1. 1 Columbia River Treaty Overview of Columbia River system water management presented at Canadian Columbia River Forum 30 May 2007 Kelvin Ketchum BC Hydro kelvin.ketchum@bchydro.com

2. 2 Columbia River Treaty Agenda - Reservoir operating concerns - Columbia River Treaty - Non-Treaty Storage Agreement - Kootenay Lake IJC Order - other coordination agreements

3. 3 Columbia River Treaty Reservoir operating concerns -Flood protection … people and property -Non-power constraints and targets (regulatory, water licence, other) fish flow requirements recreation water-level requirements & targets wildlife and vegetation issues heritage site protection industrial needs Water Use Planning has helped to better define these requirements -Constraints imposed by the Columbia River Treaty and other coordination agreements -“Keeping the lights on” at the least cost … minimizing electricity and gas purchase costs (over long-term) – Columbia region produces 50% of BC’s hydropower

4. 4 Columbia River Treaty Why do we have the Columbia River Treaty? USA – has hydroelectric plants and flood control needs Canada – has good storage dam sites Canada has 15% of the basin area Canadian basin is mountainous, with much snow … produces 30-35% of the runoff for the entire basin 50% of the highest recorded flood flows at Portland came from Canada most hydropower production, and need for flood control, is in the USA best storage dam sites are in Canada Columbia River – 4 th largest in N. America average discharge = 7300 m 3 /s drainage basin area = 670,000 km 2 installed capacity ~ 35,000 MW Jasper Banff Vancouver Whistler Yellowstone

5. 5 Columbia River Treaty Damaged homes, farms, and dykes in Canada and the USA all the way down the river to its mouth 1948 flood destroyed a city of ~ 35,000 people (suburb of Portland, Oregon) About 50-60 people were killed. 1948 Columbia River Flood Vanport, OR in 1948 Trail, B.C. in 1948 4

6. 6 Columbia River Treaty What does the Treaty Do? The Columbia River Treaty required Canada to: construct the Mica, Arrow, & Duncan storage reservoirs on the Columbia River system (total storage of 19 km 3 ) operate these reservoirs for optimum power generation and flood control downstream in both countries The Treaty required the U.S. to: pay Canada 50% of the estimated value of the future flood control benefits in the U.S. deliver to Canada 50% of the increased power capability at downstream at U.S. plants (payment for upstream regulation) The Treaty permitted the U.S. to: construct and operate the Libby project (6 km 3 storage) on the Kootenai River … flooding some Canadian land, but also providing power & flood control benefits for Canada Columbia River Treaty Jan.1961

7. 7 Columbia River Treaty Duncan and Arrow Treaty Non-Treaty Generator Dam Completed ___ _Storage Storage Capacity Height DUNCAN 1967 1.73 km³ None None 40 m ARROW 1968 8.76 km³ 0.31 km³ None* 52 m * CPC built the 185 MW Arrow Lakes Hydro plant in 2002 Duncan Reservoir & Dam Arrow Lakes Reservoir Keenleyside Dam

8. 8 Columbia River Treaty Mica and Libby Treaty Non-Treaty Generator Dam Completed ___Storage Storage Capacity __ _Height____ MICA 1973 8.63 km³6.17 km³1740 MW 198 m LIBBY 1973 6.14 km³ None 604 MW 113 m Libby Dam Mica Dam Koocanusa Reservoir Kinbasket Reservoir

9. 9 Columbia River Treaty Treaty priorities for water usage 1. Domestic & consumptive uses (e.g. drinking water & irrigation) have the highest priority and are not restricted in any way 2. Flood control – rule curves provide an upper limit on reservoir levels, and have priority over energy production 3. Firm energy - must draft reservoirs as far as is necessary to meet the specified system firm energy requirement 4. Reservoir refill – target refill by 31 July to maximize firm energy capability for the following year (95% confidence of refill) 5. Secondary energy – lowest priority, since this “less reliable” energy cannot be guaranteed in every year Other values (e.g. fisheries, recreation, etc) are not mentioned in the Treaty and must be managed by each country: - by using any “unilateral” flexibility under the Treaty, or, - by mutually-beneficial agreements between the two countries

10. 10 Columbia River Treaty Example of Flood Control Curves

11. 11 Columbia River Treaty Flood Control Benefits – an example from 1997 Note - Treaty storage reduced flood flows in Canada by about 50%

12. 12 Columbia River Treaty Peak Kootenay Lake levels before and after Treaty storage Note - Peak Kootenay Lake levels have been 5 to 8 ft lower since construction of the upstream Treaty dams (Libby and Duncan)

