New Strategies for America's Watersheds (1999) / Chapter Skim
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7 Financing Watershed Organizations
7 Financing Watershed Organizations
Pages 207-231
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From page 207... ...
Second, it explores the problem of cost allocation in watershed organizations. Finally, it briefly identifies potential financing options that may offer useful approaches for watershed groups.
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From page 208... ...
Local water, wastewater, and stormwater utilities can fund restoration activities as part of their charters if they are responsible for causing some of these impairments. Metropolitan Utilities or Districts Another popular local funding model is to form area-wide districts or utilities to serve specific purposes, like water supply, wastewater treatment, and stormwater management (e.g., the Denver Urban Drainage and Flood Control
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From page 209... ...
For example, Prince William County, Virginia, has established a three-county stormwater utility along the lines described for urban stormwater utilities (Pasquel et al., 1996~. Some funds support watershed management, but in general counties are not significant funders of watershed activities.
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From page 210... ...
For instance, the review notes that the Florida water management districts have moved aggressively into watershed management activities, especially the restoration of the Kissimmee River and the Everglades. These restoration projects are funded by a variety of sources, including the state, various counties, federal agencies such as the National Park Service and the Corps of Engineers, and taxes on agricultural operations in the Everglades Agricultural Area.
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From page 211... ...
This effort was stimulated when hydropower facilities on the river came up to be relicensed in 1991, and there was a call to investigate the potential for developing an integrated watershed management program in the basin. In 1993, the Oregon congressional delegation secured $600,000 in EPA funds to support the work.
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From page 212... ...
· Modify contracting rules to make it easier for watershed groups to hire and retain watershed coordinators. · Stable funding is needed for watershed activities that cross agency boundaries.
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From page 213... ...
These relatively informal committees proved to be ineffective (Featherstone, 1996~. To replace them, Title II of the Water Resources Planning Act of 1965 created seven river-basin commissions to deal broadly with river basins in New England, Ohio, Upper Mississippi, Souris-Red-Rainy, Missouri, Pacific Northwest, and Great Lakes.
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From page 214... ...
After reviewing the current water resources planning, management, and development situation in the Platte River Basin and elsewhere, it appears there is little indication of support from either the states or the federal agencies for a successor to the Water Resources Council, with sufficient authority to meet its goals and objectives. Funding at the Federal Level Numerous federal agencies have responsibilities related to water management.
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From page 215... ...
Hydropower generation is the "cash register" of western water development because it plays such a dominant role in generating revenue, and hydropower generation is the dominant source of revenue for the BOR. In 1984, the BOR's gross revenue from hydropower was $607 million and net revenue was $196 million, which was nearly 97 percent of the net revenue of the BOR that year.
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From page 216... ...
Many stakeholders are involved in determining the project's Annual Operating Plan (USAGE, 1994~. The estimated gross annual benefits for the Missouri River Basin are $1.1 billion.
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From page 217... ...
217 I yes, - _ Z , En / ~ K___r m ~ ' LO \ J bB O EC ~ ~ · - .
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From page 218... ...
Vhr millions of $ cents/kWhr millions of $ APAa40610 2.46 0.2 BPAb57,2451,406 2.46 27.6 SEPAC8,745165 1.89 2.4 SWPA~7,94697 1.22 2.7 WAPAe29,358536 1.83 10.6 Total-PMAs103,7002,214 2.14 43.5 TVA Hydro18,000339 Total-PMAs plus TVA Hydro121,7002,553 Nationwide-wholesale1,202,90243,384 3.61 PMAs plus TVA Percent of Total10.1%5.9% aAPA: Alaska Power Administration bBPA: Bonneville Power Administration CSEPA: Southeastern Power Administration SPA: Southwestern Power Administration eWAPA: Western Power Administration TABLE 7.2 Gross Appropriation Expended for Power and Non-power Purposes (1995) Percent PurposeAPABPA SEPA SWPA WAPA Total of Total Power $206.1 $25,331.0 $1,476.0 $1,007.6$ 5,891.0$33,911.7 78.1% Flood Control 0.0 559.3 244.3 910.00.31,713.9 3.9% Irrigation 0.0 409.2 0.0 0.01,558.41,967.6 4.5% Navigation 0.0 815.8 320.9 231.70.01,368.4 3.2% Recreation 0.0 113.8 231.3 402.328.6836.0 1.9% Fish and Wildlife 0.0 80.0 16.7 24.697.4218.7 0.5% Multi-purpose 0.0 0.0 0.0 0.02,801.62,801.6 6.5% Muncipal and Industrial 0.0 0.0 0.0 0.0197.6197.6 0.5% Other 0.0 244.2 14.3 121.16.1385.7 0.9% Total $206.1 $27,553.3 Percent of Total 0.5% $2,363.5 $2,697.3 $10,581.0 $43,401.2 100.0% 63.5% 5.4% 6.2% 24.4% 100.0% SOURCE: GAO (1995)
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From page 219... ...
