Six outstanding art students garnered top awards in the Congressional Art Competition -- An Artistic Discovery -- a high school arts contest sponsored by Members of Congress.   The competition was open to all high school students within California’s Fourth Congressional District.  The winners are:

Opening Statement by Congressman Tom McClintock, Chairman, House Water and Power Subcommittee.  Joint Water and Power and Indian and Alaska Native Affairs Subcommittee Oversight Hearing on “Protecting Long-Term Tribal Energy Jobs and Keeping Arizona Water and Power Costs Affordable: The Current and Future Role of the Navajo Generating Station”

May 24, 2011

The purpose of today’s hearing is to comprehend an effort by the EPA to impose cost-prohibitive mandates on one of the largest sources of electricity in the west – the Navajo Generating Station. 

I want to thank our Arizona colleagues, Paul Gosar and Trent Franks, for requesting this hearing.   Dr.  Gosar has spoken eloquently about the need to protect the Navajo Generating Station in our past hearings and today the subcommittees on Water and Power and Indian and Alaska Native Affairs get the chance to focus entirely on this subject with expert witnesses.  

Since 1975, the Navajo Generating Station has produced 2,250 megawatts of inexpensive electricity – more than produced by the Hoover Dam.  It employs 545 workers – 80 percent of whom are members of the Navajo Nation and Hopi Indian Tribe – and pays workers an average of over $100,000 per year in wages and benefits.  In addition, the nearby coal mines employ another 422 tribal workers.  Royalties from coal sales comprise 80 percent of the budget of the Hopi Indian Tribe. 

This electricity powers the Central Arizona Project’s delivery of affordable water to most of Arizona and provides electricity to the Los Angeles Department of Water and Power, the Arizona Public Service Company, Nevada Power and Tucson Electric Power.  Surplus electricity sales repay federal funds fronted for the construction of the Central Arizona Project and underwrite the Arizona Indian Water Rights Settlements. 

The NGS is equipped with $200 million of environmental control equipment that removes 99.5 percent of particulate matter.  In the late 1990’s, the NGS was outfitted with wet limestone scrubbers at a cost of nearly a half-billion dollars that remove more than 90 percent of sulfur dioxide.  In 2008, low NOx burners were installed at the cost of $45 million.

Beginning in 1998, environmental extremists began a concerted effort to shut down the inexpensive coal-fired electricity upon which our economy depends.  Their first victim was the Mojave Generating Station.  The taxpayer-funded Grand Canyon Trust boasted, “This ends an era of coal at that site and we hope that it is the beginning of many in this region.”  It was.  The EPA pulled an already-granted permit for the clean coal Desert Rock project in 2009. 

Former Navajo Nation President Joe Shirley said, “These are individuals and groups who claim to have put the welfare of fish and insects above the survival of the Navajo people when in fact their only goal is to stop the use of coal in the U.S. and the Navajo Nation.”  

 The question today is whether the Navajo Generating Station will be their next victim.  The EPA is now moving to impose one billion dollars of new costs on the Navajo Generating Station, which will make it economically impossible to continue operations.  This radical agenda doesn’t even pretend to be in support of public health – rather, it is to improve the “view-shed.”   But as we will hear, the $1 billion of visibility improvements – even if they could be economically supported -- won’t even be visible to the human eye. 

It is important that we understand the irrational extremism behind this effort.  This administration is willing and indeed, appears eager, to throw thousands of tribal and non-tribal workers into unemployment, devastate the Hopi Indian Tribe and the Navajo Nation, compromise the Bureau of Reclamation’s ability to make water deliveries to millions of Americans and to repudiate the federal government’s trust responsibility to numerous tribal nations. 

 We will be told by the minority’s witnesses not to worry – we’ll replace the electricity with wind and solar power.   We need to understand what that means.  It means replacing power that costs less than 4 cents per kilowatt hour with power that costs 10 cents and 21 cents respectively.  And because wind and solar power is intermittent and unpredictable, it adds absolutely nothing to baseline power because it requires us to build one megawatt of reliable back-up power for every megawatt of wind and solar.  All this to replace a generating station we’ve already paid for.  This is sheer insanity.  This is the Obama EPA.

