HomeMy WebLinkAboutLetter from Davis Wright Tremaine 10.25.07 00MID OF SUPER SORS
NOV 0 5 2007 LAWYERS
0R0V:LL' ,CALIFOPNI-A
Davis Wright Tremaine LLP
ANCHORAGE - AELLEVUE LOS ANGELES NEW YORK PORTLAND SAN FRANCISCO SEATTLE SHANGHAI WASHINGTON, D.C.
DANIEL M. ADAMSON SUITE 200 TEL (202) 973-4200
DIRECT (202) 973-4240 1919 PENNSYLVANIA AVENUE NW FAX (202) 973-4499
danadamson@dwt.com WASHINGTON, DC 20006 www.dwt.com
October 25, 2007
Ms. Kimberly D. Bose
Secretary
Federal Energy Regulatory Commission
888 First Street,NE
Washington, DC 20126
Re: Relicensing of California Department of Water Resources Oroville Facilities,
Project No. 2100-052
Dear Secretary Bose:
The State Water Contractors ("SWC") and the Metropolitan Water District of Southern
California ("Metropolitan") write to emphasize to the Commission that the Study Plan
Determination for the Wells Hydroelectric Project issued by the Director of the Office of Energy
Projects on October 11, 2007 (copy attached) further affirms SWC and Metropolitan's
conclusion that Butte County's ("Butte") claims for compensation for alleged socioeconomic
impacts associated with the relicensing of the Oroville Project are baseless.
The Commission staff's across the board rejection of a request for a study of socioeconomic
impacts of the relicensing of a major hydroelectric dam on the Columbia River is telling. It
starkly demonstrates that Butte's effort to use the Oroville relicensing process as a means of
obtaining a large amount of revenue is based on a fundamental lack of understanding of the
FERC licensing process and applicable Iaw.
The Director's order concerns a request by the Cities of Pateros and Brewster, Washington
("Cities"), that the Iicensee, Douglas PUD, conduct a study of the socioeconomic impacts of the
Wells Project on their communities. The Cities contend that the Wells Project has negative
socioeconomic impacts that need to be studied as part of the relicensing process. Issues of
concern to the Cities include the flooding and displacement that occurred when the Project was
first built, "direct, indirect and cumulative effects on ... economic, civic, and social conditions,
including the loss of area businesses and revenue (property, sales, excise and hotel/motel taxes),
changes in the cost of providing services" and other issues. Thus, the study request of the Cities
NOV 0 5 2007
Ms. Kimberly D. Bose
October 25, 2007
Page 2
in the Wells relicensing proceeding is similar in many respects to the relief sought by Butte in
the Oroville relicensing process.
The Director's order denies the Cities request for a study of socioeconomic impacts on a number
of grounds which are also applicable to Butte's compensation claims. For example, with
applicability to Butte's claire for over $6 million/year of payments in lieu of taxes (PILOT) the
order denying the Cities' request states,
While tax-related issues are important for local communities, reviewing all tax
information related to the project and surrounding communities is beyond the
scope of this licensing. As the Commission has recently stated, it will not usurp
the state's taxation function [citing to New York Power Authority, 120 FERC
161,266 at P. 33 (2007), in which the Commission denied a claim for PILOT].
This reinforces the position of SWC and Metropolitan that Butte is not entitled to compensation
for alleged tax revenue impacts associated with the existence of the Oroville Project.
The Director's order also points out that the "then and now" comparison sought by the Cities
"would reflect how the present differs from the past, but would not necessarily reveal whether
the differences are due to the passage of time, regional factors, or other factors outside Douglas
PUD's control or related to project." This reasoning also applies to Butte's allegations .of
adverse socioeconomic impacts, many of which are based on speculation and conjecture that
attribute various social 'ills and costs to the Oroville Project notwithstanding the lack of evidence
to support these claims.
The Director's order also denies the Cities' study request on the grounds that it concerns "pre-
project" conditions and thus is counter to the "environmental baseline" of"existing conditions"
that the Commission relies upon when analyzing relicensing impacts. As SWC and Metropolitan
have previously stated, Butte's claims for compensation are counter to the Commission's
existing conditions baseline because they involve mitigation for "pre-project" or "without
project" conditions that Butte alleges would exist if the Oroville Project had never been built.
Finally, the Director's order endorses the position of the licensee that "....the scope of any
socioeconomic effects must be limited to the extent that the project's environmental effects are
interrelated to any social/economic impacts on the community." Therefore, as SWC and
Metropolitan have stated, Butte's contention that alleged socioeconomic impacts unrelated to the
environment impacts must be studied in order to comply with the National Environmental Policy
Act and the Federal Power Act is incorrect.
