02.25.06

At Inland Power and Light, Cantwell Calls on President, Congress to Halt Plans for Northwest Energy Tax Hike

Cantwell: Don’t interfere with almost 70 Years of Northwest HistoryAlongside local power officials and ratepayers, Senator vows to preserve regional control, questions legality of rate hike

SPOKANE, WA – Saturday, at Inland Power and Light in Spokane, U.S. Senator Maria Cantwell (D-WA), a member of the Senate Energy Committee, joined local officials and ratepayers to highlight local opposition to a planned $1 billion backdoor electricity rate hike on the Pacific Northwest.

“The Pacific Northwest has a proven record as a responsible steward of our own resources,” said Cantwell. “Now, the federal government is trying to take away a right we’ve had for almost 70 years. At best, this is bad policy, at worst, it’s illegal. Northwest families and businesses suffered in the wake of the Western energy crisis, an energy tax hike now is the last thing we need. To keep electricity affordable and help our economy grow, I’m going to do every thing I can to keep control of our energy resources right here at the regional level.”

At Saturday’s event, Cantwell was joined by Fred Retman, Inland Power and Light’s Power Supply Manager and a long-time former employee of the Bonneville Power Administration (BPA), as well as Dave Schill, a board member of Inland Power and Light. As a representative of area ratepayers, Mr. Shill expressed concern with the increasingly large power bills faced by Spokane-area citizens.

“This rate increase would be unfair,” said Dave Schill. “It’s another example of how the Bush Administration is trying to raise additional revenue on the backs of Northwest ratepayers.”

The proposal, included in the president’s Fiscal Year 2007 budget proposal, would reverse a decades-old BPA policy of using revenue from surplus power sales to lower electricity rates for consumers in the Northwest. Earlier this month, Cantwell met with Energy Secretary Samuel Bodman and President Bush to make clear the Northwest’s staunch opposition to the plan, which would overturn a long history of regional control. Friday, in a letter to Budget Committee leaders, Senators Maria Cantwell, Larry Craig (R-ID), Patty Murray (D-WA), Conrad Burns (R-MT), Ron Wyden (D-OR), Gordon Smith (R-OR), and Max Baucus (D-MT) made clear that the Northwest would not tolerate the plan.

“We are writing to voice our unified opposition to the proposal...,” wrote the senators. “Moreover, we have raised serious questions as to whether the Department of Energy has the authority to pursue this proposal without additional legislation. As such, we ask that you reject this proposal…”

“This ill-advised plan is but the latest in a long line of OMB proposals—offered by both Democratic and Republican Administrations—that would erode the value of the Northwest’s cost-based hydropower system,” they continued. “At a time when consumers and businesses across the nation are struggling under the weight of rising energy costs, this proposal is clearly at odds with our bipartisan goal of stabilizing power prices as a means of encouraging economic growth.”

Cantwell helped stop a similar proposal last year, and is calling on the citizens of Washington and the entire Northwest to join her in signing a petition to demand an end to the plan to unravel BPA’s cost-based rates. The petition, posted on Cantwell’s website, has already been signed by 7,500 citizens.

[The Senators letter to Budget Committee leaders follows below]

February 24, 2006

The Honorable Judd Gregg
Chairman, Senate Budget Committee
624 Dirksen Senate Office Building
Washington, DC 20510
The Honorable Kent Conrad
Ranking Member, Senate Budget Committee
624 Dirksen Senate Office Building
Washington, DC 20510


Dear Chairman Gregg and Senator Conrad,

We are writing to voice our unified opposition to the proposal included in the Office of Management and Budget’s (OMB’s) Fiscal Year 2007 budget request, which would raise Bonneville Power Administration (BPA) electricity rates and undermine decades of regionally-based decision-making on issues critical to the Northwest economy. Moreover, we have raised serious questions as to whether the Department of Energy has the authority to pursue this proposal without additional legislation. As such, we ask that you reject this proposal and do not include it in the assumptions contained in the Senate’s Fiscal Year 2007 budget resolution.

OMB’s latest plan would increase rates beginning in Fiscal Year 2008, and would redirect almost a billion dollars of projected BPA revenues over the next decade, to accelerate payments to the U.S. Treasury. This ill-advised plan is but the latest in a long line of OMB proposals—offered by both Democratic and Republican Administrations—that would erode the value of the Northwest’s cost-based hydropower system. At a time when consumers and businesses across the nation are struggling under the weight of rising energy costs, this proposal is clearly at odds with our bipartisan goal of stabilizing power prices as a means of encouraging economic growth.

In addition, OMB’s budget proposal is inconsistent with over 60 years of settled law and precedent governing the way in which BPA’s rates are set and the federal investment in the Northwest system is amortized. We believe that a shift in federal policy of this magnitude would require additional legislation and Congressional approval. Should OMB nevertheless choose to proceed, this proposal will meet with vigorous legal challenges from Northwest stakeholders. And in all cases, this rate hike plan faces far from certain regulatory approval from the Federal Energy Regulatory Commission, a quasi-judicial independent agency bound by its own legal precedents beyond the purview of OMB. Given these vast legal uncertainties, we encourage you to omit this proposal from the Senate’s Fiscal Year 2007 budget framework.

Thank you for your attention to this issue, which is of great concern to our constituents.

Sincerely,

U.S. Senator Maria Cantwell
U.S. Senator Larry Craig
U.S. Senator Patty Murray
U.S. Senator Conrad Burns
U.S. Senator Ron Wyden
U.S. Senator Gordon Smith
U.S. Senator Max Baucus
Cc: Mr. Donald Marron, Acting Director, Congressional Budget Office

###