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Commentaries and editorials

Northwest Must Unplug
Bush's BPA Rate Plan

by Aaron Reardon & Jay Inslee
Guest Opinion, Puget Sound Business Journal, March 11, 2005

When it comes to your electricity bill, the Bush administration wants folks across the Pacific Northwest to pay more.

A lot more.

Many electricity providers in our area buy power from the federal Bonneville Power Administration (BPA), including the Snohomish County Public Utility District, Seattle City Light and Tacoma Power.

The Bush administration's new proposal will force the BPA to stop charging cost-based rates for power, and start charging higher rates that will earn the federal government a profit for the first time.

Today, BPA's rates are about $31 per megawatt hour; bringing BPA electricity costs to the market rate envisioned by the Bush administration could boost the price to more than $50 per megawatt hour.

Thankfully, this is one issue on which public officials in the Pacific Northwest have banded together. Republican and Democrat, Washingtonian, Oregonian and Idahoan -- we all are working together to ward off this threat.

Our U.S. senators from the Pacific Northwest have taken up the torch, objecting so strenuously to proposed BPA rate increases that the Senate Budget Committee announced this week that such increases will not be included in the Senate budget bill.

There is still a concern that House leaders may include the BPA increases in their budget, however. This week, members of Congress, both Democrats and Republicans, kept up the pressure on the U.S. House Committee on the Budget by sending several letters reinforcing the fact that we will not tolerate any efforts to raise BPA rates.

Let us remember that the energy regulatory commissioners appointed by the Bush administration are still refusing to allow Snohomish PUD to cancel its contract to purchase power from Enron without paying Enron $122 million in penalty fees, even in light of obvious fraud by Enron.

The administration's Federal Energy Regulatory Commission even tried to say it did not have authority over the matter, and had to be set straight by a judge. Considering this pointed lack of action by the administration, it is especially galling that this president is proposing to force BPA to raise its rates for local consumers.

The president's plan will boost electricity costs by literally billions of dollars. It will result in higher home electricity bills for Pacific Northwest consumers. It will result in higher energy costs for businesses, which may have to compensate by cutting jobs. It will result in higher energy costs for our schools and government, which may result in higher taxes.

The scheme is so clearly damaging to the local economy that it must be stopped in its tracks.

For BPA customers like the Snohomish County PUD and Seattle City Light, that's a real shocker. The PUD is BPA's largest purchaser, buying fully 80 percent of its electricity from the agency. Snohomish County PUD officials are still analyzing the potential impact of BPA rate increases to their customers.

But if history is a light on the future, what is in store if the Bush administration carries the day is not reassuring. Just look to the Snohomish County Energy Assistance Program-- in 2001 it served 114 local households in "crisis," meaning that these households either had their electricity disconnected or were 72 hours away from a disconnect.

After the Enron fraud, the number of households in crisis soared to more than 2,000 last year. How many additional people will face a crisis if higher market rates are now imposed?

Nor is Snohomish County's industrial base immune from rising energy costs. Additional costs threaten to sap this area of the competitive edge that it must have if we are to grow our local economy.

For example, the local operation of one of the county's most important industrial players, Kimberly-Clark Corp., already has the fourth-highest power costs among all the company's 31 facilities nationwide. Are companies in this position going to find that it makes sense to remain in our area?

The impact of the Bush administration's plan to start making a profit from BPA would rip across the entire Pacific Northwest. A new report by economist Robert McCullough predicts that depending on the administration's profit margin, job losses to Oregon and Washington will range between 40,000 and 60,000 over the next five years. Why jeopardize good-paying jobs?

Imagine, too, how much additional money our schools and their taxpayers will be paying for power. Since 2000, Snohomish County school districts have seen their electricity bills rise from $6.6 million to over $10 million. Wouldn't those local tax dollars be better spent on textbooks, computers and materials to help kids learn?

Other presidents' budget directors have looked at BPA and floated the idea of trying to close a budget deficit on the back of Northwest consumers by making a profit, but legislators from the Pacific Northwest have always swatted this idea away in a bipartisan manner. We now have the first U.S. president who has actually included the BPA idea in his budget. We will again fight the proposal in a bipartisan manner.

Each time the Pacific Northwest sent a strong message back to the nation's Capitol: When it comes to BPA, this region has played by the rules. Ever since the Columbia River dams were built, we have faithfully made our payments to the federal treasury in good times and bad -- with interest.

We have won this argument before.

Today, we must stand together to win it again.

Aaron Reardon is Snohomish County Executive U.S. Representative Jay Inslee represents Washington's 1st Congressional District, including south Snohomish County.
Northwest Must Unplug Bush's BPA Rate Plan
Puget Sound Business Journal, March 11, 2005

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