September 6, 2001

Mr. Robert Flowers

U.S. Army Corps of Engineers

304 North Eighth Street, Room 140

Boise, Idaho 83702-5820

Subject: NWW No. 012200820 - PacifiCorp Application for Dredging Permit at Bear Lake

Dear Mr. Flowers:

The State of Utah has reviewed PacifiCorp's Application for a Dredging Permit at Bear Lake, in order to fulfill its obligation to deliver water to users downstream along the Bear River.

Specific comments of state agencies are attached, however, I want to emphasize the state's basic position that this permit should be granted with all due speed. Bear Lake has been operated as a storage basin for decades, and the water level has been drawn down to low levels numerous times in the past 80 years. This same channel has been dredged on 13 occasions since 1918. The state can find no issues related to the endemic fish of the lake, or the operations of the state marina on the lake which would require a change. Instead, failure to dredge, and subsequent failure to deliver the decreed water would have a very large impact on agricultural operations in Utah. The Environmental Assessment prepared is an adequate discussion of the issues involved.

Thank you for the opportunity to comment. I look forward to your prompt decision to authorize the necessary dredging. Please call John Harja, at (801) 538-5559 with any questions or concerns about the state's position.

Sincerely,

Wes Curtis

State Planning Coordinator

WC/jh

Department of Natural Resources

The Department of Natural Resources strongly supports the proposed action as described in the application for permit. The Department recognizes the overriding legal mandate for PacifiCorp to provide water to downstream users. Nevertheless, the Department appreciates some of the management complexities involved with lower lake levels. These complexities involve three Divisions within the Department: the Division of Forestry, Fire and State Lands (DFFSL), the Division of Parks and Recreation (DPR), and the Division of Wildlife Resources (DWR).

For DFFSL and DPR, the Department understands that there is the potential need for increased monitoring responsibility by DPR of OHV use on sovereign lands managed by DFFSL exposed due to lower lake levels.

The DPR marina and boat ramp on the West side of the lake were engineered for lower lake levels. While some dredging may be required to remove a sandbar to ensure continued sailboat access, these facilities will be otherwise unaffected by the proposed project.

DWR believes that the impacts on Bear Lake protected wildlife and fisheries - particularly that of the Bear Lake Cutthroat trout - would be minimized by completing the project and any subsequent drawdown in mid-summer, as proposed by PacifiCorp in their Application for Permit.

Utah Department of Agriculture & Food

During the spring of 2001, PacifiCorp filed an application for permit with the Idaho Department of Lands and the U.S. Army Corps of Engineers to dredge Bear Lake at it's Lifton Plant. The natural circulation of the lake periodically creates a sandbar in the channel reducing PacifiCorp's ability to pump water as contracted to downstream users. The formation of the sandbar has historically been corrected through a number of approved dredgings.

As early as 1868, the first surveys were being conducted for a canal system to be developed in Northern Utah. The early settlers recognized that it was necessary to tap the Bear River to develop agricultural enterprises. By 1920, water was being delivered to 45,000 acres of sugar beets and alfalfa with capacity to irrigate 55,000 more. Box Elder County towns prospered due to delivery of adequate and dependable water supplies.

Utah agriculture generated over $1 billion in farm gate sales in 2000. Using a conservative multiplier of three, the economic contribution of Utah agriculture is over $3 billion annually. Utah agriculture is important in the state's economic mix because it is a creator of new wealth.

Cache and Box Elder Counties rank 1^st and 2^nd in agriculture sales among Utah counties with over $100 million each. Northern Utah's agricultural multiplier of four is higher than the state average because of cheese, fluid milk and the overall dairy influence. This places Cache and Box Elder County's agriculture multiplier at over $800 million annually.

According to Department of Environmental Quality, Division of Water Quality, approximately 93,000 acres are irrigated in Cache County by 70 water companies and 137,000 acres irrigated in Box Elder County by 100 water companies.

PacifiCorp delivers irrigation water to 151,000 acres in Northern Utah and Southern Idaho. Idaho farmers receive irrigation water on approximately 40,000 acres with the remaining 111,000 acres located in Cache and Box Elder Counties. PacifiCorp delivers irrigation water to 65,000 acres in Box Elder County, accounting for forty-eight percent of the total irrigated acres. PacifiCorp delivers irrigation water to 46,000 acres in Cache County, accounting for forty-nine percent of the total irrigated acres. The Bear River Canal Company maintains over 120 miles of road and laterals for delivery of Bear River water in Box Elder County.

The Bear River Water Users Association estimates that sales of crops in Utah and Idaho irrigated with Bear River water is valued at $45 - 60 million. This region is highly dependent on late season irrigation water for maturity of grain, corn, onions, vegetable crops and alfalfa. This late season water is only available through pumping the irrigation water reserve of the Bear Lake.

Utah agriculture is driven by livestock production. Nearly 80 percent of farm gate receipts come from animal agriculture. Irrigated crops, in a state that is 67 percent owned and managed by the federal government, is critical to a viable agriculture industry. Alfalfa and feed grains are crucial components where livestock accounts for 87 percent of agriculture sales in Cache County and 64 percent in Box Elder County.

