Council Meeting # 253 December 9-10, 1997 Council Offices, Portland, Oregon Approved Minutes

Members Present:

John Brogoitti (OR)
Mike Field (ID)
Ken Casavant (WA)
Stan Grace (MT)
Joyce Cohen (OR)
Mike Kreidler (WA)
John Etchart (MT)
Todd Maddock (ID)

Other Attendance: See attendance roster in exhibits.

FIRST DAY December 9, 1997

Call to Order

The meeting was called to order at 1:10 p.m. by Chairman John Etchart. Member Grace was absent on the first day.

Vice Chairman Brogoitti moved that the Council add to the agenda an executive session to consider matters protectible under the civil litigation exception; find that no earlier notice was possible; and find that Council business requires consideration of this matter. Seconded by Member Maddock, motion was adopted unanimously with a roll call vote. All members voted aye.

Presentation on Restoration of Riparian and Aquatic Ecosystems

Dr. Jay Boone Kauffman, Associate Professor of Riparian Ecology, and Dr. Robert L. Beschta, Professor of Forest Hydrology, Oregon State University, described their research into restoring riparian and aquatic ecosystems (see handouts, Exhibit A). Dr. Kauffman said the research was conducted on the east side of the Cascade Mountains in the Grande Ronde and John Day subbasins. There is a strong link among the components in an ecosystem: hydrology, land, and living organisms. The goals and restoration depend on understanding these linkages. Dr. Kauffman outlined steps in "passive restoration", which include ceasing the activities that are causing degradation or preventing recovery, such as overgrazing or polluting. If passive restoration is not effective, active restoration, such as reconstructing hydrologic features and chemical cleanup may be needed, he explained. Dr. Kauffman also pointed that misinterpretation of ecosystem functions can lead to restoration actions that cause further degradation. Fish habitat improvement projects should first focus on passive restoration, he said, as such projects usually produce the greatest benefits for the amount of money spent.

Dr. Beschta presented several research conclusions, including a suggestion that it may be necessary to purchase water rights, riparian lands, and conservation easements to affect restoration in some cases. He noted that habitat restoration is not a "quick fix" to the extensive degradation of habitats throughout the Columbia Basin

Presentation on U.S. vs. Oregon

This agenda item was withdrawn.

Update on Bonneville Cost Review

Dick Watson, Director, Power Planning Division presented this item. He reported on the Bonneville Cost Review Management Committee meetings. At the most recent meeting, the committee challenged Bonneville and Council staff to re-think the organization on a "minimalist" model with a limited role in the marketplace. He explained that the idea was to come up with a Bonneville organization that would allow the agency to subscribe federal power at below market rates. If Bonneville was to subscribe its power in the Northwest and thus retain the benefits of the hydrosystem in the region, it has to be able to offer prices that "overcome the risk - adverse nature of its historical customers". Mr. Watson noted that this type of introspection was very hard for an organization, but that he was impressed with Bonneville's willingness to take on such difficult issues.

Mr. Watson said that the Review has talked about Bonneville's cost in terms of business lines and overall corporate costs. These have been categorized according to whether they are associated with changes in operations, changes in strategic directions or changes in mission. The latter would require legislative or contractual revisions.

With regard to the power business line, the Cost Review discussed re-sizing the organization commensurate with whether running a minimal power marketing effort. Public purposes, such as support for conservation, are being reassessed. All of Bonneville's non-core functions are on the table, Mr. Watson stated.

With regard to corporate cross, Bonneville was looking at options for a 50 percent reduction, Mr. Watson continued. The work so far reflects no reductions in the Corps of Engineers or Bureau of Reclamation costs, but that was something that will need to be looked at, he said. Mr. Watson said that overall, the management committee's work suggested there were opportunities that would allow Bonneville to sell power at rates that are below market. Member Maddock commented that it has been a pleasure working on the Bonneville cost review management committee and that the committee was finding most of the savings would not require legislative changes.

Council Decision to Release Staff Draft for Review of Corps' Capital Construction Program

Jack Wong, Director, Fish and Wildlife Division; John Shurts, Senior Counsel; Jim Ruff, Senior Hydrologist; and Chip McConnaha, Manager, Program Analysis & Evaluation, presented this agenda item. Mr. Ruff gave an overview of the draft scoping document on the Columbia River mainstem capital construction program. The review will identify elements of the program that need to be examined and the types of policy and technical questions that should be addressed. The scoping document indicates there are over 50 projects in the Corps of Engineers' construction program that are in either the study or implementation phase. This review will focus on those that are proposed rather than those that are already underway, he stated, although three controversial projects will also be included. These include juvenile bypass improvements at Bonneville Dam, the second powerhouse, extended length screens at John Day Dam and the prototype surface bypass system at Lower Granite Dam. Mr. Ruff pointed out that the Council would work with the System Configuration Team and the fish and wildlife agencies during the review. The analysis will involve looking at the mitigation program in view of alternative feature scenarios for system configuration. He said the scoping document provides a series of questions that will be answered for each scenario.