   We have very painfully witnessed how left-wing ideology and junk science have made water and energy shortages and price increases a mainstay in my home state of California.   The same thing could happen in Arizona if the EPA drives the bus off the cliff on the matter before us this afternoon.  I hope today’s hearing brings the EPA back to this planet.

Orange County Water Summit, Anaheim, California.  May 20, 2011

  A generation ago, the principal objective of our federal water and power policy could be summed up in a word: Abundance. 

It was an era when vast reservoirs produced a cornucopia of clean and plentiful water and power on a scale so vast that many communities didn’t even bother metering the stuff.  

That generation of builders clearly understood the benefits that water and power development brought not only to the economy but to the environment as well.  Nothing is more environmentally devastating than a flood or a drought.

When Franklin Roosevelt dedicated the Hoover Dam, he noted, “As an unregulated river, the Colorado added little of value to the region this dam serves.  When in flood, the river was a threatening torrent.  In the dry months of the years, it shrank to a trickling stream.” 

 But the last generation seems to have abandoned this objective of abundance, and to replace it with a very different philosophy that now dominates public policy: that the principal purpose of government water policy is not to produce abundant water, but rather to ration shortages that government has caused by abandoning abundance as its objective.

 The result is increasingly scarce and expensive water that is now affecting our prosperity as a nation.  One of my greatest frustrations in taking the chair of the House Water and Power Subcommittee was to discover that we were no longer looking at cost-benefit analyses of which projects make economic sense and which do not. 

Instead, practicality was replaced by an entirely new ideological filter: those projects that ration or manage shortage are considered worthy regardless of feasibility or cost – and projects that produce abundance are to be discouraged regardless of their economic benefits or simple common sense.

So this year, the new majority on the Water and Power Committee will seek to establish a rational framework for future federal water policy, beginning with two fundamental reforms. 

The first is to establish a uniform cost-benefit analysis for all water projects coming before the sub-committee.  This framework will include an assessment of the economic value of all water sales, power sales, recreational leases and flood control protection to be produced by the project, weighed against the economic cost of construction amortized over the life of the project, and operations and maintenance. 

This will for the first time in many years give the committee clear guidance to direct federal attention to those projects of greatest economic benefit to each region, replacing the current process, which I can only describe as throwing money at any water project that is ideologically pleasing to the committee, regardless of cost considerations.  That era ended on November 2nd.

The other principal for the framework is to restore the doctrine of “beneficiary pays” for the projects initiated with federal funds.  There is no excuse for taxpayers to bear the cost of any water project – every project must be cost-effective and it must be financed by the beneficiaries of the project in proportion to their use of its benefits.  Once capital costs have been repaid, such projects can then provide a revenue stream for the participating governments for the life of the project.

With respect to future federal funding of water projects, that means that if the federal government fronts the money for a project, that money is to be repaid by the beneficiaries – and not by general taxpayers. 

Once these principles have been restored, we will have set the stage for the next great expansion of our water and power infrastructure and can begin to target federal resources to those projects that have the potential of producing the most water for the least cost.

I applaud Gov. Brown’s stated objective of restoring California’s water infrastructure and certainly look forward to doing everything I can from my position to assist this objective. 

But there is a difference between rhetoric and action.

If the governor is serious about restoring our water infrastructure, he should start by instructing his appointees on the State Water Resources Control Board to restore development rights to the federal government for the completion of the Auburn Dam.  Assuming that project can pass the cost-benefit test I have outlined earlier, it is the most obvious place to begin California’s next great era of water development, along with bringing the Shasta Dam to full capacity. 

Indeed, the completion of the Auburn and Shasta dams is a necessary pre-requisite to construction of a peripheral canal.  If additional water transfer facilities are to be constructed, there must be additional water to transfer – or all we will have done is to trade catastrophic water shortages in Southern California for catastrophic water shortages in Northern California.

Second, the Governor needs to initiate action to repeal AB 32.  If we’re going to build more dams and aqueducts, I think we can all agree that cement is a pretty handy thing to have around. 

The chemical process by which cement is produced requires the generation of about one ton of carbon dioxide for every ton of cement.  But carbon dioxide – the same stuff we all exhale with every breath – has now been classified as a toxic pollutant by AB 32 in the state and by the EPA at the federal level.

