Adn Hatchery Article

State slams hatcheries VIOLATIONS: Prince William Sound Aquaculture called the issues dated or overblown. By WESLEY LOY Anchorage Daily News Dec. 26, 2006 State officials have accused Alaska's largest salmon hatchery operator of numerous violations, some of them termed " egregious ." The Prince William Sound Aquaculture Corp., based in Cordova, has failed or refused to abide by its state permits, has been uncooperative with state officials and has failed to deal with what the state calls "large-scale straying" of hatchery -born pink and chum salmon, according to the Alaska Department of Fish and Game. Such strays can mix with wild salmon returning to their natal streams, potentially scrambling their genetic makeup or introducing disease, the department says. The state officials also said the hatchery operator repeatedly failed to manage its salmon harvests to cover its costs, forcing it to borrow $3 million from the state two years ago, adding to the $25 million in state loans the operation already had. Fish and Game Commissioner McKie Campbell's staff recommended "a strong course of action" against the hatchery operator, such as creating an oversight committee and revoking some of its permits for releasing young salmon into the sea. Hatchery managers, in a reply last week to Campbell, said the problems the state raised are either outdated or overblown. "We're very anxious to sit down with the commissioner and talk through some of these issues," said David Reggiani, general manager for the Prince William Sound hatchery operator. The operator is a private, nonprofit corporation started in 1974 as a way to boost salmon catches for commercial, sport and subsistence fishermen. It operates four remote hatcheries across the Sound, plus a fifth far inland in the Copper River basin. Three of the hatcheries are state-owned, with the corporation running them under contract. Each year, the aquaculture corporation releases close to 600 million young pink, chum, sockeye and silver salmon into the Pacific Ocean, with some 24 million returning as adults that commercial, sport and subsistence fishermen can catch.

According to a Dec. 1 letter Campbell sent to Reggiani and the aquaculture corporation's board chairman, commercial gillnetter George Covel, the state conducted a review of the hatchery operations and found numerous problems. They include: • Overstocking some lakes with sockeye fry. • Harvesting salmon outside designated areas in potential violation of state law. • Failing to provide scientific data to the state. • Failing to deal with straying of hatchery fish returning to the Sound. The state launched projects to monitor the straying and found large numbers of pink and chum salmon going into wild salmon areas in the Sound, according to a Fish and Game report. Denby Lloyd, the state's commercial fishing director, said the state hasn't come to any conclusion about whether the straying is actually hurting wild salmon stocks. No decision has been made on suspending permits for some of the aquaculture corporation's release sites as a way to control straying, he said. Reggiani and Covel, in a written reply to Campbell, generally dismissed the state's complaints as past issues they thought had already been squared away or isolated events that haven't been repeated. Yes, they wrote, about 200 fish were harvested and then released in 2004 in an unauthorized bay, but that was because of a misunderstanding with Fish and Game staff. Reggiani said revoking permits would be premature, adding that he was unaware of any study showing harm to wild salmon runs caused by strays. He said the state's characterization of the straying as "large-scale" was subjective. Hatchery operators can minimize the mixing of fish born in captivity and in the wild by siting hatcheries and release sites well away from known wild salmon runs and by staging releases so that returning hatchery salmon don't mix with wild returns. Reggiani added that the aquaculture corporation's financial health is good, having improved consistently since 1997. However, his corporation's financial reports for fiscal 2003-05 filed with the IRS show worsening losses each year. That includes a $1.8 million loss on $6.4 million in revenue for the year ending March 31, 2005, the most recent report available. At that time, the corporation had a negative net worth of $18.7 million. According to a study by economic consulting firm the McDowell Group, commercial fishermen, processors and businesses catering to sport anglers earned

an estimated $23 million off the corporation's hatchery salmon in 2004, according to the letter from Reggiani and Covel.