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Oregon Lawmakers Toy with Idea of Buying BPA by Katherine Pfleger, Associated Press Seattle Times - March 24, 2001

Some Oregon lawmakers are thinking big these days: They want to buy out the Bonneville Power Administration, one of the largest high-voltage electrical transmission systems in the world.

Why shouldn't the Northwest control the power marketing agency that supplies about 45 percent of the region's power, they ask?

But Washington Gov. Gary Locke and other lawmakers from his state see it different. They think they have to "protect Bonneville" at all cost as the region faces a power crunch, not try to encourage the federal government to put it up for sale.

"We in the Northwest have to keep BPA as a regional resource, a regional asset to ensure low cost affordable energy for our businesses and our citizens," Locke said. "But you can accomplish that in other ways than buying out all of BPA."

And so it goes as lawmakers look for solutions -- long-term, short-term and everything in between -- to the Northwest's power woes.

The idea of regionalizing Bonneville, to be sure, is of the long-term variety. It could take decades. Ideas range from actually taking over the entire operation, to just buying pieces of it to give the region more control. Generally, a buyout is a concept that is getting more serious consideration from some Oregon policy-makers.

BPA doesn't actually own the 29 hydropower dams, just the power they generate and the transmission lines. Instead, the Army Corps of Engineers and Bureau of Reclamation own and operate the dams.

Rep. Earl Blumenauer, D-Ore., admits some thought he and his like-minded advocates for regionalization were a little "kooky" when they first started pushing the idea of regional control of Bonneville.

But Oregon Gov. John Kitzhaber, Rep. Peter DeFazio, D-Ore., and state Senate President Gene Derfler, R-Salem, are among a chorus of voices actively encouraging regional control.

Other lawmakers, including Oregon Sens. Ron Wyden, a Democrat, and Gordon Smith, a Republican, are open to the idea somewhere down the road.

But "you can't do it in the middle of an energy crisis," Smith said. "It's still possible -- eventually."

Bonneville was founded in 1937 as a federal agency to market the power produced at the Bonneville Dam, located about 45 miles east of Portland, Ore. Today, the agency has expanded into a power wholesaler harvesting energy from the Columbia and Snake river basin, as well as nuclear power plants.

The agency makes annual payments to the U.S. Treasury for the federal investment in the hydropower network, the dams, which provides the region relatively cheap power.

In the Northwest during 1999 and 2000, Washington consumed an average of 67 percent of Bonneville's energy, Oregon used 23 percent, Montana got 5 percent and Idaho, 4 percent.

But persuading those states to buy and share the vast Bonneville network may be no easy task.

Such an effort would cost a lot of money -- potentially the actual fair market value of the entire system and the power it produces. No one is even offering estimates -- outside of billions. The agency also is $12 billion in debt.

Any type of takeover would also require major legislation and would require tremendous leadership to keep the Northwest delegations together to fend off attacks from other regions, including energy-starved California, where a botched deregulation effort is driving up the West's power prices as the state struggles to keep the lights on.

Without tenured senators like former Sens. Slade Gorton, R-Wash., or Mark Hatfield, R-Ore., some say the region could lose big. Hatfield, the historic protector of Bonneville, in a speech recently called for a vigorous defense of Bonneville and railed against prospective attempts to privatize the system. A next-generation senator agrees.

"We have to be very careful about Bonneville right now," Sen. Patty Murray, D-Wash., recently cautioned. "It is extremely important that we make sure that Bonneville remains viable and that regional preference is protected. I would be very cautious about opening up a can of worms to change the governance of that."

Some of her colleagues from Washington say the same: Watch out.

"We are in a crisis. We have to get through the Northwest energy crisis first," said Rep. Rick Larsen, D-Wash. "It would be an expensive process. It would be a long process, and we have no guarantee that the results would be positive."

Derfler optimistically thinks the governors can come up with a plan, following on a report developed last year by a group of experts on the ground. But, he said, his northern neighbors need to open their minds.

"Washington has got their head in the sand," he said. "The big trick is getting all four states saying the same thing, and then we can go to our congressional delegation with a plan."

But some Washington state lawmakers say it makes no sense for them to push for regionalizing the system. Their state uses most of the power, and their ratepayers are paying off the bulk of Bonneville's debt.

Letting Oregon come in at this late date and re-divvy the pie could mean that Washingtonians lose.

DeFazio has suggested that the region should acquire just the generation and transmission equipment, rather than looking for federal exemptions to control the rivers and other provisions.

He hoped he could allay Washington's concern by assuring them they would get to keep the share of the power they already have.

"We just keep plugging away in the trenches," DeFazio said. "The one-note strategy of defending the status quo might not hold up in the long-term."

But, he admits, the timing may not be right.

"You don't have to just rush out there. This might not even be the administration to try and do this with," he said.

But "we should be discussing it."