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Oregon Governor Calls for New Effort to Save the Northwest’s Fish, Low-Cost Power Sam Sperry, Associate Editor, Seattle P-I, September 12, 1999

"Your job is to prepare the road map. Others outside the region will step in if you fail. If you don't succeed, you run a serious risk of squandering the value of the river system, a legacy given to us by our past leaders."

PORTLAND -- As early as this fall, or perhaps early next year, a move by outsiders to "steal" the Northwest's reliable, low-cost electricity is expected in the Congress.

If that happens, Northwest states, particularly Washington, will suffer some major shocks.

First there would be price hikes for electricity, perhaps as high as 30 percent.

Or, if the federal Bonneville Power Administration -- the region's wholesale power marketing agency and operator of the electric transmission grid -- were sold off, the region could lose its statutory preference to the low-cost electricity. With the lost preference likely would go the half-billion dollars it spends on salmon and wildlife habitat restoration.

Most of all the four states probably would lose the opportunity at hand to cooperate in a new arrangement to control the benefits of the Columbia-Snake River system for the people and commerce of the region. The opportunity cost would be a shifting to the Congress, or worse to the vagaries of the marketplace, as the arena for resolving such regional conflicts as how to restore the fish runs, how to better allocate low-cost electricity, and how to use water more efficiently for irrigation. Likewise with the tough decision of whether to remove dams that impede fish runs yet provide a two-way water highway for the barge commerce of Washington, Oregon and Idaho.

Oregon's Gov. John Kitzhaber sums it up by saying Northwest leaders must focus upon two tasks " . . . if we are to pass along to our children and grandchildren the blessings of the Northwest we have had the good fortune to enjoy. They are: 1)a healthy environment capable of supporting plentiful and diverse populations of fish and wildlife; and 2)an adequate, reliable and low-cost supply of power.''

Fish and power: Both dependent upon the water of the river system, which nurtures so much of life in the Pacific Northwest.

We want both. Whether we can have both is up to us.

In sum, this is the message Gov. Kitzhaber will bring to Seattle Friday. In a luncheon speech to a CityClub audience at the Hotel Monaco, Gov. Kitzhaber, accepting the challenge put forth by Sen. Hatfield almost three years ago, will call for a new regional governance structure to guide the Northwest as it enters the 21st century.

Kitzhaber's message is not some stuffy, obscure political antic. The legacy of which Hatfield spoke is at risk, as much from forces outside the region as from a collective indifference within it.

The legacy

The legacy of the Columbia-Snake River system begins with the 29 federal hydropower dams that account for about 45 percent of all the electricity generated in the Northwest by public and private utilities. This system puts out more than 8,000 megawatts of electricity each day, enough to power 8 Seattles. On very cold days when more power is needed for heating, the dams can put out up 17,000 megawatts.

The wholesale price of this federal power is 2 cents per kilowatt hour. For consumers in Washington state, the average retail price is 4.04 cents per kilowatt hour. The equivalent price in California is 9.55 cents per kwh, but a whopping 11.1 cents in New York.

There is a bonus. Regularly, these dams produce surplus power that is sold at very low rates to the region's aluminum producers and other industrial customers. Plus, during the summer months when the need for electricity here is low, the surplus is sold to the southwest states, mainly California, which need extra electricity for air-conditioning.

These surplus sales help hold down rates in the Northwest, thereby increasing the value of the hydropower system to residents and businesses here.

In dollar terms, the value of the BPA system to the Northwest over the next 20 years is about $25 billion. If this value is lost, not only would household electric bills go up, but also the cost of doing business here. Electricity is used in everything we do. Therefore, everyone would pay more.

Since Washington consumers use 61 percent of the federal hydropower, if the benefits of the low-cost power were somehow shifted out of the region, the state's loss would be upwards of $15 billion. Yet the state's leaders seem passive about this risk. The fact that it is the governor of Oregoncoming to Seattle to address this potent regional issue only raises the question: What is Gov. Gary Locke doing about it? The answeris, so far, nothing that he has made public.

Low-cost electricity is not the river system's whole legacy.

It's also the flowering of hundreds of square miles of irrigated deserts -- in central Washington, eastern Oregon and southern Idaho -- that produce food and jobs and export commodities, and support an agricultural commerce that sustains a way of life.

It's the flood control that saves river communities from the devastationof raging high waters all the way from the Pacific Ocean inland to southwestern Idaho.

It's the happy times of people enjoying a host of opportunities for fishing and boating, hiking and camping throughout a river system that stretches from Canada to California and from the Continental Divide to the ocean beaches. The system also sustains a regional tourism industry worth tens of millions of dollars.

