Grand Coulee Dam and the Columbia Basin Project usa final Report: November 2000

7.  Criteria and Guidelines: Policy Evolution and Compliance 
 
This section examines the evolution of policies affecting GCD and CBP in the period following 
construction of CBP in the mid-1950s. In general, we introduce these policies in chronological order. 
However, in some cases there is an overlap in time. In order to eliminate any confusion, Table 7.1 lists 
the order of topics considered in this section.  
 
Table 7.1 Evolution of Project-related Policies After the Mid-1950s 
Policy Date(s) 
Columbia River Treaty 
1944–1964 
Pacific Northwest Co-ordination Agreement 
1964 
Authorisation and construction of Third Powerplant 
1966–1975 
National Environmental Policy Act 
1970 
Northwest Power Act 
1980 
System Operation Review 
1989–1995 
ESA Listings of Snake River salmon 
1991–1995 
Decision not to irrigate CBP second-half lands 
1984–1994 
BPA-Reclamation direct funding agreements 
1993–1996 
 
 
 
 
 
 
 
7.1  Columbia River Treaty  
 
During the early 1940s, discussions began on the possibility of using storage of the Columbia River 
within Canada to enhance the ability of GCD to generate power and control floods. In March 1944, the 
US government referred the matter of increased storage on the Columbia River to the International Joint 
Commission (IJC), a body created in 1909 under the Boundary Waters Treaty between the US and 
Canada. The International Joint Commission created an International Columbia River Engineering Board 
(with two members from each county) to analyse the situation. 
 
The IJC had not made much progress on the matter until after the massive flood of May 1948. In the 
wake of the enormous damage caused by this flood, the key US agencies in charge of managing the 
Columbia — the Corps, Reclamation, and BPA — were eager to push ahead with upstream storage 
projects. This extra storage could be used to capture excess flow during wet periods and make it 
available during periods when the river lacked sufficient flow to turn all the generators at GCD. These 
three agencies produced a 1948 report demonstrating that new storage in the US and Canada would, 
once and for all, solve downstream flooding problems. 
 
Work on the upstream storage issue progressed slowly, as the US and Canada differed on how much the 
US should compensate Canada for the increased water that would be supplied to US generators. Canada 
also sought compensation for the reduction in flood damages that would result from storing wet weather 
flows behind dams in British Columbia. It took over 20 years to move the IJC from the initial 1944 
referral to the point at which the US and Canada could agree on how the benefits from storage facilities 
on the Columbia River in Canada would be allocated. As detailed in the Annex titled “Negotiating the 
Columbia River Treaty,” numerous stumbling blocks along the way involved domestic politics in both 
countries as well as the normal complexities of international treaty negotiation. 
 
On 16 September 1964, an exchange of diplomatic notes between the US and Canada had the effect of 
bringing the Columbia River Treaty and Protocol into force. These documents included provisions for 
the following:
158
 
 
•  Canada would complete Duncan Dam by 1968, Arrow Lakes (later named Hugh 
Keenleyside Dam) by 1969, and Mica Creek Dam by 1973, to provide a total of 15.5 
MAF (19 100 million m
3
) of storage; the dams were to be operated for power and flood 

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This is a working paper prepared for the World Commission on Dams as part of its information gathering activities. The views, conclusions, and 
recommendations contained in the working paper are not to be taken to represent the views of the Commission 
 
control in the US. (These three dams are referred to hereafter as the “Canadian Treaty 
dams”.) 
•  To compensate Canada for its costs, Canada would be entitled to receive one half of the 
additional power and flood control benefits produced downstream in the US. The US 
paid Canada a one-time sum of $64.4 million (about $340 in $1998) upon completion of 
the Canadian Treaty projects for one half of the present worth of the estimated US flood 
damages prevented through 2024. 
•  Canada and the US agreed to determine the downstream power benefits based on the 
estimated increase in dependable capacity and average annual usable energy in the US 
from the operation of the three Canadian Treaty dams; these increases are calculated 
relative to the US reservoir storage system operation that existed in 1961, and assuming 
that all downstream US projects are operated for optimum power and flood control.
159
  
•  The Treaty permitted the parties to operate the Canadian Treaty dams in ways that 
would produce additional benefits to both parties.
160
 
•  The Treaty allowed the US to build Libby Dam in Montana and inundate associated land 
in Canada; the 4.98MAF (6 100 million m
3
) of storage was to be operated for flood 
control and other purposes. 
 