Cache and Box Elder Counties are the heart of Utah's commercial sized farm and ranch production units. Utah Agriculture Statistics show 610 agriculture operations in these two counties with annual sales of $50,000 or more. Twenty-four percent of Utah's commercial sized farm and ranch operations are located in Cache and Box Elder Counties.

State and local government revenues are dependent on an economic mix that includes the agriculture sector. Farmers, ranchers, agribusinesses and their employees are the foundation of rural economies and the tax base of Cache and Box Elder Counties.

Utah's dairy industry is already facing a severe cost-price squeeze. Dairy prices in the Great Basin Marketing Order, which includes Utah and Idaho, are the lowest in the nation. This year's drought and the PacifiCorp buy out, have reduced alfalfa production in the entire region. Lower production and increased demand have caused a major increase in alfalfa hay prices. Without the continued flow of Bear River water to Utah and Idaho alfalfa fields, there would even tighter supplies exacerbating the dairy farmer's cost-price squeeze. In addition, there would be a ripple effect on dairy processors like Gossners Foods, Cache Valley Dairy, Caspers Ice Cream and their employees.

There are a number of environmental benefits attributed to irrigation water delivered by the Bear River. Open space, a priority of many state and local government entities, contributes to the quality of life of Utahns. Preserving the economic viability of our farms and ranches will help in this important effort. Carbon sequestration, the need to have green, broad-leaf plants to convert carbon dioxide from cars, industry and our homes into clean air. Well-irrigated farms and ranches are a primary source of this important plant material. Wetlands, an important buffer that helps clean our water resources and provides wildlife habitat. The Bear River provides thousands of acres of wetlands and wildlife habitat as it flows through Utah, Wyoming and Idaho. Ultimately, it drains into the Bear River Bird Refuge, which provides wetlands and habitat to hundreds of species that make their homes in the Refuge or use it during their annual migrations.

Runoff in the Bear River basin at 15 percent of normal in 2000 and 5.5 percent of normal in 2001, has created the current need to dredge. Timely approval of dredging will allow PacifiCorp the ability to deliver legal water rights to downstream irrigators. The Bear River Compact, agreed to by the states of Utah, Idaho and Wyoming and ratified by the United States Congress, determines the equitable apportionment of the waters of the Bear River. Western water law doctrine of "first in time, first in right" has been upheld in the highest courts of the land. The Bear Lake provides a reserved irrigation storage right that during times of drought, is critical to downstream water users. The water rights delivered under the PacifiCorp contract are property rights with value. Ours is a country of laws and order. The Bear River Compact, the Operations Agreement for PacifiCorp's Bear River System and western water law requires that we honor these water delivery contracts.

The filing of an Environmental Assessment on dredging, a practice that has been commonplace for 80 years, should meet the legal requirements and allow work to move forward in a timely manner. Dredging is an ongoing part of river commerce in the United States. The Bear River and delivery of the Bear Lake irrigation reserve is critical to commerce in Northern Utah and Southern Idaho. It is not necessary to engage PacifiCorp in an full-blown Environmental Impact Statement.

The issue is clear. Prompt issuance of a permit to dredge to PacifiCorp is essential to assure delivery of water to northern Utah farmers and ranchers and other users. Delivery of Bear River water will determine the economic viability of agricultural producers and agribusinesses in Box Elder and Cache Counties. It is important that the Army Corps of Engineers more forward quickly and grant the permit to dredge to assure that PacifiCorp is able to deliver its water contracts and avoid a potential crisis.

Division of Water Resources

The state of Utah strongly supports the issuance of the dredging permit to PacifiCorp for the dredging of a sandbar in front of the inlet channel to the Lifton Pump Plant in Bear Lake.

Historically, Bear Lake was a natural lake located on the Utah/Idaho border. Bear River has not flowed into the lake for several thousand years. PacifiCorp's predecessor modified the natural sandbar embankment on the north end of the lake into a dike, constructed an inlet canal from the Bear River to the lake, a pumping plant which allowed the use of the top 21.65 feet of the lake as a reservoir, and an outlet canal back to the Bear River. Since about 1918 PacifiCorp has operated Bear Lake between elevations 5902.0 and 5923.65 (21.65 feet) for the benefit of water users in the lower Bear River Basin. When full, the lake has a volume of approximately 6.5 million acre-feet. When at elevation 5902 (limit of the water right), the lake is reduced by 1.4 million acre-feet to a volume of approximately 5.1 million acre-feet, i.e., the useable storage is about 22 percent of the lake volume. When full, the surface area of the lake is 70,000 acres, with the deepest point about 200 feet. When at elevation 5902, the surface area of the lake is 59,000 acres, a reduction of 15 percent. The dredging of the inlet channel will allow the lake to be operated next irrigation season within its historical operating levels and in accordance with historic practice.

The water rights of PacifiCorp to store water in Bear Lake are recognized in the Dietrich Decree (Federal District Court, Idaho) and the Kimball Decree (State District Court, Utah) and are further recognized in the Bear River Compact, which allocates the waters of the Bear River between the states of Wyoming, Idaho and Utah.