13. 13 Columbia River Treaty Supplemental Treaty operating agreements Example: Non-Power Uses Agreement adjusts Arrow outflows during Jan-Mar for whitefish spawning, and during April-June for trout spawning (Canadian fish benefit) helps smooth the refill of Treaty reservoirs enables 1 MAF storage for salmon flow augmentation and helps meet downstream minimum fish flows (U.S. fish benefit)

14. 14 Columbia River Treaty Actual operations - Biweekly Treaty study (TSR) provides the base monthly storage targets for all operations of Treaty projects - U.S. & Canada can mutually agree to deviate from the TSR targets, typically using supplemental agreements - Weekly conference call (Thursday morning) with U.S. and FortisBC to discuss the Treaty flow agreement for the upcoming week - Treaty flow agreement is finalized by Friday Noon and implemented on Saturday morning - Within-week flow shaping needs are accommodated whenever possible

15. 15 Columbia River Treaty Actual operations (cont.) - Canada has unilateral rights to flexibility within Canada, i.e. transferring water between Mica, Revelstoke, Arrow, and Duncan reservoirs … limited by flood control curves. - Examples of this flexibility: running Mica/Rev more or less than that required by the TSR study (no Arrow discharge adjustment) running Duncan more or less than the TSR requirement (Arrow discharges must be adjusted in this case) - Activity under the Non-Treaty Storage Agreement is “superimposed on top of” Treaty activity for Mica, Rev, and Arrow

16. 16 Columbia River Treaty Libby Coordination Agreement - The disagreement: U.S. needs to operate Libby as necessary to meet U.S. endangered species law (for sturgeon, trout, salmon) Canada believes that it is entitled to a Libby operation which optimizes power benefits - The solution: LCA, signed in Feb 2000: Agreed to disagree on the “legal question” Canada gets to provisionally draft Arrow and exchange power with BPA in compensation for the lost power benefits January Treaty discharge capped at 80 kcfs Canada gets option to do a Libby-Treaty swap

17. 17 Columbia River Treaty Libby - Treaty Storage Swap - allows “reservoir balancing” for Canadian benefits - Lk Koocanusa is held higher during August in return for equivalent water from Mica, Arrow, or Duncan - results in lower Mica, Duncan or Arrow levels and increased outflows at those projects - this swap is only done when it makes sense, i.e. when Lk Koocanusa is significantly lower than Arrow

18. 18 Columbia River Treaty Treaty downstream benefits now return to Canada - U.S. paid Canada a lump-sum in return for U.S. flood control benefits provided by Canadian Treaty reservoirs. - In addition, Canada sold its first 30 years of downstream power benefits back to the U.S. to acquire the capital necessary to build the Treaty dams. - As of April 2003, the 30-year sale was completed. All of the Canadian Entitlement energy and capacity now returns to the Canadian border and is owned by the BC government. - For 2006-07, energy deliveries peak at 1244 MW and average 488 MW every month. In some hours, these deliveries are used to meet electrical demand within BC. - Canada’s 50% share of downstream benefits is worth approx. $300 million per year 15

19. 19 Columbia River Treaty Treaty Term The Treaty has no specified end date. However, either government has the option to terminate the Treaty after 60 years (2024) with 10 years’ advance notice (2014). Upon termination: Mica, Arrow, Duncan, and Libby may continue to operate (subject to the Boundary Waters Treaty) Canada must provide a certain amount of flood protection for the U.S. for as long as the projects exist Canada may continue any Kootenay River diversions (although no diversions have been undertaken so far)

20. 20 Columbia River Treaty Non-Treaty Storage Agreement (current agreement) - NTSA was signed initially by BC Hydro and BPA in 1984, with two purposes: to accommodate the filling of Revelstoke Reservoir … one time benefit to coordinate additional storage at Mica/Arrow (not governed by the Treaty) to produce additional energy benefits in both countries … ongoing benefit - NTSA was expanded by the two parties in 1990 - BCH and BPA have access to 2.25 MAF (each) of storage at Mica - while the storage is nominally at Mica, NTSA activity affects reservoir levels and discharges at both Mica and Arrow due to Treaty flexibility

21. 21 Columbia River Treaty NTSA (cont.) - When BCH releases its NTSA water Arrow discharge is increased BPA sends resulting U.S. energy to BCH - When BCH stores NTSA water Arrow discharge is reduced BCH sends “in-lieu” energy to BPA - When BPA releases its NTSA water Arrow discharge is increased BCH sends Mica/Rev/ALH energy to BPA - When BPA stores its NTSA water Arrow discharge is reduced BPA sends “in-lieu” Mica/Rev/ALH energy to BCH - When both parties release or store NTSA water Arrow discharge is changed “two-fold” Energy deliveries virtually cancel out - BPA pays BCH “head loss” payments for its empty space at Mica

