By: Lauren Moldawer, Associate
This September marks the forty-ninth anniversary of the United States and Canada’s Columbia River Treaty (Treaty), which is one of the most sophisticated and important natural resource treaties to share in the world. The Treaty provides the United States with “assured flood control” in exchange for providing Canada financial support for dam development and fifty percent of the hydropower produced downstream. When ratified in 1964, the treaty was impermeable to change and could not be modified or terminated for a sixty-year period. Prior to any termination or modification, parties must provide ten-year notice, making September 2014 a key date in the life of the Treaty. Although a forty-ninth anniversary is usually nothing of interest, for the Columbia River Treaty, this September marks the final twelve-month countdown before beginning negotiations with Canada on the future of the Treaty.
In preparation for making a decision on the Treaty, Bonneville Power Administration (BPA) and the U.S. Army Corps of Engineers (Corps)—the two entities responsible for implementing the Treaty on behalf of the United States—are preparing draft recommendations for formal review and comment, with the final recommendations to the U.S. Department of State to be made in December 2013.
The Treaty, in its current form, is criticized both by environmental groups and the energy industry, and both seek it to be changed in very different and conflicting ways. Environmental groups desire better protection for the depleted salmon populations that are native to the Columbia River. Energy producers want to rebalance the coordinated benefits, as parties believe that Canada, in acquiring fifty percent of the power generated downstream, is benefiting far more than the United States in the treaty—it is estimated this power is worth $250 to $350 million annually.
In June 2013, BPA and the Corps released working draft recommendations for the continuation of the Columbia River Treaty beyond 2024. These recommendations attempt to appease all parties by keeping the same level of flood protection, while “rebalanc[ing] the coordinated power benefits between the two countries,” and adding provisions to address key ecosystem concerns. Provisions to address ecosystem concerns would include, for example, coordinated stream flow to promote the reproduction of native fish and other wildlife.
Although these draft recommendations attempt to balance the ecosystem and hydropower concerns, there is concern from the energy industry. The Columbia River Treaty Power Group, a coalition of seventy Northwest utilities, industry associations, and other major electricity users, fear that the inclusion of the ecosystem provisions will reduce energy production and increase rates. It is estimated that these new provisions could cause a potential increase in the cost for consumers by nearly one billion dollars annually.
Another factor facing these recommendations is often overlooked: Canada’s negotiating position. Canada has a significant bargaining power on many of these issues because, in the absence of the treaty, the Canadian portion of the Columbia basin would be managed solely for Canadian interest. In the current form, BPA’s and the Corps’ working draft recommendations seek to reduce the power benefit received by Canada, while maintaining, if not increasing, the United States benefits from coordinated management of the Columbia River. It is unclear if Canada would agree to these recommendations.
As the final year of preparation prior to the start of negotiations begins, BPA and the Corps have a significant amount of challenges in trying to develop recommendations that will appease both environmental and energy groups. At the same time, however, these recommendations must be viable when presented to Canadian authorities.