July 19, 2006

I introduced H.R. 4857 to give electricity consumers the right to know what they’re paying for. My bill is aimed at providing more information on one of the most volatile and uncertain costs in the history of hydropower. Those costs are related to the Endangered Species Act.

For many of us here in this Committee, the promise of low-cost federal hydropower has been an economic lynchpin for our region and a key part of our national energy portfolio. The Power Marketing Administrations – known as the PMAs -- throughout the West and Southern United States sell this federal electricity to non-profit utilities like rural electric cooperatives, municipal utilities, public utility districts and Native American tribes.

The PMAs have experienced significant costs over the last few decades and, by law, all of these costs are passed on to the consumer. One of the biggest costs – especially for the Bonneville Power Administration in my home region of the Pacific Northwest – has been related to endangered salmon protection. In fact, enough power was lost during a court-mandated 2004 summer spill to power the City of Seattle for one year. Federal biologists at the time estimated that the $75 million spill would ultimately lead to the recovery of 20 chinook salmon. Yet, today no one can tell you with absolute certainty that the spill benefited the salmon.

Everyone agrees with the goal of protecting salmon, but the issue of how to meet this goal has ripped the region apart. The ESA has simply become a quagmire of confusion and animosity and well-intended people can’t discuss the issue because either the science and data are incomplete or conflicting.

In fact, a 2005 poll found that 70% of electricity consumers in the Pacific Northwest didn’t know how much they paid for salmon recovery or wrongly believed that less than 5% of their monthly bills went towards salmon recovery. There is a disconnect of what consumers know – or have access to – versus what’s real. As the Tri-City Herald recently said in an editorial, “accurate data is needed in the salmon debate.”

My bill, the Endangered Species Compliance and Transparency Act, seeks to bring more facts to the endangered species table. What’s needed are facts and facts should be the basis of decisions and productive discussions. My bill requires BPA and the other PMAs to estimate and report costs associated with the Endangered Species Act on a monthly wholesale customer’s bill. With ongoing endangered species controversies going on in the Northwest, the Platte River, the Missouri River, the San Joaquin River, the Red River and many others, consumers who receive electricity generated from these rivers deserve the right to know how much of the government’s ESA costs are being passed on to them.

This information will help consumers so they can make an informed decision on these expenditures and to assist in regional discussions. Some may feel that the costs are excessive, fair or even inadequate but they can’t make that decision or even ask informed questions until they have the information.

When we crafted this bill, it was important to ensure that it wouldn’t add unnecessary costs to the federal government since these costs would ultimately be passed on to the ratepayer. That objective was accomplished, but not so with other more complex costs.

This bill is the first step of many when it comes to ensuring more transparency for those who pay the bills. I’m a firm believer in bringing more sunshine to the government and we should do more, but overburdening the PMAs so they will have to hire more staff and buy new computer systems – all costs that will be passed down to the retail electricity consumer – is not the answer for today. In fact, I stand ready to work with Committee members over the next few months on ensuring even more transparency without increasing rates. But, today, let’s tackle the most volatile and uncertain, yet measurable costs on behalf of the ratepayer. I strongly believe that this factual information will help bring people together in the Northwest and other regions with the end goal being to foster better communication and collaboration.

In conclusion, Mr. Chairman, I ask that Committee members vote for this bill since it will give consumers better access to information. I look forward to today’s debate.

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MEMBERS VOTING IN FAVOR OF H.R. 4857 (17)
Chairman Richard Pombo (R-CA)
Rep. Ken Calvert (R-CA)
Rep. Walter Jones (R-NC)
Rep. John Peterson (R-PA)
Rep. Greg Walden (R-OR)
Rep. J.D. Hayworth (R-AZ)
Rep. Steve Pearce (R-NM)
Rep. Rick Renzi (R-AZ)
Rep. Henry Brown (R-SC)
Rep. Jim Costa (D-CA)
Del. Luis Fortuno (R-PR)
Rep. Cathy McMorris (R-WA)
Rep. Thomas Tancredo (R-CO)
Rep. Jeff Flake (R-AZ)
Rep. Marylin Musgrave (R-CO)
Rep. John Duncan (R-TN)
Rep. Dennis Cardoza (D-CA)

MEMBERS VOTING IN OPPOSITION TO H.R. 4857 (10)
Ranking Member Nick Rahall (D-WV)
Rep. Dale Kildee (D-MI)
Del. Eni Faleomavaega (D-AS)
Del. Donna Christensen (D-VI)
Rep. Grace Napolitano (D-CA)
Rep. Tom Udall (D-NM)
Del. Madeleine Bordallo (D-GU)
Rep. Neil Abercrombie (D-HI)
Rep. Edward Markey (D-MA)
Rep. Mark Udall (D-CO)

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July 19, 2006
By Allison A. Freeman, Dan Berman and David Loos
E&E Daily reporters

Most of the bills will come up under a unanimous consent agreement, though the ESA bill will have its own roll-call vote, according to the committee.

Rep. Cathy McMorris (R-Wash.) proposed the ESA cost-reporting legislation, H.R. 4857. Republicans have praised the measure, while Democrats have criticized it as unnecessary.

The bill would require the nation's four power marketing administrations (PMAs) to estimate and report their direct and indirect ESA compliance costs each month.

The Bonneville, Western, Southwestern and Southeastern power administrations sell power to municipal utilities, electric cooperatives and government entities. Officials from the Bonneville, Western and Southwestern PMAs have said the legislation would be a welcome aid in determining and sharing their ESA costs.

The PMAs spend millions of dollars each year on ESA compliance, in large part from changing water flows to meet the needs of listed species like salmon, sturgeon, least tern and silvery minnow. Companies also tend to butt heads with ESA over land use, species habitat and consultation.

"Electricity ratepayers are being hit from all angles, and families and businesses deserve answers about contributing factors to our rising energy costs," McMorris said in a statement yesterday.

Rep. Jay Inslee (D-Wash.), one of the most vocal critics of the bill, has argued that if companies report endangered species costs, they should also report the costs from nuclear experiments, diversions for agricultural irrigation and other elements of the federal budget. Inslee will vote against the bill but is not planning to offer any amendments, his spokesperson said yesterday.

Democrats have also argued that it would be unfair to require reporting for ESA costs without also reporting overall economic benefits from preserving the species.

Bonneville has been the biggest spender on ESA compliance, spending almost $600 million in 2004, largely to meet the needs of imperiled fish in the Columbia and Snake rivers. The agency has paid for fish passage facilities, off-site hatcheries and habitat restoration and changes to flow and spill at dams to benefit fish.

The McMorris bill would require PMAs to "estimate" rather than "identify" their costs of ESA compliance. Estimations would allow companies to figure the approximate percentage of their costs for ESA, for instance, rather than reporting the precise dollar amount, according to committee staff.

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