Congressmen told of power woes
ENERGY: Regional businesses, utilities get supportive hearing
May 20, 01
Rob Carson; The News Tribune
Testimony at a congressional subcommittee hearing in Tacoma on Saturday painted a gloomy picture of the energy and water situation in the Northwest.
Representatives of industry, public utilities, science and environmental organizations all portrayed the energy situation as a rapidly developing disaster, predicting dire consequences for ratepayers, industry and the environment unless Congress does something.
"Why does the Washington, D.C., establishment continue to view the energy crisis as only impacting California?" Stephen Klein, the superintendent of Tacoma Power, asked the congressmen.
Klein noted that just five months ago Tacoma Power had cash reserves of $120 million and had not imposed a retail rate increase in six years.
Then everything changed, Klein said. The combined effects of the drought and a wholesale price surge ate up Tacoma Power's cash reserves and necessitated a 50 percent rise in average retail rates, he said. Projections of a 100 percent to 250 percent increase in BPA rates this fall will hit Tacoma Power's customers again, he predicted.
"Tacoma Power's customers have felt the sting of the real market price signal since December of last year, while some customers in California are only reading about what may someday be coming for them," Klein said.
Four members of the House resources subcommittee on water and power, including the subcommittee chairman Rep. Ken Calvert (R-Calif.), attended the field hearing at the Tacoma City Council chamber.
In addition to Calvert, the meeting was attended by Rep. Adam Smith (D-Tacoma), who initiated the meeting; Peter DeFazio (D-Ore.); and Rick Larsen (D-Everett).
About 50 people attended the hearing, including about a dozen union workers from Tacoma, Goldendale and Spokane, who carried signs protesting the curtailment of the state's aluminum industry because of the lack of affordable electrical power.
Stephen Wright, the acting administrator of the Bonneville Power Administration, called the energy situation a "calamity." The combination of near record-low stream flows in the Columbia River Basin, extraordinarily high and volatile wholesale electricity prices and an extremely tight West Coast power supply, Wright said, are "challenging Bonneville's ability to meet its public responsibilities."
Brett Wilcox, testifying on behalf of Golden Northwest Aluminum Inc., which operates smelters in the Dalles, Ore., and Goldendale, said the power crisis could "deindustrialize" the Northwest.
"Low power costs have traditionally been the only significant competitive advantage Northwest industry and agriculture enjoy," Wilcox said.
DeFazio, who last month helped co-sponsored legislation that orders the Federal Energy Regulatory Commission (FERC) to enforce cost-based rates in the Western energy market, took every opportunity to trash the policy of deregulation, which he referred to as "nonsensical."
"Two things bring us here," he said. "One is an act of God (the drought), and the other is the 1992 Energy Act, which provided for deregulation," DeFazio said. "I told people it was a mistake, and it was. Deregulation has led to power prices nobody can afford."
Smith, who requested the Tacoma subcommittee hearing, did not detail his own views on an energy fix.
In questions to panelists, he made it clear he favors easing up on the reliance on fossil fuels, focusing more on new energy technologies and imposing new regulations in the energy marketplace.
"It all comes back to exposure to the wholesale market," Smith said, adding that the only possible solution appears to be more "regulatory effort" on the part of federal agencies like FERC.
"That is the stark reality," he said. "If somebody has a better idea, I'd sure like to hear it."