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Gregoire Slams Bush BPA Plan by Don Jenkins The Daily News, February 14, 2006

OLYMPIA --- Gov. Chris Gregoire on Monday blasted a Bush administration plan to reduce the federal deficit with revenue currently used to hold down Northwest electric rates, saying the policy change could cost the region more than 1,000 jobs.

"We are just getting out of our recession," she said. "We're on the upward swing. The last thing we need is to have yet again another hit on the cost of energy."

Under the president's 2007 budget proposal, the Bonneville Power Administration will take some of the money it makes by selling surplus hydroelectricity outside the Northwest and make payments on its debt to the federal treasury.

This will change the practice of using all surplus-power proceeds to subsidize rates in the Northwest, including Cowlitz County. Cowlitz PUD receives most of its power from BPA.

The policy change, which BPA says it can do without congressional approval and will benefit ratepayers in the long run, could raise BPA's wholesale rates by 5 to 10 percent in October 2007, agency spokesman Ed Mosey said.

Cowlitz PUD spokesman Dave Andrew said a 10 percent BPA hike would translate into about a 5 percent increase for the utility's ratepayers.

"We'd like to see Bonneville use the (surplus power) sales to keep rates as low as possible. We don't need another rate-raising factor out of our control," Andrew said. The Northwest Power and Conservation Council estimates the plan will cause a 7 percent BPA price increase in 2007 and the loss of 1,120 jobs in Washington, Oregon, Idaho and Montana.

Over the first three years, the plan would cost the average public-utility ratepayer $26.13 a year, according to the council's analysis.

Industries that consume large amounts of electricity and rely on BPA's relatively low rates could be harder hit. All of the energy Longview Fibre Co. receives via Cowlitz PUD comes from BPA.

"The impact on Longview Fibre, and for that matter the entire pulp-and-paper industry, would be substantial," Fibre spokesman Curt Copenhagen said.

Historically, BPA has made as much as $500 million a year by selling surplus power at lucrative rates to California and Southwest states.

BPA says it will continue putting up to $500 million a year into holding down Northwest rates, but the agency estimates reaping another $926 million over 10 years as the price of energy increases.

While taking a hit in the short run because of the policy change, Northwest ratepayers eventually will benefit, the agency argues.

Paying down BPA's debt early will reduce interest payments and allow the agency to borrow and expand transmission lines, Mosey said. Gregoire said she will work with Northwest federal lawmakers and governors in Oregon, Idaho and Montana to lobby against the proposal.

She criticized the Bush administration for sidestepping Congress and enacting the policy administratively.