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Congressman Peter DeFazio

Representing the 4th District of OREGON

NW Energy Caucus Leaders Call on Administration to Withdraw Rate Increase Plan

Jun 15, 2006
Press Release
Hastings, DeFazio, Walden Signal Bipartisan Opposition to "Ill-Conceived" Plan for BPA
 
February 6, 2006
Press Release | Contact: Kristie Greco (202) 225-6416


WASHINGTON, DC—Co-Chairs of the Northwest Energy Caucus Congressmen Doc Hastings (R-Wash.), Peter DeFazio (D-Ore.) and Greg Walden (R-Ore.), wasted no time in calling on the Administration to withdraw a provision in its budget proposal for next year that would increase power rates in the Pacific Northwest by 10 percent or more. 

"Pacific Northwest families, farms and job-creating businesses can ill-afford another rate increase at this time," the lawmakers said.

Under the budget proposal submitted to Congress today, a portion of the Bonneville Power Administration's future revenues would be captured and used to accelerate repayment of its federal debt rather than to reduce Northwest power rates.

In a letter sent today, Hastings, DeFazio and Walden asked the Office of Management and Budget (OMB) to "suspend the pursuit of this ill-conceived plan which would negatively impact the Northwest economy." The lawmakers went on to express disappointment at the lack of consultation with the Northwest congressional delegation and noted BPA's long history of repaying their debt on time or ahead of schedule.

"Under this direction, millions of dollars will be pulled out of our region's economy to pay a federal debt obligation that is already ahead of schedule for repayment," they said in the letter.

A copy of the letter to OMB is attached below.

 

letterhead 

February 6, 2006


Joshua B. Bolten
Director
Office of Management and Budget (OMB)
725 17th Street NW
Washington, DC 20503

Dear Director Bolten:

As co-chairs of the bipartisan Northwest Energy Caucus, we are writing to express our strong unified opposition to OMB's proposal to increase near term electric rates in the Pacific Northwest by accelerating Bonneville Power Administration (BPA) federal debt repayment. We ask that you suspend the pursuit of this ill-conceived plan, which will negatively impact the Northwest economy.

As you know, BPA has made timely payments to Treasury for more than 20 years running. In fact, BPA has voluntarily made more than $1.46 billion in early payments on its federal debt. There are numerous built-in protections to assure this timely repayment of federal debt continues.

We believe this proposal to use a portion of BPA's secondary sales revenues for accelerated debt repayment is a disguised rate increase. By capturing secondary revenues in this manner, electric rates throughout the Northwest will increase - perhaps by ten percent or more. This runs counter to the President's interest in reducing energy costs for Americans and will negatively impact electricity-intensive industries. Under this direction, millions of dollars will be pulled out of our region's economy today to pay a federal debt obligation that is already ahead of schedule for repayment.
We are especially disappointed that this proposal has been made with no consultation with the Northwest congressional delegation. We have repeatedly requested, in correspondence and in congressional oversight hearings, greater consultation with OMB on these BPA budget issues. Without this communication, OMB has repeatedly issued proposals that reflect a lack of understanding of BPA's role in the Northwest economy. These proposals create tremendous uncertainty at a time when BPA and regional stakeholders are making significant decisions regarding near term rates and long term system allocation.

Our region's ratepayers are still recovering from the dramatic electric rate increases that followed in the wake of the 2001 California electricity crisis and associated market manipulation. Successive years of drought and increasing fish costs have also reduced hydro generation and increased power rates. The families, farms, and job-creating businesses of the Pacific Northwest can ill-afford another rate increase at this time.

We request that you postpone indefinitely further consideration of this accelerated debt repayment scheme.

Sincerely,

/s/

Peter DeFazio
Doc Hastings
Greg Walden

Members of Congress

cc: Energy Secretary Sam Bodman
BPA Administrator Steve Wright