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Energy Bill Passes Senate; BPA Scores Borrowing Victory by Bill Rudolph NW Fishletter, April 30, 2002

After six weeks of often rancorous debate, the Senate has approved a comprehensive energy bill, by a vote of 88 to 11. In spite of the strong vote, few members were completely happy with the bill. Democrats complained about watered-down fuel efficiency standards, while Republicans grumbled about the defeat of a plan to drill for oil in the Arctic National Wildlife Refuge. But both sides swallowed their objections and began planning a new assault, to be launched when the Senate and the House begin negotiating a compromise between two vastly different energy bills.

Several members of the Senate's Northwest delegation set aside their grievances to vote for the bill after Senators Maria Cantwell (D-WA) and Ron Wyden (D-OR) pulled off a last-minute coup for Bonneville. Moments before the Senate was slated to vote on final passage, the body accepted an amendment that would increase BPA's borrowing authority by $1.3 billion.

The amendment makes "a significant new investment in the Northwest's economy and environment," Cantwell said. "This borrowing authority will allow the BPA to make much-needed improvements in its transmission grid, modernizing lines and reducing bottlenecks. The borrowing authority will also allow BPA to fund new conservation and renewable energy initiatives and make improvements at existing hydro facilities to make them more efficient and fish friendly."

Before the bill passed, Bonneville took a hit with the release of the "Green Scissors 2002" report, which called on Congress to reject BPA's request for additional borrowing authority. The annual report, prepared by Taxpayers for Common Sense, Friends of the Earth and the US Public Interest Research Group, listed 78 budget items totaling $54 billion that it called "wasteful and environmentally harmful spending." Among them was the $700 million in additional borrowing authority included in some versions of the federal budget.

The Green Scissors report said Bonneville's current debt of $13.5 billion "a tremendous burden on US taxpayers," and yet, claimed the report, "the benefits accrue to only one region of the country." Instead of seeking additional borrowing authority, Green Scissors recommended that Bonneville "identify alternate means to ensure that resources in the Pacific Northwest are available to conduct a cost-effective capital investment program, financed by the beneficiaries of the system rather than by the federal Treasury."

Bonneville has asked for a $2 billion boost in its current $3.75 billion borrowing authority. The Administration and the House budgets contain an increase of $700 million. The budgets must be reconciled before the end of the fiscal year.

The Green Scissors document sharply criticized Bonneville's "environmentally destructive forms of electricity generation" and its fish programs, calling the federal dams "the primary cause of the decline of endangered salmon in the Columbia and Snake Rivers."

BPA spokesman Ed Mosey called the report "the usual diatribe that misconstrues the entire situation for political purposes." Noting that a long-time BPA opponent, the Northeast-Midwest Coalition, helped write the report, Mosey said, "they want to usurp the value of the federal (hydro) system from Northwest ratepayers.

"They mistakenly connect low Northwest rates with what they call the raw deal they are getting. But as we know, there is nothing subsidized in our federal system. We repay the entire debt, with interest," said Mosey.

Something For Everybody
The comprehensive energy bill approved last week offers a broad range of tax incentives designed to boost production and conservation, including investment tax credits for clean coal and fuel cell technologies, as well as oil and gas production. It also re-authorizes the Price Anderson Act and increases federal assistance for the next generation of nuclear plants.

Idaho Republican Larry Craig was successful gaining approval for his amendment to ease the hydro relicensing process. Co-sponsored by Gordon Smith (R-OR), the amendment allows a license applicant to propose the most cost-effective operating alternative that meets fish and other environmental mandates. And it requires natural resource agencies to give serious consideration to those proposals.

Calling it a "critical first step," Craig said the amendment would "provide an important opportunity for hydropower owners and operators to meet current environmental standards through alternatives that could save energy and costs." He insisted that the amendment would not change environmental standards, since natural resource agencies would still have the final say. However, if the license applicant could show its proposal met environmental mandates and was cost-effective, the resource agencies would have to accept the proposal.

Linda Church Ciocci, head of the National Hydropower Association, praised the Senate action, saying it "provides meaningful change in a process that is far too unwieldy and unpredictable for anybody's liking."

Environmental groups opposed Craig's amendment. "We believe this language, if it became law, would make it harder for the public and environmental regulatory agencies to secure environmental improvements at hydropower dams during the relicensing process," said Eric Eckl, a spokesman for American Rivers. Eckl said American Rivers and other groups would lobby to remove Craig's amendment during the upcoming conference.

Craig voted for the comprehensive bill, but echoed fellow Republicans' criticism of its failure to permit drilling for oil in ANWR. "Unfortunately, the Senate bill does not adequately address America's short-term energy needs, particularly the critical need to reduce our nation's dependence on foreign oil. I think this bill can be improved in conference and will be worth getting to the President's desk," said Craig.

The conference with the House promises to be even more arduous than the fight to get the bill through the Senate. The House energy bill, which carries the President's support, is vastly different than the Senate version. The House strongly promoted drilling in ANWR and offered $33 billion in tax incentives, primarily aimed at increasing production from oil, coal, natural gas and nuclear energy. -Lynn Francisco