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Economic and dam related articles

FY 2015 Fish And Wildlife
Program Costs Reported Two Ways

by Laura Berg
NW Fishletter, June 6, 2016

Cumulative Costs 1978-2015 by major spending area. Credit: NPCC The Northwest Power and Conservation Council's draft report of BPA fish and wildlife program costs, unveiled May 12, offers two perspectives on fish and wildlife spending relative to other BPA costs--with and without forgone revenue.

Calculated without forgone revenue, total expenditures for fiscal year 2015 were about $560 million. Total costs jump to about $757 million when forgone revenue is added, which is the estimated value of hydropower that couldn't be sold because of operational requirements for fish.

Direct fish and wildlife program spending was $258.2 million in FY 2015.

The "2015 Columbia River Basin Fish and Wildlife Program Costs Report" says there are two views "because the [BPA] Environment, Fish and Wildlife Division includes forgone revenue as a cost, and the Power Business Line does not [include it] in its calculation of how much Bonneville actually spent in the year," wrote John Harrison, information officer for NPCC, in a memo to the Council.

The Power Business Line costs totaled $2.3 billion in FY 2015, according to the Council's summary. The fiscal year is Oct. 1, 2014 to Sept. 30, 2015.

Calculated with forgone revenue, the FY 2015 fish and wildlife costs make up 33.3 percent or about $757 million of Bonneville's total power-related costs.

Without forgone revenue in the computation, FY 2015 fish and wildlife costs comprise 24.5 percent or about $560 million of BPA's total FY 2015 power-related costs.

Forgone revenue, the report observes, is not a cost but an estimate of lost revenue. The information on costs is provided to the Council by BPA.

While not required by the Northwest Power Act, the Council has reported the annual cost of the fish and wildlife program since 2001 after it was requested by the governors of Idaho, Montana, Oregon and Washington, the Council's four member states.

Since then, BPA's accounting of total fish and wildlife costs has engendered ongoing debate. Fish advocates and others say the addition of forgone revenue inflates the actual costs of the fish and wildlife program. BPA argues that it is a legitimate fish mitigation cost.

In 2002, the federal General Accounting Office (GAO) released its assessment saying forgone revenue is not an expenditure for fish and wildlife mitigation or recovery.

Despite the GAO report, lost revenue continues to be included in the annual expenditure summaries. This value is also used to calculate the cumulative cost of fish and wildlife mitigation and recovery since 1978.

The grand total from 1978-2015 is $15.3 billion. The total also includes spending before the Northwest Power Act of 1980 and the first Columbia River Basin Fish and Wildlife Program in 1982.

The 1978-2015 cumulative costs by major spending area (see figure). Also does not reflect $2.66 billion in obligations to capital projects or $2.06 billion in credits.

Recognizing the controversy over the reporting of these power-system costs, the Council said the power act requires it to consider the "monetary costs and electric power issues resulting from implementation of the program."

In addition, the Council said, it does not have the capability to audit Bonneville's financial records.

Fish and wildlife costs account for about a third of Bonneville's wholesale rate of $31.50 per MWh, according to a BPA 2015 factsheet.

The Council's summary for FY 2015 reports Bonneville's $757 million total fish and wildlife costs as follows:

(The difference in calculating costs by subtracting them from the bulleted list above and using the percentages mentioned earlier is due to rounding.)

The Council is taking public comment on the draft report through June 10.


Laura Berg
FY 2015 Fish And Wildlife Program Costs Reported Two Ways
NW Fishletter, June 6, 2016

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