Similarly, the cost of water projects is enormously inflated by the federal and state Davis-Bacon acts.  It is estimated that the federal Davis-Bacon act needlessly increases the price of federal projects by billions of dollars a year and California’s prevailing wage regulations by millions of dollars more. 

Meanwhile, we have got to take a realistic approach to environmental restrictions, particularly those imposed by the Endangered Species Act – that has been at the center of increasingly expensive mitigation mandates. 

 Like all movements, the impetus for stronger environmental protection of our air and water was firmly rooted in legitimate concerns to protect these vital resources.  But like many movements, as it succeeded in its legitimate ends, it also attracted a self-interested constituency that has driven far past the borders of commonsense and into the realms of political extremism and outright plunder and I am hopeful that we are now entering an era when common sense can be restored to our water policy.

Allow me to offer an example.  The federal government is proceeding with a plan to destroy four perfectly good hydroelectric dams on the Klamath River, because, we are told, of a catastrophic decline in the salmon population.  On my first tour of the region after taking office, I asked if the salmon population is low, why doesn’t somebody build a fish hatchery?  I was told “we have a fish hatchery at the Iron Gate Dam – it produces 5 million salmon smolt each year – 17,000 of which return as fully grown adults to spawn – but they don’t let us include them in the population count.

Include the hatchery salmon in the count and there is no salmon crisis on the Klamath and no reason to destroy four dams at the cost of more than three quarters of a billion dollars, paid by California taxpayers and California and Oregon ratepayers.  That’s three quarters of a billion dollars that instead could be used to increase water storage throughout the state.

(By the way, to add insult to insanity, destroying the Iron Gate Dam also means shutting down the Iron Gate Fish hatchery – which actually will cause a catastrophic plunge of salmon population on the Klamath).

Meanwhile, California’s Central Valley was devastated in 2009 and 2010 by the deliberate diversion of hundreds of  billions of gallons of water away from Central Valley agriculture to satisfy environmental edicts for salmon and delta smelt.  The practical effect of this action was to fallow a quarter million acres of the most productive farmland in America and throw tens of thousands of families into unemployment. 

This occurred:

• Despite the findings of the Northwest Fisheries Science Center that determined the Pacific Decadal Oscillation was the principal factor in salmon migration;

• Despite the California Department of Water Resources analysis of pumping flows that determined the pumps’ influence on salmon and smelt migration is negligible compared to natural tidal flows; and

• Despite the findings of the Federal District Court that the U.S. Interior Department’s biological opinion on Delta smelt was “arbitrary, capricious and contrary to law.”

If we simply required hatchery fish to be included in all ESA counts and mitigation plans we can solve virtually all of the ESA problems that are strangling our water supplies while at the same time provide for teaming populations of these species.  And the fact of the matter is that the only difference between a hatchery-spawned fish and a wilderness-spawned fish is the difference between a baby born in the hospital and a baby born at home.

Protecting endangered species is a worthy goal and worthy goals need to be pursued with common sense and sound science, not left-wing ideology and junk science.  We need to ask whether the enormous wealth consumed by these policies has made any significant contribution to enhancing endangered populations compared to far more effective and less expensive alternatives, including predator control, increasing overall water supplies and hatchery production.  As far as I can tell, the principal beneficiaries of current policies have been the law-firms and environmental fundraising organizations -- and the principal victims have been families and workers who face a dismal future of chronic shortages, prohibitively expensive water and power and a faltering economy.

Finally, we need to look at our overall water policies and financing structures used since the mid-1970’s and compare them to the structures that produced our state’s golden era of water development. 

At the end of the Pat Brown administration, after California had constructed not only the State water project but the state highway system and a massive expansion of the University of California, the state’s debt service ratio stood at 2.2 percent.  Today it is 7.7 percent.  With a debt service ratio three and a half times higher than at the end of the Pat Brown administration the fact is we have no significant additional infrastructure to show for it.

In the last ten years, voters have approved six bond measures totaling almost $17 billion that all promised to enhance California’s water supply.

 Compare that to the Burns-Porter Act that financed construction of the entire state water project.  It was a total of $1.75 billion approved in 1960.  That’s the equivalent of $12.3 billion in today’s money.  $12.3 billion.  That’s substantially less than the water bonds we’ve approved during the last ten years and about the size of the bond pending voter approval.