When the Treaty was implemented, the Canadian province of British Columbia (BC), which had 
accepted the treaty benefits and obligations on behalf of Canada, decided to build projects on the Peace 
River in northern BC at the same time that it built the required projects on the Columbia River. Since 
there was no immediate need for all this power, British Columbia elected to sell the Canadian 
entitlement for the first 30 years of each project, and it negotiated a deal with a consortium of companies 
in the US. This sale specified full payment up front, and BC used this payment to cover a significant 
portion of the construction costs associated with the Canadian Treaty dams. 
 
The Columbia River Treaty had specific plans for only two water uses: hydropower and flood control. 
The central idea was to use upstream storage to change the shape of the Columbia River’s hydrograph: 
the magnitude of the peak flows, which typically occur in May and June, were to be reduced, while the 
relatively low flows occurring in fall and winter were to be increased. With a more uniform flow regime, 
more power could be generated and the potential for flood damage reduced. Three agencies were 
charged with implementing the Columbia River Treaty: BC Hydro, BPA, and the Corps. 
 
A provision of the Treaty permits the parties to agree to any real operation that produces additional 
benefits for both parties compared to the basic operation for power and flood control. This provides 
considerable flexibility in implementation. The main requirements of joint operations are that agreement 
between the two nations is required and that both parties benefit. This condition has sometimes been 
interpreted to mean that accommodating water quality enhancements (and other uses aside from 
hydropower and flood control) cannot take place unless payments are made by beneficiaries of these 
other uses. However, this view is not necessarily true. In fact, there are many examples in which Canada 
and the US have agreed to an operation for fish mitigation, and both countries have lost small amounts 
of hydropower. In these cases, agreement was reached because both parties considered the modest 
hydropower loss to be more than offset by the other benefits of the revised operation. (The US and 
Canada generally agree to several such non-power operations each year.) Flood control is still 
considered to be of primary importance, and flood control operations are not compromised for other 
project purposes, including hydropower. 
 
7.2  Pacific Northwest Co-ordination Agreement 
 
The co-operation in river operations in the US envisioned by the Columbia River Treaty is reflected in a 
1964 accord called the Pacific Northwest Co-ordination Agreement (PNCA). This agreement takes the 
form of a contract that defines obligations for BPA, Reclamation, the Corps, and most major US 
Northwest hydropower project owners. These obligations concern system-wide operations planning, 
exchanges of power between utilities, and the determination of headwater benefits owed to upstream 

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This is a working paper prepared for the World Commission on Dams as part of its information gathering activities. The views, conclusions, and 
recommendations contained in the working paper are not to be taken to represent the views of the Commission 
 
reservoir owners. No project owner is required to operate its facility according to the plan, but deviations 
from the plan incur power obligations. The agreement is founded on the notion that the Columbia River 
power system is connected in terms of both hydraulics and electric power: upstream storage influences 
downstream hydroelectric power generation. By co-ordinating operations of dams as if they were owned 
by a single organisation, the overall benefits to co-operating parties can be much greater than if each 
party operated as an independent, self-optimising entity. 
 
PCNA defines “firm power” by assuming that flows will be at the lowest level recorded in the past half 
century. These flows are translated into firm power projections used in meeting each party’s obligations. 
Each year, an Annual Operating Plan is drawn up for the entire US portion of the Columbia River Basin, 
and the parties co-ordinate their operations to maximise power production after satisfying non-power 
water uses. The Agreement also includes provisions concerning payments for upstream water releases 
that benefit downstream generators and compensation (in the form of “in lieu” energy payments) when 
water held at one dam decreases energy generation at a downstream dam. 
 
7.3  Authorisation and Construction of Third Powerplant 
 
The Columbia River Treaty cleared the way for the addition of GCD’s Third Powerplant.
161
 It also 
guaranteed the additional power needed by BPA to create a power "intertie," in which BPA sold 
Canada’s share of the Columbia River Treaty power in the Southwest during periods when the power 
was an unwanted surplus in the Northwest.  
 
