S 1533 - 6.18.15

Statement of
Dionne Thompson

Deputy Commissioner for External and Intergovernmental Affairs

Bureau of Reclamation
U.S. Department of the Interior
before the
Committee on Energy and Natural Resources
Subcommittee on Water and Power
on
S. 1533, the Water Supply Permitting and Coordination Act

June 18, 2015

Chairman Lee and members of the Subcommittee, I am Dionne Thompson, Deputy Commissioner for External and Intergovernmental Affairs at the Bureau of Reclamation (Reclamation). I am pleased to provide the views of the Department of the Interior (Department) on S. 1533, the Water Supply Permitting and Coordination Act. This testimony draws upon an earlier statement presented by the Department in February 2014 during the 113^th Congress' consideration of predecessor legislation HR 3980[1].

S. 1533 directs the Secretary of the Interior to coordinate federal and state permitting processes related to the construction of new surface storage projects on lands managed by Interior and the U.S. Department of Agriculture (USDA). Section 3(a) of the bill would establish Reclamation as the “lead agency for purposes of coordinating all reviews, analyses, opinions, statements, permits, licenses, or other approvals or decisions required under Federal law to construct qualifying projects.” A series of deadlines and timelines are mandated in Section 4 for notifying and consulting with cooperating agencies, completing environmental reviews, and determining project schedules. While nothing in the bill would facilitate more regular federal funding for any of these activities, the bill does allow for contributed funds from non-federal entities. Section 6(c) of the bill would prohibit use of any contributed funds for “a review of the evaluation of permits” by the Reclamation Regional Directors in the region in which qualifying projects would be built.

This legislation raises several concerns. First, establishing Reclamation as the lead agency for permitting for storage projects on Interior and USDA administered lands is problematic. Since those lands exist in all 50 states, this would put Reclamation in a significantly expanded role of administering the permitting process for activities beyond the 17 Western states where Reclamation has typically had jurisdiction under Reclamation law.

Next, in Section 2(4) the definition of “cooperating agency” leads to confusion and is inconsistent with established regulations and judicial interpretations. For example, it is inconsistent with the definition under the National Environmental Policy Act (NEPA) and its implementing regulations which identify federal, Tribal, State, and local governmental entities as potential cooperating agencies and further allows those governmental entities with subject matter expertise to be designated cooperating agencies. In addition, it is unclear what purpose is served by the bill's limitations on the use of agencies' funding in Section 6(c).

On the whole, it is unclear what public policy problem would be addressed by the bill. Under NEPA, as well as the newly updated Principles, Requirements and Guidelines for Water and Land Related Resources Implementation Studies (P, R and G's), existing regulation, and other laws, there is already ample basis for review of projects and coordination among federal agencies involved in water supply planning.

We are not aware of any Reclamation or USDA-sited surface water storage projects that have been denied construction because of delays associated with project review or permitting, or shortcomings in communication among Reclamation, USDA, or any other state or federal partners. Rather, as stated above and in prior testimony in February 2014 and at a February 2012 House Natural Resources Committee oversight hearing on surface water storage[2], project economics and the pricing and repayment challenges in the potential markets where projects would be built are the primary reasons for some projects being authorized but not constructed. If nothing else, this bill reduces the time necessary to establish the merits of projects and, in some ways, could make favorable recommendations for project construction less likely. Reclamation is proud of its history constructing the surface water storage projects that are central to life in the West and our national economy, but what is rarely considered in the political discussion of surface storage are the realities of project repayment and market conditions associated with building large dams today. The most frequent reasons for fewer large surface storage projects being built today center around economics or an inadequate potential water market associated with the given facilities. In other cases, environmental, safety or geologic challenges came to light during a project's development, and rendered construction, completion or operation unfeasible.

This legislation places significant new requirements on the review of prospective construction of new surface water storage. But the underlying economic issues that prevent projects from being built – the difficulty of repayment – are unchanged by this bill. Reclamation's focus today must include meeting the challenge of rehabilitating the existing, aging, water and power infrastructure on which Western economies depend. We would be glad to work with the Subcommittee on this important aspect of the debate surrounding new surface water storage.

The Department believes that legislation focused on surface-storage projects should reflect consideration for the economic return to the Nation. We would be glad to work with the Subcommittee to explore these issues further. In conclusion, the Bureau of Reclamation will continue to pursue surface storage as one of many options to meet water demands in the West.

This concludes my written statement. I would be pleased to answer questions at the appropriate time.