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2004-01-27 Joint CC PUB PacketCITY OF ALAMEDA•CALIFORNIA SPECIAL JOINT MEETING OF THE CITY COUNCIL AND PUBLIC UTILITIES BOARD TUESDAY - - - JANUARY 27, 2004 - - - 7:00 P.M. Time: Tuesday, January 27, 2004, 7:00 p.m. Place: City Council Chambers and Conference Room, City Hall, corner of Santa Clara Avenue and Oak Street. ROLL CALL AGENDA ITEMS 1. Public Comment on Agenda Items Only. Anyone wishing to address the Council /Board on agenda items only, may speak for a maximum of 3 minutes per item. 2. Presentation on Trinity River by the Northern California Power Agency. 3. Report on Alameda Power and Telecom's Participation in Trinity River litigation. 4. Adjournment to Closed Session to consider: CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Name of case: Westlands Water District et al v. U.S. Department of Interior et al. (Announcement of Action Taken in Closed Session, if any.) Adjournment Beverly �ohi\s�n, i ayor • For use in preparing the Official Record, speakers reading a written statement are invited to submit a copy to the City Clerk at the meeting or e -mail to: lweisige @ci.alameda.ca.us • Sign language interpreters will be available on request. Please contact the City Clerk at 747 -4800 or TDD number 522 -7538 at least 72 hours prior to the Meeting to request an interpreter. • Equipment for the hearing impaired is available for public use. For assistance, please contact the City Clerk at 747 -4800 or TDD number 522 -7538 either prior to, or at, the Council Meeting. • Accessible seating for persons with disabilities, including those using wheelchairs, is available. • Minutes of the meeting available in enlarged print. • Audio Tapes of the meeting are available upon request. • Please contact the City Clerk at 747 -4800 or TDD number 522 -7538 at least 48 hours prior to the meeting to request agenda materials in an alternative format, or any other reasonable accommodation that may be necessary to participate in and enjoy the benefits of the meeting. City of Alameda Inter - Office Memorandum Date: January 22, 2004 To: Honorable Mayor and Members of the City Council Honorable Chair and Members of the Public Utilities Board From: James M. Flint City Manager Subject: Joint Meeting of City Council and Public Utilities Board Concerning the Trinity River Restoration Background: Alameda Power & Telecom (Alameda P &T) receives a portion of its power from the Sierra Nevada Region of the Western Area Power Administration (Western), a part of the U.S. Department of Energy. Western markets the power output from the U.S. Department of Interior (DOI) - Bureau of Reclamation's Central Valley Project hydroelectric resources in northern California, including among others, major facilities on the Sacramento River and the Trinity River west of Redding. Alameda P &T is also a member of the Northern California Power Agency (NCPA), through which it receives the majority of its power supply and through which it participates in numerous legislative, regulatory and judicial activities to help maintain and enhance its position in the electric utility industry, to protect its interests, and to maintain the local control which Alameda and other NCPA members consider to be so essential. NCPA also monitors events at Western in support of its members' interests there. Western provides power to most of NCPA's members at a price that is very competitive compared to PG &E's. In 1963, the Bureau of Reclamation completed the Trinity River diversion project, which diverts water from the Trinity River to the Sacramento River. In 1984 Congress passed Trinity River Basin restoration legislation that has led to a number of decisions to increase flows down the mainstem Trinity River and implement other enhancements within the basin to help rejuvenate fish populations. NCPA has monitored this process because increased flow down the Trinity means reduced power generation and because of evidence that Trinity fishery numbers are recovering and may recover further without drastic increases in the amount of water in the river. In 2000, a decision was reached by DOI to significantly increase flows in the mainstem Trinity River. Having secured the approval of its members, NCPA intervened. NCPA supports restoration of the fishery throughout the Trinity River Basin, but believes that the process that was utilized to reach this decision, and possibly the decision itself, was not appropriate. Alameda P &T has followed NCPA's efforts with regard to the Trinity River restoration and has helped fund these efforts through its participation in NCPA's Western Representation budget. Discussion/Analysis: Trinity River Basin Fish and Wildlife As part of the congressional authorization for the Trinity River diversion project, and as reinforced by the 1984 Restoration Act, fish and wildlife populations within the Basin were to be provided protection. The Hoopa Valley Tribe was culturally dependent on the fishery. A precipitous decline in fishery populations Dedicated to Excellence, Committed to Service Honorable Mayor and City Council