Although Congress appropriated $125 000 in 1952 for a feasibility investigation of the Third 
Powerplant, plans for the facility could not be implemented until adequate upstream storage was 
developed. Although 2.98 MAF (3 646 million m
3
) of additional upstream storage had been created by 
Hungry Horse Dam in 1954, and another 1.1 MAF (1 346 million m
3
) was created by the Albeni Falls 
Dam ten years later, it was only the prospect of 15.5 MAF (18 964 million m
3
)
 
of usable power storage 
provided by the Canadian Treaty dams that made it feasible to go forward with the Third Powerplant 
(Norwood, 1981: 247). On 14 June 1966, Congress authorised the Third Powerplant at GCD (US 
Congress, 1966), and construction began in 1967. The first unit in the powerplant started generating 
electricity in 1975, and the sixth and final unit was completed in 1980. The total cost of constructing the 
Third Powerplant (in $1998 dollars) was approximately $2 934 000 000 (USBR, 1998c). 
 
7.4  Environmental Impact Assessment Requirements 
 
On 1 January1970, President Nixon signed into law the US National Environmental Policy Act (NEPA), 
which is best known for its requirements related to the preparation of environmental impact statements 
(EISs). Under the Act, agencies of the federal government are required to prepare EISs when their 
proposed actions will have “a significant impact on the quality of the human environment”. Citizen 
participation is an important feature in the process of preparing EISs. Indeed, citizens must be notified of 
the decision to prepare an impact statement, and they must be invited to participate in the preparation of 
the scope of work to be performed in preparing the statement. In addition, citizens have opportunities to 
review and comment on a draft version of an EIS, and they have opportunities to challenge the adequacy 
of the final version of an EIS using the federal courts. 
 
The first application of NEPA in the context of GCD and CBP occurred in 1975, when Reclamation 
issued a draft EIS for CBP. At the time, the Third Powerplant was under construction, and about 8 750 
acres (3 540ha) were being brought under irrigation in block 251 of CBP. Notwithstanding that these 
actions were already in progress, Reclamation was required to prepare an EIS because NEPA did not 
exclude from its requirements projects already under construction. The 1975 draft EIS provided an 
overall review of the entire project, beginning with the initiation of construction of GCD in 1933, and 
continuing on to the development of irrigation works and the Third Powerplant. Although the draft 
elicited numerous comments from non-governmental organisations and agencies, it is not clear from a 

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This is a working paper prepared for the World Commission on Dams as part of its information gathering activities. The views, conclusions, and 
recommendations contained in the working paper are not to be taken to represent the views of the Commission 
 
reading of the final EIS (USBR, 1976) that Reclamation took (or was required to take) any action as a 
follow on to the exercise of preparing the EIS. 
 
7.5  Northwest Power Planning Act of 1980 
 
Beginning in the 1970s, the US Congress began enacting legislation that would, directly or indirectly, 
have significant consequences for how GCD and other dams in the Columbia River Basin would be 
operated. One of these laws, the Northwest Power Act of 1980 (US Congress, 1980) required that 
planning for the energy future of the US Northwest involve public participation in a process that 
considered the full environmental and economic cost of energy alternatives. The Act also required the 
establishment of a fish and wildlife programme based on recommendations of the region’s fish and 
wildlife agencies, Indian tribes, and others. 
 
Planning under the Northwest Power Act was to be guided by NPPC, a compact composed of 
representative from four states in the US Northwest. The Act requires that NPPC’s programme for 
offsetting the effects of dams on salmon and other fish and wildlife populations be financed by BPA 
hydropower revenues and by the federal agencies controlling the dams producing hydropower. BPA 
pays for mitigation and compensation projects approved by NPPC from power sales revenues. In the late 
1990s, 70% of funds were designated for anadromous fish projects, and 15% each for resident fish and 
wildlife. 
 
The Northwest Power Act of 1980 was a turning point for tribes affected by GCD. The Spokane, Coeur 
d'Alene, Kalispel, and Kootenai tribes formed Upper Columbia United Tribes (UCUT) in 1982 to 
represent the executive order tribes above the GCD in dealing with NPPC. The Colville tribe joined 
UCUT in 1999. The Columbia River Inter-Tribal Fish Commission (CRITFC) represents the treaty tribes 
in the context of NPPC’s work. As mentioned in Section 3.7.5 (and detailed in the Annex titled “Native 
Americans”), Native American tribes have filed several suits against the US government on matters 
related to GCD, and they have prevailed in a number of them. During the late 1990s, all the Columbia 
River tribes came together to create a joint Tribal Vision, calling for the protection and restoration of fish 
and wildlife habitat throughout the basin, the reintroduction of anadromous fish above Chief Joseph and 
Grand Coulee dams, and increased respect for the sovereignty and spiritual values of native peoples 
(CRITFC & UCUT, 1999). 
 