 The Burns-Porter Act paid for the entire State Water Project.  In the last ten years we’ve approved a significantly larger sum of money, promising the public it would solve our water needs.  And once again I must ask, where is our generation’s State Water Project?

 We went wrong by making a series of financing mistakes.  Let me list a few lessons we need to re-learn about responsible borrowing and public works.

 The first lesson is, “Project first – then financing.”  A generation ago, policymakers would first agree on a project, they would commission the engineering, obtain the bids – and only then borrow what was necessary to finance that project.

You don’t go to a banker and say, “I’d like to buy a nice house or something.  Please lend me lots of money.”  No, you select a house, negotiate a price and then obtain a loan.

Today, we revel in “mega-bonds” that borrow billions of dollars for vague notions like “water” or “parks” or “stem cell research” or “economic recovery,” with no specific projects in mind and at the end of the day all we have accomplished is to create a gigantic grab bag of money for local pork projects. 

That’s the first lesson: we have to get back to the classic California constitutional concept of approving bonds only for a “single object or work.”

 The second lesson is, “Don’t rob St. Petersburg to pay St. Paul.”  If a project exclusively benefits a local community, it should be exclusively paid for by that local community.

 A generation ago, it would have seemed ludicrous to ask the taxpayers of Orange County, California to pay for a water system in Orange County, New York.  Strictly local projects should be strictly financed by local revenues – regional water systems should be financed through state and federal funds.

 The third, closely related lesson is, “Beneficiaries should pay.”  Federal funds for future water projects should not be doled out as gifts to the lucky beneficiaries, but rather fronted as loans to be repaid with interest by the project’s beneficiaries – in other words, restoring the beneficiary pays principle I discussed earlier as one of the policy objectives of our sub-committee.  

With respect to state or local funds, unless it’s a self-liquidating general obligation bond like those used in the Burns-Porter Act, there’s no excuse for using a G.O. bond for a water project – it should be a revenue bond repaid by the actual users of the actual water and electricity produced by the actual project. 

 The fourth lesson is, “Don’t rob our children.”  Whatever is purchased with a 30-year bond ought to be there 30 years from now when our children are still paying off that debt.  Yet the bonds adopted in recent years include billions of dollars for cleanup and conservation projects that will be obsolete long before these bonds are repaid.  Our children are going to have their own pollution to clean up and conservation programs to promote without paying for programs from 30 years ago.

It should be painfully obvious that the policies of the last four decades have failed and failed miserably to meet this generation’s water needs – let alone to begin to meet the needs of future generations. 

It is time that we restored a little common sense to our water policy:

o We don’t build water projects so that we can dump the water into the ocean.

o We can’t create abundance by wantonly destroying our existing infrastructure.

o We can’t build water projects without cement.

o We won’t build more dams as long as we won’t complete the dams we’ve already started.

o We can’t keep plundering one community to pay for local water projects in another.

o We can’t produce projects of the magnitude of the Burns-Porter Act by squandering billions of dollars on open grab-bags for local projects.

It is true that with enough government force, fines, lawsuits, edicts, regulations and bureaucracies we can restore plant and animal populations to their original prehistoric conditions.  The problem is that this requires restoring the human population to its original pre-historic conditions.

Or we can return prosperity and abundance as the central objectives of our water and power policy – by providing abundant water, clean and cheap hydroelectricity, new recreational centers, desperately needed flood protection, burgeoning fisheries, re-invigorated farms – not to mention lower electricity, water and flood insurance bills for American families.

It is toward that brighter and more prosperous future that this majority seeks to proceed. We need a sharp and dramatic change from the folly of past policies.  I want to pledge to you to do everything I can do in my new capacity as Chairman the House Water and Power Subcommittee, and ask that you, the stewards of this region’s water, to take a leading and visible role in this fight. 

As Ronald Reagan once asked his generation, if not now, when? And if not us, who?

Congressman McClintock discusses the debt limit on Freedom Watch.

May 16, 2011

Congressman Tom McClintock will conduct a town hall meeting in Placerville on Tuesday, May 17, at 6:00 PM. The meeting will be held at El Dorado High School, in the gym, 561 Canal Street, Placerville.

