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PPC Threatens to Lift Stay on CRSO; Expresses Concerns Over NOAA Report by Steve Ernst and K.C. Mehaffey NW Fishletter, November 22, 2023

"If the stay ended, we've heard pretty clear calls
to take this to the Supreme Court, once and for all."
-- Scott Simms, executive director of the Public Power Council

Public power utilities in the Northwest are warning the White House and the State of Oregon to keep their hands off of the hundreds of millions of dollars in excess revenues that the Bonneville Power Administration collected this year as tensions between the region and the White House continue to rise.

In a strongly worded letter to White House Council on Environmental Quality (CEQ) Chairwoman Brenda Mallory and Cynthia Jefferies, a commissioner with Federal Mediation and Conciliation Service who is overseeing negotiations over the Columbia River Systems Operations EIS and biological opinion, the Public Power Council (PPC) said it will "examine all of its legal options to preclude using BPA ratepayer dollars inappropriately, without clear legal basis for doing so."

The letter also threatens to withdraw from negotiations over Columbia River Systems Operations (CRSO), which would end an interim compromise that has paused nearly 21 years of litigation.

"This would include PPC invoking its right as a party to the CRSO litigation to move to lift the newly extended stay given its position that any attempt to fund any settlement or agreements without a sound legal foundation and transparent process would constitute 'good cause' to justify lifting the stay without delay," PPC said in the Sept. 29 letter.

Scott Simms, executive director of the PPC--which represents 85 Pacific Northwest consumer-owned ­utilities on important issues--said that his group has confirmed that CEQ and Oregon have proposed using anywhere from "$50 million to $500 million or more" of BPA's surplus revenues to help endangered salmon runs in the Columbia Basin, including further study of breaching the lower Snake River dams.

It's unclear where or when the proposal was made. CRSO litigation negotiations are confidential, and emails seeking comment to both CEQ and representatives from the State of Oregon were not returned. PPC says the proposal came to its "attention through the state of Oregon's intergovernmental affairs activities."

"This is clearly customer money," Simms said. "CEQ seems to have the notion that Bonneville's revenues were just available for whatever venture CEQ may want to spend them on."

CEQ's attempt to confiscate ratepayer money completely ignores all established processes, which are backed up in statutes, Simms said.

"The Northwest Power Act is very clear about Bonneville's obligations and the protections of rate paying customers," Simms said.

The PPC letter comes as three critical issues play out in the Northwest--negotiations over renewing the Columbia River Treaty; continued talks over the stay in litigation of the CRSO EIS and biological opinion; and BPA's rate case settlement.

BPA has proposed a settlement in its power and transmission rate cases that would return nearly $350 million back to customers, and keep power and transmission rates flat.

This stems from one of the key points in the settlement involving an agreement on the revenue distribution clause that calls for BPA to return back to customers 70 percent of the nearly $500 million in revenues that it collected, mostly as a result of strong excess power sales.

The settlement also calls for using 20 percent of those revenues, or $100 million, to pay down debt and spending 10 percent, $50 million, on fish mitigation projects.

PPC also expressed concerns over a NOAA Fisheries report on rebuilding salmon and steelhead runs in the Columbia Basin, saying it contains numerous scientific flaws and should not be used as a basis of consensus in the Columbia Basin Collaborative process.

"Rebuilding Interior Columbia Basin Salmon and Steelhead" outlines actions NOAA Fisheries believes are necessary to reach mid-range goals for healthy and harvestable returns by 2050.

PPC laid out its concerns about the report in an Oct. 18 letter to the Columbia Basin Collaborative, telling members that "[A]fter thorough analysis the final report is absolutely unacceptable as the basis for collaborative action among the region going forward. It is a further unacceptable outcome for the CBC to characterize the report as a consensus regional view of 'the science' and necessary mitigation actions."

The report has been criticized because the draft was developed with input from the Nez Perce Tribe and the State of Oregon--which are suing the National Marine Fisheries Service over Columbia River System Operations, PPC Executive Director Scott Simms said. Other fish managers in the region were invited to comment, but other stakeholders were left out of the process, he added.

"I just think all the circumstances around this NOAA report are really unconventional for NOAA. It's concerning, and it's shrouded in mystery," he said.

Simms said PPC has received no response after submitting comments in an earlier letter to NOAA on the draft report. Those concerns were not addressed in the final report, he added.

