Power crunch puts the BPA under attack\

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Larry Swisher: Power crunch puts the BPA under attack\

By LARRY SWISHER For The Register-Guard

WASHINGTON - Because of the energy crisis, the Northwest's cheap federal hydropower is under attack once more in Congress, where members from other parts of the country malign it as a taxpayer subsidy.

"BPA is selling federal property that rightfully belongs to every U.S. taxpayer to a favored minority of businesses and communities for less than two-thirds of its market value," the Northeast-Midwest Institute said in a polemical broadside disguised as a report. "The result is no different than had Northwesterners picked the collective pocket of the rest of us."

Financed by 150 members of Congress and foundation grants, the think tank did not identify who authored its 58-page booklet, titled "Rethinking Bonneville." Executive director and avid Bonneville Power Administration critic Dick Munson gave a one-man press conference and rattled off parts from memory, however.

Should conscientious Northwest ratepayers feel ashamed for being such blood-sucking leeches on the body politic? Hardly. Although they are indeed fortunate that congresses and presidents since FDR have supported public power for more than 65 years, they pay for all of the BPA's expenses and more.

But the group apparently hopes some of its shotgun blast will ding the target and result in national energy bill provisions that are harmful to the Northwest or make concessions to the Northeast and Midwest. For example, members from those regions have been pushing for creation of a federal heating-oil reserve to keep winter prices down; already, their constituents receive most of the annual $2 billion in federal aid under the Low Income Home Energy Assistance Program.

The BPA's electricity is cheap because it's a nonprofit government agency, that's all. But by law, all costs of power generation and transmission and related environmental mitigation must be, and are, covered by revenues. That's one reason why the Northeast-Midwest scheme to raise the BPA's prices and sell its power to California and other high bidders - with profits going to the Treasury and then supposedly to many worthy causes - stands little or no chance of going anywhere in Congress. A bill has not even been introduced yet.

The Northwest has benefitted from federal power but so has the federal government. Since the first big dams were built on the Columbia River in the 1930s, the region has paid back $16.3 billion for their cost plus interest, and still owes $22 billion to the Treasury and to nuclear power plant bondholders.

In addition, since 1978, when the last dam on the lower Snake River was completed and sent upriver salmon runs into a death spiral, BPA ratepayers have spent another $2.2 billion to try to save them from extinction. Of that, $832 million went for capital improvements and various fish programs, and $1.4 million was the estimated cost of power generation lost because of water being spilled over dams and higher flows during spring migration.

The federal government has only recently started to kick in substantial funding for salmon recovery.

The BPA's annual budget of $2.7 billion is covered by its customers. The only subsidy has been the BPA's ability to borrow money at reasonable interest rates from the U.S. Treasury to finance construction of new transmission and other facilities. New loans must be approved by Congress.

The Bush administration's energy policy also throws a new wrinkle into the debate over the BPA. President George W. Bush, to be consistent with his market-oriented energy plan and refusal to place a temporary price cap on Western electricity, should force the federal agency to act like a private wholesale energy supplier, Munson said. Higher costs would send the proper "market signals" for consumers to conserve, he said.

The BPA sold emergency power to California at a healthy profit, Munson noted. But the BPA can't be expected to sell power to California during a time of distress, then turn around and replace it at a much higher cost to its Northwest consumers, Rep. Jay Inslee, D-Wash., said earlier this year in response to similar gouging charges. "Bonneville has no incentive to drive up prices, since we in the Northwest are being hit very hard by the dysfunctional energy market as well," he added.

The Northeast-Midwest's proposal would undo 65 years of support for co-ops, municipal and other public power utilities and amount to a "huge tax increase" of hundreds of millions of dollars on the Northwest, BPA Vice President Jeff Stier said.

The federal hydropower system and the BPA were created not only to help electrify the rural Northwest but also to provide a competitive yardstick for comparing the operations and rates of privately owned utilities with public ones.

"That's still a valid function for public power and Bonneville, as a wholesale supplier," Stier said. "It keeps them honest."

The real blood-suckers are not BPA's ratepayers but the private energy companies that afflict the West Coast's economy and consumers.

Larry Swisher, a columnist based in Washington, D.C., writes for Pacific Northwest newspapers.

http://www.registerguard.com/news/20010611/ed.col.swisher.0611.html



-- Martin Thompson (mthom1927@aol.com), June 12, 2001


Moderation questions? read the FAQ