82 



annual costs, including opportunity losses, have more than doubled, from $150 million to about 

 $350 million. Currently, about 1 of every 10 dollars of Bonneville's operating expenses for 

 FY 1995 is targeted for fish and wildlife expenditures Please see Attachment 4 on BPA Fish & 

 Wildlife Investment, This Administration supports developing healthy Columbia Basin salmon 

 stocks and maintaining a financially healthy Bonneville. 



Bonneville's annual fish and wildlife investment estimate for FY 1996, including purchase power 

 and foregone revenues, ranges from about $280 to $355 million, depending on water conditions. 

 It does not take into account additional fish mitigation measures recently proposed by the 



Northwest Power Planning Council, U.S. Fish and Wildlife Service, or National Marine Fisheries 

 Service. The 1994 Columbia River Basin Fish and Wildlife Program adopted by the Council in 

 December 1994 and the Biological Opinion issued by the National Marine Fisheries Service earlier 

 this month on operation of the Federal Columbia River Power System call for increased 

 augmentation of flows during juvenile fish migration, increased spill, and additional structural 

 changes at hydroelectric projects to potentially improve fish passage. All of these efforts result in 

 increased expenditures or lost revenues by Bonneville. They could add approximately $100 

 million to $200 million in annual costs. Please see Attachments 4 and 5 relating to such costs 

 This would result in total fish and wildlife expenditures of about 13 to 14 percent of Bonneville's 

 total operating expenses. 



FOCUSING ON FISH RESULTS 



Bonneville is moving ahead to meet its commitment to the region's fish and wildlife We are 

 forging creative exchanges and power arrangements with other regions, developing innovative 

 water agreements, and implementing changes in hydroelectric operations that will maximize fish 

 survival and minimize costs. 



This is occurring despite a prolonged drought that has compounded the salmon crisis, giving us 

 less water to work with. In each of the last three years, we have had to import more electric 

 power than we export. 



For some time, the lack of definitive biology has been an obstacle in salmon recovery efforts 

 Bonneville is actively carrying out fish restoration measures and assuring that results be monitored 

 and evaluated. Ultimately, this will allow us to prove the effectiveness of measures and increase 

 the base of scientific knowledge, thus providing a benefit to all involved parties. 



CURRENT FINANCIAL STATUS 



Bonneville's financial performance over the past several years is a testament to the uncertainty and 

 volatility of the hydro-based environment under which we operate The early years of the nineties 

 were times of positive net revenues and a strengthening financial position. The last several years 

 have challenged Bonneville as never before. 



When I last appeared before this committee, Bonneville was projecting in its FY 1995 

 Congressional budget a financial reserve level at the end of FY 1995 of $351 million, which was a 

 decrease of $284 million from the $635 million that had been projected in the FY 1994 budget 

 This year's Congressional budget projects a final reserve level for FY 1995 of $87. 1 million This 

 downward trend has been due to the long-term impact of the drought conditions, projected low 

 aluminum prices, and actions we are initiating to protect and restore endangered species of 

 salmon As of the first three months of FY 1995, Bonneville is estimating year end reserves of 

 $169 milbon due to improved stream conditions and increased aluminum prices This reserve 

 projection, however, does not take into account fish mitigations costs that will be paid in the early 

 months of FY 1996, or'potential additional fish costs. 



