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Same Old Gripes about BPA or New Situation?

by Bill Virgin, Seattle Post-Intelligencer columnist
Seattle Post-Intelligencer - July 29, 2003

Bill Virgin Suits have been filed, and more have been threatened. Sharply worded statements are the norm. Critics say too much is being spent -- or else they're saying not enough is being spent. And then there's that vocal camp that wonders whether the organization ought to exist in the first place.

Ho-hum. Just another day in the carefree existence of the head of the Bonneville Power Administration.

Is there a public-sector job in the Northwest with more attention and less good will associated with it than being Bonneville's administrator?

Governor? Heck, just keep the roads paved, don't raise taxes and people will generally leave you alone. Football coach? Win 10 or 11 games a year and there's no telling what people will give you -- or excuse.

But with running BPA, the best you can hope for is the Casey Stengel approach to managing: "Keep the guys who hate you away from the guys who are undecided."

Right now, there aren't a lot of guys who are undecided. BPA Administrator Steve Wright is under fire from the public utility districts for a planned increase in wholesale rates later this year (BPA says it's 5 percent; the PUDs say it's 15 percent, when you add in a planned 10 percent rate cut that now won't happen).

Environmental groups and Indian tribes, meanwhile, aren't happy about possible cuts in BPA's programs to protect salmon runs in the Columbia River system, although you can find plenty of people who think even the reduced level of spending is too much.

Of course, carping about Bonneville is nothing new. Rates are always too high and spending is always too high and there are always battles about allocations of power among customer classes -- how much, at what prices -- that is, when customers aren't fighting to get off Bonneville entirely, which was actually the case at one point in the 1990s.

But the volume, in number and intensity, of criticisms being lobbed at Bonneville these days does raise the question: Is what we're seeing and hearing a case of "same old" with Bonneville, or does it reflect something different and changed about this version of Bonneville, this administrator and this moment in the electric utility business?

The answer would appear to be yes.

"It's always easy to blame Bonneville," says Sara Patton, director of NW Energy Coalition, a conservation and environmental group. But the criticism also reflects the fact that, financially speaking, "utilities are in very bad shape," and in a few cases (such as Seattle City Light) "heads have rolled. It's a normal human tendency to find someone to blame ... not that Bonneville has been perfect."

"While customers have some legitimate points, there is a long history of trying to deflect the cost of decisions you make onto Bonneville," adds Randy Hardy, who has been on both sides of the customer-BPA divide as head of both Seattle City Light and Bonne- ville. "There's a 65-year history of a paternalistic love-hate relation- ship. It's not, from my perspective, a particularly healthy one."

Ed Hansen, the former mayor of Everett who is now general manager of Snohomish County PUD, says it's not just the utilities themselves that are hurting. Rates that, in Snohomish's case, have risen 46 percent in a few years are taking a toll on consumers and businesses. "In years past, low rates have been one of the real positives the Northwest has had," he says. Rate increases have put some power-dependent industries "at the breaking point."

Hansen and his fellow PUD administrators are trying to get BPA to cancel the rate increase that goes into effect Oct. 1, citing what they contend is Bonneville's "inability to control its costs."

But BPA rates and costs are a perennial source of contention. So is the awkward balancing act between BPA's multiple and often-conflicting roles: power marketer, regional energy planner, fish and wildlife agency.

What's different this time is the fallout from the California debacle. While what happened there was beyond the control of entities in the Northwest, it occurred at a time when many utilities had chosen to move away from BPA and see how they could do on their own in the open market. For a clue on how that turned out, take a look at your next electrical bill.

So now what? Beyond the question of getting through the current rate period, which expires in 2006, Bonneville has begun raising questions about what happens after that. Having been told to stay out of the business of lining up new sources of power, should it resume looking for new power? Should BPA continue as is or be split up so as to shed some of the jobs it now handles? Can BPA be counted on to be an economic driver of the region?

"Are we going to give up hope of restoring Bonneville's role of being a provider of low-cost electricity?" Hansen asks. "I don't have the answer. I just think it's time we had that kind of review."

Compounding the uncertainty, and thus the worry, is that no one is quite sure what the electric utility industry will look like. California's quasi, sort-of, halfway venture into electrical-market deregulation blew up, but that won't discourage others from trying. There continues to be an effort to rearrange the way the regional transmission system is managed. And every so often come suggestions that the historical notion of regional preference should be thrown out, and Bonneville's electricity made available to whoever wants to pay the most for it.

That kind of outcome may be what tempers the criticism, no matter how deep the unhappiness with BPA within the region at any particular moment. Counsels Patton, "All of the parties in this region would do us all a favor by calming down and quit calling names."

"If you let criticism paralyze you, so you don't make any decisions, that's when you get susceptible to real problems," Hardy adds.

Real problems might include losing regional control over Bonneville -- and then everyone will really have something to grouse about.

Bill Virgin, Seattle Post-Intelligencer columnist
Same Old Gripes about BPA or New Situation?
Seattle Post-Intelligencer, July 29, 2003

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