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Statement of Michael L. Connor, Commissioner
Bureau of Reclamation
U.S. Department of the Interior
Before the
Natural Resources Committee
Subcommittee on Water and Power
U.S. Senate
S. 3387
Ruedi Reservoir Marketable Yield Pool

June 09, 2010

Madam Chairwoman and Members of the Subcommittee, I am Michael Connor, Commissioner of the Bureau of Reclamation (Reclamation). I am pleased to be here today to present the views of the Department of the Interior (Department) on S. 3387, a bill to provide for release of water from the Marketable Yield pool of Ruedi Reservoir for the benefit of endangered fish habitat in the Colorado River, and for other purposes. The Department has concerns with the language of S. 3387 which I will describe below.

Reclamation recognizes the public interest in the Upper Colorado River Recovery Program and the Programmatic Biological Opinion (PBO) issued to Reclamation on operations affecting the 15-Mile Reach of the Colorado River, and supports the efforts of water users in Colorado to find permanent water supply requirements as negotiated under the PBO. Reclamation, the Fish and Wildlife Service (Service) and our other Federal partners have a long, positive history with the Recovery Program. Based on survival and propagation rates tracked by the Service, these recovery programs have promoted recovery of endangered fish species in the River.

The Department's contribution of water for fish habitat in the 15-Mile Reach Upper Colorado River has been substantial. From 1990 to 1999, Reclamation provided at least 90% of the water every year under prior biological opinions for the four fish species, all on a non-reimbursable basis. This averaged just under 35,000 acre-feet during the 1990s. Since adoption of the PBO in 1999, Reclamation's annual contribution of water has ranged from 20,825 acre-feet up to 50,825 acre feet. Today, Reclamation's non-reimbursable contribution of water to this Program provides roughly 75% of the water available to the Service for the 15-Mile Reach, which comes from various Reclamation facilities including Ruedi Reservoir.

Beginning in 2013, S. 3387 would authorize the annual release of 5,412.5 acre feet of water from Ruedi Reservoir. The legislation further provides that this annual release can be executed without a contract between the Federal government and the non-Federal parties. The absence of a contract is problematic for operational and financial reasons.

In a September 16, 1998, letter to the Service, Colorado West Slope and transmountain diverter water interests agreed to each "... provide or secure funding to buy or build ..." 5412.5 acre-feet of permanent water after the interim period which ends in 2012, with the water users assuming responsibility for the 5412.5 acre-feet as of January 1, 2013. In light of this, the Department believes more discussion needs to take place between our agency, the State of Colorado, and west slope water users on S. 3387. The Department believes that the bill as written is inconsistent with this cost-share arrangement which was a fundamental aspect of the 1999 PBO. Associated with this issue, the Department is concerned that the bill will impact the Federal treasury due to potential lost revenues that would result by removing 5412.5 acre-feet of water from the Marketable Yield pool (51,500 acre feet) of water from Ruedi Reservoir without a repayment contract. In 1999, the Service issued a PBO to Reclamation on operations affecting the 15-Mile Reach of the Colorado River. In addition to the 10,825 acre-feet of water Reclamation was to provide annually until 2012, the PBO, in recognition of the September 1998 letter, called for east and west slope water users to have permanent agreements in place to provide 10,825 acre-feet of water per year by 2012. The "10825 Stakeholders" as they became known began meeting in 2007 to review possible alternatives and have now selected a preferred alternative, which involves the west slope water users providing their commitment through the continued release of water from Ruedi Reservoir.

Ruedi Reservoir was constructed to provide storage for replacement of out-of-priority diversions to the east slope, which is known as the replacement capacity, and to provide water for municipal and industrial development on the west slope. Ruedi Reservoir's largest pool of water is referred to as the Regulatory Capacity. The Regulatory Capacity (73,278 acre-feet) is divided into three smaller pools, one of which is the Marketable Yield pool. The Marketable Yield pool is 51,500 acre-feet, of which 16,373 acre-feet remains available for contracting. The S. 3387 language would remove 5,412.5 acre-feet of the water available for future contracts and set it aside for the purposes of the bill without any repayment for construction, operation, or maintenance costs that are associated with this water, and incurred by the United States. Under the 1958 Water Supply Act (Public Law 85-500), and the 1962 authorization for the Fryingpan-Arkansas Project (Public Law 87-590), these costs are reimbursable.

In general, the Department views the principle of a reasonable non-Federal cost-share contribution as an important one to maintain. Water development, despite its benefits, has had an impact on aquatic ecosystems. In this case, non-federal water development has contributed to certain species being listed under the ESA. The beneficiaries of that development need to contribute to the mitigation necessary to protect and recover species. We believe that was what was contemplated in the PBO.

As S. 3387 is written, the non-federal cost sharing obligations of the west slope would be shifted to the United States. Not only is this inconsistent with the PBO as it applies to the west slope, it is also inconsistent with the approach taken by the east-slope water users who are meeting their cost-share obligation under the September 1998 letter and the PBO. Also, as alluded to earlier, the United States could lose revenues from the foregone 5,412.5 acre-feet of water that might otherwise be provided under a repayment contract. These revenues total about $6,800,000 in capital repayment if paid today in a one-time payment. Additionally, the revenues foregone from operation, maintenance, and replacement (OM&R) would annually total over $18,000, based on the OM&R figures from the previous five years.

A final issue associated with the absence of a repayment contract concerns how releases of water will be made from Ruedi Reservoir. At a minimum, the language in the bill should articulate the need to coordinate releases with Reclamation and other interested parties, and that measures need to be taken to ensure that such releases of water are protected to ensure benefits to endangered species.

In summary, I'd like to stress the importance of maintaining the 1999 PBO for the benefit of aquatic resources and water users in Colorado. Accordingly the Department is prepared to work closely with non-Federal parties to identify reasonable alternatives to the bill's present language.

This concludes my written remarks. I would be pleased to answer any questions from the Subcommittee.