Congress' efforts to cap power prices fail
ENERGY: BPA says rate boost won't be so large
June 07, 01
Les Blumenthal ; Staff writer Martha Modeen contributed to this story; The News Tribune
WASHINGTON - Efforts to reach a compromise on imposing prices controls on West Coast wholesale electric rates came to an abrupt end Wednesday amid partisan recriminations by members of the House Energy and Commerce Committee.
The collapse in negotiations came as the Bonneville Power Administration said in Portland that because utilities and aluminum companies in the region have agreed to reduce demand for electricity, it could scale back its possible rate increase from 250 percent to 150 percent.
But BPA Administrator Steve Wright said that wasn't good enough and warned that even a 150 percent increase could have a devastating effect on the Northwest economy.
"We need those utilities and industries that have not yet taken action to step up to the plate," Wright said.
The federal power marketing agency earlier had warned of a 250 percent rate increase this fall unless the region conserved 2,400 megawatts of electricity, about enough to power two cities the size of Seattle.
So far, BPA's customers have agreed to reduce their loads by about 1,200 megawatts. If BPA customers can reduce loads by another 1,200 megawatts, BPA could reduce its rate increase below 75 percent, Wright said.
Tacoma Power officials greeted Wednesday's announcement with cautious optimism. They're pleased that BPA's proposed rate increases are being scaled back, but they're concerned that regional conservation rates have not been met.
"He's issuing a challenge," Tacoma Power superintendent Steve Klein said of Wright's statement. "He's saying, '75 percent is a good number. I sure need all your help. Please help me.'"
Bonneville markets about 45 percent of the region's wholesale electricity, much of it low-cost hydropower generated at the 29 federal dams on the Columbia and Snake rivers.
But with the Northwest facing its second-worst drought in history, the BPA has been forced to buy additional power on the spot market, where prices have skyrocketed more than tenfold over the past several months.
Democrats on the House Energy and Commerce Committee had been pushing for price controls in the West Coast wholesale markets, while Republicans on the committee and the White House have opposed them.
The Republican chairman of the committee, Rep. Billy Tauzin of Louisiana, said the two sides were close to a deal, but then the effort to reach a compromise collapsed for "practical and tactical" reasons.
Tauzin said Congress may have run out of time to act, with West Coast electricity blackouts possible this summer and winter. Democrats, he said, were trying to play politics rather than trying to find a solution.
"We came awfully close," Tauzin said. "It's an issue the courts may have to settle."
Democrats scoffed at suggestions the two sides had been close, saying they hadn't heard from Tauzin or his staff since before Congress' Memorial Day recess. They accused Republicans of engaging in a charade to make it appear they were trying to solve the West Coast energy crisis.
"We were never close to a deal," said California Rep. Henry Waxman, senior Democrat on the committee.
While Washington has no members on the committee, the state's Democratic lawmakers were closely monitoring the talks.
Rep. Jay Inslee (D-Bainbridge Island) said Democrats will file a petition in the next several weeks to have his price control bill discharged from committee and brought directly to the House floor.