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� •� - � <br /> We ha�•e begun the process of �vorking with the rclevant agencies to <br /> structure this oFfice. We have also met �vith policy makers in both Houses, both to <br /> express appreciation and to make them aware of our progress. The provis�on has <br /> been universally well received and is often mentioned as a model for the <br /> pzrrnittin� of projects in other areas. <br /> FeeIncrease <br /> 'fhe President's budget request included an item proposing to assess the <br /> City of San Francisco S8 million annually in "renP' for the Hetch Hetchy system. <br /> This proposal is strikin�ly similar to one.proposed in 1995 in the Contract with <br /> America. <br /> We have been working with delegation members and staff, as �vell as the <br /> respective committees of jurisdiction to point out the absence of justification for � <br /> this provision. For example, the current federal practice, as embodied in the <br /> Federal Power Act, is to exempt municipalities from fees for the production of <br /> power used for municipal purposes or sold without profit. There is no <br /> accompanying languagr. which would indicate whether the President's proposal is <br /> designed to overturn that practice, and if so, why no language is included which <br /> would achieve that result for other municipalities. <br /> The proposal also reflects a quantum leap in the level of fees charged for <br /> "rentai". Under the Federal Power Act, private paRies are charged a per acre fee <br /> for use of federal lands associated �vith a hydro facility. The highest fee charged <br /> to any privateparty in California is just under �80. The fee proposed for the <br /> Hetch Hetchy project is in excess of S 1100. There is no accompanying <br /> justification for this massive increase, nor is there accompanying rationale for <br /> charging a municipality more than a private party. <br /> Finally, there is no indication of whether the City �vould receive credit for <br /> those contributions which it now makes voluntarily to the park. Those <br /> contributions total more than �2 million per year. <br /> This is an issue which can be expected to play out over the course of this <br /> year, and perhaps into next. It will become intricately involved in the procedures <br /> surrounding the budget process. We will continue to work with all appropriate <br /> parties in an effort to defeat this proposal, and will keep the Commission regularly <br /> updated. <br /> CALFED <br />