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Senators Block Bush Plan to Boost Northwest Power Rates by Christopher Schwarzen, Times Snohomish County Bureau Seattle Times - March 3, 2005

Northwest senators say they've blocked a White House proposal to sell federally produced electricity at market rates — a plan they say could have cost the region $1.3 billion and dealt a severe economic blow.

President Bush announced last month that he wanted four federal utilities, including the Bonneville Power Administration, to sell electricity at market-based rates, rather than at cost as they do now.

The plan would have raised by 20 percent per year the rates utilities such as Seattle City Light and the Snohomish County Public Utility District pay for power.

But after heavy bipartisan pressure against the proposal, senators from Idaho and Oregon said yesterday they have assurances that the proposal won't land in any Senate budget bill.

Sen. Judd Gregg, R-N.H., the Budget Committee chairman, made the announcement yesterday, according to Sens. Gordon Smith, R-Ore., and Larry Craig, R-Idaho.

"There was very heavy opposition to the proposal," said Chris Matthews, a Smith spokesman. "Even the chairman of the Senate Energy Committee said he would not support the proposal."

He referred to Sen. Pete Domenici, R-N.M.

Craig's office said the senators talked yesterday and Gregg confirmed his decision.

"We're happy to have [Gregg] on our side, declaring the issue dead in the Senate," said Dan Whiting, a Craig spokesman. "We tried to see if House members would announce something similar, but they don't seem ready yet."

White House spokesman Allen Abney said last night that the Bush administration was aware of the Senate's move but stood by the proposal.

"Our belief is that this is a sound and reasonable policy," Abney said. "We'll work on through this with Congress."

But Sen. Maria Cantwell, D-Wash., reiterated the effects such a plan would have on the region.

"The Bush rate hike would have a devastating impact on our economy and jobs," said Cantwell, a member of the Senate Energy Committee. "I will not rest until the administration's plan is dead and gone."

Bonneville, which supplies nearly half of the Northwest's electricity, sells power at cost: about $32 a megawatt-hour as opposed to the market-based price of $45 that energy retailers charge.

Under the president's budget plan, prices would have gone up 20 percent a year for three years for local utilities such as Seattle City Light and the Snohomish County PUD.

They likely would have passed on the increase to residential and business customers.

The extra money Bonneville and the three other agencies made would have gone directly to the U.S. Treasury to pay down the federal deficit, projected at slightly more than $400 billion this year.

The Northwest Power and Conservation Council reported earlier this week that such a plan could result in the loss of more than 13,000 jobs in the region, particularly in energy-intensive industries.

Those industries, including aluminum manufacturers, are still recovering from economic losses from the West Coast energy crisis of 2000 and 2001.

Residential customers also are languishing under high power rates that only recently have been controlled by local utilities' belt-tightening.

Bonneville officials, who took no position on the proposal, said they were unaware of Gregg's announcement yesterday.

Officials at the Snohomish County PUD, which buys 80 percent of its electricity from the federal utility, said they appreciated the Northwest congressional delegation's support in fighting the plan.

"Clearly, this plan would create a lot of additional hardship in the region for businesses and residents — particularly those already struggling with higher rates," PUD spokesman Neil Neroutsos said.