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Aluminum Debate gets Messy by Chris Mulick, Herald Olympia Bureau Tri-City Herald, June 6, 2001

Stakeholders agree the messy debate over the future of the aluminum industry threatens efforts to preserve the benefits that the Northwest gets from its federal hydropower system.

But that's not stopping anyone from taking up arms.

The war of words has been peppered with scandal-laced press releases, biting rhetoric and projections for cataclysmic economic disruptions.

While U.S. lawmakers from the Northeast and Midwest call on the Bonneville Power Administration to sell its electricity at current market rates, Northwest stakeholders are doing little to foster a unified response.

"We have to be careful," said U.S. Rep. George Nethercutt, a Spokane Republican and co-chairman of the Northwest Energy Caucus. "That all feeds the opponents of Bonneville."

The agency is in the process of negotiating new power sales contracts that will take effect Oct. 1.

BPA is caught in a pickle, squeezed by higher-than-expected demands from public utilities and rural electric cooperatives and pressured to give more power that it wants to Northwest aluminum and chemical companies.

The upshot is that BPA is oversubscribed by 3,000 megawatts. It wants the direct service industries -- primarily aluminum plants -- to sell back the 1,500 megawatts they are scheduled to buy for about two years. The move would save the agency from buying that power on the market, and jacking up rates accordingly.

But the Northwest Power Alliance, the direct service industry's public relations arm, said smelters wouldn't be likely to restart after being off-line so long, making any layoffs permanent.

Alliance Director John Wilson will debate the issue with Jerry Leone, manager of the Public Power Council, at today's noon meeting of the Pasco-Kennewick and Columbia Center Rotary clubs at the West Coast Hotel in Kennewick. The event is open only to members and their guests.

Both sides are appealing to consumers by firing up public relations machines. They're hoping voters will appeal to their elected officials, who could apply heavily sought political pressure.

In the latest twist, 25 state lawmakers sent a letter to BPA Administrator Steve Wright opposing the "tiered" rate proposals backed by the aluminum industry.

Under that plan, all Bonneville customers would pay only the inexpensive cost of production for 75 percent of their power and the sky-high market price for the rest.

Critics say the aluminum companies would simply shut down every fourth potline, saddling customers of public utilities and electric coops with explosive energy bills.

Earlier this legislative session, many of those same lawmakers were among 90 who signed letters supporting tiered rates, even though some didn't know what they were.

Among the 90 were Kennewick Sen. Pat Hale, Walla Walla Sen. Mike Hewitt, Richland Rep. Shirley Hankins and Walla Walla Rep. Dave Mastin, whose districts are served by public utilities and are not home to aluminum companies.

Hale led the effort to get the new letter, also signed by Hewitt and Walla Walla Rep. Bill Grant.

Aaron Jones, manager of the Washington Rural Electric Association, gathered signatures for the new letter. He also lobbied for a watered-down version that drew 93 more signatures, mostly somewhat reluctant lawmakers who feared the debate would only further divide the region.

"I didn't want to get into a letter-writing campaign," Jones said, wary of how it may look in Congress. "It creates an opening."

This isn't the first time the region has squabbled over allocation of Bonneville's power. There have been long-running divisions between various factions that reveal themselves from time to time.

"It's just an unfortunate way we do business," said Bob Royer, a spokesman for Seattle City Light.

Steve Hickok, Bonneville's chief executive officer, said it's these kinds of challenges that galvanize support among the Northwest congressional delegation.

So far, six of eight Northwest senators have backed Bonneville's power buy-back plan, though the support of Sen. Maria Cantwell, D-Wash., is still is up for grabs.