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In Our View: Think Snow

by Editorial writers
The Columbian, February 13, 2003

It's just about the only hope of avoiding additional power rate increases. Enjoy the unseasonable sunshine. It's going to cost us plenty.

Barring an unprecedented spring blizzard or the surprise discovery of an uncashed check for a billion dollars, another major increase in wholesale electrical rates by the Bonneville Power Administration seems inevitable this fall. BPA officials aren't prepared to say exactly how large the rate hike might be, but they ballparked it last week at 15 percent. Which is good news, in a way, given that some experts a few months ago predicted increases of up to 70 percent.

Clark County residents get only about half of their electricity from BPA, which will blunt the effects of the October rate increase. The other half comes from the River Road Generating Plant, which is fed by natural gas on a fixed-price contract that's good through next February.

But even an October rate hike of 7 percent or 8 percent for Clark customers, on top of the 8 percent increase already expected in April and the 40 percent rise in power prices since 2001, is going to hurt all of us families, businesses and industries.

The reasons for the BPA crisis are straightforward, if not simple. The warm winter has drastically reduced snowpacks, which means less runoff to generate power from the region's hydroelectric dams this summer. And whatever surplus power BPA is able to generate isn't fetching much on the open market right now, thanks to low wholesale electricity prices.

Altogether, that adds up to a $ 300 million shortfall for the current year and a staggering $ 1.2 billion deficit for the current rate period, which ends in September 2006.

To a great extent, however, BPA's pain is self-inflicted. The agency's reliance on surplus power sales to subsidize regional rates backfired in 2000, when it sold 3,000 more megawatts than it could deliver. Forced to buy out those contracts or purchase electricity on the open market at grossly inflated rates, BPA ended up depleting its cash reserves by more than 75 percent. That's a $ 600 million cushion that isn't available during the current downturn.

The agency has already cut internal costs by $ 140 million and frozen its operating budget at 2001 levels, without even allowing increases for inflation. Invariably the sights will be trained on the dollars BPA spends on salmon restoration. But those programs are not superfluous; they're mandated by the Endangered Species Act, the Northwest Power Act and tribal treaties in exchange for the use of the Columbia-Snake river system for power production. Cutting salmon programs beyond the $ 40 million they have already slashed would undercut the multibillion-dollar investment already made on salmon recovery and surely would land the BPA in legal hot water.

Besides, fish aren't BPA's problem; poor planning and inefficiency are. In the short term, the agency must look for other places to cut; in the long term, it must become as fiscally responsible as any other successful business.

Snow would be nice, but reform would be better.

In Our View: Think Snow
The Columbian, February 13, 2003

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