02.25.05

New Study Confirms Bush Administration's NW Power Rate Hike Plan Would Devestate Regional Economy

Northwest Power Planning Council Finds $1.7 billion hike in energy costs;$1.3 billion loss in income for Northwest families Some Washington residents could see power bills rise $480 per year

WASHINGTON, D.C. – Sen. Maria Cantwell (D-WA) today said a new Northwest Power Planning Council analysis shows that the Bush Administration's plan to hike regional power rates would devastate the Northwest economy.

"The Washingtonians that can least afford it will pay the most under the Administration's plan to raise Northwest power rates," Cantwell said. "It'll slam the brakes on our regional economy and raid the pocketbooks of working families a second time. The economic aftershocks would mean lower personal incomes and lost jobs for Washington. I'll use every tool at my disposal to stop this disastrous rate hike plan."

An analysis released today by the Northwest Power Planning Council assessed the Bush Administration's proposal to raise the energy rates of the Bonneville Power Administration (BPA) until they are roughly the same as rates charged elsewhere in national electricity markets. Based on assumptions about current market prices, the Council estimated the Administration's proposal would raise Northwest power rates by $1.7 billion.

On average, residential customers of public power utilities would see rates rise about 39 percent, or by $288 a year. However, "the effect would be larger for customers of utilities that rely heavily on Bonneville power. These utilities tend to be smaller and more rural and are likely to have a greater share of electric heat. A household with an all-electric home would see larger increases-about $40 per month," the Council concluded. In addition, the study found that Northwest residents would see a combined $1.3 billion decrease in their personal incomes.

In Washington state today, 72 percent of low-income families use electricity to heat their homes. And already, the 105,000 Washingtonians with incomes below 50 percent of the federal poverty level spend 34 percent of their entire annual pay on home energy bills.

The Administration included its BPA rate increase proposal in its Fiscal Year 2006 budget, released February 7. Since its creation in the 1930s, BPA's rates have been based on costs—rather than market prices, which are typically about double. Bonneville provides about 70 percent of the power consumed in the State of Washington as a whole.

In response to the rate hike proposal, Cantwell on February 11 launched an online petition drive in opposition to the plan. Already, the petition has collected close to 8,000 signatures. Next Thursday, March 3, Cantwell will report the results of her petition to the Department of Energy, when the Secretary is expected to testify before the Senate Energy and Natural Resources Committee, of which Cantwell is a member. The "Stop the Rate Hike" online petition can be accessed at http://cantwell.senate.gov.

Organizations that have already come out in opposition to the Northwest rate hike plan include: the Public Power Council; Northwest Public Power Association; Washington PUD Association; Oregon PUD Association; Oregon Municipal Electric Utilities; the American Public Power Association; the National Rural Electric Co-op Association; and the Washington State Labor Council.

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