Natural Resources Conservation Service The Natural Resources Conservation Service (NCRS) program directly linked to watershed-based approaches is the NCRS's PL-566 program, which promotes development of drainage and flood control projects for agricultural watersheds smaller than 250,000 acres (100,000 ha or about 390 sq.
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From page 220... ...
Hydropower Production and Watershed Financing As noted earlier, hydropower production has long been the primary funding mechanism for water development, particularly in the West. This approach began in the 1930s when the federal government established the TVA and Power Marketing Administrations (PMAs)
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From page 221... ...
In a report to the commission, MacDonnell and Driver (1996) recommend the creation of a new Colorado River Basin Commission that would assume responsibility for all federal facilities and the water deliveries to Mexico, and be self-supporting with income from hydropower revenues.
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From page 222... ...
pointed out that the hydropower revenues from the Columbia River basin, which have supported a large salmon restoration effort, may dwindle in the face of competition from other low-cost power sources such as natural gas. He also concluded that watershed efforts need stable long-term funding if they are to be effective.
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From page 223... ...
recommend that federal funding and technical assistance for the Platte River Endangered Species Recovery Program be expanded to levels commensurate with other programs such as the Columbia River Restoration Program, the Upper Mississippi Environmental Management Program, the Everglades Restoration Project, and the Central Valley Improvement Program. They recommended that federal funding be based on a determination of federal interests in these projects.
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From page 224... ...
One would expect reductions in irrigation if these subsidies were eliminated. COST ALLOCATION AND WATERSHED MANAGEMENT From the viewpoint of economic efficiency, it should be possible to take advantage of economies of scale, develop multi-purpose programs, and more fully exploit the benefits of integrated watershed management (Heaney,1993~.
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From page 225... ...
In particular, there was strong concern that multipurpose public water projects could outcompete existing private hydropower development, because a significant part of the total cost could be assigned to other purposes. These deliberations produced five criteria for cost allocation (Ransmeier, 1942~: · An allocation method should have a reasonable logical basis.
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From page 226... ...
method originated in this initiative (Federal Interagency River Basin Committee, 1950~. A separable cost is the incremental cost of adding group i as the last member of a large coalition of N members.
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From page 227... ...
Much of the current interest in watershed organizations has been stimulated by groups interested in remediating and restoring watersheds to reverse years of decline due to dams, diversions, point and nonpoint pollution, hydropower operations, and other development. But who will bear the cost?
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From page 228... ...
. In between are various options for eliminating the federal water agencies and transferring control of watershed management to regional and local entities or creating major watershed agencies throughout the nation, along the lines of the old river basin commissions but with stable funding and actual management authority.
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From page 229... ...
At present, hydropower revenues are the dominant source of income for the water resources-related activities of federal agencies. Other purposes such as flood control, drainage, irrigation, water supply, recreation, fish and wildlife protection, and environmental quality control are funded from direct appropriations, and beneficiaries are seldom required to repay the total costs.
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From page 230... ...
1997. Water Management Study: Upper Rio Grande River Basin.
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From page 231... ...
Denver, Colo.: Western Water Policy Review Advisory Commission. Water Management District Review Commission.
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