Both letters outline four "greatest shortcomings," including ignoring the increases in salmon and steelhead abundance since they were listed in the 1990s; a failure to reconsider the reasonableness of smolt-to-adult ratios of 2 to 6 percent given coastwide declines in SARs; neglecting to account for millions of nonnative fish that are now part of the basin's fish population; and ignoring research contrary to the report's findings.

While PPC's letter was not discussed at the Oct. 19 collaborative meeting, Michael Tehan, assistant regional administrator for NOAA's West Coast Region, said at the meeting that the report was developed to inform the Biden administration's commitment to exploring a long-term strategy for restoring Columbia Basin salmon and steelhead. Those commitments were made as part of a joint request to stay litigation.

Tehan said the report could be seen as NOAA's position on one way to get to the desired goals for healthy and harvestable returns, and includes actions that have the highest likelihood of restoring runs in the face of increasing pressures from climate change.

In August, U.S. District Judge Michael Simon granted a motion by plaintiffs and defendants in the lawsuit over the CRSO EIS and biological opinion that extended a stay in the case until Aug. 31, 2023. The previous stay in National Wildlife Federation et al. v. National Marine Fisheries Service et al., filed in the U.S. District Court for the District of Oregon, had been in place since October 2021.

If PPC follows through on its threat to withdraw from CRSO negotiations, it would throw the question of river operations back to Simon, a path Simms says could lead to taking the case to the Supreme Court.

"If the stay ended," Simms said, "we've heard pretty clear calls to take this to the Supreme Court, once and for all."

Simms said "PPC can't support a stay if it's going to unfairly commit BPA ratepayers to certain actions and through a process that lacks transparency."

He added, "We already have a set and established process--through the Northwest Power and Conservation Council and BPA--through which mitigation funding runs. It's part of an overall cost structure. We've heard CEQ wanted BPA to put its rate case through the FMCS mediation, which is laughable that they think they have that kind of power over BPA and its customers."

Relations between the White House CEQ and Northwest public power utilities have been deteriorating for some time. Public power, as well as defendant intervenors in the CRSO EIS process, claims they've been kept in the dark on a series of hugely important issues.

The PPC says the administration has cut Bonneville out of negotiations with Canada over the Columbia River Treaty, and has failed to even keep the region informed of what's happening.

Several sources said that both the Department of Interior and CEQ are actively involved in the CRT negotiations.

Public power has also been critical of NOAA's draft report "Rebuilding Interior Columbia Basin Salmon and Steelhead," which was released in conjunction with an independent study commissioned by BPA to model how energy services of the lower Snake River dams could be replaced.

NOAA says breaching one or more of the lower Snake River dams will be necessary to achieve "healthy and harvestable" returns of salmon and steelhead to the Columbia Basin by 2050. The new report contradicts the findings of the CRSO EIS and biological opinion, which were released in 2020.

Simms calls the new NOAA report "completely baseless and has a series of material flaws," which PPC outlined in a letter NOAA Fisheries in July.

BPA commissioned the consulting firm Energy and Environmental Economics to study replacing power from the lower Snake River dams. That study was made public on July 12, but BPA was told the night before E3 was scheduled to deliver its findings to the Northwest Power and Conservation Council to delay the presentation.

Sources familiar with the issue say CEQ requested the delay to allow NOAA's study supporting dam breaching to gain traction in the media.

"We've been troubled by CEQ's activities throughout this process," Kurt Miller, executive director of Northwest RiverPartners, said. "It feels like they have no desire at all to ensure a fair hearing of the facts."

Miller says CEQ excluded RiverPartners, as well as the PPC and other regional defendants in the EIS litigation, from participating in the CRSO settlement negotiations.

"We were not allowed to participate in negotiating the terms of stay, but now we are being held to the terms of stay agreement, which we disagree with," Miller said. "It kind of makes it clear where CEQ stands on these issues. They don't seem interested in acknowledging the current record of decision and EIS, and all the things the action agencies have spent considerable time and ratepayers’ dollars on. It's all very disheartening and alarming."

Simms says CEQ has been having discussions on a variety of issues in the Northwest "without public power in the room and without anyone coming out to the region to have a discussion."

"I would rate CEQ's performance, so far, as a D- and trending downward," Simms said.

"At least in terms of public power stakeholders, the way CEQ is engaging with us is disingenuous," Miller said. "I don't know how else one could describe it."