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Region Poised For New Round of Power Wars
Washington Governor Gary Locke last month withdrew from talks aimed at establishing a new regional authority to oversee management of federal hydropower operations and fish and wildlife recovery efforts in the Columbia River Basin . The Governor announced his withdrawzal from the talks at a January 13 meeting of the Northwest Power Planning Council (NPPC) .
Locke asserted NPPC is still the forum for making recommendations on balancing hydropower generation with the needs of fish. Attempts to form a new system of river governance, he argued, would only divide the four Northwest states and threaten the region's current access to low-cost federal hydropower. While acknowledging Locke's withdrawal as a significant set-back, the governors of Oregon, Idaho and Montana, led by Oregon's John Kitzhaber , vowed to continue to work with members of the Northwest Congressional Delegation, many of whom agree the current structure is not working.
The governors are not alone in proposing to restructure how fish and power resources of the Columbia River Basin are managed. Northwest Aluminum CEO Brett Wilcox and industry consultant Jim Litchfield last summer began convening representatives from the region's publicly- and investor-owned utilities along with aluminum and other Direct Service Industries (DSIs) which together buy most of the federal hydropower sold by the Bonneville Power Administration (BPA) .
The Wilcox/Litchfield group is considering numerous options for re-organizing management of the Columbia River Basin power resources. Those options include: 1) maintaining the status quo; 2) amending the Pacific Northwest Power Planning and Conservation Act ; 3) transferring ownership of BPA's power marketing business to a compact of the four Northwest states or to a "Northwest Coop ," of BPA's current customers; and 4) privatizing BPA's power business.
A separate group, assembled by Oregon Senator Gene Derfler , who introduced and sponsored Oregon's recently passed utility restructuring law, is looking at a similar range of scenarios. The Derfler group includes utility regulators, public interest stakeholders and state policy makers as well as utility and industry representatives.
To date, the Northwest Coop proposal from the Wilcox/Litchfield group has drawn the most attention. A lofty concept, critics charge it is dangerously thin on details and ignores the enormous public policy implications inherent in any proposal that seeks to re-shape how federal power is allocated. "I like the concept of regionalization, but there are a lot of questions to be answered," said Jason Eisdorfer , a lawyer with Oregon's Citizens Utility Board . "Policy follows the coop structure rather than leading it."
The Wilcox/Litchfield Northwest Coop concept includes a broadly supported proposal to convert BPA's transmission system to a "stand-alone entity" but would also strip it of any "independent governmental powers." BPA's transmission system has historically been linked to public policy responsibilities. Salmon restoration advocates argue BPA's transmission system should be used to help pay for salmon recovery and transmission operators should have the ability to grant federal dams priority access when it is needed to help salmon survive their migration through the hydropower system.
Proposals to establish a new structure for allocating federal hydropower come as utilities and DSIs are securing electricity for the 2002-2006 period. The intensity with which BPA customers jockeyed for position during the year-long subscription process which proceeded the current ratecase may be an omen of what's to come if momentum builds behind efforts to re-shape how federal power is allocated. That intensity will only grow as regional demand for power grows, as market prices for electricity rise, and as the cost of BPA power falls as the agency pays off its nuclear debt. With momentum building in Congress for utility restructuring, which has already passed in more than 25 states, the Northwest's arrangement with BPA will fall under closer scrutiny.
Conflict among utilities, public interest advocates, DSIs and others over future allocation of BPA power could undermine efforts to form a new regional authority. Another installment of Northwest power wars would only empower federal lawmakers in the Midwest and Northeast who have long sought to re-distribute the prized federal resources of the Columbia Basin and de-stabilize regional commitments to clean and affordable energy. Leadership will be vital, say veterans of Northwest energy issues. "A strong Northwest Congressional Delegation pulled us through the last round of power wars," says Sara Patton , director of the NW Energy Coalition . "Strong leadership will be the key to resolving any future conflicts."
Mark Glyde