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CBB Interview: Steve Wright, Acting BPA Administrator by Barry Espenson Columbia Basin Bulletin - December 1, 2000

His tenure could, potentially, be brief, but acting Bonneville Power Administration administrator Steve Wright sees the need to keep the momentum rolling on a number of related fronts -- among them finding agreement on a "unified" Columbia Basin fish and wildlife recovery plan demanded by his predecessor.

The 20-year BPA veteran took the reins of the federal power marketing agency when Judi Johansen left Nov. 17 to become executive vice president for government affairs and regulation at PacifiCorp. Wright, who was named deputy administrator earlier this year, had been head of BPA's Washington, D.C. office from 1990 to 1999, where he was liaison to the Department of Energy, Congress and various public interest groups.

During a Nov. 17 interview with the Columbia Basin Bulletin Wright would not speculate on who might be the next "permanent" BPA administrator.

"The new administration will pick the new administrator," said Wright, who was appointed acting administrator by Energy Secretary Bill Richardson, a member of the Clinton Cabinet. The times require, however, that BPA move ahead on a number of initiatives immediately.

Wright rattled off a list of those tasks at hand -- what he thought will be the biggest challengers for BPA and its administrator in the near future.

One of those tasks is to " finish the biological opinion and the All-H paper and move into an implementation phase where we're actually doing something instead of just talking and planning," Wright said of federal salmon recovery initiatives. "We have been doing stuff -- there's a lot of good stuff going on. But there's an awful lot of work that's gone into the BiOp and All-H paper, and it's time to start translating that into action on the ground," Wright said.

A National Marine Fisheries Service biological opinion is due in mid-December that is expected to describe actions NMFS feels must be taken in the federal hydrosystem to avoid jeopardizing the survival of salmon listed under the Endangered Species Act. A federal caucus salmon recovery strategy for the basin is expected to be released at the same time.

The BPA, under the Northwest Power Act and as a federal agency, has obligations to mitigate for hydrosystem impacts to fish and wildlife and help fund salmon recovery activities with ratepayer funds. A funding memorandum of agreement between federal agencies pegged that obligation at $252 million annually for the six-year period that ends Sept. 30, 2001. Of that total, $127 million was earmarked for the Northwest Power Planning Council fish and wildlife program. The $252 million does not include the financial consequences of changed hydrosystem operations, such as spill, designed to benefit migrating fish.

"Second, we have this rate case we need to conclude by May or June and that's critical to us. Our new contracts begin on Oct. 1 of next year and we can't operate without rates. The rates expire on that date so we have a huge fiscal crisis if we don't complete it," Wright said of BPA's reopened rate case. BPA has proposed a 15 percent rate increase.

"Third, we have to acquire a lot of resources. We have 8,000 megawatts of resources and 11,000 megawatts of load under these new contracts. 3,000 megawatts is a lot of power.

"Fourth, the rate increase is going to be hard on some of the industries in this region -- aluminum, the farm economy. We're going to have to work with them to see what we can do to mitigate some of the impact to industry without causing any costs to other customers or to fish and wildlife and other environmental restoration activities.

"Fifth, regional transmission organization we've been working on for a long time. We filed with the FERC in October and we have another filing due in February. We have a go, no-go decision on whether to implement the regional transmission organization. It has to be made sometime in the spring next year."

Finally, "we have an issue this winter -- what we call winter readiness. We're operating at a level that's a lost closer to the margin than we're accustomed to. We've had a lot of load growth and not much growth in supply and we're cutting it pretty thin as we go into winter. One of our concerns is that we're as prepared as we can be this winter and that we also have backup plans for activities that we would take if we stretched the generating capacity beyond its capability."

Wright said he shares Johansen's desire that a unified recovery plan emerge with the convergence of federal and other efforts, such as the NWPPC's amended fish and wildlife program.

"I think Judi and the rest of the federal caucus have done a great job at getting it to the point where we're getting pretty close to making that transition to implementation. I sure hope, even during my short tenure here we're going to be moving briskly into an implementation phase," Wright said. Because of BPA's potential investment, the agency is urging integration of fish and wildlife efforts.

"I think, for us at least, the key element is what we spend money on. That's guided through the federal plan and the Council plan. One of the things I'm going to be striving for is unification of the federal plan and the Council plan. It's been one of my concerns ... that these efforts would go in separate directions, that we would have two separate plans with different missions, objectives. I hope to be doing all I can to bring these two plans together.

"We need (Basin tribes) as active participants in this as well. The tribes have participated a lot in the development of the Council plan and the tribes need to be an active player in the development of the federal plan over the course of even the next 30 days as we move forward to a final BiOp."

The cost estimates for implementing the federal strategy are being developed, Wright said.

"They're trying to work on a cross agency budget that would give a sense of spending by all of the federal agencies. I'm hoping we get to the point where we have both, Bonneville costs and total federal agency costs."

In preparing for its rate case for the 2002-2006 period BPA developed a set of fish and wildlife funding principles and a range of potential costs. The costliest alternatives, more than $700 million annually, featured dam breaching. The draft federal recovery strategy would set aside any consideration of breaching for 5-10 years in favor of an aggressive effort to improve fish habitat improving hatchery operations.

