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Utilities Group Expresses Concern With Columbia River Treaty Draft Recommendations, Process, Scope
Posted on Friday, August 09, 2013 (PST)

Utilities across the Pacific Northwest are sounding off against draft recommendations for the future of the Columbia River Treaty, saying they haven’t been adequately represented in a process that could result in economic impacts for rate payers and the region.

The utilities present themselves as the Columbia River Treaty Power Group, an alliance that was formed in 2011 to evaluate the future of the treaty that could be terminated or modified in 2024.

Any changes recommended for the treaty must be submitted by the Bonneville Power Administration and the U.S. Army Corps of Engineers by the end of this year.

That would set the stage for U.S. State Department negotiations with Canada over the next decade.

But draft recommendations that were issued by a treaty negotiation group called the U.S. Entity on June 27 alarmed the Power Group, which is made up of 70 Northwest utilities representing 6.4 million utility customers.

An Aug. 8 letter from the Power Group to the U.S. Entity states that the draft recommendation “fails to prioritize the paramount need to re-establish the equitable distribution of power benefits between the U.S. and Canada and improperly recommends expanding the scope of the treaty. We believe these failures are a result of our members’ interests not being represented in the Sovereign Review Team process established by the U.S. Entity to evaluate the future of the treaty.”

“Distribution of power benefits” refers to a provision in the 50-year-old treaty called the Canadian Entitlement that currently requires the U.S. to return hydropower to Canada valued at $250 million to $350 million annually. In return, the U.S. gets flood control operations from Canadian hydropower dams.

“Currently, the methodology for calculating the Canadian Entitlement represents a significant mismatch between payments to Canada and diminishing ongoing downstream power benefits in the U.S.,” the Power Group letter states. “Unfortunately, the draft recommendation fails to focus on this primary issue facing Northwest electric customers — specifically, the need to reestablish an equitable distribution of power benefits between the U.S. and Canada.”

Instead, the letter continues, the recommendation concentrates on adding “ecosystem functions” — spending on fish and wildlife mitigation programs — as a “third primary purpose of the treaty.”

Expanding the scope of the treaty in that manner is unacceptable to the Power Group.

“Nowhere does the draft recognize the substantial investments in ecosystem functions made outside the treaty for decades,” it states. “Regional electric customers have invested billions in fish protection efforts, and each of the entities providing the Canadian Entitlement already have robust environmental mitigation plans embedded in their project authorizations.”

The environmental mitigation plans have been driven by laws and regulations that have been enacted since the treaty was ratified in 1964, most significantly the federal Endangered Species Act.

Flathead Electric Cooperative General Manager Ken Sugden sounded off on the treaty recommendations in a separate letter that was sent to Montana’s congressional delegation this week.

The draft recommendations, he said, prominently include “ecosystem recommendations that in many cases will have negative financial and operational consequences on our utility members,” Sugden said.

“From our view, renegotiating an existing international treaty is not the place to conciliate specific United States ecosystem issues, especially considering all of the current non-treaty environmental efforts ... and the multiple fish and wildlife recovery plans we have in place today,” Sugden continued.

A good share of the Power Group’s signatories are Washington state utilities, and the coalition announced this week it has hired the Seattle and Washington, D.C.-based Van Ness Feldman law firm, which recently enlisted 18-term former Washington congressman Norm Dicks.

“As a former member of Congress and Northwest representative, I am keenly aware that this region has invested billions of dollars in the Columbia River Basin during the last five decades to protect fish and water resources,” said Dicks, a senior policy adviser for the law firm. “We need to make sure that people across the country know we have programs in place — independent of the treaty — that will protect these resources going forward.”

The utility coalition believes that the law firm and Dicks will elevate the concerns of electric customers before a final recommendation is sent to the State Department at the end of the year.

“BPA customers need an additional advocate to make sure our views are heard at the highest level in the region and in Washington, D.C.,” said Will Hart of the Idaho Consumer-Owned Utilities Association. “Our organizations are intensifying our work on the treaty to bring more balance to the process. This is an incredibly important economic issue for the region.”