And the legacy includes converting the river into a two-way water highway that annually carries more than three million tons of wheat andbarley downstream, mostly for export, and more than 100,000 tons of petroleum and related products upstream, to the inner reaches of Washington, Oregon and Idaho.

Glorious as this rich inheritance is, its underside is an altered environment that has hurt once-teeming fish runs and destroyed much wildlife habitat over these same territorial stretches. The listing of threatened and endangered salmon species under the federal Endangered Species Act has officials scrambling to find ways restore these ocean-going stocks.

Threatened too are some resident fish that do not migrate to the ocean. Western Montana's Bull Trout are an example --which helps indicate why Gov. Marc Racicot and other Montanans are concerned about downstream river issues --and why Gov. Racicot supports Kitzhaber's message.

How the river system is managed affects interests from its origins on the western slopes of the Montana Rockies on downstream through Idaho and into Washington and Oregon. The Columbia-Snake River system is the tie that binds the four states -- however different their individual interests may be.

For example, two of the region's largest reservoirs behind Libby and Hungry Horse dams in Montana store water used to manage down-river flows for fish survival and power generation in Idaho, Oregon and Washington. If drawn down too much, those reservoirs recede to a point where fish are threatened, wildlife habitat is damaged if not destroyed, and the appeal to tourists who would visit Montana to camp, hunt and fish is diminished.

Of course, what literally wires the four states together is the Bonneville grid of high voltage transmission lines that "wheel" the power to and from the several utilities, public and private. A key part of the grid is the California intertie that allows for the seasonal exchange of power that benefits both the Northwest and Southwest. Bonneville's well-built and well-maintained grid is a key reason electric service throughout the Northwest is so reliable -- a feature, surveys show, that is highly valued by consumers.

By design

Our inheritance -- this elaborate electro-agri-transport machine -- came to this generation by design dating to the early 19th century.

At the behest of President Thomas Jefferson, Meriwether Lewis and William Clark observed and catalogued the Pacific Northwest's abundant natural resources: fish, timber, minerals, verdant valleys and, above all, plentiful water. In the decades that followed, the impulse to conquer the continent, cloaked as it was by the hubris of Manifest Destiny, led to the commercial exploitation of this Northwest abundance.

The Depression of the 1930s triggered President Franklin Roosevelt's New Deal to accelerate plans already in the works to harness the Columbia and Snake systems. The objectives were to control floods and to use the rivers' swift volumes to generate electric power that would drive irrigation pumps to dampen dry areas, ignite the pot lines of aluminum plants and electrify thousands of "dark" farms in the expanses far from concentrations of people that power utilities found easy and less expensive to serve.

The dams between Portland, the Tri-Cities and Lewiston, Idaho, were built with locks to allow barge transport to bring out of the "Inland Empire" the rich harvests of grains and to send back bulk-shipments of petroleum products and other supplies.

Today, in southern Idaho as much as half the Snake River flow is withdrawn for agricultural irrigation, according to Randy Stapilus who publishes the monthly Idaho Public Affairs Digest. "Without the water, southern Idaho would be a desert," he says. The same is true for much of central Washington and parts of Oregon.

By the late 1970s, the region suffered two alarming setbacks that affected the Columbia-Snake River system. The debacle of nuclear power brought on by the financial collapse of the Washington Public Power Supply System created a huge debt for both public and private utilities in the region. And the recognition that declines in the salmon runs, perhaps caused by the dams, were accelerating, created a crisis atmosphere.

Fortunately, the region's political power was at its historic peak in Congress. Washington's two powerful Democratic senators, Warren Magnuson and Henry "Scoop" Jackson, teamed up with their regional counterparts, Republican Mark Hatfield of Oregon and Idaho's Jim McClure. Together with state leaders, they forged a new regional arrangement. By pushing through Congress the Northwest Power Act of 1980, the senators ushered in a new chapter for the Columbia-Snake River Basin.

First, the new law provided that the $6.95 billion debt would be folded into BPA's wholesale power rates. Next, the Act established a four-state entity, the Northwest Power Planning Council, based in Portland, to devise a plan to promote energy conservation and restoration and enhancement of fish runs and wildlife habitat consistent with Native American treaty rights. The WPPSS debt would be "regionalized" and theenergy conservation and fish/wildlife habitat work would be paid for by BPA from its wholesale electricity revenues.

Establishment of the power planning council and its able, well-financed staff introduced regional planning for the purpose of better managing the conflicts between power production and the environment.

Each of the four states, by gubernatorial appointment and legislative approval, would send two members to the council to steer the new planning process.

To date, the results have been mixed. After not quite 20 years the council has been in business, a lot of energy conservation investments have been made, but fish runs remain down and much of the basin's wildlife habitat has been destroyed. Moreover, deregulation of the wholesale energy market has sparked calls by some in Congress to end the "regional preference" the Northwest enjoys to be first in line for low-cost electricity.