In response to questions regarding how the review will deal with the "enhanced transport option", Mr. Ruff responded that the capital construction review includes building barges and loading facilities but doesn't discuss the issue of the transportation concept, per se. Member Maddock pointed out that clearly, there could be mitigation plans downstream that might not be needed with enhanced transportation.

Vice Chairman Brogoitti moved that the Council release for public comment the staff draft for review of the Corps' capital construction program. Seconded by Member Kreidler, the motion was adopted unanimously.

Council Decision to Release Staff Draft for Comprehensive Assessment of Artificial Production

Jack Wong; Chip McConnaha; John Shurts and John Marsh, Manager, Habitat & Production presented this item. Mr. Marsh began by stating that staff was proposing the same type of public process for the draft scoping document on artificial production as that anticipated for the capital projects review. He said the first step in the hatchery review would be to develop a summary of existing artificial production programs. The second step calls for a group of five experts to analyze the use of artificial production as a tool for mitigation. The group would be made up of three ISAB members and two others. The third step will be a summary of the performance of hatcheries. He noted that a consulting firm will look at how well hatchery programs have done in meeting the objectives of the fish and wildlife program. The schedule calls for these three products to be completed and reviewed by the public by June 1998.

Mr. Marsh went on to state that based on the information developed, a set of general policy principles will be developed, along with an analysis of changes to be made in current hatchery programs. These will be submitted to Congress by December 1998.

Vice Chairman Brogoitti moved that the Council release for public comment the staff draft for comprehensive assessment of artificial production. Seconded by Member Casavant, the motion was adopted unanimously.

Chairman Etchart, at this time, provided time for Member Casavant to read his letter of resignation which he sent to Washington Governor Gary Locke. Member Casavant pointed out that the letter states he would not seek reappointment to the Council when his term expires on January 15, 1998. He said he was eager to return to teaching and research at Washington State University in Pullman, Washington, but indicated that he would serve until Governor Locke appointed a replacement.

Briefing on Three Sovereigns Governance Process

John Volkman, General, Counsel, and John Shurts briefed the Council on this item (see memo, Exhibit B). Mr. Volkman began by summarizing the draft agreement for the Three Sovereigns process. He said the sovereigns include the four states, 13 tribes and eight agencies of the federal government. The Council is not expected to be a signer to the agreement. The drafting group is expected to give a draft agreement to the Three Sovereigns senior staff on December 17, and they will decide whether to take it to the principals, he explained. The agreement could be signed in mid-January, Mr. Volkman said, but pointed out that the drafting group believes it may take longer.

Mr. Volkman said the drafting group envisions three groups in the process: the forum, a policy-level group that meets quarterly; the sovereigns committee, where "the real work" of the group is accomplished; and the independent science and economic boards. In the draft, "any issue that impinges on fish and wildlife in the basin is fair game," but there is definitely "an anadromous fish task" to the process. Under the agreement, the parties would proceed with their work in phases. First, Mr. Volkman said, they would look at the processes that are ongoing and set an agenda. Second, they would try to develop a unified plan that includes the Council, NMFS, and tribal fish and wildlife plans. Third, they would implement the plan. During the first phase, the sovereigns would consider the Council's fish and wildlife amendment process and whether it could be coordinated better.

Mr. Volkman pointed out that this was a coordination, not a decisionmaking process, in describing the authority of the draft. All agencies retain their authorities, but there would be governance principles under which the parties would work towards consensus through various procedural mechanisms. This process would require a large commitment of time and energy from the Council, he said. Council staff would likely carry the burden in areas such as public involvement and fish and wildlife program issues. He indicated that another drafting meeting would be held later in the week and that additional work was needed on the scope of work and funding.

Recess

The meeting was recessed at 4:55 p.m.

SECOND DAY December 10, 1997

Call to Order

The meeting was called to order by Chairman Etchart at 8:37 a.m.

Discussion of Framework for Fish and Wildlife Program

Jack Wong, John Volkman, Chip McConnaha, John Shurts, and Peter Paquet, Manager, Wildlife & Resident Fish, presented this item.

