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State Department: Columbia River Treaty Negotiating Position to Include 'Ecosystem-Based Function' by Staff Columbia Basin Bulletin, June 12, 2015

The U.S. State Department, in possible future negotiations with Canada over the Columbia River Treaty, has decided "to include flood risk mitigation, ecosystem-based function, and hydropower generation interests in the draft U.S. negotiating position," according to a recent letter from the state department to the Northwest congressional delegation.

"We assure you that the future of the Treaty is a priority, and internal deliberations are gaining momentum," says the state department in the letter.

"We hope to approach Canada soon to begin discussions on modernization of the Treaty."

(See CBB, April 17, 2015, "NW Congressional Delegation Urges Obama To Initiate Negotiations On Columbia River Treaty")

Northwest conservation groups praised the state department for including "ecosystem function" in the nation's negotiation position as it prepares to negotiate the Columbia River Treaty with Canada.

At issue in the region is whether or not a revised or "modernized" treaty should take into account ecosystem function considerations, such as salmon restoration. The original treaty in place today is focused on hydropower generation and flood control considerations.

"There is solid, broad-based support among Northwest states, tribes, businesses and citizens to promptly begin formal talks with Canada to modernize the half-century-old Columbia River Treaty for tomorrow's Northwest," said Pat Ford, representing Save Our Wild Salmon. "Conservationists and fishermen applaud the State Department for taking this needed step."

Throughout the process of developing U.S. recommendations for a new treaty, utility interests have expressed concern that expanding the scope of the treaty to include ecosystem-based functions is unwise, particularly because draft negotiating positions do not recognize billions of dollars that have been spent over decades to mitigate damages caused by construction of federal hydropower dams.

Utility interests say that there are multiple mitigation plans already in place because of laws such as the Endangered Species Act.

(See CBB, Aug. 9, 2013, "Utilities Group Expresses Concern With Columbia River Treaty Draft Recommendations, Process, Scope")

In December, 2013, the "U.S. Entity" - comprised of top officials of the Bonneville Power Administration and U.S. Army Corps of Engineers officials - sent a final regional recommendation concerning the future of the Columbia River Treaty to the state department.

The recommendation to strike up negotiations with Canada regarding a renewal of the treaty sets out numerous goals for such discussions, such as re-evaluation what monetary "entitlement" should be sent north of the border to pay for benefits received south of the border, and whether ecosystem considerations, such as salmon restoration needs, should be part of any new agreement.

The treaty between the two countries was signed in 1961, with implementation beginning in 1964. The treaty primarily aimed at reducing flood risk downstream, through the construction of water storage facilities in Canada and northwest Montana, and supporting hydropower generation.

Four storage reservoirs on the Columbia River system were built as a result of the treaty -- Duncan, Mica and Keenleyside (also known as Arrow) in British Columbia and Libby in northwest Montana. They doubled the amount of water that could be stored, adding 15.5 million acre-feet of capacity. The treaty called for the United States to pre-pay Canada, a total of $64 million, as each Canadian treaty dam was put into operation.

Canada and the U.S. agreed that the increased annual power generation benefits created by the treaty at the downstream U.S. dams were to be shared equally.

"This benefit is determined using theoretical calculations agreed to by the original treaty authors, and the Canadian share of the power generation, known as the "Canadian Entitlement," is delivered from the United States to Canada. Because the power was not immediately needed to serve its demand, Canada sold the first 30 years of the Canadian Entitlement to a U.S. consortium of utilities for $254 million in 1964," according to background information posted on the U.S. Entities' web site.

"The value of the Canadian Entitlement, combined with pre-payment for flood risk management, helped finance Duncan, Keenleyside and Mica dams. Now that the 30-year contracts have expired, the U.S. delivers the Canadian Entitlement energy to BC Hydro over Bonneville Power Administration transmission lines. BPA estimates that this energy entitlement is worth between $250 million and $350 million a year."

The Department of State has been using the final "U.S. Entity" recommendation in a federal policy review process to determine whether to proceed with negotiations regarding changes to the 50-year-old treaty, or to terminate the agreement with Canada.

The state department letter to the Northwest delegation says the Obama Administration has reviewed the entity's final recommendations and "we agree the Recommendation is an extremely useful document. To proceed with negotiations with Canada on issues as complex and multifaceted as those involved in managing the Columbia River and its tributaries, we are working to ensure that our negotiating position is one that maximizes benefits to the United States. We have met with stakeholder constituents from the region throughout the process, and we will continue to do so in the future."

The U.S. Entity "Regional Recommendation for the Future of the Columbia River Treaty After 2024" was developed by the U.S. Entity in collaboration and consultation with the region's four states, federally recognized tribes and a variety of stakeholders through an extensive, multiyear process known as the Columbia River Treaty Review.

The final recommendation submits that the Pacific Northwest and the nation would benefit from "modernization" of the treaty post-2024. It begins by identifying regional goals for the future of the Treaty post-2024. It includes general principles underlying this recommendation, followed by more specific recommendations related to several Treaty elements. It also identifies matters related to possible post-2024 Treaty implementation for consideration through domestic processes.

The final U.S. Entity recommendation supports a modernized treaty that would simultaneously:

• better address the region's interest in a reliable and economically sustainable hydropower system and reflect a more reasonable assessment of the value of coordinated power operations with Canada;

• continue to provide a similar level of flood risk management to protect public safety and the region's economy;

• include ecosystem-based function as one of the primary purposes of the treaty; and

• create flexibility within the treaty to respond to climate change, changing water supply needs and other potential future changes in system operations while continuing to meet authorized purposes such as navigation and irrigation.

"When the Treaty was ratified, the United States and Canada structured Canada's share of these benefits as one-half of the downstream power benefits with the Canadian Treaty projects as compared to without those projects. An equitable sharing of these benefits should instead be based on the more realistic measure of the power value of coordinated operations as compared to non-coordinated operations," the recommendations say.

"Based on the present formula developed in the 1960s, the estimated value of the Canadian share of the downstream benefits in 2024 is significantly greater than anticipated, and far exceeds the value of coordinated power operations under the Treaty."

Under the original treaty, either Canada or the United States may unilaterally terminate most provisions of the treaty as early as September 2024, with a minimum of 10 years' notice; hence the focus on 2014 and 2024.

After the final recommendation was delivered to the state department, the U.S. government was charged with formally taking up the question of the Columbia River Treaty.

That process will be a federal, interagency review under the general direction of the National Security Council on behalf of the president. The Department of State has been designated as the agency to coordinate and oversee this process on behalf of the National Security Council.

In the letter to Northwest delegation, the state department said, "The Administration recognizes the significant economic and cultural role the Columbia River plays in the lives of your constituents in the Pacific Northwest, including numerous communities in Washington, Oregon, Idaho, and Montana. We assure you that the future of the Treaty is a priority, and internal deliberations are gaining momentum."

In 2013, Canada's British Columbia Province released draft recommendations for a new Columbia River Treaty, saying the current treaty "does not account for the full range of benefits in the United States or the impacts in British Columbia," and that salmon migration above Grand Coulee is not a treaty issue.