Congress simply wants to require Bonneville to sell its power to the highest bidder. That likely would result in Southwestern utilities bidding up the price so that Northwest customers would pay not 2 cents per kilowatt hour but as much as 3.5 cents, perhaps even 4 cents.

Another idea that dates to the administration of President Ronald Reagan is simply to sell Bonneville to one or more private utilities. Either idea would raise the cost of electricity to Northwest customers and effectively eliminate the chance to build upon the tradition of regional cooperation the Northwest Power Act has engendered.

Gov. Kitzhaber proposes to build upon that tradition. With the Oregion's clout in Congress diminished by lack of seniority, the Oregon governor and others have taken as warning signs the continued calls for selling the BPA and possibly, the federal dams, to private interests.

Many leaders, including Washington's Locke and two U.S. senators, Slade Gorton and Patty Murray, have declared it essential to keep the benefits of the river system in the Northwest. Yet except for Kitzhaber, not many are doing much about it. He is calling for a new regional consensus leading to a new structure of governance to safeguard regional interests.

He is right on the mark.

A new arrangement

The the issues within the Columbia-Snake River Basin cannot be isolated to one state or solved satisfactorily by one state.

The up-river/down-river tensions that give rise to conflicts require a new forum in which they can be settled in a spirit of mutual cooperation. The same is true for issues that divide Washington and Oregon.

One fresh example is the issue of whether to breach or tear down the four lower Snake River dams in Washington state. All four states have an interest in that idea; all would be affected to some degree.

Another emerging conflict is whether the current allocation of federal hydropower is fair. About half the power from the federal dams is generated in public-power Washington, where most of the power is consumed. But, thanks to the 1980 Power Act, the residential and rural customers of private utilities can gain access to low-cost federal power, once the exclusive right of public utility customers.

More water in the rivers for fish? Does that mean less water for farm irrigation? Does Idaho give up irrigation water to help save fish runs in Washington and Oregon? What about irrigators adopting new water-conservation techniques to help fish and conserve the resource?

Navigation benefits Washington, Oregon and Idaho. Taking down the lower Snake dams might cut the water level so much at Lewiston that it becomes useless as a port. And how would the barges get up-river if the locks at the dams are gone anyway? How would those three million tons of grain get to the ports? Who would pay for the highways and rail lines to move the wheat and barley overland? Could the ports handle the additional traffic? Seattle and Tacoma port officials worry.

Issues like these and others cannot be solved in the regional interest under the current arrangement in the Columbia-Snake River Basin because there are too many players at work -- some at cross purposes:

• Four states each with differing interests being pursued by its respective executive agencies;
• A regional planning body with no authority to implement its plans;
• A federal wholesale electric power and transmission agency that does not manage any of the dams generating the electricity or any other related activities of the river-system;
• 13 treaty tribes with "usual and customary" hunting and fishing rights; and 16 federal agencies that do not work well together.

In a letter June 29 to his fellow governors, Kitzhaber stated his objective, "To create through act of Congress a Northwest regional governance entity charged with establishing a plan for the operation and configuration of the Columbia River hydroelectric facilities; and to oversee efforts to restore species adversely affected by those facilities."

The Oregon governor cited eight principles to be followed in establishing the new agency:

• One, ensure participation by the four states, 13 tribes and a presidential appointee representing the federal government;
• Two, develop a plan to restore fish runs while maintaining river flows adequate to generate electricity to meet the region's needs;
• Three, carry out a plan that is in concert with all federal laws, including the Endangered Species Act and the Clean Water Act and tribal treaty rights;
• Four, have the authority to assure plan compliance by the four states;
• Five and six, base the plan on sound science and economics;
• Seven and eight, reflect regional values that emphasize community and be highly visible and accountable.

These are good ideas but they leave unanswered the question of how should they be translated into action. With what authority should a new instrument of regional governance be invested?

Missing is the critical element of control of the federal assets: the dams and the transmission grid, including the California intertie.

If the Northwest is to adopt and carry out the kind of plan Gov. Kitzhaber wisely envisions, the region will need the legal authority and the tools to accomplish the job.

Several ideas to accomplish this are being informally discussed.

A group of Oregon legislators has broached the idea, and at least one aluminum company representative has expressed interest. Yet there is no formal effort to design the specifics of the arrangement Kitzhaber speaks about.

Such a plan is well within the reach of the four states. The best hope rests with the states' governors. They need to take that first step to see if they can shape a regional consensus of the kind Kitzhaber is suggesting.

If leadership fails, the legacy of the Columbia-River Basin built over three generations could be squandered by the fourth.