Issues That Require CAP Involvement with Other Stakeholders

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1 Public Policy Agenda Number 3. April 22, 2014 The following Legislative Issues Update outlines the status of the Board-approved Legislative Agenda as well as other relevant federal issues. The Business Planning and Governmental Programs Team will come before the Public Policy Committee on a regular basis to seek guidance and direction on these and other proposed rules and legislation that may arise during the coming year. Priority Issues EPA Rulemaking regarding Navajo Generating Station (NGS) Emissions Controls Continue efforts to engage elected officials, stakeholders, and governmental agencies in influencing the EPA to accept the Technical Work Group "Reasonable Progress Alternative to BART" for adoption as the final rule. The U.S. Bureau of Reclamation (BOR) will issue a Notice of Intent to prepare a draft Environmental Impact Statement (EIS) for NGS in the Federal Register in mid- May. The National Environmental Policy Act (NEPA) process will involve three departments of the U.S. Department of the Interior: the BOR, the Office of Surface Mining Reclamation and Enforcement, and the Bureau of Indian Affairs. The BOR will also conduct public scoping meetings (i.e. open houses) on the draft EIS in mid- June. Cybersecurity Threats and Legislation Monitor legislative efforts to address cybersecurity and potential threats to critical infrastructure and vital computer systems. No update to report at this time. Issues That Require CAP Involvement with Other Stakeholders Clean Water Act Continue to oppose expansion of the coverage of the Clean Water Act from "navigable waters of the United States" to "waters of the United States." The proposed rule for the definition of "waters of the U.S." under Clean Water Act regulation was formally published in the Federal Register for comment on April 21. The 90-day comment period will end on July 21. In review of the draft rule's wording

2 and agency explanation, CAP staff believes that it is likely that the CAP system would fall under the rule's jurisdiction. President Pickard and General Manager Modeer discussed the potential impact of the rule with the Arizona Congressional delegation members when in Washington D.C. during the week of April 7. Navajo/Hopi Water Rights Settlement Legislation Continue to seek a settlement of these water rights claims and support legislation necessary and appropriate to implement a settlement. No update to report at this time. Colorado River Basin Salinity Control Forum Continue to support the operation of the Yuma Desalting Plant or a suitable alternative. Support the activities of the Colorado River Basin Salinity Control Forum, including efforts to secure adequate funding. In April, CAP submitted written testimony to three House Appropriations Subcommittees with jurisdiction on funding for salinity control programs in FY The three are: Subcommittee on Energy and Water Development; Subcommittee on Interior, Environment and Related Agencies; and Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies. Colorado River Basin Water Supply and Energy Legislation Continue to collaborate with Federal, State, tribal, and environmental stakeholders to augment water supplies and mitigate potential impacts on CAP water and power operations. Sen. Dianne Feinstein (D-CA) is continuing to collect votes for her drought bill (S.2016), which would streamline emergency grants and raise the cap on drought relief programs. Sen. Feinstein reintroduced her bill with a broader focus and less emergency funding for California in order to attract Republic support. Her bill also authorizes funding for pilot projects designed to increase water supplies in the Colorado River system. Sen. John McCain (R-AZ) is working to include language into the Feinstein bill that would require the National Academy of Sciences, in coordination with the Secretary of Agriculture, to conduct a study on saltcedar (tamarisk) control in the Colorado

3 River watershed. The study would also investigate the anticipated migration of saltcedar beetles into the watershed. Hualapai Water Rights Settlement Legislation Support the settlement of these water rights claims and support legislation necessary and appropriate to implement a settlement. No update to report at this time. Pascua Yaqui Tribe Trust Land Act (H.R. 507) Support the passage of H.R. 507 allowing the transfer of Pascua Yaqui tribal land. On April 10, the Senate Committee on Energy and Natural Resources reported out H.R. 507 without amendment. The bill has been placed on the Senate calendar and awaits Floor consideration. Federal Rulemaking EPA Rulemaking, Greenhouse Gas Emissions Monitor proposals to regulate greenhouse gas emissions from large facilities under the Clean Air Act. The Senate Environment and Public Works Committee held a hearing on April 8 to consider the nomination of Janet McCabe to head the EPA's Office of Air and Radiation. The upcoming greenhouse gas rules for existing power plants were the focus of much questioning. EPA Administrator Gina McCarthy stated on April 7 that the EPA reached out to the Energy Department and the Federal Energy Regulatory Commission well before it sent its proposal to limit greenhouse gas emissions from existing power plants to the White House for interagency review, essentially acknowledging that technological and reliability issues factor heavily into EPA's proposed carbon regulations.

4 Water Quality Monitor water quality issues impacting the Colorado River that may affect CAP operations. No update to report at this time. Other Bills/Legislative Issues of Interest American Indian Trust Responsibility Review Act of 2014 On April 3, Representative Paul Gosar introduced the American Indian Trust Responsibility Review Act (H.R. 4388). The intent of this legislation is to provide a comprehensive overview of the unique trust relationship between the United States and American Indian tribes. Original co-sponsors from Arizona include Trent Franks, Matt Salmon, David Schweikert, and Ann Kirkpatrick. The bill is also supported by the National Congress of American Indians, the Gila River Indian Community, the Pima- Maricopa Indian Community, and the Inter Tribal Council of Arizona. If you have any questions or would like more information regarding any of the issues contained in this report, please contact CAP Business Planning and Governmental Programs,

