Statement of John W. Keys, III, Commissioner
U.S. Department of the Interior
Before the
Energy and Natural Resources Committee
Subcommittee on Water and Power
S. 2511
To authorize a feasibility study for a Chimayo water supply system, and for planning, design, and construction of a water supply, reclamation, and filtration facility for Espanola, New Mexico

June 17, 2004

Madam Chairman, I am John W. Keys III, Commissioner of Reclamation. I am pleased to be here today to present the views of the Department of the Interior regarding S. 2511 which would authorize a feasibility study for a Chimayo water supply system, and for planning, design, and construction of a water supply, reclamation, and filtration facility for Espanola, New Mexico.

We share the views of the sponsor of this bill, Senator Domenici, regarding the importance of safe and reliable water supplies for cities, towns, and villages. The goals of the bill are commendable. While the Administration cannot support S. 2511 in its current form, we do think that it points out the urgency for Congress to enact rural water legislation now pending before the Senate. Both the Espanola and Chimayo communities may directly benefit from establishment of a systematic rural water program within Reclamation.

Rural water legislation would provide Reclamation with authority and guidelines to assist rural communities as they develop proposals for rural water solutions based on sound economics and best practices. Among three separate versions of rural water legislation now pending before the U.S. Senate, there is bi-partisan, interbranch consensus that the federal cost share should not exceed 50% for planning on rural water projects, at least until a capability-to-pay analysis that is consistently utilized indicates that a different cost-share is more equitable.

The rural water legislation would provide a mechanism for Reclamation and the communities to calculate that capability to pay for both construction and operation and maintenance. This helps in two ways. Reclamation and Congress will be able to identify fair construction cost-sharing requirements, and local sponsors will be able to objectively assess whether they will have the resources to properly operate and maintain projects constructed under the program.

By contrast, Title I of S. 2511 provides that any assistance or grants for Chamayo would be made on a non-reimbursable basis, and with only a 25 percent local cost-sharing requirement.

Title II of the bill directs the Secretary of the Interior, acting through the Bureau of Reclamation to provide financial assistance to the city of Espanola, New Mexico, for the construction of an Espanola water filtration facility.

Reclamation has already provided financial assistance of about $400,000 to the City of Espanola to perform a feasibility study, including environmental reviews under the National Environmental Policy Act. However, Reclamation has not yet received the feasibility study from the City of Espanola required under Section 1604 for review and acceptance. We believe this is a critical step that should precede construction authorization of the proposed filtration facility for three reasons: 1) Reclamation has not yet reviewed the feasibility study for adequacy; 2) the feasibility report never contemplated providing water to Chimayo; and 3) the Espanola feasibility study may need to be expanded to include these additional concerns.

Until these questions are resolved, construction authorization is not appropriate. Reclamation believes that after reviewing the feasibility study provided by Espanola, we would be in a far better position to help shape legislation to authorize construction. Furthermore, regarding the Chimayo project, with which we are only minimally familiar, the needs of the Community may be better met by one of the other numerous Federal rural water programs.

Thank you, Madam Chairman, for the opportunity to present this testimony. I will be pleased to answer questions you and other members of the subcommittee might have.