Regional Resource Stewardship Council
Integrated River Management Subcommittee

Addendum to Policy Recommendations on TVA’s Integrated Management of the Tennessee River System

Approved by the Regional Resource Stewardship Council on October 26, 2001

Recommendations

1. Recommend to the Council that consideration of changing the winter pool level from354 feet to 355 feet in elevation on Kentucky Lake to aid in navigation of the waters below Pickwick Dam be added to the Reservoir Operations Study.

2. Recommend to include in the TVA Reservoir Operations Study consideration of the flow requirements on the Upper Ocoee River, to include a cost/benefit analysis approach for river recreation and economic development. Please refer to the Post Olympic Impact Analysis (EIS) of the Ocoee River (1996) and to the ongoing Cooper Basin Economic Development Association Study. For background, see the attached notes from the IRM subcommittee meeting with whitewater interests in Ducktown, Tennessee, on September 28, 2001.

Attachment:

Notes from IRM Subcommittee Meeting with Ocoee Outfitters
September 28, 2001 - Ducktown, Tennessee

Attendees: See list below

Austin Carroll, serving as subcommittee chair, thanked Kevin Colburn and the outfitters for bringing their issues to the attention of the Regional Council and for organizing the meeting in Ducktown. He reviewed the Council charter and described how the subcommittees evaluate issues to the Council for consideration.

Kevin Colburn, representing American Whitewater, a member-organization of private whitewater recreationists, described his understanding of the FERC dam re-licensing process and how it serves to increase whitewater recreation below privately owned dams.

Robin Kirsch, TVA staff, presented a history of the Ocoee Olympic venue development and the evolution of water release agreements with the commercial outfitters and the U.S. Forest Service. She used a hand-out schematic of the river depicting the stretch from Blue Ridge Dam to Ocoee No. 1 dam to acquaint Council members with the upper Ocoee and middle Ocoee rafting areas, describing the tunnel and flume operations that deliver water to buildings that house the generators. Unlike other dams, the generators are not a part of the dam structure, so the water doesn’t serve both purposes — it is either diverted to the powerhouses or released in the river bed. Robin also explained the economics, physical limitations and current operations trade-offs between hydropower generation and whitewater releases.

W. C. Nelson described the land use patterns on the Blue Ridge reservoir, noting that shoreline lots are going for $800,000. He expressed concern that the outfitters need to recognize that Blue Ridge residents would like higher pool levels later into the fall months which outfitters needed to take into consideration when asking for additional water releases. The outfitters noted that the Blue Ridge residents did not pay a fee for the benefits of the water above the dam like they do for the benefits of the water below the dam. Aquatic health considerations were discussed; the water is highly acidic, partly due to the residual of the copper mining pollutants and partly naturally occurring. In short, the river supports little to no aquatic species.

Outfitters clarified the issues associated with the upper section and middle section of the river:
Middle Section: A $2.50 per customer amusement tax is required by the county, $1.00 per rafter goes to TVA to repay the U. S. Treasury for the 35-year, interest-free loan appropriated by Congress, and $.50 goes to the state of Tennessee for management of the river. The outfitters are currently in litigation with Polk County over the amusement tax. There are 116 days of releases scheduled each year on the middle section of the Ocoee River.

Upper Section: The upper section is the site of the Olympic racing venue. The current contract between TVA and the outfitters for water releases on the upper Ocoee River allows for 20 days of water releases; for 8 of these days TVA donated the water in 2001. In 2001, the outfitters paid $4.50 per rafting customer to TVA for water releases, and this amount will increase to $6.25 in 2002 and 2003, per the contract, because the contract stipulates no free releases after this year. TVA has donated water releases each year since the 1996 Olympics for special events and competitions on the upper Ocoee River. Background - the TVA Board committed to this donation in the TVA Record of Decision (ROD) for the post-Olympic Environmental Impact Statement. The ROD stated that all water releases will be reimbursed except for 10 of the 20 days of releases for special events and competitions for the first 5 years after the Olympics. This was increased to 13 days of free releases in 2000 and 2001 to help support the Slalom World Cup Championships.

