02.07.06

Cantwell Blasts Bush Plan to Raise Northwest Power Rates by Nearly $1 Billion

Senator vows to fight backdoor tax hike for Pacific Northwest

WASHINGTON, D.C. – U.S. Senator Maria Cantwell (D-WA) vowed Monday to defeat a new Bush Administration plan to increase Northwest electricity rates by up to 10 percent. The proposal would reverse the Bonneville Power Administration’s (BPA) long-standing policy of using revenue from the sale of surplus power to lower electricity rates for Northwest consumers. Last year, Energy Secretary Sam Bodman promised not to unravel BPA’s system of cost-based rates without Congressional approval. Monday’s proposal ignores this promise and would place an extra burden on a Northwest economy already struggling under sky-high energy rates.

“In his State of the Union speech, the president said lower energy prices are the key to moving our economy forward,” said Cantwell, a member of the Senate Energy and Natural Resources Committee. “Less than a week later, he’s turning his back on working families across the Northwest by proposing a nearly $1 billion rate hike in a budget that also falls short on energy and weatherization assistance. The Northwest economy has already suffered enough as a result of the Western energy crisis, which brought BPA rate increases of more than 40 percent. As far as I'm concerned, this ill-advised plan is dead on arrival.”

Under federal law, BPA has the authority to sell surplus power to customers both inside and outside the Northwest. The revenue from surplus power sales is then used to lower BPA’s electricity rates throughout the Northwest. Currently, about 70 percent of the electricity consumed in the state of Washington is BPA power, sold at cost-based rates. The proposal included in the administration’s Fiscal Year 2007 budget would prevent certain surplus sale revenues from being used to lower power prices for BPA customers, as Bonneville has done for decades. According to budget documents, this plan could raise Northwest power rates by an estimated $924 million over the next 10 years—depending on the amount of surplus power BPA sells and the market price of power.

“Energy prices are already through the roof,” said Cantwell. “Now the administration is trying to squeeze extra dollars out of Northwest businesses and families, just when our economy can least afford it. This is nothing more than a billion dollar tax hike on the Northwest economy, and I intend to fight this proposal at every opportunity.”

Cantwell successfully defeated a similar proposal in last year’s budget that would have directed BPA to abandon its historical system of cost-based rates in favor of a market-based structure—costing the Northwest more than 13,000 jobs. Under questioning last year, Energy Secretary Samuel Bodman promised not to carry out similar proposals without the approval of Congress. This week’s rate-hike plan abandons that promise.

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