In 2007, the 9th Circuit Court slammed the Bonneville Power Administration (BPA) for violating the 1937 Bonneville Power Act. The BPA had not given public utilities and cooperatives preferential access to the cheapest electric power, as the law required. Last year, the BPA imposed new rates that were lower for Public Utility Districts (PUDs), and higher for investor-owned utilities (IOUs). The IOU rates would enable Bonneville to start paying the PUDs back for six years of overcharges.
Is everybody happy? Of course not. Aggrieved utilities and manufacturers have filed petitions to the 9th Circuit challening the rates that Bonneville has imposed in light of the 2007 decision. Petitioners include Puget Sound Energy; PacifiCorp; Avista; Idaho Power; Weyerhaeuser; Georgia-Pacific; Grays Harbor Paper; Simplot; Longview Fibre; the Cowlitz County PUD; and the Oregon Public Utility Commission.
Tom Deboer, Puget Sound Energy's director of Federal and State Regulatory Affairs, explains that although there are serious disagreements, that's not the only point: If you want a seat at the table when negotiations start, you have to already be in court, so even if you're not that unhappy with Bonneville's decision — even if you figure the court has given Bonneville little choice — you'll probably sue early and often.
On Feb 11, Bonneville proposed new, higher rates to take effect later this year. Undoubtedly, most if not all of the usual suspects will sue over that too.
None of this comes as any great surprise. Last September, BPA Administrator Stephen J. Wright wrote that soon after the 9th Circuit shot down the settlement, "it was clear there would be a contentious discussion regarding the [Residential Exchange Program], which involves literally billions of dollars...this has been a very difficult undertaking," Wright said.
BPA rate arguments have always has a geographic component. Most people in Oregon get electricity from investor-owned utilities (IOUs). Most people in Washington do not. As a result, The Oregonian reported, Oregon "ratepayer advocates and the Oregon Public Utility Commission (PUC) are calling BPA's plans a massive transfer of wealth from Oregon to Washington." Also reported, Commission Chairman Lee Beyer said of BPA's move, "Our congressional delegation needs to revise the outdated Northwest Power Act so benefits can be distributed fairly throughout the region, not just a select number of utilities."
Do we really want to take a chance on revising the Power Act?
Oregon PUC spokesman Bob Valdez says yes. Valdez concedes that reopening the Power Act is potentially a can of worms, but insists: "We need to do that. The threat of a risk should not paralyze us into doing nothing." Valdez argues that the "premise [of the original Bonneville Power Act] doesn't really hold water" anymore. Back in 1937, PUDs and cooperatives got preference because developing the rural areas they served was a national policy goal. The BPA would bring the rural Northwest into the 20th century much as the TVA would jump-start the rural South. But that has already happened. Virtually no one milks by hand or reads by kerosene lamp anymore.
Valdez argues that it's time for a change. Nevertheless, "getting traction to do anything is getting increasingly difficult," he says. Every time politicians from other regions start looking covetously at cheap Columbia River hydro, the whole Northwest delegation puts its wagons in a circle to face the outside threat, and internal differences take a back seat.
Time has in fact marched on. Not only has rural development become a non-issue, but the implicit glue that held the 1980 legislative deal together has dissolved. As the Council's John Harrison — who is an historian of the Columbia River — explains, the legislation "fit a different set of circumstances." When the original concepts were taking shape "in Henry Jackson's kitchen, with his staff doodling on napkins," the idea — unspoken in the legislation but widely understood — was that the aluminum industry and the other "direct service industries," which bought large amounts of power from Bonneville, would pay for it.
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