UNITED STATES SENATE

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

SUBCOMMITTEE ON FISHERIES, WILDLIFE, AND WATER

 

Written Testimony

Joe Peone, Acting Director, Colville Natural Resources

Representing the Confederated Tribes of the Colville Reservation

 

Dirksen Senate Office Building, Washington D.C.

June 24, 2003

 

 

Dear Chairman Crapo and members of the Committee,

 

It is with concern and reflection that we write to you today about the future of fish and wildlife in the Columbia basin.  Recent events surrounding the financial condition of the Bonneville Power Administration (BPA), and their inability to meet fundamental obligations for fish and wildlife mitigation, gravely concern our People and tribal leadership.  BPA’s (and in some cases the Northwest Power and Conservation Council and NOAA Fisheries) management of the fish and wildlife program represent an administration whose influenced policies are adversely affecting our members, the region’s citizenry, our State’s natural resources and the economy.

 

Today, we ask for your help in this matter.

 

The Confederated Tribes of the Colville Reservation (CCT) wish to emphasize that the decisions made over the course of the next few weeks and months will have a profound and long term effect on the basin as a whole, and unremittingly to regional and tribal fish and wildlife programs.  Therefore, and because effective leadership is essential, we feel strongly that decisions in these matters should be determined largely from forthright consultations with the basin Fish and Wildlife leadership, key stakeholders and most importantly, in genuine conference with the tribes. 

 

In a series of self-regulating decisions by the BPA Administrator and his staff, the region is now exposed to one of the most alarming sets of circumstances since the Congress formed the Northwest Power Planning Council and authorized the Power Act.    We are convinced that the direction in which these choices are leading the region is inconsistent with the Power Act, the 2000 Fish and Wildlife Program, and the failed 2000 FCRPS Biological Opinion and remarkably, with the most basic tribal trust and mitigation responsibilities.

 

 

 

 

 

The CCT have three overriding concerns relative to this situation. These are:

 

1.     Many unexercised actions and options are at BPA’s, the NPCC and NOAA Fisheries’ disposal and far too many questions remain unanswered about why F&W budgets are targeted and misappropriated. We have detailed some of the most problematic questions and practices in this letter including issues such as skyrocketing increases in BPA overhead, financial mismanagement and lack of consultation and/or deference to the regions F&W experts. 

 

Thus, we ask that your committee intervene and demand that BPA, as the principal funding entity, meet its basic obligations to the tribes and initiate a collaborative process to establish an obligations-based fish and wildlife fund.  Based upon our recent and various failed attempts to convince BPA, NOAA and NPCC to participate in this exercise, we ask that you form a subcommittee to lead this effort and that your subcommittee place special emphasis in determining if the F&W program could be better managed and implemented differently.

 

2.     We ask that your committee request BPA rescind many of its unilateral policy decisions such as:  self-regulating and unreviewed project solicitations, funding re-appropriation to the BiOp, one-sided interim actions/cuts, and subjective and individual project cuts and task amendments. 

 

We ask that these policies be subject to independent scientific review, regional F&W manager review, comment and tribal accord where appropriate.

 

3.     Finally, CCT is concerned about broad federal complicity with some of these recent BPA actions.  Examples are: supporting an ESA emphasis at the cost of other obligations (e.g. The Power Act).  Far too many decisions have been made without adequate consultation and/or deference to F&W managers and have resulted in a de-emphasis on required program elements targeted for non-listed species and resident fish and wildlife needs and an inconsistent geographic implementation of ESA BiOp actions.

 

Thus, we respectfully ask that your committee/subcommittee(s) seek solutions to the BiOp’s unfunded mandates and thereby reestablish stability for the regions hydropower system, tribal trust and F&W resources and economy.

 

 

In closing, while we can agree that biological opinion implementation is a high priority; we disagree that it takes precedence over statutory objectives of the Northwest Power Act and federal trust responsibilities to the tribes.  It is important to recall that the biological opinions’ reasonable and prudent alternatives (RPAs) were conceived as an additional layer to the Council’s existing fish and wildlife program.   Recent decisions have now tipped the balance so far to ESA that other stocks risk petitioning and possible listing, and the region may be unwillingly forced to reopen the “dam breaching and drawdown” discussions.

 

 

Thank you for your attention to this matter.

 

 

Sincerely,

 

THE CONFEDERATED TRIBES OF THE COLVILLE RESERVATION

 

 

Joe Peone, Acting Director

Colville Natural Resources

 

Attachments (1)

 

cc:       Senator Maria Cantwell—(WA)

Senator Patty Murray—(WA)

Mary Verner, UCUT

Warren Seyler, UCUT.

