NW Energy Coalition Testimony on BPA Regional Dialogue Proposal

Dec. 6, 2006

Comments of Sara Patton, Executive Director

Good afternoon. I am Sara Patton, executive director of the NW Energy Coalition, a regional, non-profit alliance of more than 100 organizations committed to bringing the benefits of clean and affordable energy to the people and businesses of the Northwest.  Since our inception 25 years ago, the Coalition has worked closely with BPA and the NW Power and Conservation Council to further the development of the region’s great energy efficiency and renewable energy resources, and to mitigate the damage done to salmon and other wildlife by the federal hydrosystem.

Our Coalition was founded to further the goals established by the U.S. Congress in the 1980 Northwest Power and Conservation Act. The Act makes Bonneville responsible for meeting public utilities’ load growth. The Act specifically directs Bonneville to meet those needs first by acquiring cost-saving energy efficiency and second with cost-effective renewables, such as wind, solar and biomass, before looking at any fossil fuels.

In fact, BPA has played a key role in the acquisition of cost-effective energy efficiency, low-income weatherization and new renewable energy projects. Bonneville has used its ideal position as provider of nearly half the region’s electricity and operator of nearly three-fourths of the region’s high-voltage to help bring clean and affordable energy to all the people and businesses of the Northwest.

I wish I could say that the “Regional Dialogue” proposal now before us will advance that goal. Sadly, it will not. BPA has proposed a radical change in direction that could undermine both the letter and intent of the federal Power Act.  As currently written, the Regional Dialogue transfers load-growth responsibilities to the utilities themselves, but not the Power Act’s priorities for meeting that growth. Without a specific obligation to prioritize clean energy, utilities may make short-term decisions causing long-term economic harm to energy consumers.

Instead of becoming an accomplice in exposing consumers to the financial risks associated with increased reliance on fossil fuels, Bonneville should continue its active role in supporting efficiency, renewables and fish and wildlife stewardship. The Regional Dialogue’s allocation of the federal system is unacceptable without a specific, comprehensive, meaningful, reliable, funded program for accommodating BPA’s stewardship responsibilities, including energy efficiency, new, renewable resource development and an adequate power supply. 

The Coalition and other public-interest advocates have put forward specific amendments to the Regional Dialogue to protect energy consumers and uphold the legal responsibilities detailed in the Northwest Power Act. Let me list a few of these:

First, the Regional Dialogue presents a great gift to public utilities in the Northwest -- 20 years of very low cost federal power, enough to meet to meet the majority of their power needs. As the quid pro quo for this bounty, utilities must commit to meeting additional needs the way Bonneville would be required to -- first with energy efficiency and second with cost-competitive renewable energy. That commitment must be written into each utility’s power-purchase contract with BPA.

Second, the Regional Dialogue gives Bonneville’s utility customers the option of asking Bonneville to meet their load growth with a market price-based “Tier 2” product. For those utilities opting to meet their rising demands in this way, BPA should offer only an all-conservation and renewables package of resources. Again, construction of a clean-energy-only “Tier 2” product is necessary to meet the legally binding priority directives of the Northwest Power Act.

Third, cycles of over- and under-development have been hallmarks of deregulation schemes around the country.  In addition, by shifting the responsibility for meeting load growth to its utilities, there is a real possibility that, like in the 2000-01 energy crisis, resources will not be developed in time to prevent the region from again using emergency declarations to keep the lights on at the expense of salmon restoration.  To prevent these boom and bust cycles and emergencies that endanger fish, the contracts between BPA and its utilities should require that each utility acquire adequate resources by adhering to the Resource Adequacy Standards developed by the Council and Bonneville. Bonneville must incorporate the resource adequacy requirements more firmly into the Regional Dialogue proposal and into the 20-year power sales contracts.

Fourth, Bonneville should use its market position to help Northwest utilities acquire ALL the cost-effective energy savings in their communities – not just the fractional equivalent to the amount of BPA power in a given utility’s portfolio. BPA should exact a specific commitment from each utility that buys low-cost federal hydropower that it will meet the goal of achieving ALL the available cost-saving energy efficiency in its service territory.

Fifth, BPA needs to clarify its financial commitment to acquiring new renewable resources. It must categorically state that its proposed $21 million per year allocation is NOT a cap and that the agency will invest as necessary to ensure acquisition of the most cost-effective renewables.  This is an excellent clarification that the Council should request be added to the BPA proposal. 

Sixth, Bonneville, the Council and regional stakeholders have been working to identify and overcome barriers to integration of new renewable resources into the grid. We appreciate those efforts, and urge Bonneville to incorporate the specific recommendations of the integration committee into its proposal.

In conclusion, we acknowledge that BPA has proposed a major change in the way it serves the region’s energy needs.  Done wrong, the new scheme puts us at risk of a dirty and expensive energy future.  We have all seen other deregulation experiments go awry, so we must be wary about changing the “one-utility” model that has served us so well since the Regional Act was passed in 1980.  We believe the improvements and safeguards that we have suggested are critical to mitigating these risks. 

Thank you for the opportunity to provide the Coalition’s perspective on Bonneville’s regional dialogue proposal.