22. 22 Columbia River Treaty NTSA (cont.) -the “release provisions” of the NTSA expired in June 2004 -both parties have until June 2011 to fully refill their storage accounts -a significant amount of Non-Treaty storage was refilled during 2006 and 2007 -as of 31 May/07, the Non-Treaty storage space is 78% full (up from 23% full on 1 Jan/06) -this storage activity improves reservoir levels for Mica &/or Arrow

23. 23 Columbia River Treaty A new coordination agreement ? - BC Hydro and BPA may consider an agreement to replace the NTSA. BC Hydro’s main goals are: fair benefits for both countries, more Canadian control over Kinbasket & Arrow reservoir levels - A replacement coordination agreement must be flexible enough to meet all of the Water Use Plan (WUP) restrictions for Columbia projects and help meet WUP “soft constraints” - Discussions are currently on hold. However, there may be an opportunity soon to consider alternatives for a new agreement. - BCH has committed to Columbia basin stakeholders that it will: conduct negotiations with recognition of all WUP objectives, comply with all agreed operating constraints (e.g. WUP), assess ability to meet WUP soft constraints with new agreement, bring potential alternatives to stakeholders for comment prior to signing an agreement

24. 24 Columbia River Treaty Kootenay Lake IJC Order -Boundary Waters Treaty signed in 1909 … set up the International Joint Commission (IJC) -IJC has jurisdiction over all transboundary waters, except where explicitly covered by another agreement (e.g. CRT) -1938 IJC Order on Kootenay Lake outlines rules for maximum lake levels -Kootenay Lake IJC Order is held by FortisBC -administered by the Kootenay Lake Board of Control

25. 25 Columbia River Treaty Kootenay Lake IJC Order - Kootenay Lake IJC Order determines the maximum level for the lake fixed rule curve from 1 Sept until the date when spring freshet starts (normally in April) “lowering formula” applies during freshet - based on simulation of “natural” lake level (natural lake outlet conditions, but actual inflows) less a specified amount after the freshet, then a fixed rule curve is followed until 1 Sept

26. 26 Columbia River Treaty Kootenay Lake IJC curve

27. 27 Columbia River Treaty Canal Plant Agreement - between BC Hydro, FortisBC, Cominco, & CPC - implemented in 1975 upon completion of BC Hydro’s Kootenay Canal powerplant - agreement covers powerplants on the Kootenay and Pend d’Oreille rivers - BC Hydro schedules releases from Kootenay Lake and directs the powerplant generation - FortisBC (holder of the Kootenay Lk IJC Order) and other owners can override this direction as necessary to meet legal or reliability requirements - FortisBC, Cominco, CPC receive fixed energy & capacity entitlement

28. 28 Columbia River Treaty Arrow Lakes Hydro Agreement - between BC Hydro and CPC - covers the Arrow Lakes Hydro (ALH) plant, which was completed in 2002 - BC Hydro directs the ALH generation pattern - CPC can override this direction as necessary to meet its requirements - CPC receives firm energy & capacity entitlement - BC Hydro, in its role as the CRT Canadian Entity, continues to schedule total releases from Arrow Reservoir (via ALH and Keenleyside Dam)

29. 29 Columbia River Treaty 1890’s – first powerplants built on Kootenay River 1938 - Kootenay Lake IJC Order - allowed storage in Kootenay Lake (Corra Linn) 1938-42 - Grand Coulee Dam built (U.S.) 1948 - Columbia River flood caused much damage in both countries 1961-64 - Columbia River Treaty signed and ratified - sale of first 30 years of Canadian Entitlement to the U.S. 1967-73 - Duncan, Arrow (Keenleyside), Mica, and Libby dams completed 1975 - Kootenay Canal built, Canal Plant Agreement implemented 1984 - Revelstoke project built and Non-Treaty Storage Agreement signed 1998-2003 - Treaty Entitlement energy returned to Canada (end of 30-year sale) 1999-2007 - Water Use Plan consultative process 2002 – Arrow Lakes Hydro plant completed 2011 - Non-Treaty Storage Agreement expires, all NTSA storage is refilled 2014 - 10-year notice for termination of Columbia River Treaty may be given by either Canada or U.S. 2024 - earliest termination date for Columbia River Treaty Some key dates (historical & future) 6