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Proposed Bonneville Privatization
Plan May Cause Local Rate Hikes

by Brad Mosher
Headlight Herald, July 7, 2017

In this 2010 file photo, power lines from Bonneville Dam head in all directions in North Bonneville, Wash. (AP Photo/Don Ryan) The source of the electricity used throughout Tillamook County and the Pacific Northwest is being put on the chopping block, a move which could mean massive rate hikes according to some Oregon politicians.

Representatives from the Tillamook Peoples Utility District (TPUD) did not think too highly of the proposal.

"It is not a new idea. At this point, it is premature to even know the impacts of it," said Barbara Johnson, the public relations manager for TPUD. However, she added, that other public utilities have done studies which have shown the plan would definitely not mean lower rates for the customers in the Pacific Northwest.

Johnson also noted the executive director of the Public Power Council, which represents consumer-owned utilities in the region, recently took a public stand against the proposal.

"Unlike most federal agencies, the BPA is not supported by tax dollars. Instead, the BPA operating like a utility, covering all of its costs by charging those who buy its power or move other power across the transmission system," explained Scott Corwin in a publicly-released commentary.

He explained the BPA predated the Department of Energy and was created to serve the public with low-cost, emission-free hydropower from federal dams.

"Privatizing these assets would be a tax on customers with no increase in efficiency or reliability," he added.

In addition, if the proposal was adopted and completed, the areas at most risk would be the rural and remote area.

"The remote areas of the system may be neglected. This could harm the very rural communities that grew up with -- and paid for -- much of the 15,000 miles of transmission lines and 300 substations that reach ever corner of the Columbia River Basin," Corwin added.

The executive director also noted the proposal has already drawn letters of opposition that included signatures from every member of the House of Representatives from both Oregon and Washington. It also had signatures from all of the senators from Oregon, Washington, Idaho and Montana.

Major source of power

Bonneville Dam is a major source of electric power throughout the Pacific Northwest, but it is being targeted for sale by the recently announced Trump Administration's budget proposal.

The Bonneville Power Administration markets wholesale electrical power from 31 federal hydroelectric projects in the Northwest, one nonfederal nuclear plant and several small nonfederal power plants. It also provides about 28 percent of the electric power used in the Northwest.

The nonprofit federal power marketing administration based in the Pacific Northwest also operates and maintains about three-fourths of the high-voltage transmission in its service territory. The territory includes Idaho, Oregon, Washington, western Montana and small parts of eastern Montana, California, Nevada, Utah and Wyoming.

The recently released budget summary from the Trump Administration announced plans to sell off the publicly-owned transmission assets. That sale would reportedly raise $4.9 billion for the U.S. Treasury over the next 10 years.

The proposal follows a plan proposed last year by the conservative Heritage Foundation.

"The blueprint calls for eliminating frivolous federal spending on energy projects that should be driven solely by private sector investment," said Nick Loris, an energy and environment fellow at Heritage and author of the plan, in a blog.

The Heritage plan announced in September also recommended the four federally run Power Marketing Administrations, including the Bonneville Power Authority on the Columbia River, be privatized.

"None of these spending activities is a legitimate function of the federal government. Each is an inherent subsidy for the industry the government is supporting," the Heritage blueprint said.

Wyden familiar with plan

According to U.S. Senator Ron Wyden, it is just another round in politicians trying to attack public infrastructure.

"It would also sell off most of the Bonneville Power Administration, increasing costs for tens of thousands of Oregon homes and businesses. I successfully fought Republicans' efforts more than a decade ago to privatize Bonneville Power, and I will fight this misguided attempt. Public power customers in the Pacific Northwest have paid for the system and their investment should not be put up for sale," he announced in a recent press release.

Actually, the Heritage Foundation published a "Five-point Checklist for successful Electricity Deregulation Legislation" in 1998. In the document, written by Adam Thierer, it called to "privatize federal public power entities immediately to level the playing field."

The document demanded the elimination of Power Marketing Administrations -- specifically identifying Bonneville.

The announced divestiture/privatization plan also came under fire from another source.

"This is ... threatening to fragment the Northwest energy system and increase costs for customers," commented Wendy Gerlitz, NW Energy Coalition policy director in a press release.

"BPA plays a fundamental role in bringing stability to the energy system."

According to one of the NWEC policy associates, the entire plan is flawed.

Fred Heutte, a senior policy associate at the NW Energy Coalition said the BPA is a self-supporting business and makes annual payments to the federal government to pay down its debt, so any revenue from the sale of its transmission assets would be a one-time fix.

According to Oregon's junior senator, Jeff Merkley, the proposal is just another example of the push to hurt ratepayers in the Pacific Northwest.

"Senator Merkley believes the proposed privatization of transmission lines owned by Bonneville Power Administration would be an unacceptable threat to affordable power rates in the Northwest. Ratepayers built these transmission lines to deliver low-cost electricity to 12 million people across the Northwest, including those in rural communities," said spokeswoman Sara Hottman.

"Senator Merkley is dead-set opposed to selling Bonneville's transmission system, which will lead to higher electricity costs, lower reliability, and neglect of remote areas. The senator says this is just one more example of how the president's budget delivers only broken promises, putting billionaires first and rural America last," she added.

'A Threat to Northwest'

The plan will mean hikes for ratepayers throughout the region, another spokesman for a conservation organization said.

Tom Karier, the eastern Washington representative on the Northwest Power and Conservation Council, foresees expensive costs and rate hikes for ratepayers.

"We've been paying off this mortgage and debt on this power system for 60-70 years," Karier said, in a recent interview with public radio. "It's a real threat to the Northwest."

Karier says the proposal isn't new and it isn't surprising. It has been talked about and proposed for many years.

He said this proposal would affect only the transmission system, but it would have a huge effect throughout the West.

"The entire West Coast is connected through those lines," Karier said. "Bonneville owns and manages three-quarters of those transmission lines, so trying to privatize those would be a massive change and cost billions of dollars and transfer of ownership. And it's a huge cost to ratepayers in the Northwest."

According to Karier, the proposal would affect mostly public utilities that buy power directly from Bonneville.

The Heritage Foundation "blueprint" also calls for the elimination of several Energy Department's offices, including Electricity Deliverability and Reliable Energy.

The blueprint from the right-leaning think tank also recommends that the four federally run Power Marketing Administrations, such as the Bonneville Power Authority and the Southeastern Power Administration, that run the grids in large parts of the country, be privatized.

"None of these spending activities is a legitimate function of the federal government. Each is an inherent subsidy for the industry the government is supporting," the blueprint said. "Even research that is in the early stages of commercial readiness but has an end goal of improving the functionality of wind power or extracting natural resources more effectively should be left to the private sector."

Loris said reform in the next (Trump) administration should focus on shrinking the size and scope of federal intervention in the energy marketplace.

Related Pages:
BPA Grid Sale Tied to Fantasy Budget by Editorial Board, Spokesman-Review, 6/7/17
21 U.S. Senators Blast Trump Proposal to Sell BPA Power Grid by Staff, Seattle Times, 6/8/17
Northwest Lawmakers Oppose Selling BPA Transmission Lines by Dameon Pesanti, The Columbian, 6/6/17
Politicians Oppose Privatization of Bonneville Power Administration by News Sources, KOBI 5, 6/5/17
NW Lawmakers Urge President Trump: Don't Sell Off BPA Assets by News Sources, KTVZ, 6/5/17

Brad Mosher
Proposed Bonneville Privatization Plan May Cause Local Rate Hikes
Headlight Herald, July 7, 2017

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