Ill 



allocate the costs of a flow enhancement experiment jointly, to all project 

 purposes, because the flow was deemed necessary as a result of the existence of 

 the Federal dams generally, not any particular project purpose or specific project 

 feature. Corps, Report on Methodology and Recommendations For Allocating 

 Costs Associated With Drawdown of John Day And Lower Granite Reservoirs 

 (February 5, 1994). 



In summary, my review of the pertinent sections of the Act, especially section 

 4(h)(10)(C), 16 U.S.C. 839b(h)(10)(C), and the accompanying report of the 

 House Interior Committee, H.R. Rep. No. 976, 96th Cong., 2d Sess. pt. II, at 45 

 (1980), leads me to conclude that Congress directed the BPA Administrator to 

 allocate between BPA ratepayers and the taxpayers all fish mitigation expenses 

 incurred by the Administrator in the exercise of his responsibilities under section 

 4(h) of the Act. These expenditures include replacement power costs related to 

 spill and flow measures for the purpose offish mitigation, to the extent that such 

 expenditures exceed the hydro power share of the Federal Columbia River 

 projects. 



Relying on the existing accounting procedures for the FCRPS, I have determined 

 that the BPA ratepayer share of such costs is approximately 73 percent of all 

 system-wide fish mitigation measures, including replacement power purchases. 

 The remaining 27 percent of these costs are for non-power purposes and are non- 

 reimbursable. Section 4(h)(10)(C) requires me to allocate those mitigation costs 

 and credit BPA's Treasury debt in an amount equal to the non-power share of 

 those costs. 16 U.S.C. § 839b(h)(10)(C); see H.R. Rep. No. 976, 96th Cong., 2d 

 Sess, pt. II, at 45 (1980). 



Accordingly, I conclude that BPA's allocation of the replacement power costs 

 related to fish flow measures is in accordance with the authorities granted under 

 the provisions of the Act. 



I have shared the analysis contained in this memorandum with the Department of 

 the Interior's Solicitor, the Department of the Army's General Counsel, and the 

 Army Corps of Engineers' Office of Chief Counsel. They defer to BPA's 

 interpretation of section 4(h)(10)(C). Copies of the advice received fi-om these 

 agencies are enclosed. 



The specific questions Chairman Miller posed at the end of his letter are addressed 

 in Enclosure A. 



Enclosures 



