This report documents a preliminary investigation of the economic effects of implementing the
Hatchery Scientific Review Group (HSRG) draft recommendations on Fish and Wildlife
Program (FWP) projects. Phase I study focuses on incremental hatchery costs. A potential Phase
II would broaden the context to include changes in harvest and habitat that would accompany
implementation of the HSRG recommendations.
The HSRG recommendations could significantly increase the costs of the FWP. The report 1)
analyzes direct effects of the recommendations on hatchery projects currently funded by BPA in
the FWP (FWP projects), 2) considers the potential FWP cost impacts of HSRG
recommendations for non-FWP hatchery projects, and 3) discusses some potential interactions
involving habitat, harvest, and mainstem bypass operations. At the time of this writing, the
HSRG report was still considered draft and subject to revision.
FWP projects. Based on Pisces data, the direct cost of FWP hatchery projects has recently
averaged $20 million annually of which $18 million was paid by the FWP.1
Indirect costs,
primarily a share of research, monitoring and evaluation (RM&E), should be added to obtain the
total FWP hatchery cost that might be affected. BPA estimates total FY 2008 FWP hatchery
costs of $46.2 million including RM&E.2
About 15 to 20 percent of recent FWP direct hatchery
costs involved resident and sport fisheries that would probably be unaffected by HSRG
recommendations.
Appendix 1 identifies important HSRG recommendations and considers potential costs for FWP
hatchery projects. Important new investments were recommended for these FWP projects:
• New adult trapping facilities and rearing facilities at the Hood River Production Program;
• New acclimation facilities for the Umatilla Hatchery;
• For Coho Restoration Mid-Columbia, additional rearing locations in the upper Columbia
River;
• Development, testing and deployment of live capture gear at the Nez Perce and Umatilla
projects;
• Improvements to the fish weir on the Lostine River to benefit captive breeding under
Northeast Oregon Hatchery project (NEOH) as well as conventional hatchery fish.
Additional costs may be required for planning, to allow separation of integrated and segregated
populations, and for facilities and equipment.
Cost estimation is complicated by several issues. First, the cost to attribute to the HSRG
recommendations depends on the cost baseline. Some HSRG recommendations were already required or planned through the Federal Columbia River Power System 2008 Biological Opinion
(BiOp) or through hatchery Master Plans. Some have been planned even longer; the Lostine weir, for example, since 2006. Some HSRG recommendations may be funded through the 2008
Columbia Basin Fish Accords Memoranda of Agreements (Fish Accords). The Fish Accords
confirm the commitment of certain tribes, States and federal agencies to many hatchery projects
potentially affected by HSRG recommendations.3
The Fish Accords will provide funding for
some HSRG recommendations at existing FWP hatcheries. However, new projects are proposed
that are not covered by the HSRG recommendations.
Second, it is sometimes not clear what method or technology would be selected to implement a
recommendation. Some projects are still in planning stages. In other cases there are no
representative cost data or cost allocation among potential funding sources is not clear.
Incremental costs might be less if recommended changes are accomplished using existing
infrastructure, or more if facilities require unusual amenities or configurations.
Still, we estimate that, as a result of HSRG recommendations, the additional one-time investment
costs (above and beyond BiOp costs) requested of BPA for existing FWP hatchery projects could
be, as an order of magnitude estimate, about $10 to $20 million. By “order of magnitude” we
mean that incremental capital costs would likely be in this range, but could be more or less. A
large share of this cost might be covered under the Fish Accords. However, some of the projects
in the Fish Accords are not yet planned or described in much detail.
In addition, HRSG recommendations would increase long-term annual operations costs through
increased marking requirements, operation of live capture gear, adoption of selective harvest
methods, and some additional transportation of fish. The additional costs for FWP hatchery
projects, after considering some cost savings, might be, as an order of magnitude estimate, $1 to
$2 million annually. Again, it is not clear what share of this cost might be covered under the
existing Fish Accords, and the estimated cost increase does not include some actions that were
also required by the 2008 BiOp Reasonable and Prudent Alternatives.
The HSRG recommendations could also result in additional research, monitoring and evaluation
(RM&E) costs. The potential RM&E costs have not been scoped, but some of these costs were
also required or paid by other initiatives.
