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An Open Letter to the President about BPA Electricity Rates by Jack A. Speer, March 1(?), 2005

The Honorable Geroge W. Bush
President of the United States
The White House
1600 Pennsyslvania Avenue, NW
Washington D.C. 20500

Dear Mr. President:

Please consider immediately withdrawing your proposal to bring Bonneville Power Administration electricity rates closer to average market rates throughout the country.

There are many reasons to withdraw this proposal, but I will focus on just three:

First, the proposal is not fair. Some people assume that power rates are lower in the Northwest because of federal subsidy. That is not the case. Power rates are lower in the Northwest because the natural resources of the region allowed the construction of economical hydroelectric dams. Public utilities had begun to develop regional hydroelectric potential long before the federal dams were authorized, and it is reasonable to assume that utilites would have developed this economical power supply, and that Northwest consumers would be enjoying the benefits of cost-based hydroelectric power today even without federal involvement. It would simply not be fair for the federal government to preempt northwest hydroelectric sites and then charge the region higher electricity rates.

Second, the proposal would result in severe economic hardship. If your proposal is adopted, power rates to Alcoa and other industries in the Northwest will increase substantially, and plants will close because they cannot compete in worldwide markets. This will bring increased unemployment and economic hardship to many parts of the region. Furhtermre, lost aluminum production will not move to other parts of the United States. New manufacturing plants will be built off-shore where low power rates are available. This proposal would not just result in an economic loss for the Northwest, but one for the United States as a whole.

Third, the proposal will disrupt regional captial investment, even if it is eventually rejected. The Bonneville Power Administration has been working with regional interests to define the future role of BPA, and to provide the long-term certainty necessary for capital investment by utilites and industris in the region. No firm plans can be finalized until there is more certainty about future BPA rates. Decisions that should be made now will be delayed, and valuable time will be lost in the construction of necessary utility and inudustrial infrastructure even if your proposal is eventually rejected.

Please withdraw your proposal immediately.

Sincerely,

Jack A. Speer
NW Vice President for Government and Energy Affairs
Alcoa
Wenatchee Works
6200 Malaga/Alcoa Highway
Malaga, WA 98828-9784 USA