For Immediate Release:

Wednesday, August 8, 2001

Thank you for that kind introduction Today, I want to talk about two of the biggest challenges facing our state: energy and transportation. I want to talk about some of the choices before us, and what I'm doing in the U.S. Senate to help our state. We've had a lot of developments on energy in the past few months, and just last week, the full Senate passed a transportation bill that has a lot of support for projects here in Washington state.

But before I get into specifics, I want to make a more general observation. These days we're really feeling the impact of our energy and transportation problems. We're struggling to meet our region's energy needs. We sit in traffic, and our state legislature is tied in knots over transportation funding. Because we see these problems everyday, it's easy to forget that what's happening today is part of a much larger context.

In fact, in the history of the Pacific Northwest, three issues -- water use, energy, and transportation -- have shaped our region. The reason it's important to remember this larger history is because we can learn lessons from our history about what works. When I look at how our state has handled these issues: whether it was working to bring electricity to all parts of our state, tapping the power of our rivers for energy and irrigation, or building roads and bridges, I see two big lessons.

First, we're all in this together. What we do in one of part of the state impacts everyone else. We've got to make sure everyone shares in the benefits and the sacrifices. There isn't enough money or time to meet every individual interest. But if we stand together, we can meet our common needs.

My belief that 'we're all in this together' is very personal. I was born and raised in the Seattle area. My husband Rob's grandfather was born in Seattle in 1892. My grandfather raised his family starting in 1914 in Eastern Washington. And just last year, my grandson was born here. I care about keeping this a good place to live. Wringing hands and pointing fingers won't help. But if we come together, decide what we want, and work for it together, we will make progress. I've been given a unique opportunity to chair the Senate Transportation Appropriations Subcommittee, and I hope to work with other community leaders to find common ground.

Now, the second lesson I draw from our history is this: We've got to take the long view. As we make short term decisions, we've got to make sure they won't hurt us over the long term. For example, in the energy area, there are some policies that would get us through the next ten years. But after that, we'd be right back here where we started facing shortages and high prices. So even though we're making decisions right now about this summer and next winter, we've got to lay the groundwork for good long-term solutions.

So as we work together to find solutions in areas like energy and transportation, let's remember that we're all in this together, and we've got to take the long view. With that in mind, let me start by talking about energy. I want to talk briefly about four immediate challenges: conservation, controlling prices, boosting supplies, and curtailment. Then I want us to take the long view, and look ahead to some of the long term questions our region is facing. In the short term, there are four issues that affect our energy outlook.

Conservation

First, we've got to conserve. Conservation does not mean sitting in the dark. It means being more aware of how you choose to use energy. For example, just changing your regular light bulbs to compact flourescent light bulbs you can save 33 percent in energy costs. But conservation isn't just something that we support as individuals. It's something the federal government has to show leadership on through tax credits and investment. Frankly, I'm concerned about how the Bush Administration is treating conservation. Conservation has to be the first solution on everyone's list both in our homes and offices and in government.

Energy Prices

Second, we've got to keep energy prices reasonable. While they're coming back down, for many months, electricity rates have been out of control. There's one agency whose job is to keep energy prices "just and reasonable." That agency is the Federal Energy Regulatory Commission, known as FERC. For months, it did not do its job. Finally, in June, FERC agreed to limited action. Unfortunately, FERC's action is too little, too late. And the mechanism it adopted was complicated. Now we've got to watch FERC carefully to make sure it's effective.

Site New Plants

Third, we've got to site new plants. Even without the problems in California, our population and our energy demand have grown dramatically. But we haven't added any significant new power in the last decade. That means we've got to site new plants quickly.

Curtailment

Finally, I want to say a word about curtailment, because we're all concerned about how major employers like the aluminum industry will fare. BPA was faced with a very difficult decision: either keep the aluminum industry operating at full throttle by charging everyone dramatically higher rates or idle the industry temporarily and keep rates lower for everyone else. Facing this decision, BPA has asked aluminum companies to idle their plants for the next two years. That will save consumers huge rate increases, but it does have consequences. It will reduce the payroll and tax base in vulnerable communities across our state at least temporarily and perhaps permanently. Either way, it's going to have a ripple affect throughout our state's economy. I want you to know that I am committed to trying to preserve as much of the aluminum industry as we can by working with the DSIs and BPA. This experience has left many of us wondering how we should balance the needs of keeping rates low for households while meeting the needs of important industries.

So the immediate challenges are conservation, keeping rates reasonable, building new power generation, and balancing our needs thoughtfully when it comes to drastic measures like curtailment.

Energy Transmission / RTO's

Next, I'd like to turn to three of the longer term issues: improving our transmission systems, the future of deregulation, and diversifying our energy sources. First, I want to tell you about something that's happening in energy transmission that's really under the public's radar screen. In addition to our supply problems, we have problems moving energy efficiently. Our transmission system has about 40 major bottlenecks, which we need to fix.

