Selling BPA’s Assets Ill-Advised; Keep BPA Rates Competitive

CEO Dave MarkhamThis spring, I joined Oregon electric co-op leaders and others throughout the country for the National Rural Electric Cooperative Association’s Legislative Conference in Washington,D.C. This annual trip presents an opportunity to visit Capitol Hill to advocate for our members.

Despite Congress previously rejecting it, the administration once again rolled out an ill-advised proposal in its FY2020 budget to privatize the transmission assets of the Bonneville Power
Administration and other power marketing administrations and impose market-based rates on PMA power sales. Last year, the Northwest congressional delegation demonstrated bipartisan opposition and helped prevent it from getting any traction. After our round of visits with Oregon U.S. Sens. Ron Wyden and Jeff Merkley and our House delegation, I am pleased to report they will again stand united in opposition of this proposal. Our lawmakers recognize that if the federal government sold BPA’s transmission assets to the highest bidder, co-op members would face a significant spike in electric rates and lose millions of dollars of equity they have invested in BPA’s assets through the years.

Selling BPA and other PMA assets is a recycled and tired idea. These proposals date back to Presidents Reagan and Clinton as administrations seek ways to raise revenue to feed ever-growing budgets. Electric co-ops have successfully warded off all attempts, and I am optimistic we will do so again.

Rather than expending energy to defeat the privatization of PMAs, Congress’ time would be better spent keeping power rates of PMA competitive. Unfortunately, we continue to see BPA rates climb. This raises concerns about the long-term economic viability of this resource. As I shared with you last month, BPA has scheduled a wholesale rate increase for October 1, 2019, with an estimated average increase of 2.9% for electricity and 3.6% for transmission services. That will likely result in a need to increase CEC’s rates in January.

A recent sliver of good news from BPA: they will absorb spill costs this year. BPA spilled water past Columbia River hydroelectric dams last year to help salmon migration downstream. Bypassing turbines means less power generation and requires BPA to buy replacement power in the regional market. To recover costs, BPA imposed a spill-related surcharge on Northwest utility consumers; CEC’s costs were $150,684.

Defeating the administration’s proposal and avoiding a spill surcharge this year are examples of the various fronts we must work to deliver this carbon-free renewable resource to you in a cost-effective manner.