Mr. Shurts stated that the Council decided at the work session to call for fish and wildlife program amendments on July 1, 1998. He explained that a question has arisen about how the Council should incorporate the fish and wildlife framework, which staff was developing into the fish and wildlife program. He said if it is used as the scientific foundation for decisionmaking, the Council would need to officially incorporate it into the program. Member Grace said he was unclear about whether the framework would be used to filter amendments and if it was, then there should be a two-part amendment process. The first would be a decision on the framework, and the second would be amendments to the program. After a lengthy discussion by Council members on the various approaches to amending the program, Mr. Shurts outlined several options. One was for a single amendment process in which the Council would adopt both a framework and amendments. He said the Council could also consider a split process or a process which calls for recommendations on the framework and a decision in April on how to proceed. Following further discussion, it became more obvious that the Council was not clear or had consensus on the concept and process for amending the program. Chairman Etchart concluded that more time should be scheduled at the January Council meeting for further discussion.

Progress Report on Hood River Production Project

This item was presented by Mick Jennings, Confederated Tribes of the Warm Springs Reservation; Jerry Brian, Farmers Irrigation District; John Buckley, East Fork Irrigation District; Brian Connors, Middle Fork Irrigation District; Chip Dale, Oregon Department of Fish & Wildlife; and Ann Saxby, Hood River Watershed Council (see handout, Exhibit C).

This project is aimed at re-establishing healthy runs of spring chinook and summer and winter steelhead by supplementing the existing wild stocks with fish from neighboring sources, including the Deschutes system. Mr. Jennings described the project, which includes a program to acclimate hatchery smolts before they are released into the river. The results of the acclimation program were encouraging, and the survival rate of smolts leaving the Hood River system has increased from 32 percent in 1994 to 87 percent in 1997.

Broodstock for the chinook and steelhead production programs are collected at the Powerdale Dam fish trap, which is owned by PacifiCorp. PacifiCorp has improved the adult fish ladder and plans to improve the juvenile fish streams and enhance flows below the dam. In addition to production, the Hood River project has started focusing on habitat opportunities and adult passage problems.

Ms. Saxby of the Hood River Watershed Council described a number of cooperative activities among water users in the subbasin. Representatives of three irrigation districts reported on their contributions to re-establishing the fish runs. Jerry Brian of Farmers Irrigation District said that because of severe economic pressures and a large debt load, the district has changed its way of doing things to become very efficient. He said the better the district gets at paying attention to ecological matters, the better their project economics become. For example, through the installation of piping, the district has dramatically cut back the number of diversion sites without an impact to agricultural production.

Presentation on Proposal to Refine Analysis of Bonneville Stranded Cost

Dick Watson, and Pete Swartz, Senior Systems Analyst, presented this item (see overheads, Exhibit D). Mr. Watson reported on the staff's analysis of Bonneville's potential stranded costs. He said the analysis offered some insights into the situation, including the strong influence of market prices and the importance of timing. But the results fell into a broad band of uncertainty, he said. There was little "buy-in" among various interests around the region largely because they were not involved in the analysis. Mr. Watson thought it was worthwhile to try to reduce the uncertainty in the initial study by conducting a more comprehensive analysis. In order to complete such an analysis, he said, the staff would need to refine market estimates, which would include getting updated forecasts of gas prices, technology developments, load growth and the effects of restructuring in California. The Council has acquired the use of a new model of the West Coast system, called Aurora. He said a comprehensive analysis would also need to incorporate hydro uncertainty and the cost and timing of various scenarios for salmon recovery measures.

Mr. Watson said an effort would be made to build buy-in by allowing other interests to participate and help shape the analysis. He said the staff has formed a technical workgroup, which includes tribes, customers, and environmental interests. In addition, staff proposes that the Council form a policy workgroup to give overall direction to the study. The Council agreed with Mr. Watson's recommendations.

Presentation on Comments on Fourth Northwest Conservation and Electric Power Plan

Dick Watson said there were relatively few comments on the draft fourth Power Plan and addendum. He said there were comments aimed at the process, in particular, concern about ways in which the plan does not agree with the Comprehensive Review. The Spokane Tribes recommended that the Council defer to the Three Sovereigns and objected to the plan's use of the competitive model.

With regard to conservation, Bonneville commented that the Council overestimated the potential. Bonneville also said that if the Council was to continue to monitor and assess Bonneville's role in the market after the Transition Board's work was completed, it should be done under a mandate from the region and Congress.

Mr. Watson said the Washington Department of Community, Trade and Economic Development appreciated the fact that the addendum addressed stranded costs and the benefits of the federal system to the Northwest. They also supported the creation of a regional technical forum to track progress on conservation and renewables. The Department also commented that the role played by the Council in objective analysis would continue to be valuable to the region. He said the Renewables Northwest Project urged the Council to include plans for an in-depth analysis of uncertainties related to global climate change.

Public Comment

Alfred Canada of Grants Pass, Oregon, offered a petition (Exhibit E)on solar photovoltaic generation for the Council's consideration in finalizing the plan. Mr. Watson said staff would work on packaging, responding to comments, and finalizing the plan for adoption at the February 1998 meeting.

