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Another Raid on the BPA

by Editors
Register-Guard, February 8, 2006

Maybe someone should fly over the Columbia River basin just to see whether the Bonneville Power Administration's dams look like huge concrete piggy banks from the air.

If they do, it might explain the unflagging interest of President Bush - and his three predecessors - in raiding the federal power marketing agency to help underwrite the federal budget.

In the latest such effort, Bush proposed Monday that the BPA reverse its longtime policy of using surplus revenue to lower electricity rates for Northwest consumers and instead use the money to help pay down the federal debt. Administration officials insist their BPA proposal is "consistent with sound business practices," which is government code for "There's some money over there - quick, grab it." It's the most recent in a long line of initiatives targeting the agency dating back to Ronald Reagan's administration.

Last year, Northwest lawmakers blocked a Bush administration proposal to require the BPA to charge market rates for its power. The move would have jacked up wholesale power prices by nearly two-thirds over three years, costing ratepayers $1.3 billion annually and resulting in the loss of 60,000 jobs.

Now, they must fend off another Bush proposal, which could raise Northwest power rates by nearly $1 billion over the next decade. It comes at a time when the region's businesses and households are still grappling with steep power increases resulting from the West Coast energy crisis several years ago.

Federal law authorizes the BPA to sell surplus power to customers both inside and outside the Northwest. Revenue from the sales is used to reduce the BPA's electricity rates throughout the Northwest.

Under the administration's 2007 budget proposal, any BPA surplus revenues above $500 million would be turned over to the U.S Treasury, instead of used to provide rate relief.

The Bush plan technically calls for the surplus revenues to be used for the purpose of pre-paying the BPA's remaining $2.8 billion debt to the federal government. Administration officials argue that paying down the debt would expand Bonneville's borrowing authority and allow the agency to make needed capital investments to improve transmission capacity. Because the administration previously has shown little interest in BPA requests for the increased borrowing authority that would allow such investments, the administration's latest initiative seems designed as a bookkeeping shift that sidesteps the need for approval by a skeptical Congress.

President Bush has made it clear that he believes federal power agencies such as the BPA provide power at artificially low rates made possible by unfair federal subsidies. By forcing these agencies to charge market rates, and perhaps eventually privatizing them, he hopes to level the playing field with non-federal power providers and to provide a steady current of new revenues.

If Bush were more familiar with Northwest history, he would realize that the BPA was created in 1937 for the express purpose of providing at-cost energy to the Northwest and promoting development throughout the region - purposes it continues to fulfill.

For its part, the BPA has been a responsible partner with the federal government. Northwest ratepayers have repaid, with interest and often ahead of schedule, the agency's debt to the federal government incurred in the construction of federal dams in the Columbia River basin. The BPA also has fully covered its operating costs and, in fact, is legally prohibited from receiving federal funds for operations.

Like its predecessors, the region's congressional delegation must now rise to defend 70 years of sound regional energy policy in the Northwest - and to fight off this latest presidential raid on the Bonneville Power Administration.

Another Raid on the BPA
Register-Guard, February 8, 2006

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