134 



H.R. Rep. 976.. 96th Cong.. 2d Sess.. pt. 2. at 54 (Sept. 16. 1980). 



Replacement power costs fall comfortably Into the plain language of these 

 provisions. Such costs are Incurred on a short term basis, usually from May 

 to June, July or August. BPA Incurs these costs when It replaces generating 

 capability lost as a result of spill for fish. The costs enable BPA to 

 fulfill both its contractual obligations to supply power and Its fish 

 obligations. Therefore, replacement power costs should be allocated pursuant 

 section 4{h)(10)(C). 



That the purchase of replacement power furthers the power purpose of the 

 project Is of no consequence. Rather, the focus Is on the actions taken to 

 benefit fish: spill and flow augmentation. The cost of that mitigation is 

 the cost of SPA'S replacement power. According to current allocation 

 methodologies, the cost of spill and flow augmentation Is a Joint cost to be 

 shared among all project purposes. °' This Is consistent with a fundamental 

 principle of Regional Act mitigation: consumers of electric power should pay 

 only for power's share of the costs. 16 U.S.C. § 839b(h)(8). 



B. Section 4(h)(10)(C) Also Should Be A pplJPd to BPA's Past Pa yments for 

 Fish and Wildlife Hltioation In Excess of the Power Purpose Share pf 

 that Mitigation . 



Since passage of the Northwest Power Act, BPA has spent $270 to $325 

 mllliofvL^' on f^sh and wildlife mitigation not attributable to the power 

 purposes of Columbia River Basin Federal hydroelectric projects. This figure 

 does not include lost revenues which total approximately. $79 million. 



The measures funded are too numerous to list^^, but all have been funded as 

 either a part of the Council's Fish and Wildlife Program or consistent with 

 the Program. Consequently, section 4(h)(10)(C) applies to the sums already 

 expended. Prior years' expenditures In excess of the power share of 

 mitigation should be treated In a future year as BPA payments required to be 

 made to the Treasury because Congress Intended BPA's customers to "bear the 

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

 development and operation of electric power facilities and programs only." 

 16 U.S.C. § 839b{h)(8)(B). 



2/ i££ generally . Corps, Draft Report on Methodology and Recomme ndations For 

 Allocating rnsts Associated With Drawdown of John Day and Lower Granite 

 Reservoirs 5 (Dec. 1993). When allocating fish mitigation measures to project 

 purposes, the Corps assigns the measures to the responsible or causative 

 purposes of the project in the same way as other project costs. IsL ( citing 

 Water Resources and Development Act, 33 U.S.C. § 2283(c)). The Corps has not 

 found that any particular project purpose has caused the need for flow 

 enhancement measures such as reservoir drawdown. liL. at 6. The cost of such 

 measures Is a Joint cost shared among all project purposes according to the 

 existing al locations. 



i^^ BPA does not always identify the reasons replacement power is needed, so 

 BPA can only approximate Its expenditures for replacement power needed as a 

 result of fish mitigation. 



•U-/ Prior to taking action under section 4(h)(10>(C). the Administrator would 

 assign site-specific measures tliat serve the site where they are located to 

 the hydroproject where they are located. Offsite, site-specific, or 

 system-wide measures that benefit the entire Federal Columbia River Power 

 System can be assigned to a specific hydroproject or be addressed using a 

 weighted methodology that accounts for the size, output, and project purpose 

 allocations of each hydroproject in the system. S££ generally. BPA Office of 

 Financial Management Memorandum, attached. Both of these proposals are 

 supported by section 4(h)(10)(C) and the provisions of the Act requiring 

 mitigation on a system-wide basis. S££ 16 U.S.C. §§ 839(b)(h)(10)(A) . 

 (h)(1)(A); 5££ iiiQ, H.R. Rep. No. 976. 96th Cong., 2d Sess.. pt. 2, at 38. 



