it concluded 

 that the repayment allocation method appeared appropriate as the estimate of the 

 percentage of dam loss attributable to the hydropower for federal projects, because this 

 represents the amount of the project that is being paid for by hydropower ratepayers. 



197 The Allocation of Rsh and Wildlife Costs, Pacific Northwest Utilities Conference Committee, 

 September 1987. 



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