The Executive Director of the Copper Basin Economic Development Association (CBEDA) described the recently truncated World Cup Slalom financials, which included fundraising and sponsorships for the cash purse. The goal was to break even, noting that timing of events is important because of the cost differential between summer and fall water releases. He further explained that CBEDA is developing an economic development plan using grants from the Appalachian Regional Commission, TVA, and the Forest Service and that whitewater is the backbone of that plan — it is the primary asset the county has to work with. He estimates that it will cost two cents per ratepayer, per year to get the water they need to build a stable and sustainable whitewater economy.

Subcommittee asked if investor-owned utilities donated water. Kevin Colburn stated that FERC is requiring investor-owned utilities to donate water as recreation is being given equal consideration in re-licensing. Subcommittee asked Kevin to secure documentation about other federal dams that are required to dedicate water releases to whitewater.

Carlo Smith, President of the Ocoee River Outfitters Association, described his review of the water pricing formula, stating that in lieu of more donated days or more total days of release, that there is room to create a new formula for factoring the reimbursement rate. He stated that the foregone cost of power is factored by using spot market prices at peaking, which puts the kWh price on the high end of pricing.

David Brown of America Outdoors, a national coalition of commercial outdoor adventure operators, stated that the flat water beneficiaries of the Lake Improvement Plan have never paid the annual $2.3 million in foregone power costs in order to get summer pools and asked why the rules are different for the Ocoee whitewater beneficiaries, especially considering that whitewater is the backbone of the economy in the very poor Polk County. He noted that the profit margin on the upper Ocoee is greater than on the middle because the experience is higher impact, of higher quality, so more can be charged per person. On the middle Ocoee, outfitters’ net revenue per trip averages $25; the 24 outfitters charge different prices.

Subcommittee asked what the bottom line request from the outfitters is:
1) They want the rules and water releases to be the same on the upper Ocoee as are now applied to the middle Ocoee.
2) They want a process that would place greater emphasis on the values of whitewater recreation on the river.
3) They want the economic development people from TVA to be reunited with their issues —they believe they are not getting a fair assessment from TVA because their issues and cause have been relegated to an operations organization. It was clarified that private paddlers do not pay any fee for use of the water. Alternative 5 in the U.S. Forest Service EIS - that would be an ideal solution.

Austin committed to the outfitters that the IRM subcommittee would talk to the Council about making a recommendation to TVA.

Meeting attendees
Austin Carroll
General Manager
Hopkinsville Electric System
P.O. Box 728
Hopkinsville, Kentucky

Lance Lake
Wildwater Ltd./OROA
P.O. Box 507
Ducktown, Tennessee 37326

Carlo Smith
Adventures Unlimited/OROA
Route 1, Box 540
Ocoee, Tennessee 37361

Robin Kirsch
TVA River Scheduling
400 West Summit Hill Drive, WT 10D
Knoxville, Tennessee 37902
rekirsch@tva.gov

Frank Lewis
U.S. Forest Service
P.O. Box 2010
Cleveland, Tennessee 37320

Leland Rymer
CBEDA
43 Ocoee Street
Copperhill, Tennessee 37317

Michael and Stephen Smith
Hiwassee Outfitters
P.O. Box 62
Reliance, Tennessee 37369

Jack Marcellis
1832 Old Ringgold Road
Chattanooga, Tennessee 37404

W. C. Nelson, Jr.
2075 Allison Road
Blairsville, Georgia 30512

Kevin Colburn
20 Battery Park Avenue, Suite 302
Asheville, North Carolina 28801

Miles Mennell
Association of Tennessee Valley Governments
42 Compton
Bristol, Tennessee 37620

Tom Vorholt
Ingram Barge Company
4400 Harding Road
Nashville, Tennessee 37205

David L. Brown
America Outdoors
P.O. Box 20847
Knoxville, Tennessee 37939

Kate Marx
TVA
400 West Summit Hill Drive, WT 11A
Knoxville, Tennessee 37902