BPA riles California lawmakers

Letter seeks to keep agency from renewing NW contracts

From staff and wire reports

California lawmakers have asked the Clinton administration to stop the Bonneville Power Administration from renewing contracts with Northwest utilities and industries until Congress reviews BPA plans to possibly reduce power shipments to California.

But eight Northwest senators say delaying the contracts could disrupt the Northwest economy and hurt the Portland-based power marketer's ability to repay the Treasury for money invested in the region's hydropower system.

The eight also said in a letter to Energy Secretary Bill Richardson that delays could hurt financing of efforts to recover salmon listed under the Endangered Species Act.

Three California Democrats -- Rep. George Miller and Sens. Dianne Feinstein and Barbara Boxer -- asked Richardson for the delay so Congress can determine the impact of the contracts on "a broader constituency" in the West.

California and Northwest lawmakers have sparred over energy prices that skyrocketed this year. The lawmakers disagree on who is to blame for the problem and what should be done to fix it.

The Californians point at BPA, a source of cheap power in the Northwest that also markets surplus power to California customers, including the Bay Area Rapid Transit, Southern California Edison and the cities of Anaheim, Modesto, Santa Clara, Edison, Glendale, Burbank and Pasadena.

BPA's customers in California pay as much as 21 cents per kilowatt hour, while Northwest customers -- who under federal law receive at-cost power from the agency -- pay 2 cents per kilowatt hour, the Californians said in the Richardson letter.

"A tenfold difference in the price of electricity between the Northwest and California may have had some rationale decades ago ... but it is archaic and unfair in the increasingly deregulated, market-driven economy of the 21st Century," Miller, Feinstein and Boxer said.

In a separate letter to the U.S. General Accounting Office, two East Coast congressmen called for an audit of BPA's "profiteering sales into the tight California electricity market."

Representatives Bob Frank, R-N.J., and Marty Meehan, D-Mass., said California authorities looking for answers to the power squeeze have no jurisdiction over Bonneville.

"Since Bonneville is virtually unaccountable, we've asked the nation's top independent auditors to review the agency's recent practices," Meehan said.

Frank and Meehan allege that only "a few lucky corporations and favored utilities in the Northwest" benefit from Bonneville's power, at the expense of California ratepayers and U.S. taxpayers, "which created and subsidize BPA."

Bonneville officials told their California customers three weeks ago that the agency may reduce net power sales this winter or in the next five years to the state because the Northwest faces potential electric energy supply shortages.

The loss of BPA power could have "significant implications" for the price and availability of power in California, Miller, Feinstein and Boxer said.

Richardson is still reviewing the Californians' letter, said Tom Welch, an Energy Department spokesman.

BPA spokesman Ed Mosey said while it is true that BPA sold power to California at higher, market rates this year, the state's deregulated market structure required the agency to do so.

BPA provides less than 1 percent of electric energy to California, anyway, so the agency should not be blamed for California's price swings, Mosey said.

He said the letters are the first salvos in what will likely be a donnybrook next year over access to Bonneville's electricity.

The Northwest senators blamed California's high power prices on the state's "flawed experiment" in electricity deregulation. They said the high California prices helped drive up Northwest power costs.

"Rather than seeking scapegoats beyond the borders of their state, Californians would do well to at least fix their failed electricity restructuring plan," the senators said.

Northwest signers of the letter included Sens. Patty Murray, D-Wash., Slade Gorton, R-Wash., Max Baucus, D-Mont., Conrad Burns, R-Mont., Ron Wyden, D-Ore., Gordon Smith, R-Ore., Larry Craig, R-Idaho, and Mike Crapo, R-Idaho.