On the national level, there is a move to consolidate all the transmission lines in each region. Back in December of 1999, federal energy regulators told transmission owners that they needed to start creating regional transmission organizations -- known as RTOs. Since then, BPA, investor-owned utilities, public power, and other stakeholders have been negotiating the creation of an RTO for our region -- known as RTO West. It would handle transmission lines for seven states. Now in areas where there are dozens of different companies that own transmission lines -- and where each one charges a fee -- it may make sense to consolidate management. But in our region, just one transmitter, BPA, controls 75 percent of the transmission lines. So the advantages of an RTO here are not very clear.

I'm concerned that the RTO is moving forward without much public discussion of its cost, benefits and impact on prices. I'm not dismissing the RTO idea out of hand, but I do have four concerns. First, it's going to cost from $30 - 100 million dollars each year. Certainly, these costs will be passed onto consumers in higher energy bills. Second, we have no evidence that this system will serve the Northwest better than our current system. In fact, its creation could even delay our work clearing up existing bottlenecks. Third, it's not clear how an RTO would affect energy prices. If we move to a market-driven transmission system -- in the face of existing bottlenecks -- we may end up paying the same price as California. Finally, this proposal is moving forward much faster than I would like. It could dramatically change our power system, and there's been little opportunity for public discussion about its impact. While direct stakeholders have talked about it, the general public, the media, and many elected officials don't know about the possible impact of an RTO West.

Deregulation

Finally, I want to talk about deregulation, because -- even with the problems we're seeing in California and other states -- there is still an effort to deregulate energy markets. Montana has already experienced negative results from its deregulation effort. In fact, the state legislature has been trying to lessen the impact. In Oregon, the legislature delayed implementation of its deregulation plan.

I'm relieved by this pause in the deregulation push because we shouldn't treat energy the same way we treat cable service. Here in the Northwest, energy affects everything from our economy to salmon recovery, trade, and air quality. That's why having a stable, predictable market is so important. Unfortunately, in a deregulated market we'd lose that stability. We would face unpredictable boom and bust cycles. Low-cost, public power built this region, and today it's still a major engine. I don't want that engine to stall one year and overheat the next. For a state so heavily served by the cost-based rates of BPA and public utilities, it is hard for me to imagine less expensive and more stabile prices under a deregulated market. I sincerely hope Washington state takes a long, wait-and-see approach to the deregulation debate.

Diversify Our Energy Sources

Finally, I want to turn to the last long term energy issue. I'm concerned that we're moving from an over-dependence on hydropower to an over-dependence on natural gas. And natural gas is limited in transmission, production and reserves. While hydropower and natural gas will always be our primary generators, I believe we need to expand capacity from renewables like wind, biomass, solar, and geothermal sources. Wind is especially attractive because it can be brought online quickly, and farmers can generate income from land used for wind farms. Our state is taking a major step forward in wind generation near Walla Walla. When it's completed, the Stateline Wind Power Project will be one of the largest wind farms in the country. We also need to continue to invest in fuel-cell research and development. On the more controversial side, many people are asking us to take another look at nuclear energy. I have no doubt that debates about nuclear energy will be lively.

So when we look at our energy needs, we've got short-term issues like conservation, price regulation, new generation and curtailment. And we've got long term questions like whether a new transmission system will help our region, how to handle the push to deregulate energy, and how to diversity our energy sources. That's a lot on our plate, but if we remember that we're all in this together, and we take the long view -- we'll come out alright.

TRANSPORTATION

Next, I'd like to turn to transportation. I remember back when I served in the Washington State Senate. I became the first woman ever to serve on the State Senate Transportation committee -- because I've always believed that transportation is a family issue. I drive around Seattle -- and throughout our state, and I know how bad our transportation problems are. The Seattle-Tacoma-Everett corridor has the second worst traffic in the country. And our traffic problems have international impacts too. As a state, we rely heavily on international trade. Soon, one in every three Washington jobs will be trade dependent. Our transportation problems can cost us jobs. Let me give you an example. As you know, the Port of Seattle competes with other ports -- like Vancouver BC -- for international trade. We're trying to attract large container ships to Seattle. Not long ago, the Port of Vancouver ran ads in major trade publications. Those ads were targeted at the shipping companies that use the Port of Seattle. They showed a big container ship along with this headline: "You didn't cross the ocean to get caught in a sea of traffic." So in highly competitive areas like international trade, our traffic problems can cost us jobs.

Unfortunately, our airports aren't much better. Last month, Sea-Tac was the most delayed airport in the country so far this year. Clearly, we've got problems in every mode of transportation. That's why in the Senate I sought out my new position as Chairman of the Transportation Appropriations Subcommittee. After I became chairman, I held several hearings to identify the greatest needs. Then I worked with my colleagues and wrote the Senate's transportation bill. This $60 billion funds everything from highways and airports to the Coast Guard and pipeline safety. Just last week, my bill passed the full Senate. Now it needs to be reconciled with the House bill, and then signed by the President. I want to share some of the highlights of that bill with you.

