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Economic and dam related articles

Energy Summits Generate Worries

by Gail Kinsey Hill & Joe Fitzgibbon
The Oregonian, February 22, 2001

Congressional delegation members and others discuss how the power crisis affects Oregon

As an electricity shortage maintains its grip on the West, everyone from federal regulators to governors to Eastern Oregon farmers has struggled to find short, immediate solutions.

On Wednesday, members of Oregon's congressional delegation took their turn at the high-voltage issue, with energy summits in Hood River County and Portland.

But, like the summits, roundtables and forums before them, the Wednesday gathering produced more worries than answers.

"Somehow, we have to find our way through this," said U.S. Rep. Greg Walden, R-Ore., as the summit, hosted by Walden and U.S. Sen. Gordon Smith, R-Ore., came to a close.

Walden and Smith chose Bonneville Dam for the backdrop for their summit. U.S. Reps. Earl Blumenauer and David Wu, both Democrats, picked Bonneville Power Administration's auditorium in Northeast Portland.

Although the meetings covered a wide range of issues, the economy dominated the talk among utility executives, farmers and steelworkers who gathered in the Cascade Locks auditorium near the 63-year-old, 1,200-megawatt Bonneville Dam.

The electricity crunch, which began squeezing the Northwest last summer, already has hurt the economy. Energy-intensive manufacturers, including aluminum smelters, pulp and paper mills and chemical producers, have been hardest hit. The aluminum industry alone has laid off more than 1,000 workers in Oregon and Washington.

"It's really devastating," said Ken Berry, president of Steelworkers Local 8147 in Goldendale, Wash. "We do need a solution."

More than 300 workers have been laid off at Goldendale Aluminum in Washington, Berry said, casualties of sky-high wholesale electricity prices and an energy-intensive production process.

Many smelters in the Northwest have found they're better off selling unused electricity than they are producing aluminum.

Through an agreement with power-marketer Bonneville Power Administration, parent company Golden Northwest Aluminum resold the power and used the proceeds to pay workers for lost wages and to invest in new forms of generation.

Across the Columbia River in The Dalles, Golden Northwest idled workers at a second smelter under a similar agreement with BPA.

"We're able to maintain some dignity," Berry said. "But I'm not here to express a willingness to continue to do that. . . . I want to work."

The remarketing deal ends in September, and no replacement contract has been reached.

Steve Hickok, BPA's chief operating officer, said the agency and utilities aggressively have been buying back power previously sold to industrial customers other than aluminum. All told, the repurchased power amounts to 3,000 megawatts, a quantity almost identical to the estimated electricity shortage this winter.

"The reason the lights are on in this room today is that more than 3,000 megawatts of Northwest industrial load is shut down," Hickok said.

BPA may forge similar agreements for the next year or two, but Hickok said the possible economic repercussions could be severe.

"What's going to happen to the rural Northwest economy?" he asked. "That's what we're playing with."

BPA has begun contacting farmers to discuss a plan that would pay them to keep fields fallow and energy-intensive sprinkler systems quiet.

Smith, a Pendleton resident and owner of a vegetable processing business, said he has encouraged BPA to pursue the program and would draft federal legislation if necessary.

"We have to explore every opportunity to help our farmers," he said.

Kent Madison, a third generation farmer in Northeastern Oregon, said it may be too late to put such a plan into effect. Within two weeks, spring planting will begin.

In the city
At the Portland summit, the discussion sent a slightly different message: Conserve. Conserve. Conserve.

That's the short-term solution to Oregon's impending energy crisis, a panel of politicians and energy experts announced at the summit convened by Blumenauer and Wu.

"I'm looking at the realities, and the message we're hearing from everyone is that we need a long-term policy that ensures fair energy-rate allocation and renewable energy development," Blumenauer said. "But, for the next year or two, everyone's going to have to become good conservationists."

To that end, officials with BPA said that the utility will spend about $465 million in the next five years on conservation efforts.

"That will even include retrofitting Bonneville Dam to make it more efficient," said Ken Keating, a forum panel member representing BPA.

The three-hour gathering included representatives from public and private utilities, advocates for the aluminum industries, city and state energy administrators and tribal representatives. Several said that home and business conservation efforts in the metropolitan area could save about 1,700 megawatts of the 3,000-megawatt shortfall anticipated for the region.

"If the solar, wind and geothermal projects that are being developed came on line in the next year or two, you could add another 400 megawatts to the power supply," said Rachel Shimshak, representing Renewable Northwest.

Portland Mayor Vera Katz said that recent events in California prompted her to delay support for any efforts to deregulate the power industries in Oregon.

"I'd like us to take a long look at the comprehensive energy policy that the city developed in 1979 when we faced our last crisis," Katz said. "I'm concerned that we will overreact to the immediate problem when there are some major issues to address."

Roy Hemmingway, who represented Gov. John Kitzhaber and a former member of the Northwest Power Planning Council, said that solving the region's energy needs over the long haul won't be easy. "We're facing the most difficult set of problems we've ever seen, including that we don't have a set of institutions that can easily access the dimension of the problem," he said.

Hemmingway and others pointed to high energy prices, near drought conditions in the state, low snowpacks and the refusal of federal regulators to help resolve the Northwest's difficulties.

Olney Patt, Jr., chairman of the Confederated Tribes of Warm Springs, added his support to conservation efforts, but worried that the increasing demand for hydroelectric power will take precedence over fish reclamation projects.

"To the sovereign nations, the issues of fish and power are inseparable," Patt said. "It's distressing to think that we are expecting the highest return of spring Chinook salmon since we began counting and we could lose thousands if we pour water over the dams just to create more electricity."


Gail Kinsey Hill & Joe Fitzgibbon, Oregonian staff
Energy Summits Generate Worries
The Oregonian, February 22, 2001

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