The legislation that is the subject of this hearing, S. 2027, proposes to establish a warm water fish hatchery at Fort Peck Lake. This legislation reflects an increasing environmental awareness and recognizes the need to take action to maintain viable fish populations in the Missouri River and its reservoirs.
I am concerned, however, about the power supply provisions contained in Section 6 (Cost Sharing) (b)(3) which states "The Secretary [of the Army] shall offer to the hatchery project low-cost project power for all hatchery operations."
First, the marketing of power generation at the Pick-Sloan Missouri Basin Program multi-purpose dams is a responsibility of the Western Area Power Administration (WAPA), not the Corps of Engineers. WAPA was established in 1977 for that specific purpose - to market federal power generated at federal dams. Under the Flood Control Act of 1944, that power is first offered to consumer-owned electric utilities in the region.
The Western Area Power Administration has currently allocated all of the output of the federal dams that are part of the Pick-Sloan Missouri Basin Program. That means that any legislation enacted that calls for further allocations of Pick-Sloan power will force WAPA to withdraw power from existing customers.
Pick-Sloan power is a crucial part of our power supply. The rural electric cooperatives, municipal electric utilities, and public power districts in the region entered into a partnership with the federal government to help pay the costs of a vast regional scheme meant to aid in the economic development of the region. Rather than build their own power plants, these consumer-owned entities agreed to purchase the output from the federal dams. In areas as sparsely settled as Montana and other upper Great Plains state, this power has helped to nurture already fragile local economies.
Our allocations of Pick-Sloan power are already being diminished. Our rural electric cooperative - along with all other firm power federal customers -- will already be losing 4% at the end of this year to provide power for newly qualifying consumer-owned electric utilities and Native American Tribes under WAPA's Energy Planning and Management Plan (EPAMP). In 2006, WAPA may withdraw another one percent of our federal allocation to create another Resource Pool for additional allocations. The Corps' impending revision of the Master Manual also threatens to diminish the federal resource we depend upon. Changes in river operations could threaten not only the availability of federal power, but also its price. The Western Area Power Administration cannot market power that is not there.
The Endangered Species Act stand to affect Missouri River operations, and, in fact, it already has. The Corps of Engineers has already modified releases in an effort to help recover the Interior Least Tern and Piping Plover, losing precious power generation in the process. The recovery plan for the pallid sturgeon has yet to be decided.
Power supply for the fish hatchery is an important issue, no doubt about that; but it must be analyzed within the context of the economies it is meant to serve. In this part of the country, we know full well how important affordable power is.
The hatchery would receive the benefits of Pick-Sloan power by purchasing its needs from the local rural electric cooperative. A power supply for the hatchery using Pick-Sloan power from the dam will disadvantage the local rural electric cooperative by reducing their allocation and depriving all consumer-owners in the area of needed load to maintain rate stability. The whole is greater than the sum of its parts.
Furthermore, since the operations and maintenance costs of the hatchery are a federal obligation, it makes little sense to sell the power at the project rate (2.5 mills). To do so would make the power costs not a federal obligation, but the obligation of power customers throughout the region, who will be paying for the true cost (currently 14.54 mills) through their electric bills.
As I understand it, the fish hatchery would not be needing power until 2006 or so. Why not seek an allocation under the next Resource Pool allocation process of the Western Area Power Administration? In that way, the hatchery could receive a direct allocation of Pick-Sloan power without forcing WAPA to withdraw even more power from its firm power customers.
I urge the sub-committee to vest the determination of federal power supply with the federal agency that bears that responsibility - the Western Area Power Administration; and consider alternatives to the power supply language currently in the bill.
Thank you.