For the Coast Guard, my bill increases funding by 13 percent. That will help improve search and rescue operations, training and equipment.

On pipeline safety, my bill provides record funding for the Office of Pipeline Safety, including -- money to hire new inspectors, funding for research and development, money for testing, and dollars to support community right to know efforts.

And I've worked hard to help meet the specific needs here in Washington state. In this bill, Washington state will get about three times the transportation dollars it received last year.

For example, we've got a lot more money for transit projects. We secured $94 million in formula funding for transit. And, we secured another $34 million in earmarks for specific transit projects around the state. That means more buses, serving more communities, with better facilities. I also secured major funding for Sounder Commuter Rail. We'll get $24.5 million to improve infrastructure, to purchase equipment, and to improve rail lines.

We've also done well in funding our Ferry system. As many of you know, Washington state has the largest passenger ferry system in the United States. Unfortunately, in recent years, state funding for ferries has decreased. Last year, Washington received about $2 million in federal funds for our ferries. This year, I was able to secure $5 million. In addition, we secured another $4 million to make infrastructure improvements to the Bainbridge Ferry.

Earlier, I mentioned the importance of being able to move freight from our ports to points eastward. For several years we've been working on something called the FAST Corridor. It helps improve the flow of freight between the ports of Everett, Seattle and Tacoma. This program takes bottlenecks -- like places where roads and railroads intersect -- and separates the two types of traffic. As a result, trains and cars can move through the intersection more efficiently and with fewer safety risks. This year, for the FAST Corridor program, I secured $20 million.

When it comes to airports, I helped secure a $26 million earmark to improve the air traffic management system at Sea-Tac. That money will help purchase and deploy the latest technology for managing air traffic. It will mean improved safety and fewer delays.

Light Rail

I want to mention Light Rail for a minute. As you know, we secured $500 million for Light Rail. Unfortunately, Light Rail has had a lot of problems. The Inspector General of the Department of Transportation and the House of Representatives have both been critical of the management and the projections of Sound Transit and light rail. They have raised questions that need to be answered. Today, I think Sound Transit is heading in the right direction. There's a new management team and better organization. But we've still got a lot of work to do to show critics that this project is affordable, under control and has local support. I am confident that if Sound Transit is able to answer these questions, we will see an improved transit system in the Puget Sound area soon. A few months ago, we were in danger of losing that $500 million. It almost went to another city, but I worked very hard to set that money aside. Right now that money is being held in abeyance. So if we can answer the questions and get our act together, that money is still available -- but it won't be for long. If we don't reach a local consensus on what we're building and how much it will cost, we will lose this opportunity. And let me tell you, I've seen the other projects out there competing for our dollars. If we blow it this time, we we'll have to wait a long time before we're eligible for those funds again. Let's reach a consensus and make the case so we can get a system up and running soon.

What's happening with Light Rail points to a bigger issue we're facing -- which is how we as a state come together to take advantage of federal help. Virtually all the federal dollars that are available for transportation require a state and local commitment. Right now, we are not maximizing our opportunities. That won't change until community members like you convince our state government to make a real commitment to transportation solutions. Back in Washington, D.C., I can try to secure as much funding as possible, but we won't be able to maximize that funding without a state and local commitment. So we're in this together, and I can provide a lot of federal support. But the consensus and commitment have to be there at the state and local level. Listen, we can improve our state's infrastructure. We can get the money. The real question is: Do we have the will? Are we prepared to push ourselves and our state's elected officials to put a comprehensive plan into action? For our future and our children's future, our answer must be yes.

Of course there are so many other issues in the Senate that will affect our state, which I don't have time to cover today. For example, when it comes to education, some of you may know that the Senate recently passed a reform bill that has very strict testing and accountability standards. Unfortunately, right now that bill does not include the funding needed to make those reforms successful. I serve on the conference committee that's combining the work of the Senate and House on education, and I'm working to make sure that students get the resources they need. That's just one of the many issues beyond energy and transportation that I'm working on.

Before I close, I want you to know that if you're concerned about issues like these, every week I send a legislative update by email to Washington residents. If you'd like to join my list, you can sign up on my web site. The address is http://murray.senate.gov.

So in closing, I know that we can make progress on any issue if we remember that we're all in this together, and that we've got to take the long view.

Throughout our state's history, we've been through challenges like this before. Back in 1889, Seattle was devastated by the Great Fire. But community leaders cleared the debris and started to rebuild. Their efforts transformed a town into a city. They came together and built the foundation for the progress we enjoy today. We've had challenges like this before, and we've come together to solve them.

As Rotarians and especially as members of this club with its strong history of service and civic involvement, I hope you'll join me to help our state meet the challenges before us. So that years from now, when this chapter of our history is written, it will tell the story of community members who came together and made a difference. That's our challenge, that's my hope, and I look forward to working with each of you to make our future a success.