Ms. Kimberly D. Bose
October 25, 2007
Page 3
In closing, SWC and MWD respectfully request, that consistent with the Director's order in the
Wells' proceeding and applicable law and precedent, the Commission deny Butte's requests for
compensation.for socioeconomic impacts when it issues a new license for the Oroville Project.
Sincerely,
Daniel M. Adamson
Davis Wright Tremaine LLP
1919 Pennsylvania Ave.,NW
Suite 200
Washington, DC 20006
Tel: (202) 973-4240
Fax: (202) 973-4499
Counsel for Metropolitan Water District of Southern California
Thomas M. Berliner
Duane Morris LLP
One Market, Spear Tower, Suite 2000
San Francisco, CA 94105
Tel: 415-957-3333
Fax: 415-957-3001 fax
Counsel far State Water Contractors
Attachment
cc: FERC Service List-P-2100
CERTIFICATE OF SERVICE
I hereby certify that the foregoing document has been served upon each person
designated on the official service list by the Secretary in this proceeding via first-class mail on
October 25, 2007.
Debra Sloan
Davis Wright Tremaine LLP
1919 Pennsylvania Ave.,NW, Suite 200
Washington, DC 20006
(202) 973-4200
FEDERAL ENERGY REGULATORY COMMISSION
WASHINGTON D.G. 20426
October 11, 2007
OFFICE OF ENERGY PROJECTS
Project No. 2149-131-Washington
Wells Hydroelectric Project
Public Utility District No. 1 of
Douglas County
William C. Dobbins, Manager
Public Utility District No. 1 of Douglas County
1151 Valley Mall Parkway
East Wenatchee, WA 98802
Reference: Study Plan Determination for Wells Hydroelectric Project
Dear Mr. Dobbins:
This letter contains, pursuant to 18 CFR §5.13(c), my study plan determination for
Public Utility District No. 1 of Douglas County's (Douglas PUD) Wells Hydroelectric
Project (Wells Project). My determination is based on the staff s review of the revised
study plan and comments on the proposed and revised study plans.
Most study issues have been resolved. I accept the staff s findings on the
proposed studies and the issues still in dispute, which are discussed in Appendix A. A
list of approved studies is attached as Appendix B.
Background
On May 16, 2007, Douglas PUD filed their proposed study plan that included
studies on fish, water quality, cultural, recreation, and terrestrial resources. The Cities of
Brewster and Pateros filed comments on the proposed study plan on August 14 and 15,
2007, respectively.
On June 14, 2007, Douglas PUD held a study plan meeting to discuss the study
plans. Douglas PUD filed a revised study plan on September 14, 2007. The
Confederated Tribes of the Umatilla Indian Reservation (Umatilla) sent a letter to
Douglas PUD on August 14, 2007, that included comments on the proposed lamprey
Wells Hydroelectric Project 2
Project No. 2149-131-Washington '
studies and new requests for salmon and steelhead studies. Umatilla did not address the
study criteria or file the study requests with the Commission; however, Umatilla's request
and Douglas PUD's responses were included in the revised study plan and reviewed by
Commission staff. Comments on the revised study plan were filed by the City of Pateros
on October 1, 2007.
Study Plan Determination
The study plan filed on September 14, 2007, as modified herein, is approved.
If you have any questions, please contact Bob Easton at (202) 502-6045 or
robert.easton@ferc.gov.
Sincerely,
J. Mark Robinson, Director
Office of Energy Projects
Enclosures: Appendix A, Study Request Issues
Appendix B, Approved Studies
cc: Public Files
Mailing List
Wells Hydroelectric Project 3
Project No. 2149-131-Washington
APPENDIX A—STUDY REQUEST ISSUES
Staffs Findings/Response to Comments on the Study Plan
The following includes staff s findings on studies proposed by Douglas PUD.
Except as explained below, we concur with Douglas PUD's conclusions and basis for its
proposed studies and conclude that the study plan filed on September 14, 2007,
adequately addresses all study needs at this time.1
Survival and Rates of Predation for Juvenile Pacific Lamprey Migrating through
the Wells Hydroelectric Project (Juvenile Lamprey Study)
As part of the.Juvenile Lamprey.Study, Douglas PUD proposes to conduct a
literature review that will compile all of the available information regarding juvenile
lamprey survival at hydroelectric projects in the Columbia River Basin. Douglas PUD
indicates that they will conduct a literature review because a juvenile lamprey survival
study is infeasible at this time.Z Because compilation of existing information does not
constitute a study, there is no need to approve this portion of the juvenile lamprey study.