Honorable President and Public Utilities Board January 22, 2004 Page 2 was experienced after the completion of the project. The cause of the decline is uncertain, and although the significant reduction in flows was believed to be a major contributor, there were other factors. Significant timber harvesting and mining were simultaneously occurring within the region, contributing to overwhelming in -river disturbances and sediment influx into the river. Overharvest by commercial fisheries in the ocean was also a factor. During the early eighties, fishery restoration goals and strategies were established, and various actions were implemented. A 12 year study was to be conducted to establish the long term flow requirements for the fishery. The importance of this study was reinforced by language in the 1992 Central Valley Project Improvement Act, (CVPIA). The flow study was not completed until 1999,and then it was completed under significant controversy. Mainstem Trinity River Flows Beginning in1963, when the Trinity River diversion project was completed, flows from the point of the diversion down the mainstem Trinity River were first greatly reduced, and then gradually increased. The water is diverted to the Sacramento River basin where it is transported for use for irrigation and domestic water supply. The diversion also allows for the opportunity to develop efficient hydroelectric power generation plants, which provide low -cost power to preference customers such as Alameda, thus supporting economic growth in Northern California. The power- related costs of the construction, operation and maintenance of the diversion project are recovered in the rates charged for the hydro power. The diversion project consists of the Trinity Dam and Reservoir, the Lewiston Dam and Reservoir, the Clear Creek tunnel, Whiskeytown Dam and Reservoir, and the Spring Creek tunnel. Prior to the diversion, natural flows down the mainstem Trinity River varied greatly from season -to- season and from year -to -year, depending on precipitation. Natural flows average about 1.3 million acre - feet per year into Trinity Reservoir. With the completion of the diversion project, annual flows were reduced to a minimum of 120,000 acre -feet at Trinity Dam, but these minimum flows were increased over time to support fish and wildlife needs. Annual flows frequently exceed the minimum amounts as a result of flood control operations. Since the initial diversion in 1963, flows have been increased in increments. Exhibit B is a chronology of the various events and decisions over the years and shows the associated river flow requirements as measured at the output of the diversion at Lewiston Dam. Minimum flow requirements have increased from 120,000 acre -feet in 1963 to 452,600 acre -feet in 2003. Litigation In December 2000, the Secretary of the Interior issued its Record of Decision (ROD) on the Trinity River directing the DOI to implement certain measures, including increasing water releases down the Trinity as shown on Exhibit B. The ROD emphasized the use of flows to create conditions in the mainstem that would, hypothetically, provide increased fishery populations. In January 2001, NCPA and SMUD intervened in support of a lawsuit previously filed by the Westlands Water District, citing the shortcomings of the Federal Environmental Impact Statement (EIS) and asking that the ROD be set aside until a revised EIS could be completed. NCPA claimed that the DOI's EIS, which supported the decision to increase flows was flawed in that it did not follow the legally required procedures, had not provided adequate public involvement, did not satisfactorily address fish restoration and water resource management mandates, did not utilize science -based adaptive management procedures, and did not consider the environmental effects beyond the mainstem of the Trinity River. The hope was that a revised EIS would provide a better alternative for improving the health of all affected river systems as well as minimizing adverse air quality and power system impacts. Dedicated to Excellence, Committed to Service Honorable Mayor and City Council Honorable President and Public Utilities Board January 22, 2004 Page 3 In December 2002, the U.S. District Court issued a ruling on the litigation. The ruling confirmed that the concerns raised by NCPA were justified. It concluded that the DOI did not take full consideration of a list of alternative solutions for retaining fish populations in the Trinity River and ignored negative environmental impacts on the Sacramento River and the Delta. The ruling also stated that inadequate consideration was given to electric power supply and reliability impacts from the increased diversions. The judge ordered that a new supplemental EIS be completed taking these issues into account. The new EIS was ordered to be completed by July, 2004, but the defendants have asked for an extension to November 2004. All elements of the Trinity River Restoration Project as identified in the ROD are being carried out, except for the flow levels, which have been set each year by order of the presiding