Item B - EWEB Carmen-Smith Relicensing Project

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Settlement Agreement and new license based upon the preliminary design (30 percent design) for fish passage work and conceptual design (15 percent design) for power generation facilities. The cost to complete the project at that time was estimated to be $156 million plus or minus 30 percent, in accordance with standard engineering practice. Since then, EWEB has expended approximately $15 million in design, procurement and construction as part of the project. EWEB continues to monitor and update anticipated project costs as the design work progresses. The next project cost estimate, based on the 60 percent design for fish passage work, will be available shortly. The project is being financed with a phased bonding approach. EWEB previously issued $13.4 million in bonds relating to the Carmen-Smith Project. The remainder of the project will be funded through two additional bond authorizations: $45 million requested at this time, and the balance to be requested after the license has been issued and accepted. Authorization for $45 million is being requested to 1) provide reimbursement of $20 million of project costs paid from reserves over the last several years and 2) provide funds to cover design and implementation work planned for the remainder of 2012 and through 2013. Once the FERC license is issued and after completion of design work, EWEB will return for additional authorization for bonding of the construction phase of the project. The reimbursement of prior year project costs will be placed in reserve to pay for project costs in 2014 and beyond. The authorization for the first $45 million of bonding authority is on the May 29 council consent calendar. The impact on rates from issuance of the requested bonds is approximately two percent. TRIPLE BOTTOM LINE – SOCIAL, ENVIRONMENTAL, ECONOMIC IMPACTS EWEB and the Settlement Parties included triple bottom line (TBL) concepts as they balanced the environmental and social impacts of the Carmen-Smith Project with project economics in the Settlement Agreement. EWEB also recently completed a specific TBL analysis of the project as part of an updated economic evaluation. The TBL analysis identified the following impacts of completing the project. Social  Improved safety of recreational facilities through design and construction and financial support for State Police personnel stationed in the area.  Improved accessibility and maintenance of recreation opportunities close to the Eugene/Springfield area.  Bull trout and Chinook salmon habitat improvements that result in increased fishing and tourism opportunities.  Enhanced Native American tribal value as a result of increased number and variety of culturally significant plant sources of traditional foods and vegetative craft material.  Increased educational opportunities related to aquatics and wildlife management. Environmental  Decreased risk of oil contamination into the reservoir with the relocation of the substation.  Maintains a low carbon hydro peak power generation facility for the region.  Improvements to trout, Chinook, elk, bird and many other species habitat through installation of habitat or removal of invasive vegetation. S:\CMO\2012 Council Agendas\M120529\S120529B.doc