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Budget Slaps BPA, Dredging Proposal by Tom Detzel, The Oregonian staff The Oregonian, February 4, 2003

WASHINGTON -- Spending on Northwest projects from highway construction to salmon recovery would grow slowly or be subject to delays or cuts under the 2004 budget proposed Monday by President Bush.

The budget -- often regarded as a political document, regardless of the party in power -- also contained some potentially ominous precedents for Northwest electricity consumers and businesses engaged in international trade.

One was a broadside at the Bonneville Power Administration, which the White House budget office accused of competing with private power sellers.

And the budget raises another hurdle for a $119 million plan to deepen the Columbia River shipping channel by continuing a policy of "no new starts" for construction projects by the U.S. Army Corps of Engineers.

The slap at the financially ailing BPA, which generates half the region's electricity, set off alarms in the Northwest congressional delegation.

"This is the strongest attack in a president's budget on BPA since Ronald Reagan was president," said Rep. Peter DeFazio, D-Ore., who vowed war against any effort to shift the BPA's decades-old mandate to sell federal power at cost.

The criticism of the BPA also drew fire from Sen. Patty Murray, D-Wash., who sits on the powerful Senate Appropriations Committee, and from Sen. Gordon Smith, R-Ore. A spokeswoman said Smith "will fight" any privatization effort.

The critique came as part of an Office of Management and Budget performance assessment of select agency programs that accompanied the budget.

The office complained that the BPA competes with the private sector when selling surplus power to California and asserted that taxpayers are subsidizing the agency through low-cost financing the BPA has obtained from the U.S. Treasury.

In addition, the BPA's main functions "could be performed under contract or through non-federal ownership of transmission lines and generation capacity" at the 29 dams that produce the bulk of its power, the budget office said.

Though the budget office said it was up to the BPA to recommend ways "to improve" its marketing and cost recovery, the BPA released a statement seeming to demur. "This is something the administration believes should be explored, but there will be no implementing initiatives any time in the near future," the BPA said.

Potentially as troubling for supporters of the Columbia dredging project was the corps' decision to extend its policy of "no new starts" for a second year and perhaps indefinitely.

Work on the two-year Columbia deepening project had been scheduled to begin in mid-2004. But it was excluded from the budget because the corps' Portland office has not completed a revised environmental impact statement.

Project supporters, including the Port of Portland and members of Congress, contend that the Columbia is not a new start because the corps has spent money from a construction account on project planning. In their view, the project could move ahead in fiscal 2005.

But White House budget office officials and corps leaders generally have adopted a more restrictive definition of "new start." Unless the corps already has signed a contract for dredging, it probably won't proceed, they said.

Other elements of the budget could stall economic recovery in the Northwest and impose additional hardships on families, according to Democrats.

Rep. David Wu, D-Ore., said the budget proposed halting a scheduled increase in Pell Grant funding for college students. "This is a disaster for education when we already have problems of our own," he said.

And aides to Sen. Ron Wyden, D-Ore., combed proposed spending on highways and found that Oregon would get $21 million less in 2004 than under the 2003 spending bill passed by the Senate but not yet signed by Bush.

Other highlights from the budget:

• Spending on Northwest salmon recovery by five resource agencies would increase slightly from the $219.4 million proposed by the 2003 budget, but the BPA is expected to cut back on ratepayers' contribution. Environmentalists say the total is about half of what is called for in a federal recovery plan.

• Wildfire programs are slated to get $2.2 billion, an increase of $219 million, after the second-worst fire seasons on record. The budget also calls for $416 million to reduce hazards on 2.5 million acres, mostly near populated areas.

• Murray praised the administration for committing more than $2 billion for continued cleanup of radioactive waste at the Hanford Nuclear Reservation. Bush had shorted the Hanford cleanup in each of his previous two budgets.