It is expected that PacifiCorp will operate Bear Lake to fulfill all of its irrigation water delivery requirements this year. This operation will lower Bear Lake to an elevation of approximately elevation 5911.5 at the end of the 2001 irrigation season.

The majority of Bear Lake storage water is used in Utah with the remaining amount being used in Idaho. The Bear River Canal, West Cache Canal and Cub River Canal Companies irrigate approximately 100,000 acres in Utah in Cache and Box Elder Counties. The Bear River Canal Company, the largest of the Utah companies, signed an agreement with PacifiCorp in 1912 in which it conveyed its Bear River water rights to PacifiCorp in exchange for the delivery of water throughout the irrigation season. This agreement was made possible by construction of the Lifton Pump Plant and the channel into the deeper part of the lake. The farmers of the Bear River Canal Company rely heavily on their contract with PacifiCorp and the storage in Bear Lake to provide them with up to 2/3 of their irrigation water. If that water were not available, it could be an economic disaster for individual farmers and farm communities in Box Elder and Cache Counties. The state of Utah as a whole would also stand to lose economically.

PacifiCorp has recently surveyed the sandbar that is in front of the Lifton Pumps and determined it to be at elevation 5908. This will leave a clearance of approximately three feet between the projected end of year water surface elevation (5911.5) and the sandbar across the inlet channel to the pumps. Channel hydraulics require PacifiCorp to dredge the inlet channel down to an elevation of 5902 to pump the lake down to an elevation of 5904.

Because of the highly regulated nature of Bear Lake, several important agreements underpin the lake's operation and management. The early agreements between the canal companies and PacifiCorp's predecessor are crucial in this regard. More recently, in the April 1995 Settlement Agreement (copy attached) a minimum pump elevation was established at elevation 5904. This agreement is between PacifiCorp, irrigation water users, environmental interests and Bear Lake property owners, and is a "Bear Lake Storage Allocation and Recovery Proposal". The annual allocation for irrigation decreases yearly as the lake approaches elevation 5904. This reduced water allocation agreement helps keep Bear Lake at higher levels than historically was the case.

Flood and drought cycles led PacifiCorp to reprioritize operation of Bear Lake, and irrigation contracts and flood control became primary operational objectives. Since the mid-1970's, PacifiCorp has operated Bear Lake as if the irrigation reserve were at elevation 5918, which is higher than the irrigation reserve in the Bear River Compact. This keeps the lake relatively high, which satisfies most of the recreational users and provides good holdover storage for downstream irrigators in times of drought. The target elevation represents PacifiCorp's effort to strike a balance between its flood control, irrigation, and other management responsibilities.

Drought conditions in the early 1990's brought tension between water users with contracts to receive Bear Lake water and homeowners and other groups around the lake. Litigation over a dredging permit resulted in the April 1995 Settlement Agreement that allowed a permit required for dredging to be issued and required formal accounting for irrigation releases.

In the late 1990's when the merger between PacifiCorp and Scottish Power was pending, the states of Utah, Idaho and Wyoming were concerned that the merger would impact Bear Lake operation. In response, an agreement among the states and PacifiCorp was reached whereunder PacifiCorp memorialized its historic operational practices on Bear River and Bear Lake and agreed not to change them. The October 5, 1999 Agreement (copy attached) provided:

a. PacifiCorp's water rights are constrained by the historic practice of not making a delivery call for hydropower generation; and

b. Bear Lake is operated, consistent with long-standing historic practice and applicable laws, primarily as a storage reservoir to satisfy contracts for existing irrigation uses and flood control needs in the three states, with the use of water for hydropower generation being incidental to the other purposes for which the water is released.

A subsequent "Operations Agreement for PacifiCorp's Bear River System" (copy attached) was executed among the same parties on April 18, 2000. Under that agreement, PacifiCorp promised to continue to operate Bear Lake primarily for irrigation water delivery or flood control, and the 5918 irrigation reserve target elevation, which preserves water in Bear Lake for irrigation at the expense of hydropower generation downstream, was formalized.

Bear Lake has been drawn down to low levels numerous times in the past 80 years. PacifiCorp has dredged the channel on 13 occasions since it first started operating the pumps in 1918. History shows that as the lake approaches elevation 5911 it becomes necessary for PacifiCorp to dredge the channel to deliver water to the downstream contract water users. Since 1977 PacifiCorp has dredged the channel seven times to ensure adequate flow to the pumps at the lower lake elevations.

In conclusion, the state of Utah supports issuance of the dredging permit because it is integral to continued operation of Bear Lake according to longstanding, historic practice dating back more than 80 years. This practice is grounded in valid water rights, recognized by a Congressionally-approved interstate compact, and refined and memorialized in several important agreements. The state of Utah requests the Bear Lake Dredging Permit be issued without delay so the required irrigation water needed below Bear Lake may be delivered during next year's irrigation season. If the permit is denied or delayed, water rights, property rights, agreements and provisions of the interstate Bear River Compact will be impacted.