judge in the case. Environmental Considerations Reduced flows, along with impacts associated with mining and logging, have caused considerable alterations to the natural environment of the Trinity River Basin. Plant and animal habitats have changed, sedimentation in the rivers has increased and changed in composition and, subsequently, fish populations have declined. The main intent of the ROD's proposals to increase flows and implement other mitigation measures for the Trinity River is to provide improved habitat that would lead to improvements in the numbers of fish. It appears that fish populations have responded to the increased flows and other measures implemented to -date. NCPA recognizes that efforts need to continue. However, NCPA believes that the 2000 ROD is too narrowly focused on the Trinity River flows without due consideration of other river basins conditions and needs, as well as other environmental effects of the proposed actions, such as the effect of reduced flows in the Sacramento River, which is already facing similar fishery problems. Effects on Power Generation Estimates show that the reduction in diversion proposed by the ROD would reduce power generation by about 324 MW in a dry year. This is enough capacity to meet the peak requirements of about 324,000 homes and is equivalent to a large sized thermal - electric power plant. The energy reduction from the ROD flows amounts to about 340,000 megawatt-hours during an average water year. These estimates are based on the difference between the flow regime in force in 1992 of 340,000 acre -feet, which was the previous expectation, and the flow required under the ROD. The loss of this generation could also have significant impact on the power supply situation in California. The State is not that far removed from the energy crisis that caused so much disruption in 2000 and 2001. Alameda P &T has rights to a small share of Western's hydroelectric generation: 1.08075 percent as of January 2005. As a result, the amount of power that Alameda P &T stands to lose represents about 3,600 megawatt-hours per year, less than one percent of Alameda's total requirements. Fiscal Impacts: Overall, the loss of the power provided by the diversion from the Trinity River potentially represents a significant economic loss, particularly to those customers of Western with a large allocation. For Alameda P &T, the effect is not as significant. Staff estimates that, based on the loss of power and the value of this power on the wholesale market, Alameda P &T will pay, on average, about $170,000 more per year to replace the power. While this is not an insignificant amount of money and Alameda P &T works hard to provide power at the lowest possible cost, it is a small percentage of the normal $25 million power cost budget. Dedicated to Excellence, Committed to Service Honorable Mayor and City Council January 22, 2004 Honorable President and Public Utilities Board Page 4 Conclusion Alameda P &T supports the restoration of the fishery within the Trinity River Basin, and believes that an appropriate and balanced approach should be taken. Alameda is an environmentally conscientious City and Alameda P &T is proud of its environmental record. The Supplemental EIS is under development and is expected to be completed this year. The genesis of this supplemental EIS is that not all factors were properly considered in the initial EIS. NCPA and its members have consistently supported restoration of the fishery in the Trinity River throughout this process and have pressed to ensure that all alternatives have been considered in achieving this objective. Other public power entities have backed away from their support. During 2003 SMUD, under pressure from environmentalists, withdrew its participation in the Supplemental EIS process after the judge's ruling. The City of Palo Alto also subsequently withdrew its funding for the litigation and EIS work by NCPA. And the Port of Oakland directed NCPA not to allow its funds to be used in support of the litigation. Alameda P &T's economics are not critically impacted by the outcome of this proceeding. Respectfully submitted, Junona A. Jonas, General Manager Alameda Power & Telecom JF /JAJ /vof Exhibits: A. Map of Trinity River Basis B. Historical Flow Requirements in the Trinity River Dedicated to Excellence, Committed to Service Yurok Indian Reservation l Weitclipec rHoopa Valley \ Indian Reservation Trinity Dam Lewiston Reservoir Lewiston Dam Lewiston EXHIBIT A Historical Flow Requirements in the Trinity River (As measured at the Trinity Diversion) 1963 Completion of the Trinity River Diversion 1981 DOI Decision - except dry years - dry years Acre Feet per Year 120,000 340,000 140,000 - 220,000 1992 Central Valley Project Improvement Act - all years 340,000 2000 DOI Record of Decision - normal years 646,900 - dry years 368,600 - 452,600 - wet years 701,000 - 815,200 2001 Court Ruling (post ROD litigation stay) - 2001 flow 368,600 2002 Court Ruling - 2002 flow 468,000 2003 Court Ruling - 2003 flow 452,600 (plus 50,000 acre -feet if needed during fall fish run) EXHIBIT B