Battle brews among major Washington power users

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Wednesday, May 16, 2001 - 02:27 p.m. Pacific

Battle brews among major power users

By The Associated Press

Leaders of public power utilities, schools and the Sierra Club are among those who backed a letter yesterday asking the Northwest congressional delegation to oppose a tiered electricity-rate structure proposed by the aluminum industry.

Aluminum companies insist they're only asking for a fair deal.

At issue is power marketed by the Bonneville Power Administration (BPA) and how much it will cost when new rates take effect Oct. 1. BPA markets power produced by 29 dams on the Columbia and Snake rivers and by one nuclear-power plant.

The problem began when Bonneville realized it had signed contracts to provide 11,000 megawatts of power but will have only 8,000 to sell. That means the agency must cover the 3,000-megawatt shortfall by buying power off the wholesale power market during the West's current power crunch - an expensive proposition that could easily double rates for retail customers of public utilities.

Those utilities and rural electric cooperatives are supposed to get first dibs on Bonneville power, according to the 1980 Northwest Power Act.

Bonneville asked Northwest aluminum smelters to shut down for two years. They need 1,500 megawatts, so removing them from the equation would wipe out half the shortfall. In return, the BPA would pay the wages for idled workers.

The Northwest Power Alliance - an aluminum-industry organization - wants a different deal.

Under its proposed rate plan, all customers would get 75 percent of their Bonneville power share at the cheap cost of hydroelectric production. They'd then have to pay whatever it costs the agency to buy the other 25 percent.

Public utilities, however, say the aluminum companies could simply curtail operations so they never would have to pay more than the cheap rate. If that doesn't happen, wholesale power rates from BPA could increase as much as 250 percent, and public utilities would have to jack up rates simply to keep the lights on, yesterday's letter said.

Both sides have hired public-relations companies and the battle is being waged via radio ads and news releases. Newspaper ads are planned.

Bonneville is supposed to make a decision next month.

"Let's all face the power problems of our region fair and square," yesterday's letter read.

Those who signed included representatives from the Public Power Council, the Sierra Club, Seattle City Light, the Snohomish Public Utility District, the Washington Association of School Administrators, the Washington State Grange and the Washington State School Directors Association.

Already, six of the Northwest's eight U.S. senators have sent a letter to Acting BPA Administrator Steve Wright backing his proposal that the aluminum smelters shut down temporarily.

John Wilson, director of the aluminum-industry alliance, says Bonneville's approach will effectively kill the industry in the Northwest, along with 7,500 jobs. Public-power advocates reply that rate increases could jeopardize as many as 60,000 jobs.

Copyright © 2001 The Seattle Times Company

http://seattletimes.nwsource.com/html/localnews/134295810_rateletter16m.html

-- Martin Thompson (mthom1927@aol.com), May 17, 2001


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