The Trump administration wants higher power rates for Tri-Citians and others who rely on electricity from the Northwest’s largest power supplier.
Just weeks after the Bonneville Power Administration released a plan to keep cost increases at or below the rate of inflation, the White House released its proposed federal budget for congressional consideration.
The budget proposal calls for authorizing BPA to charge wholesale rates for the power it supplies to local utilities — including the Benton and Franklin PUDs, and Richland energy services — at rates comparable with those charged by for-profit, investor-owned utilities.
“This would mean power rates would go up, and the increased cost would inevitably be passed on to consumers,” said the Northwest Power and Conservation Council.
BPA sells wholesale electricity to Northwest utilities at its cost, with no markup for profit.
The proposed change in pricing is in addition to the revival of a proposal the Trump administration made last year to sell off the publicly owned Northwest transmission grid.
BPA owns 15,000 miles of Northwest electric transmission lines.
Selling off BPA’s transmission system and abandoning cost-based rates would raise electricity rates and throw sand in the gears of the Northwest economy.
Sen. Maria Cantwell, D-Wash.
Selling off the BPA grid would produce $5 billion in revenue for the federal government, the administration’s budget proposal said.
Allowing BPA and other federal marketing administrations to sell power for more than their cost would raise almost $2 billion by 2028, it said.
Language in the budget proposal says that “reducing or eliminating the federal government’s role in electricity transmission infrastructure ownership — thereby increasing the private sector’s role — and introducing more market-based incentives, including rates, for power sales from federal dams, would encourage a more efficient allocation of economic resources and mitigate risk to taxpayers.”
Washington’s congressional delegation and other lawmakers representing states with federal transmission assets said the opposite.
The two proposals “would raise electricity rates and throw sand in the gears of the Northwest economy,” said Sen. Maria Cantwell, D-Wash., the ranking member of the Senate National Resources Committee.
Her colleague on the committee, Sen. Lamar Alexander, R-Tenn., called selling off federal transmission assets a “looney idea.”
Cantwell pointed out that it is Northwest consumers who already have covered the full costs, with interests of building and operating the region’s hydropower system.
Ratepayers compensate the federal government, with interest, for BPA’s power and transmission systems.
“Our investment shouldn’t be put up for sale to free up money for runaway military spending or tax cuts for billionaires,” said Sen. Ron Wyden, D-Ore.
Northwest members of the U.S. House of Representatives saw the proposals coming.
These changes would lead to certain rate increases for consumers, imposing increased costs on families and economic development.
Bipartisan letter from Northwest lawmakers
On Feb. 9, before the administration’s budget request was released, 13 bipartisan Northwest representatives sent a letter to the U.S. Office of Management and Budget, urging it not to include any provisions that would raise the rates or harm operations of the BPA.
“If market rates were imposed, Northwest public power utilities would see no value in continued BPA service,” said the letter, signed by Reps. Dan Newhouse and Cathy McMorris Rodgers, both R-Wash.
“The consequence would be to leave the federal government holding non-economic assets, as well as financial responsibility for fish mitigation costs that approach $1 billion per year,” the letter said.
BPA markets power from dams, including on the Snake and Columbia rivers, and other sources, including the Columbia Generating Station nuclear power plant near Richland.
Divesting transmission assets to the highest bidder, or changing the rate structure, would jeopardize the consistent revenue the BPA sends to the Treasury each year, the letter said.
“Furthermore, these changes would lead to certain rate increases for consumers, imposing increased costs on families and economic development,” it said.
Service to rural communities would be needlessly risked, Newhouse said.
After a similar proposal to sell of the BPA transmission system last year, Northwest lawmakers argued that if the BPA grid is privatized, high-value assets would be sold off at a premium and lines that serve rural areas and contribute to the reliability of the electric grid would be abandoned as unprofitable.
The Northwest Power and Conservation Council said proposals to change the way BPA sells power and transmission go back as far as 1986, with all being defeated by Congress.
Northwest lawmakers, including Cantwell and Newhouse, said they would be working to make sure the most recent proposals again are nonstarters in Congress.