The Bonneville Power Administration has pegged its 2006 fish and wildlife costs at $851.7 million, a total that is the second highest on record and nearly $300 million more than the previous year's total, according to a draft annual expenditure report produced by the Northwest Power and Conservation Council.

The sharp increase is driven in large part by a near doubling of costs categorized as foregone revenue generating opportunities and power purchases.

Those lost generating opportunities resulted because of operations -- such as the spilling of water at federal Columbia/Snake River hydro projects -- dictated to benefit fish.

Likewise, fish operations at times force the need for Bonneville to purchase higher priced power on the open market to meet the contracted demand of its customers.

The agency markets power generated in the Federal Columbia River Power System and funds fish and wildlife activities as mitigation for effects caused by the construction and operation of the dams. It covers those and other costs through ratepayer revenues.

The highest BPA expenditure total over a record going back to 1978 was $1.78 billion in 2001. That year was marked by the so-called "power crisis" and by a drought across the Columbia Basin. Because of the scanty water supply and astronomic power prices, BPA's power purchase costs soared to nearly $1.4 billion, according to the draft report.

A BPA memo to the Council says that the larger volume of water available in the system in 2006 over 2005 represented increased energy production potential. As a result, more energy production was foregone through implementation of fish protection measures. Revenue effects were amplified because of 2006's high power market prices, the memo says.

"The effects of the operations for fish caused an increase in lost opportunity sales of about 5.2 million megawatt hours and a small reduction in additional purchases of about 0.2 million megawatt hours," the BPA memo says. "The cost of purchases increased from $110.8M to $168.2M and the lost opportunity sales revenues increased from $182.1M to $397.4M. (Response from our hydro ops group to an earlier question about that variance)"

Additionally, capital investment costs jumped from $66 million in 2005 to $396.3 million in 2006. Most of that rise in BPA debt, $360 million, came as the result of BPA's responsibility for costs accumulated for mitigation analysis conducted over the years by the U.S. Army Corps of Engineers.

The 2006 Corps capital costs ballooned as it was deemed necessary that a backlog of completed projects and studies be shifted from "construction work in progress" status to "plant in-service" status. The cost of the work, funded by congressional appropriations, at the end of FY 2006 became BPA's obligation to repay, according BPA officials.

That obligation must be repaid to the U.S. Treasury within 50 years.

The capital investments are channeled through the Corps' Columbia River Fish Mitigation Project, which develops research to evaluate fish passage and survival and identifies, develops and constructs fish passage improvements.

Capital expenditures also rose from $12.4 million in 2005 to $35.4 million in 2006 for projects such as hatchery construction and land acquisition that are developed through the NPCC's fish and wildlife program.

BPA has said in recent year it will fund up to $36 million annually in program capital projects, but actual expenditures have only risen above $15 million once, $16.5 million in 2001, since 1998, according to the draft "Sixth Annual Report to the Northwest Governors on Expenditures of the Bonneville Power Administration to Implement the Columbia River Basin Fish and Wildlife Program of the Northwest Power and Conservation Council 1978-2006.

The report is compiled each year by the Council and staff from financial information provided by BPA. It also includes information about salmon and steelhead in the Columbia River Basin. The reporting comes in response to a 1999 directive from the governors of Idaho, Montana, Oregon and Washington to report on BPA's expenditures to implement the NPCC's program. The Council was created via 1980's Northwest Power Act. Its members are appointed by the four governors.

The sixth annual report details Bonneville's spending from 1978 through 2006. It is posted on the Council's website, www.nwcouncil.org.

Comments will be accepted through the close of business on Friday, Sept. 14. Comments should be directed to Mark Walker, director of Public Affairs, Northwest Power and Conservation Council, 851 S.W. Sixth Avenue, Suite 1100, Portland, OR, 97204, or submitted by e-mail to comments@nwcouncil.org with "BPA spending report" in the subject line.

The program is created by the Council to "protect, mitigate, and enhance" fish and wildlife, and related spawning grounds and habitat, of the Columbia River Basin that have been affected by hydropower dams.

In Fiscal Year 2006, the Bonneville Power Administration paid for $851.7 million in fish and wildlife "expense," a figure that does not include the capital investments. The 2005 total was $576.3 million.

Of the 2006 expense total, $137.9 million was for direct spending to implement the NPCC's Columbia River Basin Fish and Wildlife Program. The remainder was Bonneville reimbursement to the Corps and Bureau of Reclamation for fish-related dam operations ($60.7 million), interest, amortization, and depreciation (these are called "fixed expenses") on capital investments in facilities such as hatcheries and fish passage at dams ($87.5 million) and the foregone revenue opportunities and power purchases.

The 2006 expenditures bring the grand total of Bonneville's fish and wildlife spending, from 1978 through 2006, to $8,662,800,000. That figure does not include capital investment spending. Following, in descending order, is a breakdown of the expenditures, 1978-2006:

-- $2.90 billion for power purchases to meet load requirements in response to required river operations that reduce hydropower generation.

-- $1.78 billion in forgone revenue, the calculated value of hydropower that could not be generated because of required river operations to assist fish passage and improve fish survival, such as water spills at the dams when salmon and steelhead are migrating to or from the ocean.

-- $1.71 billion for the Council's direct-program. As noted above, the direct-program expenditures do not include annual expenditures from the separate capital-investment budget. With capital expenditures added, the total for 1978-2006 is $3.97 billion.

-- $1.38 billion in fixed expenses for bonds issued by Bonneville to pay for capital investments in fish-passage facilities at the dams.

-- $862.2 million to reimburse the U.S. Treasury for the power-generation share of other federal agency expenditures to mitigate the impact of hydropower on fish and wildlife. Primarily these reimbursements are paid to the U.S. Army Corps of Engineers, Bureau of Reclamation, and U.S. Fish and Wildlife Service for efforts to improve fish and wildlife survival apart from the Council's program, such as operation and maintenance of fish passage facilities and federal fish hatcheries.

Of the 2006 expenditures for the NPCC program, 61.5 percent ($106.6 million) were for anadromous -- salmon and steelhead -- projects. Wildlife projects absorbed $26.8 million and $25.6 million was spent on resident fish.

Bonneville reports $3.2 million in spending on systemwide fish and wildlife program support, including data management, coordination and information.

Bonneville program support totaled $10.9 million in 2006, including contracts for program review and independent analysis and for its Environment, Fish, and Wildlife Division overhead and personnel costs.

Of the NPCC direct program total expenditures ($35.4 million for capital and $137.9 million for expense), 38.7 percent or $67.3 million went to habitat-related projects. The next largest share -- $36 million or 20.7 percent -- was for artificial production. Other funding categories, in order of spending, include research and evaluation, monitoring, BPA program support, data management, coordination and mainstem survival.