Rod Sando and Tana Klum, CBFWA

 


ATTACHMENT 1

 

Interim Measures and Recommended Actions/Solutions:

 

BPA’s financial crisis has been triggered by an over commitment to producing and selling power during this and the last rate case period and its overestimation of “secondary revenues” (seasonal surplus power sales).  These faulty assumptions and the associated and policy strategy was the basis for maintaining low industrial and residential power rates (a recently disproved and dubious approach to fiscal and corporate management).  Given that global warming predictions are also working against the gain of BPA’s assumptions for secondary revenues, basic revenue principles need to be reexamined.  This is borne out by the in-depth presentation by Council staff and University of Washington scientists at the December meeting and provides evidence that summer generation potential will be the hardest hit.  Unfortunately, BPA is attempting to retain artificially depressed power rates and continue the residential and small farm subsidy programs at or near existing levels by cutting costs in the F&W program rather than raising rates or reducing subsidy programs.  There exists no legal obligation, such as those required under the Act for mitigation of impacts of the federal hydropower system, for these programs.  

 

To help guide future decisions and actions, the CCT provide the following objectives and principles.

 

1.     Restoration of adequate funding levels for F&W including no cuts to the F&W program until such a time when the F&W managers are convinced that 1) BPA’s accounting is accurate, and 2) BPA has exhausted all avenues for cutting costs, especially in those areas directly responsible for the financial instability of BPA, and 3) funding adequate to meet BiOp requirement and Power Act obligations are appropriated and authorized.

 

2.     In the short term we expect that Bonneville will fulfill their public promise to the region by funding the fish and wildlife program at the average $186 million in direct spending that Bonneville committed to.  This includes both expense and capital expenditures appropriate and sufficient for each category.  Further, we have the expectation that these funding categories will be dedicated to F&W expenditures, not other “borrowing authority” or subjective BPA program initiatives.  In the long term we will look for an increase in Fish and Wildlife Program spending adequate to meet the restoration goals, and associated cultural and economic benefits we are all striving to achieve.  The current BPA policy is just the opposite of this blueprint.  Their approach will put the region and U.S. government at significant risk on several levels.

 

3.     The economic value of resorting and maintaining healthy runs of anadromous fish as well as abundant resident fish and wildlife populations clearly outweighs the short term deficit reduction benefit derived from cutting funding to the Fish and Wildlife Program.  Fish and wildlife restoration and mitigation funding is one of the most important investments we as a region can make in our future, and therefore we ask your committee to protect the region in this regard as directed under the provisions of the Power Act.  The Fish and Wildlife Program is an investment in our regions economy and culture as well as an investment in the national legacy we hand down to future generations.  The value of this legacy is incalculable and cannot be expressed solely in terms of dollars and cents. 

 

4.     We seek the development of a formal process by which regional Fish and Wildlife managers play a more effective and leading role in Council decision making processes by September 2003. 

 

5.     CCT urge your committee to convene a task force to seek a redefinition for balanced and effective implementation of the 2000 Fish and Wildlife Program for the FY 03-05 period and beyond.  Examples to include more effective conformity between the recommendations of the managers to Council and Council’s ultimate proposals to BPA, an effective balance between ESU, Eco-Provinces, listed v. non-listed species, and resident fish and wildlife mitigation obligations and requirements.

 

6.     We strongly recommend that a long-term and stable agreement between and among the F&W managers, Council, NOAA Fisheries and BPA for decision making and implementation of the F&W program be sought.  An MOA may be supportable depending upon the level of commitment to the agreement and obligation levels.  This instrument would be used to calculate the measure of mitigation needs versus, identification of sufficient funding targets, and how well the Council programs, BiOp and BPA funding are meeting those obligations.

 

7.     A formal dispute resolution process for the three dramatis personae (F&W managers, Council and BPA) is needed.

 

8.     We recommend identification of a dedicated F&W contingency fund, which could be accessed to augment direct Fish and Wildlife Program spending, but would be also be useful in attenuating erratic spending patterns, and addressing financial emergencies.  Such a contingency fund would assure essential levels of stability and continuity in Fish and Wildlife Program funding.

 

9.     We seek stronger fidelity and more formal commitments to the longer-term implications of the subbasin planning process.  BPA, Council and NOAA Fisheries should commit to funding each 3-year update and to a clear process for conforming to the goals, priorities and needs that will be identified in the subbasin plans.  Since BPA was instrumental in developing the subbasin planning process itself, we do not wish to engage in undue project by project or redundant “Plan” review process once the Independent Scientific Review Panel confirms the technical veracity of the Plans.

 

10.  CCT are interested in ensuring that decisions related to Research, Monitoring and Evaluation made in a process led by the F&W managers and regional scientists and not just of “federal parties.”

 

11.  We ask that Council recommendations to BPA be tracked for implementation and that an annual audit of program implementation be co-authored by Council and BPA.  This report should be presented to the F&W managers for review and comment prior to publication.  

 

12.  The CCT are very concerned and troubled by recent statements and policy direction relating to power industry influence in F&W programs.  CCT do not support a process which allows industry representatives to participate or convene as “F&W managers,” or prescribe measures that affect the timelines (e.g., deferral) or efficacy of actions deemed necessary to meet mitigation obligations by F&W professionals.  Further, the tribes do not recognize industry representatives with legitimate regard to the Power Act provisions requiring “deference to F&W managers.”  CCT does support a forum that allows for expanded dialogue between the parties.  We recommend that a bi-annual Fish 4 and Power 4 facilitated forum would adequately serve this need.