5 Public Policy Agenda Number 3. Attachment 1. 1

6 Waters of the U.S. - The proposed rule for the definition of "waters of the U.S." under Clean Water Act regulation was formally published in the Federal Register for comment on April 21. The 90-day comment period will end on July 21. In review of the draft rule's wording and agency explanation, CAP staff believes that it is likely that the CAP system would fall under the rule's jurisdiction. President Pickard and General Manager Modeer discussed the potential impact of the rule with the Arizona Congressional delegation members when in Washington D.C. during the week of April 7. Feinstein bill - Sen. Dianne Feinstein (D-CA) is continuing to collect votes for her drought bill (S.2016), which would streamline emergency grants and raise the cap on drought relief programs. Sen. Feinstein reintroduced her bill with a broader focus and less emergency funding for California in order to attract Republic support. Her bill also authorizes funding for pilot projects designed to increase water supplies in the Colorado River system. Sen. John McCain (R-AZ) is working to include language into the Feinstein bill that would require the National Academy of Sciences, in coordination with the Secretary of Agriculture, to conduct a study on saltcedar (tamarisk) control in the Colorado River watershed. The study would also investigate the anticipated migration of saltcedar beetles into the watershed. American Indian Trust Responsibility Review Act - On April 3, Representative Paul Gosar introduced the American Indian Trust Responsibility Review Act (H.R. 4388). The intent of this legislation is to provide a comprehensive overview of the unique trust relationship between the United States and American Indian tribes. Original co-sponsors from Arizona include Trent Franks, Matt Salmon, David Schweikert, and Ann Kirkpatrick. The bill is also supported by the National Congress of American Indians, the Gila River Indian Community, the Pima-Maricopa Indian Community, and the Inter Tribal Council of Arizona. Pascua Yaqui Tribe Trust Act - On April 10, the Senate Committee on Energy and Natural Resources reported out H.R. 507 without amendment. The bill has been placed on the Senate calendar and awaits Floor consideration. 2

7 Public Policy Agenda Number 3. Attachment 2. TO: FR: David Modeer and CAWCD Board Terry Bracy, Tracy Tucker, and Brandon Avila DA: April 15, 2014 RE: Federal Legislative Report for Board Meeting Navajo Generating Station EPA granted the Hopi Tribe an extended comment period on the NGS rulemaking that wrapped up at the end of March. The U.S. Environmental Protection Agency (EPA) is reviewing the comments and has indicated the rule will be finalized later this year. Waters of the U.S. Rulemaking The pre-publication notice of the proposed rule for the definition of U.S. waters under Clean Water Act regulation was released a couple of weeks ago and is expected to be formally released in the Federal Register soon. Based on the proposed definition, CAP will be impacted. President Pickard and General Manager Modeer, who traveled to Washington D.C. during the week of April 7, discussed the potential impact of the rule with the Arizona Congressional delegation members. The Administration is conducting an outreach effort over the next 90 days, holding discussions around the country and gathering input needed to shape a final rule. Proposed Carbon Rules Earlier this month, the EPA sent its draft guidance for reducing carbon dioxide emissions from existing power plants to the White House, two months before the proposal's expected June 2 release date. The rule is the product of months of meetings between EPA staff and a wide range of state officials, environmentalists, industry representatives, and other stakeholders. Feinstein Drought Bill Sen. Dianne Feinstein (D-CA) is continuing to collect votes for her drought bill (S.2016), which would streamline emergency grants and raise the cap on drought relief programs. Sen. Feinstein reintroduced her bill with a broader focus and less emergency funding for California in order to attract Republican support. In addition, the bill potentially eases environmental protections for fish in the Sacramento-San Joaquin River Delta by maximizing water pumping to farms and cities farther south. We are working with the

8 Senate offices on the bill including language that reaffirms the protection of the Lower Colorado River Basin Development Fund. The House-passed drought bill, H.R. 3964, sponsored by Rep. David Valadao (R-CA), would reverse environmental protections for fish in favor of sending more water to farmers in the Central Valley. President Obama issued a veto threat when it passed the House in February. Energy Efficiency Tax Bill On April 1, Senators Ben Cardin (D-MD), Dianne Feinstein (D-CA), and Brian Schatz (D-HI) introduced S. 2189, the Energy Efficiency Tax Incentives Act. S would provide new or expand existing tax credits for commercial and residential energy efficiency products, including combined heat and power and industrial water reuse. Tax Extenders Bill On April 3, the Senate Finance Committee approved the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act by a voice vote. As passed by the Committee, the EXPIRE Act would extend almost 50 expiring or expired tax credits, including the Production Tax Credit, for 2 years. Senate Nomination Hearing On April 8, the Senate Environment and Public Works Committee held a hearing to consider the nomination of Janet McCabe to be EPA's Assistant Administrator for Air and Radiation. Republicans used the opportunity to criticize the Administration s climate policies and regulations affecting the coal industry during opening statements and questions directed at Ms. McCabe. Ranking Sen. David Vitter (R-LA) also questioned Ms. McCabe's contribution to the Administration's estimate revision for the social cost of carbon (SCC) last year. Sen. Vitter asked Ms. McCabe in a letter for details about the working group's methods for arriving at the new estimate that carbon dioxide costs society $37 per ton emitted, a figure contained in the cost-benefit analyses for several EPA rulemakings. Critics, including Sen.Vitter, have said that the interagency working group process that led to the SCC revision last May, was not transparent. The group increased its estimate for the economic and health costs of carbon dioxide from $24 per ton emitted in Senate Cybersecurity Hearing On April 10, the Senate Energy and Natural Resources Committee held a hearing entitled Keeping the Lights on Are We Doing Enough to Ensure the Reliability and Security of the U.S. Electric Grid? Witnesses included FERC Commissioners Cheryl LaFleur and Phillip Moeller. All of the witnesses generally agreed that the U.S. is doing enough to prevent cyber-attacks, but can still continue working to develop the best protections. 2

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