7.6  System Operation Review 
 
As mentioned in Section 3.2, BPA, the Corps, and Reclamation operate what is known as FCRPS (ie, 
GCD plus thirteen other federal dams that dominate in hydroelectric power production on the Columbia 
and Lower Snake rivers). During the 1990s, these three agencies teamed up to use the EIS process 
(established by NEPA) to develop a “system operating strategy” for the co-ordinated operation of 
FCRPS by conducting a System Operation Review (SOR)
162
. As stated in the SOR final report, the 
review is the “environmental analysis required by . . . NEPA to consider changes in the Columbia River 
system operations and the effect of those changes on users of the system and the environment” (DOE et 
al. (Main Report), 1995:1-1).  
 
The SOR was also to be used to examine issues tied to a new PNCA and a new Canadian Entitlement 
Allocation Agreement (CEAA) (Hyde 1999). The original PNCA and CEAA were signed in 1964 and 
will expire in 2003. Replacement agreements extending through 2024 were completed in 1997. The 
CEAA concerns obligations of owners of the middle Columbia River non-federal dams to deliver a 
portion of the downstream power benefits owed to Canada under the Columbia River Treaty. Canada 
sold a portion of the downstream benefits to a consortium of US Northwest utilities in 1964; that sale 
will also expire in 2003. An updated CEAA was needed to meet the Treaty requirements. The middle 
Columbia River project owners needed PNCA to assure their ability to meet CEAA obligations. The 
PNCA assured the owners of non-federal projects downstream of GCD that they would receive either 

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This is a working paper prepared for the World Commission on Dams as part of its information gathering activities. The views, conclusions, and 
recommendations contained in the working paper are not to be taken to represent the views of the Commission 
 
streamflows similar to the optimum power operation assumed in the Treaty operating plans or exchanges 
of power with BPA that compensate them for the difference. 
 
The SOR departed from traditional environmental management practices in the Columbia River Basin in 
several ways. According to interviews we conducted with federal agency staff, the SOR was a pivotal 
event in FCRPS operations, marking the first comprehensive, programmatic, and holistic review of all 
major environmental impacts of system-wide project operations (Brooks 1999; McKay 1999; Rodewald 
1999; Jaren 1999). Preparation of the SOR also involved an unprecedented amount of public 
involvement
.
163
 Another major difference in approach was that the SOR was geared towards developing 
adaptive environmental management strategies, as opposed to “one time only” solutions to 
environmental problems (Jaren 1999). 
 
Conducting the SOR proved to be an enormous undertaking. When completed, the final EIS (ie, the 
main report) was a document several hundred pages in length, and it was accompanied by over 20 
technical appendices.
164
 In total, the SOR took about six years to complete. The scoping process alone 
(ie, the process used to identify the issues the study would investigate) took one year (Jaren 1999). 
Although exact dollar amounts are not available, the total cost of conducting the SOR is estimated at $20 
million ($23.5 million in $1998), with BPA contributing the majority of the funding (Jaren 1999). 
 
Notwithstanding the multiple goals of the SOR, issues related to salmon passage and habitat began to 
overshadow the review process as the prospect increased that certain species of salmon would become 
listed as an endangered species under the Endangered Species Act (ESA). This shift was clearly 
indicated in the final EIS, which makes the following statement about how the need to address 
anadromous fish issues received increasing priority over the course of the review process: 
 
The ESA listings and associated events have had a significant effect on the SOR. While one of the 
primary goals of the SOR is to decide on a co-ordinated operating strategy to balance conflicting 
demands on the system, the reality is that the need to help conserve endangered salmon, specifically, 
and all salmon, generally, has taken precedence over other considerations . . . In short, the single 
most immediate and salient issue in the SOR is the recovery of endangered runs of wild salmon on 
the Snake River. (DOE et al (Main Report), 1995:1-1) 
 
The preferred system operation strategy that was ultimately adopted was driven by the 1995 NMFS 
Biological Opinion, a plan designed to recover the three species of threatened and endangered Snake 
River salmon. The overarching goal of this plan was to store more water during the fall and winter to 
meet spring and summer flow augmentation targets and to manage other detrimental effects by 
establishing maximum summer draft limits. Actions specific to GCD included ensuring availability of 
water for summer flow augmentation and drafting during July and August to meet flow targets at Priest 
Rapids Dam (see Annex titled “System Operations — A Closer Look at Hydropower, Flood Control, 
and Anadromous Fish Management Activities” for details). 
 
