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Stimulus: Hiring Jolt Doubtful

by Warren Cornwall
The Seattle Times, February 14, 2009

A multibillion-dollar provision of the new federal stimulus package, billed as a huge jobs boost for the Northwest, might not translate into lots of new jobs for years.

The measure, inserted into the bill at the urging of U.S. Sen. Patty Murray, would enable the federal Bonneville Power Administration (BPA) to take on another $3.25 billion in debt to pay for construction projects, such as massive new power lines.

Murray has said the increased spending limit would deliver a swift jolt to the Northwest's economy, creating jobs and retooling critical infrastructure that would spur development of renewable energy such as wind power.

"It puts people to work immediately. Everyone from engineers to lineman. All the people who are going to have to get up there to build this grid," Murray said in an interview Thursday, after details of the package were announced.

But even without the new stimulus package, BPA was expected to begin construction of some new transmission lines this year. And, despite claims the added spending power will quickly create jobs, construction of many of the new power lines wouldn't start for several years.

Officials with BPA, however, said there is a benefit to the new spending authority - the equivalent of having your credit-card spending limit raised.

While the federal power agency already was making plans to pay for a number of the transmission projects over the next few years using its existing budget, those plans were vulnerable to funding shortfalls.

And the agency doesn't want to max-out its spending power, which would hurt its ability to fund future programs, BPA officials said.

"Getting the increase in that authority makes it easier to move forward," said BPA spokesman Douglas Johnson.

Work already expected

The stimulus package probably won't make much difference for the one major project ready to go this year, a $342 million installation of 79 miles of new power lines paralleling the Columbia River between Umatilla, Ore., and John Day Dam.

The BPA is completing environmental studies now and could break ground on the new lines in the spring, Johnson said. In initial interviews, Johnson said the BPA could afford the new lines even without the added spending power.

"The numbers would certainly work out. There would be adequate capital for that," Johnson said early Thursday.

However, the head of BPA, Administrator Steve Wright, later cautioned that without the higher debt limits, it wasn't a done deal.

"It was an open question; I didn't know what I was going to do," Wright said. "It was going to be a difficult decision, and now made easier."

That was news to Robert Kahn, an observer of the BPA in his role as executive director of the Northwest and Intermountain Power Producers Coalition, an alliance of independent power generators.

"I find that utterly shocking, that there is any question (that the line would get built)," Kahn said. "I have never seen, up until now, any indication otherwise."

Likewise, Scott Corwin, a strong advocate of the increased spending limit, said he thought BPA could afford the John Day project without the new debt limit.

But Corwin, executive director of the Public Power Council, which represents Northwest consumer-owned electric utilities, said he thought the project might now get started sooner.

The John Day project, and several others contemplated for Eastern Washington and Oregon, are driven partly by the region's growing wind-power industry.

A lack of transmission lines has limited where wind-power companies can install new turbines. Utilities and power generators have urged the BPA to build new lines connecting those windy places to urban centers, where demand for power is greatest.

"I think it's brilliant that Congress is going to try to assist, because I think it will enable a lot of new, clean projects to be able to come forward," said Rachel Shimshak, director of the Renewable Northwest Project, an alliance of nonprofits and renewable-energy companies, who has pushed to let BPA spend more money.

In the case of the John Day project, the BPA estimates it will open the door to 878 megawatts of new power, much of it from wind turbines. One megawatt is enough to light roughly 680 Northwest homes.

It's the first of a slate of transmission projects the BPA is on the verge of pursuing. But it would be 2011 or later before additional projects are ready for construction because they still must go through planning, environmental studies and the process of getting permits.

"Are these ready to be built? No. The answer is no. It's not a problem of money. It's a problem of permitting," Kahn said.

Long-term spending, too

Asked about the delayed effect of the new spending in the stimulus package, Murray said, "They (BPA) have been very, very clear with us that this is something they are project-ready to go on."

Asked for further clarification, Murray spokesman Matt McAlvanah later said, "We're confident this funding's going to be used for both short- and long-term transmission grid projects throughout the region, that it's going to create jobs, that it's going to bring alternative sources of power online."

The federal agency released plans last year to increase construction spending from an average of $350 million a year in the 1990s to $800 million a year between 2010 and 2014.

The projects include power lines, dam upgrades and efforts to boost salmon runs.

At that rate, the BPA expects to reach the $4.4 billion limit on how much it can borrow from the U.S. Treasury in 2013. The stimulus package would raise that limit to $7.65 billion, opening the door to more construction.

The BPA has tried for years - long before the recession - to get the spending limit raised and increase its ability to pursue new projects.

The cost of that additional spending is eventually borne by Northwest ratepayers, rather than federal taxpayers. BPA, the region's biggest source of wholesale power, pays back the money it borrows from the Treasury, with interest.

Warren Cornwall
Stimulus: Hiring Jolt Doubtful
The Seattle Times, February 14, 2009

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