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Bonneville Power Administration says Fish Restoration Program Cuts are a Temporary Blip by Ted Sickinger The Oregonian, September 13, 2012

Even as it faces court mandates to make measurable progress in fish restoration, the Bonneville Power Administration is proposing to trim spending on wildlife programs due to a tight budget and higher than anticipated spending by the contractors who carry them out.

The federal power marketing agency has asked some of its largest contractors to cut spending by 10 to 15 percent in 2012 and 2013. They say it's a temporary blip in programs where spending has been ballooning, and won't affect commitments to mitigate the impact of the region's hydroelectric dams on endangered runs of salmon and steelhead, as well as lamprey, sturgeon and other wildlife.

The proposed cuts as well as the rapid growth in BPA's wildlife spending are causing angst among its many constituents, from public utilities customers to tribes and government agencies that depend on the agency for research funding.

Some recipients targeted for cuts say they didn't overspend, that BPA's cash flow crisis stems from its own lack of financial controls, and that rushing into cuts could ruin programs they spent years building.

Further, while BPA has long stressed it has the money to meet all its commitments, contractors worry the agency's closed-door negotiations with individual contractors mask an effort to permanently cut commitments that, while important for fish survival, don't directly help satisfy court mandates.

"We're disturbed by the lack of transparency," said Joel Moffett, treasurer of the Nez Perce Tribal executive committee.

The Nez Perce faces potential cuts of some $4 million on 29 contracts totaling $20 million. The Nez Perce was the lone holdout from BPA's 2008 agreements with Columbia Basin tribes that vastly increased wildlife spending. Moffett said it was no coincidence they're being asked to cut spending. The accord partners have not yet been asked to take specific spending cuts.

"Ten to 15 percent is pretty huge," Moffett said. "It could dramatically decrease the effectiveness of our programs and set us back for years."

Meanwhile, the rising price tag has customers pushing back. They say some spending has become institutionalized, and has nothing to do with the impact of federal dams. They say Bonneville should focus on projects that will help meet court mandates and exercise more discipline so the agency stays within the spending targets set in rate cases.

"We're really concerned about the longer-term trajectory," said Terry Flores, executive director Northwest RiverPartners, which represents public utilities, ports and farming organizations. "We have all this expense coming on board, but we don't see things coming off the table to make room."

BPA, meanwhile, faces financial pressures due to low natural gas prices. Booming gas production and cheap prices are a boon for many utilities and their customers, but pose problems for BPA because they reduce revenues from the sale of surplus hydropower. Those revenues offset BPA's costs and ultimately reduce rates for the 140 public utilities that buy power directly from the agency. BPA expected a significant, perhaps double-digit percentage rate increase in October 2013.

Under court orders and negotiated agreements, BPA underwrites the largest fish and habitat restoration effort in the nation, and perhaps the world. Counting foregone power generation to improve fish conditions, depreciation and interest on fish ladders and other expenses, BPA spends some $700 million a year to alleviate the dams' impact on fish and wildlife.

The total includes $250 million a year in direct spending on some 500 projects being carried out by state and federal agencies, non-profit organizations and tribes. The projects are geared to meet restoration goals under a court-ordered biological opinion as well as 10-year agreements known as the Columbia Basin Fish Accords. They range from hatchery operations and watershed restoration to fish tagging, and stretch from the Pacific Ocean deep into Idaho, Montana and Wyoming.

Spending has increased from less than $150 million when the fish accords were signed in 2008 to about $250 million a year this year and next. Contractors say that's because the programs are finally ramping up after several years of design, hiring, equipment purchases and land acquisitions.

At a meeting of the Northwest Power and Conservation Council this week in Astoria, BPA executives said they have already added $13 million to the wildlife budget for the coming year. But it is looking to trim spending by deferring land and equipment purchases, paring programs that aren't specifically related to the impact of federal dams, and suspending operations and maintenance that aren't critical.

The agency has asked six of its largest partners, including Oregon and Washington and the Nez Perce Tribe, to cut their budgets by 10 to 15 percent.

Lorraine Bodi, BPA's vice president for environment, fish and wildlife, said the cuts amounted to "growing pains in a growing program." Spending is still set to increase from $246 million a year in 2012 to $260 million by 2015.

"This is belt tightening, not a fundamental change in what we're going to get done on the ground," she said. "We're suggesting areas where potential cuts could occur. This is a collaborative effort to make sure we live within our budget, not something we're imposing on people."

BPA says it is actually adding $13 million to its 2012-2013 budget to cover higher than anticipated spending. But some say the new budget amounts to a $17 million cut.

"BPA lost track of all the moving pieces going on. This should not have been a big surprise," said Tom Iverson, program director of the Columbia Basin Fish and Wildlife Foundation. "The problem is that most of these projects are employee driven. When you cut people with expertise, two years later when you try to ramp things back up, those people are no longer available."