The committee meets today to review three bills that make minor adjustments to current water projects, but that open larger issues I hope to address in coming months.

We have again before us the Hoover Power Allocation Act, H.R. 470 authored by Dr. Heck of Nevada and Mrs. Napolitano of California. 

The Hoover Dam is an ideal model to which we must return.  It produces a cornucopia of water storage, hydroelectricity, recreational resources and flood control -- financed not by general taxpayers but by the users of these benefits.  The federal government helped front the money for construction, the project participants paid back that money with interest from the proceeds of their water and electricity sales.  The original project was paid off long ago and continues to store up to 28 million acre feet of water and generate 2,000 megawatts of electricity, while providing one of the great recreational gems of the West and shielding the Colorado River Basin from the devastating cycle of floods and droughts which once ravaged it.

We have drifted far from this model of abundance in previous congresses and we need to get back to it.

In the meantime, the question arises of how to allocate these power benefits when current contracts expire in 2017. 

One approach is before us today.  It allocates power at at-cost rates for the project participants, with a five percent set-aside for latecomers to the vineyard.  With the exception of this set-aside, it follows existing precedent. 

A second approach was rejected by Congress in the 1980s: to put the power out for bid at market rates.  This would reap a windfall for the treasury, but at enormous expense to 29 million existing ratepayers.  This approach would also discourage future partnerships by denying participants the fruit of their investments. 

A third approach is to default this decision to the Western Area Power Administration that is pursuing an administrative process.  This has the advantage of engaging in far more detailed discussions and negotiations than can be addressed by Congress, but with the drawback of unaccountability to taxpayers and ratepayers, potential lawsuits and re-igniting conflicts between the affected states. 

The next bill, H.R. 489 – authored by Congressman Paul Gosar of northern Arizona – addresses a growing problem that we are having with the U.S. Forest Service.  This bill arises from the bureaucratic intransigence, megalomania and abuse that has become the new hallmark of this rogue agency. 

In this case, there is a small water system (called the Cragin Project) serving several small rural communities in Arizona that was transferred from private ownership to the Bureau of Reclamation.  The water system is nearly 50 years old and needs repairs. 

Simple enough – you go in and fix it.  Except in this case, Forest Service bureaucrats have claimed jurisdiction and have actively impeded, obstructed, delayed and disrupted efforts to repair this vital water system.  Having watched the Forest Service’s abusive behavior in my own district, I have no doubt that it is deliberately attempting to create conditions that would ultimately expel these long-established communities from the national forests.   This is a pattern of abuse we are watching across the western United States – and particularly ironic considering that the original mission of the Forest Service was to open the forests for the benefit of the people. 

This bill re-states and re-enforces existing law that the Bureau of Reclamation alone has jurisdiction over the maintenance and operation of the Cragin Project and tells the King’s Foresters to go pound sand.  Amen.

The Subcommittee will also review H.R. 818, a bill sponsored by Congressman Jim Matheson of Utah.  This legislation allows a local water district to pre-pay its loan obligations to the Federal Treasury, in the same way a family has the option to pre-pay its home loan to save compounded interest costs.  This is a principle that should be replicated uniformly and I hope that this committee will produce a more comprehensive bill during this session.   

# # #

May 12, 2011. 

House Water and Power Subcommittee legislative hearing on: H.R. 470 (Heck); H.R. 489 (Gosar), and H.R. 818 (Matheson)

 

The House voted this week on bills to increase energy production, create jobs and lower prices. 

May 11, 2011 

This truly is a tale of two parties.

  The Democrats have been very clear on their approach: heap additional taxes on producers – which will be instantly passed on to consumers -- and continue to delay and obstruct the development of America’s vast petroleum resources.  Higher prices at the pump, increasing dependence on foreign oil and thousands more families thrown out of work. 

  The Republicans have also been very clear on our approach: open America’s vast petroleum resources; triple our current production by 2027; cut foreign imports by one third.  Even more importantly, this measure means hundreds of thousands of new jobs and hundreds of billions of dollars of direct revenues into the national and state treasuries – not through higher costs for consumers but through growing prosperity for our country. 

  That’s the choice between the two parties, plain and simple – a choice, I believe, the American people are ready and eager to make. 

Floor Remarks by Congressman Tom McClintock, May 11, 2011.

