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Yakama Nation Asks Ninth Circuit to Review BPA Fish Funding by Barry Espenson Columbia Basin Bulletin - July 11, 2003

Program funding modifications, the Confederated Tribes and Bands of the Yakama Nation has for the second time in recent weeks asked the U.S. Court of Appeals for the Ninth Circuit to step in.

In late May, the tribes petitioned the court to review the Northwest Power and Conservation Council's Feb. 21 acceptance of a $139 million cap on fiscal year 2003 expenditures in its fish and wildlife program.

On June 24, the Yakama Nation initiated legal action by petitioning the court "for a review of the Final Agency Action of the Bonneville Power Administration of March 28, 2003, modifying funding for its statutorily mandated Fish and Wildlife Program." Both petitions were brought to the court under the auspices of the federal Northwest Power Act.

The NPCC solicits project proposals, and after a series of reviews, recommends which projects will be funded through the program. BPA makes the final decision on what will be funded and pays for contracted projects with electric ratepayer revenues.

Bonneville markets power generated in the federal Columbia/Snake hydropower system. The Power Act created the NPCC, called for the development of the fish and wildlife program and gave BPA responsibility to fund fish and wildlife projects as mitigation for impacts from the construction and operation of the federal hydropower system.

"We want Bonneville to put up some money to adequately fund the fish and wildlife instead of complaining about being in such bad financial condition," Tim Weaver, attorney for the Yakama Nation, said this week. He accused BPA of "bullying the Council" into accepting a lower level of funding than had been anticipated.

BPA, and Justice Department attorneys who would likely act in defense of a lawsuit, have not decided on a next move.

"We haven't even talked to the Yakama tribe yet to find out what it is they want," said BPA spokesman Bill Murlin.

In December 2002, Bonneville Administrator Steve Wright announced that Council program "expenses" would be capped at $139 million in accrued expenses for 2003 without any provision for costs that carry forward from previous years. Bonneville officials have said that the agency expected to receive in 2003 some $40 million in bills from previous years, which would have brought anticipated expenditures to nearly $180 million this year.

Wright asked the Council to "identify appropriate steps to ensure that Bonneville Power Administrations' (BPA's) Fiscal Year (FY) 2003 expense accruals for the Integrated Program do not exceed $139 million." In establishing the wholesale power rates to start the 2002-2006 rate period, BPA estimated the annual average fish and wildlife budget, on a "planning basis," would be $150 million. That estimate anticipated that only $139 million in expenses would actually be billed or accrued within a given year.

Wright's edict made the $139 million a cap rather than an average, raising the fear of the Council and project proponents, such as the Yakama, that money would be lost each year if projects are not carried out on schedule.

The Council and staff spent the next two months culling through projects to find savings and developing a scheme that kept the program intact, but deferred some work to future years and reduced the planned scope of other projects to bring spending down.

That plan was forwarded to BPA on Feb. 21. At the time the Council also cautioned that further reductions in spending for outyears could jeopardize Bonneville's ability to meet its legal requirements under the Power Act and the Endangered Species Act and also slow progress toward fish and wildlife recovery.

"I don't think the Council should have given in to Bonneville," Weaver said.

Wright responded with the March 24 letter to NPCC Chair Judi Danielson. He said the plan met the agency's stated needs.

"It's a very good deal for them," Weaver said. Because the Council and BPA are only recommending $139 million in spending, he said it is unlikely that that much will actually be spent.

The belt tightening is one of the many steps taken Bonneville since it was sent reeling during 2001's drought/West Coast energy crisis. The agency was obligated to provide some 3,000 megawatts beyond the system's capability, forcing it to go onto a volatile and super-high market to find the necessary power. At the same time, the Columbia/Snake was running dry, leaving the agency without the capacity to generate, and sell out of the region, excess power at times when Northwest energy demand is low.

BPA in October 2001 imposed a 46 percent wholesale rate increase to help close a budget deficit. The agency said in November of 2002 that it expected the deficit to hit $1.2 million by the end of the rate period.

But conditions have improved considerably. The agency says it has saved about $90 million over the remainder of the rate period by terminating its remaining ENRON contracts. Additional cost cutting has saved another $80 million, including $35 million in internal budget reductions. The agency has also been able to improve cash flow in fiscal 2003 by refinancing debt, taking advantage of historically low interest rates.

On the revenue side, BPA's outlook improved when a dramatic change in weather brought more water into the Columbia River system this spring and has allowed the sale of excess power. That has improved the revenue side of the ledger.

NPCC attorneys and Weaver have met to discuss what would be included in the case's administrative record and what would be the preferred schedule for filing briefs with the Court. The parties earlier agreed to ask the appeals court to suspend a briefing schedule that was to begin in September. Such schedules are generated automatically when a petition is filed, according to John Ogan, senior counsel for the NPCC. The Council would like to better define the tribes' issues in the lawsuit and, if possible, solve those problems out of court.

"We're very very early in those discussions," Ogan said. The Ninth Circuit also has the option of steering the parties to mediation.

Related Sites:
Yakama Nation
Northwest Power and Conservation Council
BPA