HSRG recommendations could reduce some operations costs at FWP hatcheries relative to
planned operations. For example, production levels would be reduced at some hatcheries and
some transportation of fish from outside of local river basins would be eliminated. An important
share of FWP hatchery costs are related to the conservation, recovery and re-introduction
objectives. Successful integrated hatchery operations should allow these projects to scale back
operations and reduce costs. In the long run, hatchery operating cost savings from HSRG
recommendations could be similar in size to operating cost increases.
In summary, for FWP hatchery projects
1. The HSRG recommendations generally would not require major changes in planned
operations at FWP hatchery projects, partly because many of the changes were already
planned;
2. Therefore, the recommendations should not result in large incremental cost increases at
these hatchery projects.
Incremental costs could be more if major re-engineering of existing hatcheries is required; no
such changes have been identified.
Other Hatchery Projects. The FWP might be asked to fund HSRG recommendations at
hatchery projects that are not currently within the FWP. BPA currently provides about $30
million annually for other federal hatchery projects. The potential for HSRG recommendations to
increase costs at these federal hatcheries has not been analyzed on a project-by-project basis.
Other funding sources, especially Mitchell Act and State funds, are facing cutbacks related to
changing federal priorities and reduced State revenues. BPA could be asked to fund HSRG
recommendations outside of currently-funded hatchery projects simply because of a lack of
funds from the other sources. In general, the types of changes suggested for hatcheries in the
lower Basin, which tend to be funded by sources other than the FWP, are more significant than
for hatcheries elsewhere. The provisions of Section 4(h)(10)(A) of the Northwest Power Act may
limit BPA’s responsibility at hatcheries where funding is currently provided by States or other
agencies.
Hatchery operations costs at non-FWP hatcheries might be decreased by changing the species
composition as well as total level of production. Hatchery production of all species except
sockeye salmon would be reduced, so some cost savings at the other hatcheries might be
expected, all else equal. Total operations cost savings system-wide from HSRG-recommended
production reductions are estimated to be about $1.8 million annually.
Harvest and Habitat Interactions. FWP costs could be affected by changes in harvest patterns.
HSRG recommendations often note that more selective harvest practices are needed to obtain
population objectives. Common harvest-related problems include excessive straying of hatchery
fish into the wild, insufficient escapement of natural-origin fish, or insufficient numbers of
natural-origin fish for broodstock. The HSRG recommendations often include more marking of
fish and changes in harvest practices to remedy these problems. Our order-of-magnitude estimate
of increased FWP costs includes increased marking costs, costs for live capture gear, and new
weirs and weir improvements. Additional operations costs associated with selective fisheries
may involve enforcement and monitoring. Some of these costs are covered by the Fish Accords.
HSRG costs should be somewhat offset by benefits from larger harvests. The HSRG estimates
that total harvest will be increased. For some populations, harvest would shift from ocean to
mainstem and terminal fisheries. A variety of interactions with international treaties and Native
American treaties, as well as harvest management agreements, will affect the cost of HSRG
recommendations and the value of fish harvested. More analysis of effects on total harvest and
subsequent economic outcomes is suggested when a harvest BiOp is completed.
The HSRG recommendations interact with habitat projects in several ways. In most cases, the
HSRG notes that population objectives depend on habitat conditions. In some cases, HSRG
population objectives recognize the inadequacy of existing habitat. HSRG recommendations are
part of an overall push to establish naturally self-reproducing populations. This initiative
includes habitat projects as part of the overall package. Hatchery improvements will not, by
themselves, increase habitat costs. However, the HSRG recommendations generally
acknowledge the important synergies between integrated production and improved habitat. In the
short run (the next ten years) existing commitments and legal pressures will probably not allow
for changes in habitat costs in response to HSRG recommendations or their results. In the long
run, if HSRG recommendations are successful in establishing naturally self-reproducing
populations then legal pressures to increase habitat spending could diminish.
HSRG recommendations often note situations where data collection or reporting is inadequate.
Research, monitoring and evaluation (RM&E) costs are currently almost 40 percent of FWP
costs depending on the definition used. HSRG recommendations could have important effects on
RM&E costs. Given the relatively large role the FWP has assumed in RM&E, this potential
should be investigated further. We also recommend some cost engineering studies to estimate
and compare costs of alternative selective harvest strategies and live capture, including weirs,
modifications at existing facilities, and live capture gear.
