02.14.03

Northwest Power Interests Protected in Spending Bill

Bill places roadblock on Standard Market Design; includes BPA borrowing authority

WASHINGTON, D.C. – The omnibus spending bill conference report protects energy interests in the Northwest by ensuring Congress' oversight role in reviewing Federal Energy Regulatory Commission’s controversial Standard Market Design (SMD) proposal, and increasing BPA’s borrowing authority by $700 million.

Standard Market Design

The conference report requires the Secretary of the Department of Energy to do an independent analysis of impact on electricity prices and reliability in different regions. U.S. Senator Maria Cantwell (D-WA), a member of Senate Energy Committee, fought for the inclusion of language addressing the SMD proposal because of its possible negative effect on Northwest energy prices and consumers.

Cantwell has been fighting FERC’s efforts to finalize the SMD rule, which restructures regional energy markets.

"While I would have preferred eliminating SMD altogether, this gives Congress another tool with which to review FERC’s decision," Cantwell said. "However, to be useful, the Secretary’s report must be genuinely independent and not just a rubber stamping of the Administration’s refusal to protect consumers in energy markets."

Under the bill’s new language, before SMD can be finalized, the Department of Energy must complete an analysis comparing electricity prices and the impact on the safety and reliability of generation and transmission both under current conditions and the proposed SMD rule. DOE’s analysis of SMD must evaluate five issues:

The costs and benefits of the rule; Effect on state utility regulation; Financial effect on retail customers; Effect on the reasonableness of electricity prices; and Effect on the safe, reliable, and secure operation of the Nation’s generation and transmission facilities.

BPA Borrowing Authority

Cantwell helped secure $700 million in increased borrowing authority for the BPA in the Senate omnibus bill and in the conference report. BPA will use the increase in borrowing authority to ensure the region’s energy system is reliable and secure, Senator Maria Cantwell (D-WA) joins Senator Larry Craig (R-ID) and the six other Northwest members in supporting the provision.

"Increasing BPA’s borrowing authority is an investment in the Northwest’s energy system," Cantwell said. "BPA will now be able to make the infrastructure improvements necessary to guarantee our energy system is reliable and secure."

BPA owns and operates 75 percent of the high voltage transmission in the Northwest. Increased borrowing authority gives BPA the ability to make much-needed improvements in the region’s transmission grid, modernizing transmission lines and reducing bottlenecks. The borrowing authority will also allow BPA to fund new conservation and renewable energy initiatives and make improvements at existing hydroelectric facilities, to make them more efficient and fish friendly.

The omnibus spending bill conference report passed the Senate and House of Representatives late last night. It is headed to the President’s desk for his signature.

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