 

13.  We recommend that an adequate, stable and long term program to obligate fund implementation of the F&W program be sought.  This will perhaps best be accomplished through the use of a third-party trust or obligations fund.  We recommend that this be in place no later than FY 2005 to accommodate the implications and findings of the subbasin planning process.

 

14.  CCT seek equitable Province-level funding calculations with regard to meeting the multiple obligations under the NW Power Act, ESA and tribal trust responsibilities.  CCT urge that this result in a process free from prejudice to individually preferred projects or programs, or pressures exerted on BPA by industry or other non-fish and wildlife special interests.

 

15.  Proportional cuts are the only reasonable and justifiable approach, if indeed cuts are to be made.  The proposed cut to F&W is in excess of .22 using the 186 million expenses + capital planning target figure, or up to .29 using the 139 expense planning target number.  These de-funding levels are simply not proportional to cuts or expenses in other BPA programs.

 

16.  BPA’s overhead has increased from 8 to 12.2 million annually in the “crisis.”  This amount is charged against the planning target total within the overall F&W budget. We ask that Bonneville aggressively seek cost savings within its own administrative structure just as we have done within all of our programs through the Provincial review process.  There are clearly opportunities for greater cost savings within Bonneville’s shared services, corporate G&A, and power business operations, among others.  BPA has committed to reduce the F&W program overhead, but it should be reduced from the original 8 million dollar figure, not from the inflated 12 + million dollar level.  Other programs need to seek these types of cuts before F&W budgets are reduced.

 

17.  The costs of changing from an obligation to an accrual based accounting system are in large part being absorbed in the F&W budget.  The effect is significant.  BPA should provide an adequate level of stabilization funding until this transition is complete and the F&W managers are convinced that BPA’s accounting practices provide certainty in meeting F&W obligations.  Establishing this fund should be done in consultation with the F&W managers.

 

18.  BPA expensed many more costs than were expected during the MOU period.  In other words, the F&W budget was effectively limited by a forced and unilateral “cap” created by questionable BPA accounting decisions.  This had the effect of costs being shifted to the expense category rather than as appropriate capital expenditures.  BPA should review and comment on the F&W managers proposal for capitalization of costs.  No inadvertent “caps” on F&W funding should be imposed on the region prior to a regional discussion and agreement.

 

19.  BPA’s own figures show a penchant for overestimating obligations during the six-year MOU period.  Less than .75 of BPA’s obligations, or planned expenses, resulted in accruals actually “billed” to BPA.  If the six-year average obligation: accrual ratio is applied to the FY 02 projection, less than 104m would be actually spent on the ground.  This is far less than the 139 million that BPA is currently projecting in the expense category and would result in another year of under spending in the F&W program.  Until BPA accounting can more accurately predict what will actually be spent on F&W, cuts to the program based upon inflated and unsubstantiated numbers, should be rejected.

 

20.  Capital should be obligated at a minimum of 36 million. BPA has identified only 13 million for FY 03 and there is no indication that BPA will increase this number.  CBFWA and Council staffs are working on criteria for BPA to use, but Steve Wright indicated a reluctance to do this in a large way.  His stated rational (resistance to borrowing) is inconsistent with how BPA finances Power side borrowing and its own internal operations.  BPA should provide the region a set of commitments to restore the stability to the program and guard against making the series of mistakes and use of flawed policies that have led the region to this situation.

 

21.  BPA is developing “targeted solicitations” for F&W projects.  This circumvents the entire F&W process and is likely tied to a strict BiOp emphasis.  If BPA wishes do this, CCT urges Council to recommend that BPA utilize funding outside the F&W targeted levels and seek concurrence from, or defer to, the F&W managers that these solicitations are supportable from a strategic resource perspective.  If a BiOp emphasis is a goal for BPA, then CCT expects the federal government to fully fund the needs of the BiOp without prejudice or failure to meet all obligations including those required by the Power Act and tribal trust responsibilities.

 

22.  It is clear to us that BPA has inaccurately characterized and alleged increased costs in the F&W program and has not openly defined or justified to the F&W managers’ satisfaction, the methods and metrics used to derive their estimates. 

 

23.  It can be legitimately argued that the F&W program has not contributed at all, or to the degree assumed, to BPA’s financial crisis.  Thus, we find it difficult to endorse that Council embark upon on a major funding cut until such a time that all accounting questions are answered.   An OMB audit may be the only way to gain an adequate level of confidence in these estimates. At a minimum, a far more transparent system of checks and balances is needed and we urge the Council to aggressively seek this level of accountability from BPA.

 

24.  CCT urges the Committee to not accept, either by implication or by explicit acknowledgment, the proposed annual average funding level of 139 million as a legitimate or adequate planning target.  Irrespective of BPA’s financial woes, this number must be derived in consultation with Council and with deference to the F&W managers and ground-truthed, perhaps independently.

 

25.  CCT urges Council to be clear that determining the appropriate annual average funding levels (both capital and expense) requires both consultation and must meet BPA’s tribal trust obligations. Program funding targets and priorities cannot be predicated on merely meeting provisions for the BiOp; rather, Council has a clear responsibility for all making recommendations that meet all aspects of the BPA’s obligation to the region including ESA, Power Act and tribal trust responsibilities.