OUR VIEWS: Power pinch shuts down industry
On July 1, the last of the Northwest's 10 aluminum smelters will shut down, idling at least temporarily an industry that guzzles energy while supporting some 7,500 high-paying jobs.
No one likes to see people lose their jobs. No one enjoys watching small communities such as Ferndale and Goldendale have the mainstays of their local economies silenced. But in this case for sure, the electric ratepayers and general health of the regional economy are best served by the plant closures.
The aluminum companies can't prosper without cheap electric power from the Bonneville Power Administration.
The cold, hard fact is this: BPA can't provide the power to the aluminum companies in the face of the 2001 drought and renewed demands for federal hydropower over the next five years. Those demands exceed supply by some 3,700 megawatts, which is enough electricity to serve three Seattle-sized cities.
Bonneville has said it loud and clear: The region as a whole must reduce its demand on Bonneville by at least 10 percent, or face gut-wrenching wholesale power rate increases of 150 percent or more come Oct. 1.
Even with the load reductions, Bonneville may be forced to raise rates 50 percent to 75 percent to offset the costs of buying some of its power on the turbulent spot market.
Public utilities and the farm and residential customers of the private utilities have first crack at the Bonneville power under the terms of the Northwest Power Act passed by Congress in 1980.
The direct service industries -- another name for aluminum companies -- have enjoyed that cheap hydropower for years as well.
However, the aluminum companies lack the long-term guarantee that the utility preference customers have enjoyed. The power planning act made BPA service to the aluminum companies discretionary after Sept. 30, 2001.
To their discredit, the aluminum companies mounted a mean-spirited, less than factual public-relations campaign aimed at Bonneville over the past few months.
They alleged that BPA's decision in 1996 to sell some of its hydropower outside the region to California customers was a "dirty little secret" that has exacerbated today's energy crunch in the Pacific Northwest. That's hardly the case.
Five years ago, Bonneville was hard-pressed to sell all the power produced from the Columbia and Snake river dams. Utilities and industries alike were fleeing the Bonneville camp in favor of electricity purchased on the open market.
It was cheaper than Bonneville power then. It sure isn't now. So everybody's running back to Bonneville for the next five-year contract period, throwing demand and supply out of whack.
There's no doubt the aluminum companies are caught in the power pinch. They can't operate in today's energy market.
Nevertheless, their disingenuous public-relations campaign did nothing to help their cause.