The Juvenile Lamprey Study also includes an assessment of the occurrence of
juvenile lamprey in the diets of predatory birds and fish. Douglas PUD indicates that the
information collected through this study would be used to modify, as appropriate, the
ongoing predator control programs in a manner that would maximize protection for
outmi grating juvenile lamprey while continuing to ensure protection for juvenile
salmonids.
Douglas PUD indicates that evaluation of predation on juvenile lamprey by birds
would be assessed as part of the Piscivorous Wildlife Control Study. The information
collected through this study would be useful for addressing effects of the wildlife control
program on juvenile lamprey. We recommend approval of this study.
To address the effects of predatory fish on juvenile lamprey, Douglas PUD
proposes to examine the stomach contents of approximately 20 smallmouth bass and 20
walleye from the Wells tailrace and 500 northern pikeminnow from the Wells tailrace
and reservoir. Douglas PUD indicates that fish collection will occur through angling and
r None of the comments made by the Umatilla persuaded staff to modify the study
plan.
z Douglas PUD indicates that obtaining sufficient numbers of juvenile lamprey to
conduct a survival study is not practicable and the technology for tagging juvenile
lamprey is in the development stage.
Wells Hydroelectric Project 4
Project No. 2149-131-Washington
coordination with existing programs that already capture these species. Examination of
504 pikeminnow stomachs could provide information that would be useful in assessing
the effectiveness of the ongoing pikeminnow removal program and deriving potential
modifications to the program. However, the benefit of examining approximately 20
smallmouth bass and walleye stomachs is not apparent. We are not aware of any ongoing
predator control activities for these species that could be modified based on these data
and the sample sizes for sampling smallmouth bass and walleye appear to be too small to
have any statistical validity or value for creating such a program. We conclude that this
information is not necessary for our analysis [18 CFR §5.9(b)(4)]; therefore, we do not
recommend that Douglas PUD be required to conduct this portion of the proposed study.
An Assessment of Adult Pacific Lamprey Spawning within the Wells Project
(Lamprey Spawning Assessment)
Douglas PUD proposes to identify areas within Wells Reservoir that are consistent
with spawning habitat requirements for Pacific lamprey and conduct surveys to determine
if spawning is occurring in the reservoir. If spawning is observed, Douglas PUD
proposes to assess whether Wells Dam operations adversely affect lamprey spawning
habitat.
From 1998 to 2005, adult lamprey passage over Wells Dam ranged from 73 to
1,417 fish (annual average was approximately 400). Pacific lamprey spawning has not
been documented within Wells Reservoir and Douglas PUD has suggested that spawning
habitat within Wells Reservoir may be marginal and patchy. Existing information
suggests that the habitat preference of spawning lamprey includes small tributaries
consisting of shallow (approximately 1 meter deep) tailouts of pools over large gravel to
small cobble substrates. This habitat is generally not available within Wells Reservoir
because the vast majority of the reservoir is much deeper than 1 meter.
Based on available information, we conclude that it is unlikely that there would be
substantial adult lamprey spawning habitat within Wells Reservoir. Additionally, there
are several tributaries upstream of Wells Dam and outside of the project area that are
better candidates for providing suitable adult lamprey spawning habitat and we have no
reason to conclude that the adult lamprey passing over Wells Dam would be unable to
access these areas. Therefore, we conclude that existing information is adequate for our
needs and the proposed study is not necessary for our environmental analysis [18 CFR
§5.9(b)(4)]. We do not recommend that Douglas PUD be required to conduct the
proposed study.
Wells Hydroelectric Project 5
Project No. 2149-131-Washington
Continued Monitoring of Dissolved Oxygen (DO), pH, and Turbidity in the Wells
Forebay and Lower Okanogan River (DO, pH, and Turbidity Study)
Douglas PUD is proposing to conduct two additional years of monitoring DO, pH,
and turbidity in the Wells forebay and Lower Okanogan River within the project area.
Douglas PUD indicates that monitoring of these parameters began in August 2005 and
continued in 2006. They do not indicate if any monitoring was conducted in 2007.
