BPA seeks $2 billion for power projects
By Kevin Galvin
Seattle Times Washington Bureau
WASHINGTON - The Bonneville Power Administration is urging the White House to increase its authority to borrow from the federal Treasury by $2 billion to build new electricity lines and improve power-generating facilities.
Agency officials hope the new borrowing authority will be included in a comprehensive energy strategy the Bush administration is expected to release next week, although federal officials have yet to give BPA the final word on their request.
But not everyone agrees BPA deserves greater access to the federal Treasury.
Dick Munson, director of the Northeast/Midwest Institute, a coalition representing regional interests, noted that BPA is already seeking to minimize its annual cash payment to the Treasury this year because of the high cost of power and low river levels. The coalition is often critical of what it sees as federal power subsidies for the Northwest.
"I would think it's an awkward time for them for making such a request," Munson said.
"At a time when they're trying to figure out how not to make their annual payment, to be asking for a larger credit line strikes me as chutzpah-ish."
Rep. Jay Inslee, D-Bainbridge Island, said that giving BPA "additional flexibility is not a bad decision, given the extreme conditions" and that he hoped lawmakers from other regions wouldn't seek to block the move. "I hope that it will not end up in a fracas," he said.
Energy Secretary Spencer Abraham, key members of Congress and the staff of Vice President Dick Cheney, who has taken charge of developing the administration's energy strategy, all have been briefed on BPA's proposal.
"We expect that this is something the administration will propose and support," said BPA Chief Operating Officer Steve Hickock.
Another BPA official was more reserved. Jeff Stier, the agency's top representative in Washington, D.C., said he hoped to see the increase included in Cheney's report, but "I don't know if the administration is going to end up supporting our point of view on this."
Many Western politicians have been critical of the Bush administration's reaction to the energy crunch, complaining too little has been done to rein in soaring electricity costs. And by emphasizing the supply of oil, gas and coal, critics say the administration won't act quickly enough to alleviate the power crunch in the West.
But behind the scenes, BPA has been building a case for a budget item that officials say would be a significant boost to the region's power infrastructure in the near term. And if the administration doesn't include it in its energy strategy, BPA officials say they will nevertheless press for the increased borrowing authority in Congress.
BPA's pays about $730 million a year to cover such costs as debt on construction of the regional power grid and operation and maintenance of 29 federal dams that generate the power the agency sells.
Under the 1980 power act, the BPA can apply costs associated with protecting salmon and wildlife against its annual Treasury payment. Faced with soaring electricity expenses, BPA plans for the first time to use more "fish credits" than cash to meet its annual debt obligation, reducing its cash outlay by some $400 million.
When BPA was restructured in 1974, Congress granted it the ability to borrow up to $1.25 billion from the federal Treasury for capital improvements. That figure has twice been increased, and BPA's borrowing authority is now c capped at $3.75 billion.
Hickock, BPA's operating officer, said that the power administration had expected its borrowing authority to be sufficient until 2006. But given the energy situation, BPA could hit the ceiling by 2003.
BPA had expected to spend about $2 billion on capital improvements between 2002 and 2006; it now hopes to spend $1.25 billion more, including $750 million in new transmission lines and facilities.
"The West Coast electric-power crisis is fairly serious, and it's fully half a transmission crisis. That actually is not well understood," Hickock said. "There's tremendous congestion in the system."
BPA wants to bring 20 new projects for 500-kilovolt transmission lines and substations online between 2003 and 2006.
"We've got constraints around the Northwest grid that are nowhere near as severe as you've got in California, but they will be if they're not attended to," he said.