HR 1231 is part of a package of energy bills voted on by the House this week that will increase energy production, create jobs and lower prices.  The other bills are HR 1230 and HR 1229. 

Floor debate remarks in support of H.R. 1229, Putting the Gulf Back to Work Act.

May 10, 2011

FreedomWatch with Judge Napolitano

Fox Business Network, April 28, 2011

Opening Statement by Congressman Tom McClintock, Chairman, House Water and Power Subcommittee.  Oversight Hearing on “Protecting the Federal Hydropower Investment:  A Stakeholder’s Perspective”

May 4, 2011
 
The purpose of today’s hearing is to receive testimony on the benefits that hydroelectricity offers to our nation’s prosperity, the impediments that hydroelectricity generators now face, and the costs that these impediments impose on the family budgets of millions of Americans and on job creation at a time when Americans suffer the most prolonged period of high unemployment since the depression. 

Hydropower is by all accounts the cheapest and cleanest electricity available to modern technology.  Its cost is typically estimated at between a half-cent and three cents per kilowatt hour, compared with more than 14-cents per kilowatt hour for subsidized solar power. It produces zero air emissions.

And yet, no major hydro-electric facility has been built in many years, and our existing facilities are being bled dry by endless litigation and regulatory obstacles that result in major increases in electricity prices and chronic shortages of electricity.

 Earlier this year, this subcommittee heard from the federal agencies charged with producing and delivering hydropower.  It became painfully clear that crushing new costs continue to be heaped onto our electricity bills from over-regulation, water use restrictions and mandated use of so-called alternative energy sources.  Worse, it became apparent that there are no plans actually being implemented to increase our hydro-electric generation through construction of major facilities.  

We see around us the wreckage of these retrograde policies.  California, which boasts of being on the cutting edge of this folly, now suffers the highest electricity prices in the continental United States, chronic shortage of capacity, per capita electricity consumption that is now lower than Guam and Aruba, and an economy that leads the nation – from behind.  This must not become America’s future.

 Our water and power pioneers had the vision of constructing large multi-purpose facilities to “make the desert bloom” and to provide low cost, emissions-free energy.  The cheap and abundant hydroelectricity generated in the west’s federal dams played a major role in producing the armaments and food needed to defeat our enemies in World War II.  And it laid the foundation for the explosive economic growth and prosperity of the western United States in the post-war years.

 This Administration purports to support hydropower through press releases, yet actions speak louder than words:

It continues to pursue the destruction of four hydroelectric dams on the Klamath that produce enough electricity for more than 150,000 homes.  The capital cost is more than half a billion dollars, on top of crushing replacement costs, on top of the loss of the Iron Gate Fish Hatchery that releases 5 million salmon smolt each year.

It continues to fund extremist organizations like the one invited by the minority party today, whose President has said the destruction of these dams would be a model for the demolition of four additional dams on the Snake River that produce enough electricity for 1.1 million homes – adding a half-billion dollars per year just in replacement costs.

It continues to pursue high flow spillage from the Glen Canyon Dam that wastes millions of dollars of lost electricity production and ironically increases predator populations that devour endangered humpback chub.  Upstream, it has its sights on the Aspinall Unit in western Colorado. 

We will hear today that thirty percent of the electricity bills of families in the Pacific Northwest are just to meet environmental regulations.

 Protecting endangered species is a worthy goal and worthy goals need to be pursued with common sense and sound science, not left-wing ideology and junk science.  We need to ask whether the enormous wealth that has been consumed by these policies has made any significant contribution to enhancing endangered populations compared to far less expensive and effective alternatives, including predator control, increasing overall water supplies and hatchery production.  As far as I can tell, the principal beneficiaries of current policies have been the law-firms and environmental fundraising organizations -- and the principal victims have been families and workers who face a dismal future of rationing, shortages, prohibitively expensive water and power and a dying economy.

It is the purpose of these hearings to begin moving the pendulum back toward sensible and proven policies that built our hydro-electric infrastructure.  Today, we will hear from leading experts from outside the beltway whose work is dedicated to providing for the needs of a growing population.  Their insights on hydropower policy will provide this subcommittee with guidance to restore the federal government as a positive force for prosperity, abundance and plenty once again.