http://craig.senate.gov/press/

For Immediate Release:
March 10, 2005

Beneficial Power Administration

by Senator Larry Craig

Dams and cheap power. Those are probably the first things that come to mind for many Idahoans and Northwest residents when the Bonneville Power Administration (BPA) is mentioned. Clearly, BPA is more than that, but hydroelectric power provided by BPA-operated dams has been, and continues to be, a critical factor in shaping the character of our region and way of life.

As we know, the Pacific Northwest largely is a land of fast-running rivers and vast, open expanses of high-plateau desert. Small parts of the region are blessed with abundant supplies of water, but like much of the West, we have a lot of arid land. However, in the first half of the 20th Century, the enormous potential of our rivers was harnessed by a network of dams built on the Columbia and Snake Rivers.

Many of these dams were built to generate electricity, and they do the job well. The BPA was created to market the power generated by these projects. The dams generate electricity at a low cost, because all that is needed to turn the turbines is some water, and the force of gravity does all the work. At other power plants (wind and solar power aside), fuel must be burned to generate steam or turn the turbines. Fuel costs money. Water and gravity are free.

In addition to the power generated, the dams also create irrigation sources to "make the desert bloom." And bloom they have, for many, many years. The existence of dams virtually produced the agriculture and aluminum industries in the Northwest out of thin air. Businesses and manufacturers have been attracted to our region for decades because one of the major costs of doing business - energy - is very low compared to other regions. When those businesses come here, they bring jobs that provide a living for thousands of families.

Unfortunately, some look at the low rates the BPA is able to charge and see an opportunity to boost the revenues of the federal government. BPA generates power more cheaply than other providers, and that isn't fair, they say. And with the federal budget likely to be tight this year, they think it would be a good idea to make the BPA and other power marketing administrations (PMAs) sell their power at market rates. This would bring the PMAs more revenues to fill Treasury coffers, or so the thinking goes.

That's baloney, plain and simple. While making such a change could, perhaps, generate more revenues for BPA, the argument supporting it is misinformed. BPA operates at no cost to the federal government, and each year makes payments on its remaining debts. In fact, BPA has moved ahead of schedule with its payments to Treasury.

Making PMAs sell at market rates could result in rate hikes of 20 percent or more. We learned from power shortages in California that rate hikes are inevitable, and rate hikes always hurt the consumer. By forcing BPA to raise rates, the cost of energy goes up in Idaho, Oregon and Washington. That hurts businesses, which may be forced to cut jobs or relocate to another region. Most important, it hurts the workers and families of the region by reducing the number of good paying jobs and increasing their bills.

That is why I worked so hard to defeat the Administration's request that BPA and other PMAs sell their power at higher rates. BPA provides 40 percent of all power in the Northwest, more than any other PMA. A small increase in rates would have a devastating impact on Idaho's economy and the entire region. I'm pleased my effort was successful, but this monster has reared its head before, and I'd be willing to bet it will again. If it does, rest assured that I will do everything in my power to stop it.

The BPA has been instrumental in the development and prosperity of the Northwest. It has shaped our economy and our way of life for the better. If the "B" in BPA stood for "Beneficial," I think that would be appropriate, and many residents of the region would agree. As long as I'm in the Senate, I'll work to keep it that way.

[30]