The monitoring data collected in 2005 and 2006 suggest that waters within the
Wells Project area are generally in compliance with state standards for DO, pH, and
turbidity. All surface water measurements collected had DO values greater than 8.0
milligrams per liter (mg/L), pH was within the specified range, and turbidity was
generally low except for a few elevated measurements collected in tributaries to the
project reservoir. Douglas PUD states that during times when waters in the project area
exceed state numeric criteria, the waters entering the Wells Project area are also out of
compliance.
To justify the need for the DO, pH, and turbidity study, Douglas PUD states that
additional monitoring is necessary to make a final determination that the project is in
compliance with state criteria. We have reviewed the existing information and we
conclude that there is little justification for additional monitoring. Various entities,
including Chelan PUD and Grant PUD, have recently conducted water quality monitoring
in the mid-Columbia River and none of these studies have indicated concerns with DO,
pH, or turbidity conditions downstream of Wells Dam. Additionally, long-term
monitoring of water quality in areas upstream of the Wells Project, primarily the
Okanogan River and Methow River, suggest that tributary flow into the project area
meets state criteria for DO, pH, and turbidity under most conditions.3 Lastly, the site-
specific data reported by Douglas PUD indicates that waters in the project area are not
exceeding state criteria for DO, pH, or turbidity. Based on this information, we conclude
that existing information is adequate for our needs and additional monitoring is not
necessary for our analysis [18 CFR §5.9(b)(4)]. We do not recommend approving this
study.
Socioeconomic Impact of the Wells Project on Okanogan County and the Cities of
Pateros, Brewster, and Bridgeport
The Cities of Pateros (Pateros) and Brewster request that Douglas PUD conduct a
study of the socioeconomic impacts of the Wells Project on Okanogan County and the
Cities of Pateros, Brewster, and Bridgeport. Pateros states that (a) construction of the
3 High turbidity measurements have been recorded in these areas; however, they
appear to be related to background conditions or periods of higher stream flows.
Wells Hydroelectric Project 6
Project No. 2149-131-Washington
Wells Dam caused a direct impact on the City of Pateros by flooding the city's downtown
area and displacing much of its business, civic, and population centers; and (b) the past,
present, and future operation of the Wells Dam has and will continue to cause direct,
indirect, and cumulative effects on the City of Pateros' economic, civic, and social
conditions, including the loss of area businesses and revenue (property, sales, excise and
hotel/motel taxes), changes in the cost of providing services, increased maintenance costs
of new park assets, damage to the city's civic and social fabric, the loss of valuable
agricultural land and warehouses, the loss of different kinds of recreation opportunities
associated with a free-flowing river, and environmental costs. Pateros requests that a
cost-benefit analysis (or an appropriate variation thereof)be conducted to evaluate the
impact that the construction of the Wells project had, and will continue to have, on lost
revenues from property, sales, excise and hotel/motel taxes. Pateros would have Douglas
PUD identify: (a) factors that influence regional and local economics, including health
care, agriculture, schools and other public entities, industry, and tourism; (b)
socioeconomic impacts of the Wells Project on Okanogan County and the Cities of
Pateros, Brewster, and Bridgeport; (c) future growth opportunities and estimated impacts
of project operations on these resources; and (d) past and continuing socioeconomic
impacts resulting from the City of Pateros' relocation and displacement when the Wells
Dam was originally constructed.
Douglas PUD states that it does not propose to conduct a socioeconomic study,
arguing that the information would not be of use during the development of license
requirements and because the study would focus on original project impacts that were
already mitigated.during the term of the original license. Douglas PUD further argues
that the purposes of any socioeconomic analysis must be to identify socioeconomic
impacts specifically related to the project and its proposed operations. Douglas PUD
states that the scope of any socioeconomic effects must be limited to the extent that the
project's environmental effects are interrelated to any social/economic impacts on the
community. They add that an analysis should not consider those areas of Pateros'
socioeconomic conditions for which the city is the responsible entity or which are
unrelated to the project, including tax structure, business incentives, and other local
economic conditions.
The subjects of Pateros' proposed socioeconomic study are the uncompensated
effects of inundation and relocation of parts of the city and forgone tax revenues that
would continue into the future because of the lost tax base on lands inundated by the
reservoir. As the Commission has explained, the environmental baseline at relicensing is
Wells Hydroelectric Project 7
Project No. 2149-131-Washington
the environment as it exists at the time of relicensing, not pre-project conditions.
m
Moreover, while the Commission will consider pre-project conditions to help inform the
Commission's judgment concerning appropriate mitigation and enhancement measures, it
will not require a licensee to re-create or analyze the environmental conditions that
existed before the project was built. The Commission evaluates and considers the
appropriateness of requiring enhancement measures in the context of today's
environment and in relation to today's needs and problems, not in the context of the
world as it existed 50 years ago.5
The City of Brewster did not address the study criteria [18 CFR §5.9(b)]. Pateros
does not explain why its requested additional information is needed [18 CFR §59(b)(4)].