Update on Fish and Wildlife Prioritization Issues

Doug Marker, Senior Policy Coordinator, updated the Council on closing out the Fiscal Year 1997 fish and wildlife budget. He explained that the process for reallocating funds was conducted in steps and that the first step was to determine the level of funds available. The second step was to seek recommendations from CBFWA on how to reallocate the fund. Following that, the Council would then act on CBFWA's recommendations. Mr. Marker said there were several requests for the available funds including interim funding for law enforcement programs, acquiring a conservation easement at Burgdorf Meadows in Idaho, and funding for rehabilitation of Kootenai River sturgeon aquaculture facilities. He said CBFWA has not offered a unified or prioritized plan for reallocation of funds, but has indicated the Council will need to field the requests for these three projects individually.

Sue Ireland of the Kootenai Tribe described the proposal to rehabilitate the Kootenai River White Sturgeon hatchery (overheads, Exhibit F). She explained that the installation of Libby Dam brought a host of problems to the sturgeon, including a lack of spawning which has resulted in an aging population. An aquaculture facility was built in 1991 and biologists were able to determine that the fish could be reared from eggs. The facility has had problems in both 1996 and 1997 related to acquiring permits to collect fish for spawning and from a chlorinated water problem. Ms. Ireland explained that it was very important for the facility to have a clean water source in 1998. In addition, the facility needs new pumping, electrical and water treatment systems. There is also a need to upgrade building and support facilities. The Phase I construction budget has $1.4 million while Phase II has $3.2 million. Ms. Ireland also handed out a copy of the preliminary engineering report (Exhibit G).

Brian Allee, Executive Director of CBFWA, said the sturgeon facility has been thoroughly reviewed. It constitutes an emergency need and CBFWA will soon consider how to fund the entire proposal.

The next prioritization item was presented by Peter Paquet, who reported on a new appraisal done to determine the value of a conservation easement at Burgdorf Meadows in central Idaho. He said an independent appraiser set the value of the easement at $450,000. Discussion followed among Council members, staff and panel members on the nature of the restrictions contained in the language of the easement document (see handouts, Exhibit H). Council members were generally concerned that the easement language allowed for other uses of the property that ultimately could be detrimental to habitat and fish spawning capacities. Most Council members tended to agree that in this particular instance, money would be spent to protect what already existed rather than on recovery later in the future. Member Maddock moved that the Council recommend to the Bonneville Power Administration funding for the Burgdorf Meadows conservation easement on Lake Creek in the Salmon River Basin of Idaho. Seconded by Member Casavant, motion was adopted 7-1, with Member Cohen voting no.

The next prioritization item represented a request from the states of Washington, Montana and Idaho, as well as a tribal request, for $1.4 million in funding to continue law enforcement programs for 90 days. Mr. Marker said this would allow time for CBFWA to come back with a common proposal for law enforcement. The Council asked for assurance that all parties understood that approval of this interim funding proposal did not assure or imply approval of CBFWA's future proposal. Some Council members were reluctant to approve funding proposals on a project-by-project basis and that all requests should be prioritized and ranked with other projects. It was recommended that these projects come back from CBFWA as a package and on a prioritized basis. Member Casavant moved to approve the interim law enforcement expenditures. Seconded by Member Kreidler, motion was adopted with Members Brogoitti and Cohn voting no.

At the conclusion of the review of the above-mentioned funding requests, the Council discussed the drafting of a letter to CBFWA requesting that CBFWA review the proposed funding adjustments and to develop a unified funding proposal within the budget available under the Bonneville fish and wildlife funding agreement. (see Bisbal memo, Exhibit I). This would be consistent with the project prioritization process which uses a collaborative sequence of budget review and recommendations for funding reallocations. This sequence is important to improving regional accountability and program review. Therefore, the Council should ask for CBFWA's assistance by convening the regional fish and wildlife managers to review these recent requests for funding adjustments and to make the appropriate prioritization and funding recommendation as a package to the Council. Member Casavant moved that the Council recommend to Bonneville that it take appropriate steps to extend the law enforcement programs contract, on an interim basis, with available FY 1997 funds, through March 31, 1998. Seconded by Member Field, motion was adopted unanimously.

Council Business

Adoption of minutes - Vice Chairman Brogoitti moved that the Council approve for the Vice Chair's signature the minutes for Council meeting 252 with changes adopted by the members at today's meeting. Seconded by Member Grace, motion was adopted unanimously.

Adjournment

The meeting was adjourned at 1 p.m.

Approved ___________________________________, 1998.

_____________________________________________________________ Vice Chairman