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NW Senators Push California BPA Debt Payment by Les Blumenthal, Scripps-McClatchy Western Service Spokesman Review, March 14, 2001

WASHINGTON -- Northwest and California senators tangled on the Senate floor Tuesday over a proposal aimed at ensuring that the already financially hard-pressed Bonneville Power Administration will be repaid about $100 million owed by two California utilities on the brink of bankruptcy.

Under orders from the Department of Energy, Bonneville sold electricity to Southern California Edison and Pacific Gas & Electric during the height of California's energy crisis. Northwest senators argued that the federal power marketing agency ought to be repaid.

"In the Northwest, we believe we have been a good neighbor and repeatedly shipped power to California," said Sen. Ron Wyden, D-Ore., adding that he thought it was only fair for BPA to be repaid. "It's a huge deal to ratepayers in our area."

But Sen. Dianne Feinstein, D-Calif., said any move by Congress to guarantee repayment to BPA and other public utilities could force the two California utilities into bankruptcy and unravel efforts to solve California's energy woes. The two utilities owe more than $12 billion to BPA, other utilities, electricity marketers and generators.

"It is a very dangerous thing to do," Feinstein said.

Wyden and Oregon's other senator, Republican Gordon Smith of Pendleton had sought to protect BPA by offering an amendment to legislation overhauling the nation's bankruptcy laws. A vote on their amendment is scheduled today.

Washington Sens. Patty Murray and Maria Cantwell, both Democrats, did not speak during Tuesday's debate but reportedly support the amendment.

The sometimes-testy debate represented the first airing of West Coast energy issues on the Senate floor.

BPA and other utilities were ordered to ship electricity to California in December, January and part of February, first by Energy Secretary Bill Richardson of the Clinton administration and then, reluctantly, by President Bush's Energy secretary, Spencer Abraham.

Bonneville shipped more than $120 million worth of power south.

At the same time, BPA was facing an increasingly bleak financial situation itself and had to dip into its reserves to purchase electricity in a spot market where prices had skyrocketed more than tenfold.

BPA's financial situation could deteriorate further because the region is facing a severe drought, with runoff in the Northwest's rivers predicted to be the second lowest in history.

Wyden and Smith insisted it was only fair to repay BPA because it helped the desperate California utilities.

"Let's be fair as neighbors," Smith said.

Wyden said BPA doesn't have shareholders like the two California utilities, but rather has ratepayers who would see their electric rates increase even more if Bonneville isn't repaid.

California's other senator, Democrat Barbara Boxer, supported Wyden's amendment.

"I don't want to be known as a deadbeat state," she said.