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 BACKGROUND PAPER 



Chairman Miller agrees that the cost of certain Bonneville Power Administration 

 (BPA) fish mitigation measures are allocable on a non-reimbursable basis to all 

 project purposes. Nonetheless, he questions whether the same rationale should 

 apply to replacement power costs BPA incurs when fish flow measures are 

 implemented. 



Changes in dam operations for authorized project purposes, such as navigation, 

 flood control, and irrigation, can and do change the amount of power which can be 

 generated. They can force BPA to purchase power to meet its load. Those 

 purchase power costs are entirely borne by ratepayers. There is no allocation of 

 those purchase power costs to other project purposes. However, the Northwest 

 Power Act (Act) changed how the Federal Columbia River Power System 

 (FCRPS) is operated and how the cost offish flow measures are allocated. 



The Act required the Pacific Northwest Electric Power and Conservation Planning 

 Council (Council) to create a Fish and Wildlife Program (Program), and to include 

 fish flow measures in the Program. 16 U.S.C § 839b(h)(6)(E)(ii). Fish flow 

 measures include spill to move outmigrating salmonid smolts past dam structures 

 and turbines, as well as flow augmentation to move smolts downstream between 

 dams more quickly. See , e.g.. Volume 11 of the Council's, 1992 Columbia River 

 Basin Fish and Wildlife Program— Strategy for Salmon 23-30. 



In operating and managing the FCRPS, the Corps of Engineers (Corps), the 

 Bureau of Reclamation (BOR), and BPA must exercise their responsibilities by 

 "taking into account at each relevant stage of decisionmaking processes to the 

 ilillest extent practicable, the program adopted by the Council." 16 U.S.C § 

 839b(h)(l l)(A)(ii). In compliance with the Act, these Federal agencies have 

 implemented the Program's fish flow measures, as well as additional fish flow 

 measures recommended by the National Marine Fisheries Service. 



Congress saw that implementation of fish flow measures would reduce the amount 

 of hydroelectric power generated by the FCRPS, and that such reductions would 

 compel BPA to purchase replacement power to serve its load. Consequently, 

 Congress authorized BPA to purchase replacement power to ensure 

 implementation offish flow measures. 16 U.S.C §§ 838i(b)(6)(iv), (b)(12), see 

 H.R. Rep. No. 976, 96th Cong., 2d Sess., pt. n, at 54 (1980). 



Congress realized further that BPA's purchase of replacement power necessitated 

 by implementation of the Program's fish flow measures would be expensive, so it 

 required the Council to consider the burden of those measures on the ratepayers by 

 taking into account certain principles regarding the financial impact and the source 

 of funding for those measures. One principle is that " [c]onsumers of electric 



