Call for changes in BPA pricing
REPORT: Northeast-Midwest Institute says taxpayers in rest of nation are subsidizing Pacific Northwest electricity costs
May 31, 01
Les Blumenthal; The News Tribune
WASHINGTON - At a time when electric rates in the Pacific Northwest already have risen sharply, a group backed by Midwest and Northeast members of Congress released a report calling for changes at the Bonneville Power Administration that could push prices even higher.
The report, the latest in a series of attacks on Bonneville by the Northeast-Midwest Institute, argued that federal taxpayers have subsidized the region's lowest-in-the-nation energy rates. And, the report said, BPA should be required to increase its rates to current market levels.
"BPA is selling federal property that rightfully belongs to every U.S. taxpayer to a favored minority of businesses and communities for less than two-thirds of its market value," the report said. "The result is no different than had Northwesterners picked the collective pocket of the rest of us."
Bonneville markets the electricity produced at 29 federal dams on the Snake and Columbia rivers and also runs the region's extensive power grid. Though the dams and the transmission system were financed through the U.S. Treasury, Northwest ratepayers have paid back billions of dollars over the years.
"The restructuring of BPA is past due," the report said, adding that if BPA started charging market rates, the profits could be used to help cut federal taxes and fund other federal programs.
"It's almost as though there are 46 states in the United States of America and another four in the United States of Bonneville."
BPA officials said they've heard the allegations before.
"This is just a rehash of the same old, tired arguments we have heard over the years," said Jeff Stier, a Bonneville vice president based in Washington, D.C.
BPA currently is considering raising its wholesale rates by up to 250 percent, having been forced to buy power on the expensive spot market as a result of the second-worst drought in the region's history.
Officials were uncertain Wednesday exactly how high residential rates would increase if BPA started selling its wholesale electricity at market levels.
BPA currently charges about $25 a megawatt-hour for electricity. Wholesale electricity on the spot market is now selling at between $250 to $300 a megawatt-hour, and wholesale power sold through long-term contracts is going for between $75 and $150 a megawatt-hour.
"The effect would be devastating to the region's economy," said Mike Hansen, a BPA spokesman in Portland.
Northwest lawmakers said there was nothing particularly new in the report.
Sen. Patty Murray (D-Shoreline) said all she has heard from families, businesses, school districts and local governments during the current congressional break has been about electricity prices.
"The Northeast and Midwest don't understand," she said. "They should back off now and work with us rather than being divisive."