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BPA says GAO Report Seriously Underestimates Fish Recovery Costs

by Bill Rudolph
NW Fishletter, September 13, 2002

A new report from the General Accounting Office that indicates the federal government has spent $3.3 billion in the last 10 years on Columbia Basin salmon and steelhead recovery seriously underestimates what has actually been spent, say critics of the review. Those critics include the Bonneville Power Administration, which has funded the lion's share of the basin's recovery costs for the past 25 years. The power agency reportedly spent about $1.5 billion last year alone on power purchases related to fish recovery efforts, but the GAO didn't include those dollars in its assessment.

The Aug. 26 report, commissioned earlier this year by Sen. Mike Crapo (R-ID), pegs estimated recovery expenditures for 11 federal agencies at almost $1.8 billion (unadjusted for inflation) from 1982 through 1996, and about $1.5 billion (2001 dollars) from 1997 through 2001. Crapo said the report contained some key findings regarding the ESA consultation process and showed the federally-managed system needs more financial accountability.

Others said the big issue was what the GAO didn't count. "This report totally mis-characterizes the issue," said BPA spokesman Mike Hansen, who said his agency reviewed the draft report and made comments that reflected their concerns. Though the GAO responded to BPA's letter and included it in the report, Hansen said the GAO "didn't do a very good job of making our points" in its response.

He said that BPA ratepayers had paid for about $1.1 billion of the $1.5 billion in recovery efforts the GAO tallied up since 1996. But the report did not include what the power agency lost on foregone revenues and spent on power purchases during that time, a complaint BPA made in its critique of the GAO draft report.

Hansen said BPA has draft numbers for its last five years of foregone revenues and power purchase costs related to fish actions. These costs, incurred by the agency to satisfy BiOp-mandated reservoir elevations, along with flow and spill regimes designed to improve fish passage at dams, were tentatively estimated at $800 million and $1.3 billion, respectively.

A soon-to-be released Power Planning Council report on BPA's fish and wildlife costs pretty much tracks with the BPA numbers, pegging the 1996-2001 fish-related foregone revenue and power purchase costs at a whopping $2.3 billion, most of which was incurred during last year's drought. Though the numbers are preliminary, BPA spent about $1.5 billion in 2001 in that category, according to the report. BPA's 2001 annual report said total power purchases for the year added up to about $2.3 billion, with total sales of $3.56 billion. In 2000, these fish-related costs added up to about $337 million and in 1999, $252 million.

The GAO said it didn't include costs of foregone revenues from flow augmentation and spill strategies, or the added costs of replacement power "because they do not reflect expenditures for actual recovery actions and determining these costs is difficult to derive, since replacement power and lost revenues could result from other management decisions that are not related to salmon and steelhead recovery."

In its final report, the GAO agreed that BPA is a major supplier of fish recovery money. "However, we were not asked to provide information on the source of funds for salmon and steelhead recovery efforts but rather how much the agencies spent on such efforts. Therefore, the report reflects the funds Bonneville is referring to as expenditures by other federal agencies, such as the Corps, Bureau of Reclamation and Fish and Wildlife Service."

But BPA's Hansen said the report downplays the fact that regional ratepayers, not the nation's taxpayers, pay for the lion's share of the recovery efforts. For instance, the report estimates the US Army Corps of Engineers spent about $598 million from 1997 through 2001 on recovery efforts. "About $450 million was funded by ratepayers," said Hansen.

The GAO report pegged BPA's expenditures for the same period at nearly $405 million, but the power agency's letter on the draft report says its costs were actually over $3 billion. The June letter also stressed that the final report should make clear that costs are not borne by US taxpayers. The final report does mention this issue, but says additional details were added to show how BPA covers other agency expenditures and how it reimburses the US Treasury for both capital and O&M costs by agencies' recovery efforts.

A Washington, DC-based tax lobbying group was quick to pick up the topic. "There is really no evidence that this massive federal investment has been effective at all," said Autumn Hanna, policy analyst at Taxpayers for Common Sense, in a news release issued by the budget-watchdog organization. "We are sending billions of dollars down the river with no clear results and no accountability for how these agencies spend our money."

Despite the many federal actions taken to recover the fish stocks, "the precise extent of their effects on salmon and steelhead are not well understood," the GAO report said. It was difficult to quantify benefits from the actions because of natural fluctuations in fish populations, ocean conditions, and the length of time for "some project benefits to materialize," the report continued. "However, federal agencies are confident that recovery actions are having positive effects and have resulted in higher numbers of returning adult salmon and steelhead than would have occurred otherwise."

The National Oceanographic and Atmospheric Administration said the GAO remarks were an "oversimplification," and pointed out "extensive agency and published peer-reviewed science that documents at least the proximate effects of salmon recovery science." In a letter regarding the report, NOAA cited NMFS research that found major improvements in juvenile fish survival after 1993, when dam operators began an extensive series of modifications to improve fish passage.

But since the National Marine Fisheries Service did not quantify adult returns from the juvenile migrations, the GAO said its report makes a valid point because there is "little evidence to quantify the effects of recovery efforts on the number of returning salmon and steelhead." The report pointed to "other" studies that have shown that bypass facilities at dams increase fish mortality downstream.

Other federal agencies' 1997-2001 recovery costs were much more modest. The US Forest Service spent $105 million, mostly on ESA consultations and habitat improvement; US Fish and Wildlife Service funded salmon and steelhead hatcheries at a cost of $97 million; and the US Bureau of Reclamation spent $62 million on Columbia and Snake river recovery projects and for water enhancement in the Yakima Basin. Seven other federal agencies spent a total of $114 million.

Over the 1997-2001 time frame, the GAO report said that Northwest states received nearly $217 million in federal funds, and Indian tribes got $137 million for fish recovery projects.

Bill Rudolph
BPA says GAO Report Seriously Underestimates Fish Recovery Costs
NW Fishletter, September 13, 2002

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