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Cheap BPA Power Unites Northwest

by Jeff Mapes, The Oregonian staff
The Oregonian, February 2, 2001

The leaders of Washington, Oregon, Idaho and Montana
find a common current at an energy summit in Portland

Northwest governors and legislators, increasingly fretful about losing the benefits of the region's relatively low-cost hydropower, on Thursday agreed to seek a firmer regional grip on the Bonneville Power Administration.

The four governors joined more than 40 legislators from Oregon, Washington, Idaho and Montana in agreeing to explore ways to ensure that the Northwest does not lose its first rights to electricity supplied by the federal power marketing agency headquartered in Portland.

The officials, meeting in Portland at the start of an energy summit sponsored by the Western Governors Association, set aside differences over how BPA electricity is allocated among the states to warn of a growing threat to the region's hydropower.

"It is an asset that could be seized at any time from outside the region," Washington Gov. Gary Locke said. "We need to keep this power and the benefits of Bonneville for the people of the Northwest."

Gov. John Kitzhaber and Oregon Senate President Gene Derfler, R-Salem, who have spearheaded efforts to bring regional leaders together on the BPA, said they hoped the pact eventually could lead to a Northwest takeover of the agency.

Right now, "the federal government is telling us how much water to release, how much power to generate, where to send the power and what we're selling it for," Derfler said. "If that doesn't scare you, I don't know what does."

The agreement reached Thursday stops far short of proposing exactly what should happen to the BPA -- an issue that is in the hands of Congress and the White House, in any case. Kitzhaber said he now hoped to create a regional plan that could be taken to Congress.

The energy crisis that created rolling blackouts in California -- and shipments of power south at a time of year when California usually sells surplus power to the Northwest -- clearly has brought Northwest governors and legislators together.

"We are determined to stick together in the Northwest," said Montana Senate President Tom Beck, a Republican who led the meeting. "We do not want to take any chance of losing the largest power grid in the Northwest to some out-of-state interest."

For the past two years, Derfler has urged a regional group of legislators studying governance of the Columbia River system to move toward a takeover of the BPA, saying the region's manufacturing and high-tech economic base is dependent on the relatively cheap electricity. The BPA provides about half of the electricity consumed in the Northwest.

More than once, the Northwest has fought off attempts in Congress to force the region to pay higher costs for BPA electricity. Critics from other regions say they also should reap the benefits of the dams built by the federal government.

But any regional agreement on the BPA has been frustrated partly by Washington state's concern that it would no longer get the lion's share of the agency's electricity. Washington receives about 57 percent of BPA electricity because the state relies more heavily on public utilities, which get first call on Bonneville power. Oregon, dominated by investor-owned utilities, gets about 30 percent of BPA electricity, with the rest going to Idaho and Montana.

As energy prices have increased, however, and the federal government has ordered power sales to California, attitudes in Washington have changed.

Washington Rep. Jim Buck, R-Port Angeles, said the states needed to unite in the face of new threats instead of arguing with one another, which he compared to the "worst team in the NFL arguing about who is going to divvy up the Super Bowl spoils."

Kitzhaber and Derfler told the Washingtonians that as the region studies the future of the BPA, it won't involve the issue of how power is allocated among the states. "We are not after your power," Derfler told Locke. "We are not trying to change your allocation."

Still, Locke did say after the meeting that he didn't necessarily like the idea of a regional takeover of the BPA.

"Low-cost reliable power for the Northwest is the No. 1 objective," Locke said. "If we can do that without changing the current structure, that would be best."

Idaho Gov. Dirk Kempthorne and Montana Gov. Judy Martz also agreed to the resolution presented by the legislators, which called for a panel to be created to "develop a joint strategy to secure the benefits of the Columbia River hydroelectric system for the region."

As the conference got under way Thursday evening, Western governors seeking relief from soaring wholesale electric power prices found an unlikely ally in keynote speaker J. Bennett Johnston, a former Democratic senator from Louisiana and architect of the 1992 Energy Policy Act, which deregulated wholesale electricity markets.

Johnston, a staunch free-market advocate, called for federally imposed caps on wholesale electricity prices. Many Western governors, including Kitzhaber, Locke and California Gov. Gray Davis, have pushed for short-term price caps. But the Federal Energy Regulatory Commission, which could impose such regulation, has been reluctant to respond.

Jeff Mapes, The Oregonian staff
Gail Kinsey Hill of The Oregonian staff contributed to this report.
Cheap BPA Power Unites Northwest
The Oregonian, February 2, 2001

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