Northwest (will)power shortage

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Friday, June 08, 2001 - 12:00 a.m. Pacific

Guest columnist Northwest (will)power shortage

By Cecil D. Andrus Special to The Times

The news has not been good. The chaos from California's botched deregulation scheme has rippled up and down the West Coast. We in the Northwest, so accustomed to wet winters that provide us bountiful free fuel for our electric system in the spring and summer, now bemoan how dry it has been. And the Bonneville Power Administration - whose grid of high-voltage wires literally ties this region together - says it doesn't have enough electricity to go around. The battle over how to allocate a shortage has led to the inevitable war of words - BPA blaming the aluminum industry, the industry blaming BPA, and the public utilities and rural co-ops, dependant upon mother Bonneville, trying to whip up a ratepayer revolt.

It needs to stop. It is time for all sides to engage in some statesmanship instead of brinkmanship. Rather than steadily escalating the blame game, demonizing a single industry, its companies and its workers, and villainizing public officials caught in the crosshairs of an epic regional shootout, we need to be reaching for common ground. We need some solutions.

As a lifelong Northwesterner who deeply cares about this region, let me be so bold as to start the discussion.

First, we need some mutual policy disarmament. BPA needs to drop its "take it or leave it" ultimatum to the aluminum industry to shut down for two years and then totally bail out of the federal power system by 2006. For its part, the aluminum industry needs to drop its proposal for a two-tiered rate structure because public utilities will fight it regardless of the theoretical economic merits. Finally, there needs to be a cease-fire between all participants. The past is past. Squabbling over it like two children wrestling over a sandbox toy doesn't address the future.

And the future - both short- and long-term - must be our regional focus. We are facing the loss of a multibillion-dollar regional asset, and this region simply cannot afford to lose one of its primary economic assets. BPA and all the customers must work for the good of the entire Northwest.

First and foremost, preservation of Northwest jobs must be a top priority. Not every community has been blessed by a Microsoft or Micron. For too many of our citizens, the jobs you can support a family on have become as endangered as the fabled salmon. It is arrogant to cavalierly toss aside or endanger these kinds of jobs - and, yes, that means even those in the aluminum industry. At the Goldendale smelter in Central Washington, the average aluminum worker earns $42,000. The average wage in Klickitat County is just $18,000. The potentially displaced aluminum worker isn't going to find another 42-grand job with a "help wanted" sign pinned to it.

Second, tying back to jobs, BPA must return to its core mission as an economic engine for the entire region. Cheap electricity is not only our legacy but also one of our few marketplace advantages. Since the 1937 BPA Act, the federal agency has played a pivotal role spreading opportunity throughout the Northwest - from irrigated agriculture for potatoes in my native Idaho to the aluminum smelters to an aerospace industry that helped us win a war. That, after all, was the genesis of BPA and the entire public-power movement. It was not to allocate a shortage or have government pick economic winners and losers. BPA must look for how to meet the needs of all its Northwest customers - public and private utilities, and the so-called direct-service industries.

Third, to meet regional demand both now and longer term, energy efficient conservation must be our first resource. The kilowatt saved today can be sold tomorrow at a fraction of the new generating cost. Toward that end, it is incumbent upon all public and private utilities (to date, only a handful have) to immediately sign the conservation contract amendments presented by BPA to each save 10 percent of the load they are seeking from the federal power system. So far, the utilities have been playing a collective game of chicken - waiting for someone else to go first. It's time for them to sign on the line.

And if conservation and other measures aren't enough, the aluminum industry must demonstrate it will operate for the good of the region - even if that means brief curtailment to close the supply/demand gap. That's already happening with some aluminum companies.

So what are some possible solutions?

We must be much more aggressive about energy efficiency, and the greatest potential is in the commercial and industrial sectors. For example, a pulp and paper mill in Pend Oreille County recently installed a frictionless drive system developed by a Seattle company, MagnaDrive, and slashed its electrical use by 62 percent at the same production levels. How much more energy efficiency can we capture from systems like this? We need to push hard and fast to find out.

Next, BPA needs to begin negotiations with independent power producers who might be willing to sell power to the Northwest at a reasonable rate over the next 24 to 36 months. Why sell power to the Northwest instead of much larger California? Because what you can sell the power for isn't the same as what you get paid for the power. The Golden State has already exhausted its rainy day fund for power purchases, one major private utility is bankrupt, and another is teetering perilously close. Suddenly, selling to a public agency like BPA with the financial backing of the "full faith and credit" of the U.S. Treasury doesn't look like such a bad idea.

Any short-term fix, however, must drive toward a long-term solution that resolves this beyond the 2006 deadline when these new contracts expire. We cannot be pitting regional economic interests against each other every five years or this will devolve into a "dog eat dog" environment in which no one wins and we all lose.

So BPA needs to be more creative, looking at various options including public/private partnerships that can quickly bring on reliable and affordable sources of new electricity. For example, BPA could provide financing for power projects, with a share of the power promised for the federal power system at an agreed-to price and the developer allowed to sell the balance in the open market to make their profit.

In the end, this is not an energy crisis as much as it is a crisis of wills. We know a myriad of ways to generate electricity. Energy is too important to the region's economic lifeblood not to fix this. The questions are, do we have the foresight to put our differences aside, the wisdom to work for the good of the entire region, and the will to make hard decisions fairly?

I call upon my former colleagues, the governors of the four Northwest states, to take the lead in ensuring that the region works together to preserve and protect the benefits of the low-cost hydro system for all of us, rather than sit back and risk the loss of any of our hydro asset to California. And I would urge them to make the compelling case to BPA that the only future that works is one that works for all our regional economic interests.

Cecil D. Andrus is former four-term governor of Idaho and secretary of the Department of Interior during the Carter administration. He directs the Andrus Center for Public Policy at Boise State University.

http://seattletimes.nwsource.com/html/editorialsopinion/134304045_andrus08.html

-- Martin Thompson (mthom1927@aol.com), June 09, 2001


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