Monday, February 12, 2018

President's budget proposal alters funding for waterways projects (Updated)

This news release from the Waterways Council Inc. showed up in my inbox a little while ago. It seems President Trump wants to make some changes to the way waterways projects are funded and  the rate at which construction will take place.

It wouldn't affect the Ohio River itself, but there are projects on the tributaries that would have to wait.

Following is the text of the news release.


Washington, DC – The FY2019 budget request to Congress released by President Trump today proposes to cut more than 22% of the U.S. Army Corps of Engineers’ Civil Works funding, at $4.78 billion, down from the FY2018 Senate Appropriations Committee’s funding level of $6.16 billion.

For the Corps’ Construction account, $1.02 billion was requested, reduced from the FY2018 Senate Appropriations Committee’s funding level of $1.7 billion.

The FY2019 budget requests $5.25 million of the $114 million collected in 2017 from the Inland Waterways Trust Fund (IWTF) with only the Olmsted project to be funded (at $35 million to completion).  The budget estimates that the IWTF will collect $104 million in FY2019.   The Balance in the IWTF is estimated to grow to $340 million, if this budget is followed.  Work at the other three priority navigation projects under construction  – Lower Mon, Kentucky Lock and Chickamauga Lock – would cease and workers would be laid off  if the budget is accepted.

The FY2019 budget proposes a New User Fee on Inland Waterways.  The proposal would establish a vessel user fee to supplement existing revenue from the $0.29 per-gallon diesel fuel tax to help finance the users' share of anticipated capital investment projects, as well as 10% percent of the cost of Operations and Maintenance (O&M) – historically a Federal responsibility –  activities on the inland waterways.  This proposal would raise approximately $1.7 billion over a 10-year window. 

The FY2019 budget proposes $2.07 billion for O&M,  a cut from the FY2018 Senate Appropriations Committee funding level of $3.52 billion ($760 million would go toward inland waterways).

Also, the President’s budget request for FY2019 would reduce, by half-a-billion dollars, the Harbor Maintenance Tax rate, from $1.6 billion collected into the Harbor Maintenance Trust Fund currently to around $1.1 billion “to better align estimated annual receipts from the tax with recent appropriation levels for eligible expenditures from the Harbor Maintenance Trust Fund. Reducing this tax would provide greater flexibility for individual ports to establish appropriate fee structures for services they provide, in order to help finance their capital and operating expenses on their own,” according to the budget documents.

WCI President & CEO Mike Toohey said, “this dour FY2019 budget represents a clear disconnect from the encouraging rhetoric made by President Trump about the inland waterways in the State of Union address and at his historic visit to the Ohio River in June 2017,” he said.  “If accepted, this budget, like the infrastructure proposal issued earlier today, hamstrings America’s ability to compete in the world,” he continued. 

Waterways Council, Inc. is the national public policy organization advocating for a modern and well-maintained national system of ports and inland waterways.  The group is supported by waterways carriers, shippers, port authorities, agriculture, labor and conservation organizations, shipping associations and waterways advocacy groups from all regions of the country.  Visit       


The Corps of Engineers issued its own statement on the president's budget. Here are two  paragraphs about inland waterways:

Invests in Existing Water Resources Infrastructure. The Budget provides $2.9 billion for the operation and maintenance of existing infrastructure and improving its reliability. The Budget prioritizes the operation and maintenance of key infrastructure, including navigation channels that serve the Nation’s largest coastal ports and the inland waterways with the most commercial use, such as the Mississippi and Ohio Rivers and the Illinois Waterway.

Reforms Inland Waterways Funding. The Administration has proposed to reform the laws governing the Inland Waterways Trust Fund, including an annual per vessel fee to sufficiently increase the amount paid by commercial navigation users to meet their share of the costs of activities financed from this fund. The current excise tax on diesel fuel used in inland waterways commerce, which was recently increased to 29 cents per gallon, will not produce the revenue needed to cover these costs. The Budget also proposes paying for 25 percent of ongoing maintenance work for these waterways from the Trust Fund, making the costs of using the waterways more comparable to other means of transportation.


When the hydroelectric power plant at the Smithland Locks and Dam went into commercial operation last summer, it marked the end of this phase of hydroelectric development on the Ohio River.

The hydroelectric power plant at the Willow Island Locks and Dam.

The small run-of-river power plants won’t overtake coal as the principal power generator along the river as long as coal is burned, but taken together, they are a significant source of electricity in the Ohio Valley.
Here’s a chart of the ten largest power plants along the Ohio River, ranked by their net generation in 2016, the last year for which all numbers are available. All ten are primarily coal-fired unless otherwise noted.

The last line combines all nine hydroelectric plants for comparison purposes.

Power Plant2016 Generation (Megawatt hours)2006 Generation (Megawatt hours)
Beaver Valley *15,219,57412,135,311
Gen. James M. Gavin13,955,08816,671,669
Bruce Mansfield11,614,35418,628,146
Hanging Rock **9,716,9721,006,760
H.L. Spurlock8,560,9887,610,353
Trimble County ***8,555,4034,526,798
All hydro plants2,536,6001,800,070
* Nuclear
** Natural gas
*** Primarily coal with some natural gas
Source: Energy Information Administration

In case you were wondering, the 2.5 million megawatt hours of electricity produced by the hydroelectric plants would put them 25th on the overall list of plants along the river.

As you also probably noticed on the chart, production at the largest coal-fired plants dropped in the past decade as coal lost market share to natural gas and renewables.

The year 2016 saw three hydroelectric plants — Willow Island, Cannelton and Meldahl — go online. Those three and Smithland were all developed by American Municipal Power.