The proposed recovery strategy has not prompted BPA to recalculate its range of fish and wildlife costs "for the purposes of setting rates. We finished our rate case this spring and it had as its basis a whole bunch of cost estimates," Wright said.

"We are reopening the rate case because we have this issue of increased costs for the purchase of power. We have about 8,000 megawatts of generation and we now, as a result of the contracts we signed, have about 11,000 megawatts of load. We have a lot of power that needs to be purchased. With the market having gone up as much as it has this summer we don't have enough money, we won't have enough money in the future, to cover our costs.

"We're trying to keep the scope of this rate case limited to things that absolutely have to be addressed. At this point the only thing that absolutely has to be addressed is the increased costs for market purchases."

Wright said he doubted the proposed federal strategy would be more costly than the breaching options outlined in BPA's fish and wildlife funding principles.

"It seems unlikely to me. Dam breaching only affected four of the listed stocks so we were still going to have to do a bunch of work with the other eight listed stocks. It never struck me that we were going to be able to breach the dams and not do anything else. It was going to be breach the dams and do other things. The type of strategy that is spread all the way across the basin and addresses all 12 listed stocks strikes me as something that necessary."

Wright said BPA will continue its wait-and-see policy regarding some $227 million earmarked for spending under the current MOA but unspent, in large part because Congress did not approve appropriations at the levels expected for hydrosystem capital improvements. The Columbia River Inter-Tribal Fish Commission and others have asked that the amount not be carried into the next rate period as reserves.

"I'd treat that the same way Judi did. The issue here is not how much money is available because we said that we will provide enough money to carry out the plan once the plan is developed. What we need is the plan, then we'll provide the necessary funds for it. Let's not focus on how much money we're spending; let's focus on the activities that need to happen in order to get salmon back to the levels that we want."

The recently completed first phase of the Council's program amendment process created new funding categories -- for land and water acquisitions, high priority actions and subbasin planning -- and the NWPPC is pondering requests for 2001 funding that are beyond its base budget. Again, Wright said BPA is receptive as long as the requests mesh with an overall strategy.

"We're open to the concept. The concept of early action is one we're comfortable with as long as there's an appropriate set of criteria for it. I think the thing we felt most strongly about is that this is tied to a plan of some kind -- that we're headed toward a goal and all of these activities make sense in terms of some larger context; that it's not just the proposal of the day.

"The important thing is that we have a reasonable set of criteria that are tied to objectives and measures. The thing that has struck me as most important is the development of performance standards for both ESA and non-ESA -- that we've got a goal line that we're headed towards and we're in agreement about where that goal line is. With that this process gets a whole lot easier.

"Right now, we've got everybody asking for different kinds of projects, all of which sound like good things. But the question is: what is our ultimate objective here?"

The financial context must also be considered. BPA ratepayers, soon to be buffeted by the 15 percent increase, monitor all of BPA's efforts closely.

"That hits some people pretty hard," Wright said of the increase. "There's the potential for some people being put out of work as a result of this. It's really incumbent upon us to show that we're getting benefits out of all the different programs, not just fish."

"I think that's what we're looking for in terms of performance standards -- being able to describe to people what it is we're getting for the money we're spending -- where it is that we're going. We will also create more consensus behind the fact that the spending we are incurring for fish is a worthwhile investment," Wright said. "The region wants salmon. That part is clear. And it's not just salmon -- they want fish and wildlife. It's not a question of whether we want fish and wildlife; it's a question of what's the best way to get there."

The hoped for integration of federal and NWPPC recovery proposals is progressing, Wright said.

"Like most things we do in this region, we have fits and starts. I'm optimistic that it will come together ultimately. I actually think that there are a lot of people here that are working toward doing the right thing and what's in the public interest. Trying to get some cohesion between these efforts will best serve the interests of the entire region. And I mean that in terms of both ratepayer interests and those who are advocates for fish and wildlife."

"If you've got cohesion then you get back to this point where the ratepayers are feeling that their money is well invested and the fish and wildlife advocates are getting the outcomes they desire."

Wright was asked whether he saw the potential for competition for available funding between prescribed BiOp measures and ongoing NWPPC program initiatives.

"Yes, there is competition between those two. And it's something I like about the institutional structure set up here. If we were just focused on listed stocks we would always be in the emergency repair mode and only taking care of things when the fish were on their dying last breathe. The fact that there is a Council out there -- with a mandate to mitigate for damage done by the federal hydroelectric projects -- that can focus upon doing work in areas that can prevent listings and can try to restore fisheries is a good thing."

Wright said that competition can serve to better focus both efforts and bring the needed integration.

"From an institutional standpoint I think we want there to be a little tension between those efforts. Where is the best place for our dollars to be spent?"

With the existing fish and wildlife MOA expiring at end of the fiscal year, Wright was asked how he expected BPA to define future funding obligations.

"We haven't done much work on that yet. But my personal view is that it would be good for there to be a successor budget agreement of some kind. It doesn't necessarily have to be an MOA just like the last MOA but some outline of what we plan to do for the next five years," Wright said.

"I think it's one of the things you need in order to have a unified plan. A unified plan assumes that you have some sort of agreement on the types of measures and activities that you're going to implement. And if you know something about that, you know something about the costs of those measures.

"A unified plan means to me an agreement between folks that represent the ratepayers and folks that represent the fish and wildlife community. The ratepayer folks are going to want to know how much it cost."