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BPA's Columbia basin mitigation costs pegged at $682 million for 2013

The Bonneville Power Administration said it incurred $682.4 million in total fish and wildlife costs during fiscal year 2013, a total derived in great part by the need to buy and sell power and operate dams with the goal of improving salmon and steelhead passage up and down the federal Columbia/Snake River hydro system.

That total is about par with the previous two years, but well below totals from 2006 to 2010 when BPA estimated that “total costs of fish and wildlife actions” per year ranged from $716 million to $876 million. During those years foregone revenue costs and power purchases dominated the ledger, ranging from $383 million to $566 million.

Foregone revenues are represented by hydro operations carried out to help facilitate salmon and steelhead passage, such as the spilling of water. That water flowing through spill gates instead of powerhouse turbines means lost power, and revenue, generating opportunity. The power purchases debit represents power bought on the open market to replace generation, and revenue, lost as a result of fish operations.

Over the past three years power purchase and foregone revenue costs have been relatively stable at about $200 million, according to the draft “2013 Columbia River Basin Fish and Wildlife Program Costs Report” released this week by the Northwest Power and Conservation Council for public comment.

The NPCC crunching of BPA numbers will lead to the 13th annual report to the governors of Idaho, Montana, Oregon and Washington on Columbia basin fish and wildlife costs by BPA. Bonneville, which markets power generated in the federal Columbia-Snake river power system, is obligated under Congress’ Northwest Power Act to fund actions that mitigate for the dams’ impacts on fish and wildlife.

The NPCC, created by 1980 Northwest Power Act, helps guide fish and wildlife spending through its “direct” program. The Council includes two members each appointed by the governors of the four states. BPA also has fish and wildlife mitigation funding responsibilities aimed at counteracting hydro impacts on salmon and steelhead listed under the Endangered Species Act.

To view the draft NPCC report, go to:

http://www.nwcouncil.org/media/7099873/2014-5.pdf.

At the June 2014 Council meeting, the report was approved for release for public comment. Please email comments to comments@nwcouncil.org by July 11. http://www.nwcouncil.org/reports/financial-reports/2014-05/

The purpose of the report is to provide information, not to assess or comment on the costs. Information in the report is provided by Bonneville and is not independently verified by the Council.

In Fiscal Year 2013, Bonneville reported total fish and wildlife costs of approximately $682.4 million, as follows, according to the NPCC report:

-- $239 million in direct (expense) costs for fish and wildlife projects;

-- $78.5 million in direct costs and reimbursements to the federal Treasury for expenditures by the Corps of Engineers, Bureau of Reclamation, and U.S. Fish and Wildlife Service for investments in fish passage and fish production, including direct funding of operations and maintenance expenses of federal fish hatcheries; this category also includes one-half of the Council’s $10.2 million budget in Fiscal Year 2013 (the other half is assigned to the Power Business Line budget).

-- $143.4 million in fixed costs (interest, amortization, and depreciation) of capital investments for facilities such as hatcheries, fish-passage facilities at dams, and some land purchases for fish and wildlife habitat.

-- $135.5 million in forgone hydropower sales revenue that results from dam operations that benefit fish but reduce hydropower generation.

-- $85.8 million in power purchases during periods when dam operations to protect migrating fish reduce hydropower generation, such as by spilling water over dams in the spring or storing it behind dams in winter months in anticipation of required spring spill.

The 2013 costs bring the grand total of all fish and wildlife costs incurred by Bonneville from 1978 when the costs began, through 2013, to $13.75 billion.

The total does not include $2.38 billion in annual obligations to capital investments (the actual annual costs are captured in the “fixed costs” category), or $1.87 billion in credits applied to Bonneville’s Treasury debt.

Following is a breakdown of the major cost categories:

-- $4.05 billion for power purchases to meet electricity-demand requirements in response to river and dam operations that benefit fish but reduce hydropower generation.

-- $3.02 billion in forgone hydropower sales revenue. Bonneville calculates the value of hydropower that could not be generated (revenue that is forgone) because of river operations to assist fish passage and improve fish survival, such as water spills at the dams when juvenile salmon and steelhead are migrating to the ocean.

-- $3.08 billion for the Council’s direct program. This amount does not include annual commitments to capital investments in the direct program.

-- $2.26 billion in fixed expenses for interest, amortization, and depreciation on the capital investments.

-- $1.34 billion to: 1) directly fund fish and wildlife projects undertaken by the Corps or the Bureau that predate the 1980 Northwest Power Act and for which Bonneville pays the hydropower share, consistent with the Power Act (these expenditures include, for example, operations and maintenance costs of certain fish-production facilities, fish passage facilities at dams, and research activities), and 2) reimburse the U.S. Treasury for the hydropower share of major dam modifications by the Corps, such as installing spillway weirs, bypass systems, fish-deflection screens in front of turbine entrances, and spillway modifications to reduce dissolved gas.

Columbia Basin Bulletin The Columbia Basin Bulletin e-mail newsletter is produced by Intermountain Communications of Bend, Oregon and supported with Bonneville Power Administration fish and wildlife funds through the Northwest Power and Conservation Council's Columbia Basin Fish and Wildlife Program. Articles republished by The Dalles Chronicle with permission.

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