The information that Pateros would have Douglas PUD gather and analyze already exists
(i.e., demographics, tax statistics, property valuations, etc.). We expect that the existing
available information would be analyzed by Douglas PUD in its application, and that the
analysis would be done in the context of proposed operational and environmental
measures of any future license as noted by Douglas PUD.
Additionally, it is not clear whether the methods described by Pateros would be
appropriate [18 CFR §5.9(b)(5)] because a comparison of pre-project conditions to
existing conditions would not likely shed any light on the effects of relicensing the
project. A "then and now" comparison would reflect how the present differs,from the
past, but would not necessarily reveal whether the differences are due to the passage of
time, regional factors, or other factors outside Douglas PUD's control or related to the
project.
While tax-related issues are important for local communities, reviewing all tax
information related to the project and surrounding communities is beyond the scope of
this licensing. As the Commission has recently stated, it will not usurp the state's
taxation function.6
Therefore, for the above reasons, including those stated by Douglas PUD,we do
not recommend requiring Douglas PUD to conduct a socioeconomic study.
4 Order No. 513, 54 Fed. Reg. 23756 (rune 2, 1989), FERC Stats. & Regs.,Reg.
Preambles 1986-1990 T 30,854 at 31,401, citin Confederated Tribes of the Yakima
Indian Nation v. FERC, 746 F.2d 466 (9th Cir. 1984), cert. denied, 471 U.S. 1116 (1985).
' 47 FERC 61,225 (1989).
6 New York Power Authority, 120 FERC¶ 61,266 at P.33 (2007).
Wells Hydroelectric Project 8
Project No. 2149-131-Washington
Visitor Information Center
Pateros requests that Douglas PUD study the feasibility of constructing a new
regional Visitor Information Center because Douglas PUD's Revised Study Plan does not
provide an assurance that the existing visitor center would be relocated.
As part of its Recreational Needs Analysis, Douglas PUD would identify future
recreation needs in the Wells Project area and evaluate existing information, including
historic and current Wells Dam Visitor Information Center records. Following
completion of the study, the need for reopening or relocating the Wells Dam Visitor
Information Center would be evaluated. Consequently, Douglas PUD does not believe a
separate feasibility study is warranted.
Pateros also did not include any of the requisite information stipulated in 18 CFR
§5.9(b) to justify their request and to assist in our analysis of the recommendation,
including the methods for conducting the feasibility assessment [18 CFR §5.9(b)(b)].
Moreover, consideration of the need for this measure is premature. Data collected and
analyzed from the Recreational Needs Analysis would identify existing and future
recreation needs, as well as, determine whether demand exists to justify the construction
or enhancement of recreation facilities, including the Wells Dam Visitor Information
Center. Ne, therefore, do not recommend requiring Douglas PUD to conduct a
feasibility study for a new Visitor Information Center.
Wells Hydroelectric Project 9
Project No. 2149-131-Washington
APPENDIX B
APPROVED STUDIES
# Study Name
1 Cultural Resource Investigation
2 Evaluation of Public Access To and Use of the Wells Reservoir as it Relates
to Reservoir Fluctuations, Aquatic Plants, and Substrate Buildup (Public
Access Study)
3 An Evaluation of Recreational Needs within the Wells Project(Recreational
Needs Analysis)
4 An Evaluation of the Effects Of and Alternatives To the Existing Bird and
Mammal Control Programs (Piscivorous Wildlife Control Stud
S Plant and Wildlife Surveys and Cover Type Mapping for the Wells
Hydroelectric Project 230 kV Transmission Corridor (Transmission Line
Wildlife and Botanical Study)
b Survival and Rates of Predation for Juvenile Pacific Lamprey Migrating
through the Wells Hydroelectric Project (Juvenile Lam re Stud
7 Adult Pacific Lamprey Passage and Behavior Study (Adult Lamprey Passage
Study)
8 An Investigation into the Total Dissolved Gas Dynamics of the Wells Project
(Total Dissolved Gas Investigation)
9 Development of a Water Temperature Model Relating Project Operations to
Compliance with the Washington State and EPA Water Quality Standards
(Water Temperature Study
10 Assessment of DDT and PCB in Fish Tissue and Sediment in the lower
Okanogan River (Okanogan Toxins Stud