Bureau of Reclamation Banner

Statement of John W. Keys, III, Commissioner
Bureau of Reclamation
U.S. Department of the Interior
Before the
Energy and Natural Resources Committee
Subcommittee on Water and Power
U.S. Senate
on
S. 2513
To authorize the planning, design, and construction of the Eastern New Mexico Rural Water System

June 17, 2004

Madam Chair, I am John W. Keys III, Commissioner of Reclamation, and I am pleased to be here today to present the views of the Department of the Interior regarding S. 2513, which would authorize the planning, design, and construction of the Eastern New Mexico Rural Water System.

We commend the Eastern New Mexico Rural Water Authority (ENMWRA) for bringing this project as far as it has since 1972 when the first of four reports on it was completed. Eastern New Mexico needs to address an impending water shortage and, with continued effort, additional reports can be developed to ensure a successful project for these communities. However, because of several questions and issues discussed below, the Administration cannot support this bill as written.

The communities that form the ENMRWA, the local sponsor of the Eastern New Mexico Rural Water System, need a long-term renewable water supply. All of these communities take water from the Ogallala aquifer which is experiencing water quantity and quality problems. The viability of the Ogallala is hard to predict and heavily reliant on agricultural use in the area. Estimates on when it will be fully drawn down range from 20 to 40 years at current consumption rates. The Eastern New Mexico Rural Water System is proposed to provide a long-term renewable water supply and includes a wastewater treatment facility. In general, participation in the design and development of wastewater systems is beyond the purview of Reclamation’s mission, and detracts resources from core activities.

Reclamation received authorization to develop a feasibility study for the Eastern New Mexico Water Supply Project in 1966, P.L. 89-561. The 1972 feasibility study was followed by special reports developed in 1989 and 1993. The most recent report, dated August 2003, the Conceptual Design Report (CDR), was developed by Smith Engineering Incorporated with funds provided through Reclamation at the direction of Congress

Madam Chairman, anytime that Reclamation undertakes appraisal and then feasibility phase planning on a proposed project we ask ourselves a series of critical questions. We feel examination is even more important when Reclamation, itself, did not perform the appraisal or feasibility work. Here are some of the questions that we ask:

• Have the most economic alternatives been considered? • Does the construction cost estimate include all likely items and anticipate items that may not yet be listed? • How do estimates for services such as design and construction management compare with our experience with comparable projects? • Have the right materials been selected? • Do assumptions in the construction estimate match assumptions in the operation, maintenance, and replacement costs? • Have the studies supporting a proposal to proceed with a project been adequately peer reviewed? • Do communities who will be sharing project costs have an accurate estimate of how much those costs might be, and do they have agreement on how to apportion those costs among themselves? • Is the proposed construction project schedule realistic given the design uncertainties and the backlog of already authorized Bureau of Reclamation rural water projects? • Does the work otherwise meet the Administration’s principals and guidelines for construction authorization?

Madam Chairman, we would like to sit down with the project sponsors and the consultants who are working on Eastern New Mexico and carefully go over each of these questions. Until then, we are not prepared to support authorization of construction as currently contemplated by the Conceptual Design Report. In general, the Administration will not support authorization of a project that has not undergone a thorough review, which is necessary to ensure sound stewardship of taxpayer funds, and to help both the Administration and Congress in developing the budget. The Administration must have full oversight of the development and final review of reports that could form the basis for any authorized project.

Finally, the cost share percentage set forth in the legislation is beyond the normal federal cost share for rural water projects. Legislation proposed by the Administration to establish a systematic rural water program in Reclamation would base the non-federal cost-share for a project such as the Eastern New Mexico Rural Water System on a capability-to-pay-calculation, but in no event less than 35%.

The Eastern New Mexico Rural Water Authority has plans to develop additional studies, including a pipe corrosion evaluation, bench and pilot water treatment testing, energy management, threat assessment, an operation and maintenance plan, and a storage assessment. All of the studies planned by the Eastern New Mexico Rural Water Authority will impact the accuracy of cost estimates for construction as well as OM&R. Because the CDR currently does not meet Reclamation standards for a feasibility level study, it is impossible to estimate construction costs accurately enough to warrant project authorization. While the Administration cannot support this bill at this time, we pledge to work more closely than ever with the project sponsors and Senator Bingaman to develop answers to our questions.

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.