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Department of Energy Targets Bonneville Power for Third Audit by Associated Press Capital Press, August 15, 2003

PORTLAND -- The Bonneville Power Administration is facing a third audit as congressional scrutiny of federal electricity marketing agencies increases.

Auditors from the Department of Energy appear most interest in transmission costs, said BPA vice president Jeff Stier.

Separate audits by the congressional General Accounting Office already are under way to examine overall Bonneville finances and cuts in salmon recovery program spending.

In a July interim report, the GAO said rising Bonneville costs and financial problems could prompt some customers to buy power elsewhere. It also said the risk is higher that BPA could miss a debt payment to the U.S. Treasury.

But Stier disputed the interim report, saying Bonneville can make its $788 million Treasury payment this year.

He also said that the GAO concerns about the risk of losing customers "was not supported by any quality analysis whatsoever."

The BPA raised rates 45 percent after suffering huge finanical losses from the Western energy crisis and drought of 2000-01. Another 5 percent increase is set for the beginning of the new federal fiscal year on Oct. 1.

Utilities and industries that buy BPA power say the agency should cut costs rather than raise rates.

The agency is under scrutiny by a House subcommittee led by Reps. David Hobson, R-Ohio, and Peter Visclosky, D-Ind. Visclosky belongs to the Northeast-Midwest Coalition, a group that has claimed BPA and other federal power marketing agencies in the South and Soutwest get unfair taxpayer subsidies.

In addition, Northwest Indian tribes have complained to Sens. Daniel Inouye, D-Hawaii, and Ben Nighthorse Campbell, R-Colo., that Bonneville is not spending enough on fish conservation.

The tribes have been urging the BPA to raise rates even higher to maintain or expand salmon programs in the Columbia River basin, home to 29 federal hydroelectric dams that generate most of the electricity Bonneville sells.

The federal agency markets nearly half the electricity used in the Pacific Northwest.