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Northwest Coordination Agreement, and the overall operation of Treaty storage 

 water A similar Notice of Intent to sue was previously served by the State of 

 Oregon The 60 day notice has passed, and at this time, no lawsuits have been 

 filed 



However, on February 6, 1995, the same environmental coalition led by 

 Idaho Rivers United, filed suit in the Ninth Circuit Court of Appeals alleging 

 violations of the Northwest Power Act and the National Environmental Policy Act 

 These parties allege that Bonneville failed to fully consider fish impacts of the 

 return of the Canadian Entitlement, the Canadian Entitlement Allocation 

 Agreements, and the Pacific Northwest Coordination Agreement during the course 

 of negotiating these agreements There are no alleged violations of the 

 Endangered Species Act Bonneville filed a motion to dismiss the petition for lack 

 of jurisdiction because, among other things, these agreements are still being 

 negotiated and Bonneville has not made any final decisions subject to judicial 

 review 



Question What is the impact of these lawsuits on your negotiation of 

 these proposed agreements and on your ability to comply with the terms of the 

 Treaty'^ 



Answer: Notwithstanding the legal challenges involving these particular 

 agreements, the United States Entity is expected to take action necessary to 

 perform its Treaty obligation, including making arrangements for the delivery of 

 the Canadian Entitlement If the obligation to Canada cannot be performed as 

 currently being negotiated because of constraints due to United States law, the 

 United States will consider alternative methods of satisfying the Treaty obligation. 



Although the United States' obligation to Canada would remain even after 

 a failure to execute new Canadian Entitlement Allocation Agreements and Pacific 

 Northwest Coordination Agreement, such a failure would increase the cost to 

 Bonneville, and its ratepayers, of complying with the Treaty. For example, the 

 non-Federal project owners have considered financing the $180 million in 

 consideration for satisfaction of their obligation to return their share of the 

 Canadian Entitlement capacity obligation The non-Federal project owners have 

 advised Bonneville that they have been advised by legal counsel that the financing 

 is not possible given the expectation of Endangered Species Act and other 

 litigation which might challenge the validity of the agreements If Bonneville must 

 proceed with other financing arrangements to make the $180 million payment to 

 Canada because the non-Federal project owners are unable to obtain financing due 

 to threatened Endangered Species Act litigation, Bonneville may have to arrange 

 for alternative, third party financing or borrow the $180 million from the Treasury, 

 or negotiate alternative arrangements for meeting the United States' Treaty 

 obligation to Canada Bonneville would prefer to avoid these outcomes 