Some observers believe the SOR has had a positive impact on salmon recovery efforts. For example, 
according to one policy analyst, the SOR “allowed the federal agencies to play a much more constructive 
role in the salmon debates than they would have otherwise”. (Volkman, 1997: 83). Some federal agency 
staff we interviewed also believed that the process helped different stakeholders understand the 
complexity of the system and better understand trade-offs among the various system functions (Jaren 
1999; Rodewald 1999; Brooks 1999). One staff member also saw the SOR as providing useful 
information for guiding future decision-making (Jaren 1999). 
 
However, not all stakeholders were satisfied with the SOR’s process, content, and use. For example, 
some have criticised the SOR for not using data generated by the project as the basis for decision-
making. In the opinion of some federal agency staff we interviewed, some SOR critics felt that, in the 
end, all the analyses conducted to assess alternative operating strategies were abandoned in light of the 
pressure to address the 1995 NMFS Biological Opinion (Jaren 1999; MacKay 1999; Brooks 1999). 
Additionally, some groups, most notably, Native American tribes, environmental NGOs, and agencies 

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This is a working paper prepared for the World Commission on Dams as part of its information gathering activities. The views, conclusions, and 
recommendations contained in the working paper are not to be taken to represent the views of the Commission 
 
with environmental protection responsibilities, were not satisfied with the results of the SOR. For 
example, in EPA’s comment letter to the draft environmental impact statement, the agency makes the 
following assertions.  
 
In our view the draft environmental impact statement (DEIS) fails to comply with the dictate of the 
National Environmental Policy Act . . . The DEIS lead agencies . . . assert that Appendix C-2 
(Juvenile Fish Transportation Program Technical Appendix) constitutes the required “hard look” at 
the transportation program. We do not agree . . . [For example] the analysis fails to adequately 
consider the negative impacts of transportatio . . . The appendix does not rigorously explore and 
objectively evaluate all reasonable alternatives to fish transportation . . . Furthermore, Appendix C-
2 considers alternatives to transportation in isolation and independent of each other. No discussion 
of possible combinations of alternatives is included. (DOE et al (Appendix T), 1995: O-7, O-10)  
 
In commenting on the draft EIS, the Sierra Club also roundly criticised the SOR for, among other things, 
failing to include other major federal projects in the Snake River Basin above Hells Canyon and all 
Canadian water in the Columbia under the Non-Treaty Storage Agreements. In addition, the Sierra Club 
argued that the preferred alternative was not consistent with the system operation strategy recommended 
by the region’s fisheries agencies and the tribes (DOE et al, (Appendix T), 1995: O-14 to O-23).  
 
The Spokane and Colville tribes also lodged serious criticisms concerning the SOR process itself. The 
following extracts from letters of comment on the SOR are illustrative: 
 
 
From the Spokane Tribe of Indians: 
Throughout the SOR process we have watched the focus of the federal agencies shift with the 
political winds until, at this late stage in the Review, we observe the agencies with diligence pointing 
toward a SOS [system operating strategy] that favours compliance with the ESA to save endangered 
salmon, despite reliable forecasts of ill effects to other resources if ESA considerations are not 
modified to accommodate other considerations of equal or greater importance. For the Spokane 
Tribe, the SOS [system operating strategy] alternative that is being pushed forward threatens to 
decimate our resident fisheries . . .  
 
We cannot continue to participate in a process that has a predetermined outcome . . . The agencies 
appear to be “railroading” the NEPA review to accommodate closure on the EIS, and seem to be 
unwilling to open up the process to full participation by the tribes. (Letter from the Spokane Tribe of 
Indians in DOE et al (Main Report Exhibits), 1995) 
 
 
 
From the Colville Confederated Tribes: 
Along with 13 other tribes included in the SOR EIS, the CCT [Colville Confederated Tribes] is 
concerned and offended that Native Americans were not meaningfully included in the early stages of 
the process . . . The CCT [Colville Confederated Tribes] feels that the Federal government 
established the boundaries of the “playing field,” made the rules, and then reluctantly invited us into 
the game. This was not done in a spirit of cooperation. (DOE et al (Appendix D Exhibits), 1995: D-
2)