Water and power development on the Sacramento River has depleted the water supply and caused salmon stocks to dwindle rapidly. To make up for the water depletion, cold water is released into the river from Lake Shasta, a federal reservoir. Until modifications are made to the Shasta Dam, however, part of the water released must bypass the dam's power generators. The Western Area Power Administration, the federal agency marketing Bureau of Reclamation hydropower in California, purchases more expensive power on the open market to make up the deficiency, and passes the costs of purchased power on to local power customers.

Rep. Vic Fazio (D-CA) succeeded in adding a provision to the Energy and Water Development Appropriations bill to pass these costs on to the nation's taxpayers instead, and to do so retroactively from 1986. That rebate alone is estimated at $11 million. Conservationists have generally argued that environmental mitigation costs associated with federal water projects should be borne by the irrigators and other water and power consumers, not the general taxpayers.

When the Appropriations bill was before the House on June 19th, Rep. Tom Petri (R-WI) offered an amendment to strike the rebate and cost-waiver provision. In addition, conservationists, Petri, and other House members argued that federally generated hydroelectric power in California is already a bargain, and that for federally-marketed power in the Pacific Northwest such fishery mitigation costs are included in rates of federally-served power customers. However, the Petri amendment was defeated by a vote of 140-277 on June 19. Yes is the pro-environment vote.