136 



CONCLUSION 



Shortly after passage of the Northwest Power Act In 1980. BPA debated how to 

 fulfill Its section 4(h)(10)(C) obligations. BPA did not act because It 

 believed the amounts then being expended were de minimus, and thus did not 

 Justify the effort to make the assignments. However, the duty to assign a 

 measure to a hydroelectric project and allocate the measure's costs to the 

 various project purposes Is not discretionary, and the significantly 

 Increasing annual cost of fish and wildlife mitigation compels reexamination 

 of SPA'S prior practice. The magnitude of such costs has now placed at risk 

 the Administrator's statutory obligation to provide "an adequate, efficient, 

 economical and reliable power supply." 16 U.S.C. § 839(2), and to do so while 

 keeping rates to consumers as low as possible "consistent with sound business 

 principles." 16 U.S.C. § 838g(l). 



Congress designed section 4(h)(10)(C) to assure that BPA ratepayers would pay 

 only for the fish and wildlife costs associated with the power purpose of the 

 Federal dams from which they benefit. Other provisions of BPA's enabling 

 legislation support this outcome. Any expenditures In excess of this amount 

 were to be absorbed on a non-relmburseable basis by the United States and be 

 treated as payments for other project costs for which BPA Is responsible under 

 existing law. This obligation covers all fish and wildlife mitigation 

 measures BPA has implemented since adoption of the Northwest Power Act. and 

 measures BPA Implements now or In the future, including purchases of 

 replacement power. This Is Inclusive of ESA expenditures, provided that such 

 expenditures are consistent with the Council's Program. This obligation does 

 not cover lost revenues. 



BPA can assign system-wide measures to specific hydroelectric projects, or 

 calculate what the system-wide nonpower purpose share of such measures would 

 be. BPA can then reduce Its Treasury payments by an amount equal to the 

 mitigation BPA funded on behalf of the non-power purposes. Beyond 

 coordination with other affected Federal entitles, there are no administrative 

 or legal actions necessary before BPA Implements section 4(h)(10)(C). 



Attachment 



Development of System-wide Fish and Wildlife 

 Percent of Joint Costs Allocated to Power 



The Northwest Power Act, Section 4(h)(10)(C), assigned the Administrator authority to 

 decide which hydro-project should be assigned the costs of fish and wildlife measures. 

 This authority is applicable to both site-specific measures located at particular hydro- 

 projects, and for system-wide or non-site specific projects that mitigate for impacts of 

 the FCRPS as a system. An allocation for a system-wide fish and wildlife program 

 should be developed by BPA. 



ANALYSIS 



Table F^, WP-93-FS-BPA-07, which is labeled as Document D for this study, is the 

 source for the percent of joint costs allocated to power to each specific multi-purpose 

 facility. Three options were studied to develop a system-wide allocation: 



Document A - The established joint allocation percentages for power were applied to 

 the distributive share of each projects cumulative MWH produced. This applicauon 

 recognizee the connection betwecL the productivity of a project to generate revenue that 

 is used to pay for fish and wildlife measures. This results in a 27% non-power 

 allocation. 