Sugden said Flathead Electric Cooperative and other utilities must be better represented with any future recommendations that are made by the Sovereign Review Team.

“Without their representation, all Northwest utility customers most likely will face unfair and significant economic disadvantages that could harm the economy,” Sugden wrote.

The draft document released in June by the U.S. Entity is a result of a multi-year, collaborative process between the U.S. Entity, Sovereign Review Team and stakeholders.

For the purpose of sending the working draft out to stakeholders, the U.S. Entity said “it should be understood that, at this point, there is tentative alignment” among the U.S. Entity and Sovereigns on a number of key issues:

-- The Treaty has substantial benefits for both the U.S. and Canada, but it should be modernized to reflect the current values and priorities of the Pacific Northwest region.

-- A modernized Treaty will be flexible and resilient enough to adapt to the impacts of climate change and other factors.

-- Ecosystem-based functions will be integrated into the Columbia River Treaty as a third primary purpose, or benefit, in the same way that hydropower and flood risk management benefits were developed in the original Treaty.

-- A number of Treaty modifications are needed to improve ecosystem function, including augmentation of stream flows in spring and summer, a dry year strategy, and discussions with Canada on the feasibility of restoring fish passage on the main stem Columbia.

-- The coordinated power benefits should be reasonably and fairly balanced between the U.S. and Canada and this should be reflected in the calculation of the Canadian Entitlement return.

-- Continued flood risk management is an important component to protect public safety and the region’s economy.

-- Important river uses such as navigation and recreation should not be negatively impacted by Treaty operations.

There are also key areas where agreement is yet to be achieved, says the U.S. Entity. More discussion and input will be necessary to achieve alignment in these areas, it says, which include, but are not limited to:

-- The correct balance for the use of any additional water supplies for both ecosystem flows and consumptive use through a modernized treaty remains a significant issue. Some Sovereigns, including the four Pacific Northwest states and several federal agencies, propose that a process be established whereby the states, tribes, and stakeholders will determine how the allocation of any additional spring/summer water from Canada will occur, while the Tribal perspective is that ecosystem needs and tribal reserved water rights must be fully met before any consideration is given to any additional out-of-stream uses.

-- Columbia Basin tribes and others have stated that achieving ecosystem-based functions such as stable reservoirs and additional downstream flows requires a modification to current flood risk management practices. Other sovereigns have proposed that the current level of flood risk must be sustained unless modified by a formal public process. Therefore, the U.S. Entity has identified a post-2013 process to examine the level of flood risk management throughout the basin. The U.S. Entity’s position is that such an analysis cannot take place without more comprehensive involvement from a wider array of stakeholders, and that additional funding would be required to implement this process.

-- Columbia Basin tribes and others continue discussing the degree and extent to which both Canadian and U.S. hydropower production should be reduced or traded-off in order to provide increased ecosystem-based function. The U.S. Entity maintains that reductions in hydropower production would also result in reductions in system reliability. Columbia Basin bribes think that reliability issues can be addressed through the integration of renewables and increased conservation measures.

-- How future treaty operations will balance ecosystem-based function, flood risk management, and hydropower with other authorized purposes.

-- How regional sovereigns will continue to participate in the treaty modernization process after the recommendation is delivered to the State Department, as well as post-2024 treaty governance structures.

For more information go to the U.S. Entity cover letter:

http://www.crt2014-2024review.gov/Files/US%20Entity%20cover%20letter,%20June%2027%202013.pdf

The CRTR working draft recommendation:

http://www.crt2014-2024review.gov/Files/CRTR%20working%20draft%20recommendation,%20June%2027%202013.pdf

The treaty development schedule can be found at:

http://www.crt2014-2024review.gov/Files/Treaty%20Review%20process%20timeline,%20Final,%20June%2025%202013.pdf

Comments on the draft U.S. entity draft recommendations are required by Aug. 16 to help refine the proposal. The U.S. Entity will post all comments received during this review period to the Treaty Review website.

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