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LETTER FROM JOHN D. LESHY 



,. OCT /2 (99J 



Robert R. Horahaus, General Counsel ^^ 



Departicant of Energy 

 Forrestal Bldg. 



1000 Independence Ave. , S.H. , 



Washington, D.C. 20505 ' . • 



Dear Mr. Kordhaus: 



As you Icnow, on July 11, 199*. Congressnan George Killer, 

 Chatr»an of the House Connittao on Matural Resoorces, wrot« to 

 the Secretary of Energy and the Secretary of the Interior 

 expressing concern aJbout a legal opinion of the general ooiinsel 

 of the Bonneville Power Administration (BPA) which found that BPA 

 had authority to allocate certain costs incurred by BPA to 

 purchase pov^er to cover power sale contractual conaltnents . 

 Chaiman Killer retjuestad that, anong others, the Interior 

 Solicitor's Office "conduct a coaprehensive review of the 

 Bonneville legal opinion." what follows is a report on oxir 

 review. 



Chairaan Miller's primary concern is that BPA has erroneously 

 concluded that it has authority under the Pacific Korthwest 

 Electric Power Planning and Conservation Act (Northwest Power 

 Act), Pub. L. 96-501, 9« Stat. 2697, 16 U.S.C. i 839 aH ftfiS. , to 

 allocate purchase power costs it incurs when taking measures 

 under the Northwest Power .Kct to assist fish and wildlife, 

 notably species of Snake River salnon that have been listed for 

 protection ui>der the Endangered Species Act. Chairaan Killer's 

 letter eigrees generally that section 4(h)(lC}(C), 16 O.S.C. 

 I B39b(hH10)(C), of the Northwest Power Act perwits BPA to 

 allocate fish aitigation costs to r^sn-power purposes. Bvit he 

 points out that allocation of purchase power costs to non-power 

 purposes has been done only by federal power marXeting agencies 

 pursjant to an explicit directive from Congress. BPA, he 

 continues, has no control over flows and thus can sell power that 

 can be generated only once other project purposes are aet. If 

 BPA has' signed contracts in excess of that output. Chaiman 

 Killer states it is BPA's responsibility to purchase the 

 additional power to aeet the contract obligations. He also 

 points out that BPA has not supported its position in its legal 

 opinion. 



In addition to BPA'S June 6, 1994 legal opinion and Chaiman 

 Miller's letter, we have reviewed the BPA reply to the Killer 

 letter orovidjed to us by BPA's General counsel's Office. After 

 considering these docusents and the relevant sections and 

 legislative history of the Northwest Power Act, we understand the 

 basis for BPA's conclusion that it has authority to allocate the 

 purchase power costs In question to be as follows: 



o Under the Korthwest Power Act, 16 U.S.C. e3ai(b)(6)Civ), BP& 

 can imrchase power on a short-term basis to aset BPA's fish 

 ■itigation obligations under the Korthwest Power Act. 



o The Korthwest Poweir Planning Council (UPPC) nust develop a 

 Fish and Wildlife Prograie to "protect, aitigate and enhance 

 fish au>d wildlife." 16 U.S.C. 839(b) (b) fl) CA) . Ilie prograa 

 Buet include provisions for flow aeasures, iA±. at 

 (6)(r}(ii).' Flow «©asurBs include spill, where water is 

 sent over spillways instead of through turbines at daas in 

 the sigratory pathway of salnon. 



o BPA oust use its funds and authorities to "protect; aitigate 

 and enhance fish and wildlife to the extent affected by the 

 devalopnent and operation" of any hydro project in Colujiasia 

 River Basin "consistent with the . . . program" developed by 

 the KPPC. 16 U.S.C. 839b(hH10) CA). Under this section, 

 one of the aitigation aeasures for which BPA would use its 



