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Take Power Grab Seriously by Editors The Oregonian, October 28, 2000

With energy prices rising in California and elsewhere,
Northwest states must unite to protect our low-cost power

While political campaigns and the rhetoric that goes along with them have dominated the public's consciousness over the past several months, a major threat to the Northwest's economy and future quality of life is unfolding behind the scenes.

It's a power grab -- a movement started four years ago by a group called Alliance for Power Privatization, which over time has evolved into the Northeast Midwest Institute. That organization's goal, which is gaining broad support in Congress, is to require federal power marketing agencies, including the Bonneville Power Administration, to charge customers market-based rates rather than the cost-based rates.

In other words, the idea is to force customers from the West and, to some extent, the South to pay the same cost for electricity that residents in the Northeast and Midwest regions have to pay, regardless of how much it costs to produce the power.

This concept, a sort of socialized energy, is all about envy and jeolousy. States that haven't made sound energy policy decisions, have not invested in reliable and low-cost energy resources and want somebody else to be their cheap-energy farm want the Northwest, which has the cheapest electricity rates in the nation, to share its energy wealth.

California, for example, would like a larger slice of the Northwest energy pie to compensate for its own disastrous mistakes in restructuring its electricity market. Those mistakes led to skyrocketing retail power costs this summer, almost resulting in rolling blackouts.

The argument the power grabbers are using to persuade Congress to act is that the Northwest's cheap electricity -- much of it coming from the Columbia River Basin federal hydroelectric system -- is subsidized by U.S. taxpayers who financed the federal dams.

The subsidy argument is ludicrous if you actually examine the economic benefits that the taxpayer-financed federal dams have contributed to every taxpayer in America. Food, for example. The Columbia Basin dams are responsible for providing water and electricity for millions of acres of irrigated land in Idaho, eastern Oregon and Washington. They have turned arid lands into productive farms. Most of these irrigated crops feed taxpayers throughout the nation and, when exported abroad, help to reduce this nation's balance of payments.

The so-called Northwest "subsidy" is responsible for exporting millions of dollars in jobs and revenues to industrialized states across the country.

The dams also have formed the backbone of the Northwest economy. They have been an engine of great wealth and welcome prosperity for Northwest citizens. But they weren't a gift from U.S. taxpayers. Indeed, Northwest ratepayers are repaying the $7 billion debt on the dams and transmission system with annual payments to the U.S. treasury -- both principal and market-rate interest.

Turning back this threat to the Northwest economy will require a spirited, united effort by the congressional delegation and the governors of Oregon, Washington, Idaho and Montana.

Northwest stakeholders in the energy business must curtail the usual infighting over whether public power or private power or industry is getting too much of a good thing.

And politicians must stop bickering over which state makes out best in the allocation of federal power.