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Senate Approves BPA Borrowing Increase by $700 Million by CBB Staff Columbia Basin Bulletin - January 24, 2003

The Senate has approved an additional $700 million line of credit for the Bonneville Power Administration, mainly to finance new electricity transmission lines and improvements.

The increase would raise BPA's U.S. Treasury borrowing authority limit to $4.45 billion. It was added on Thursday to an overdue $390 billion catch-all annual spending bill that passed the Senate. Next, a final compromise must be worked out with the House, which has not yet approved the financing.

All eight senators from states served by the agency -- Oregon, Washington, Idaho and Montana - worked to persuade Senate Appropriations Committee leaders to amend the FY2003 omnibus appropriations bill to include the increase. The omnibus bill combines 11 annual spending measures that have been stalled since the start of the fiscal year on Oct. 1. Congressional leaders hope to pass a final version by Feb. 3, when President George W. Bush proposes his FY2004 budget.

Sen. Larry Craig, R-Idaho, lead sponsor of the BPA amendment, along with Sen. Conrad Burns, R-Mont., and Patty Murray, D-Wash., are members of the committee and will take part in negotiations with counterparts from the House starting next week to work out the compromise spending bill.

"It is a credit to the entire Senate Northwest delegation that this amendment has passed. We now must fight to keep it in conference with the House," said Murray.

One transmission project that would be funded is the Hanford-Schulz line, which will help implement spill increases at federal dams as called for under the Columbia Basin salmon plan and biological opinion, she said.

Due to the 2000-01 West Coast energy crisis and current low rainfall and snowpack, BPA is under severe financial strain, and without the new federal borrowing authority would have had difficulty making these necessary transmission improvements, Murray said.

The $700 million increase is the same amount recommended last year by Bush in his FY2003 budget. But it is less than the $1.3 billion sought by BPA and Northwest members of Congress and approved by the Senate last year as part of comprehensive energy legislation, which died.

Bonneville originally sought $2 billion for a 10-year capital investment program, launched during the height of the Western energy crunch. Agency officials and Northwest members said that despite the region's economic slowdown since then, it will soon reach its current federal borrowing limit and needs the increase to meet demands for new transmission, reliability and other improvements.

The federal power marketing agency owns and operates 75 percent of the high voltage power transmission in the Northwest and "is now being forced to operate way beyond its limits," Craig said. "New power generation is critically needed in the region, and the additional borrowing authority provided by this bill to upgrade transmission services will go a long way to make that happen."

A number of Northwest transmission paths are severely constrained, producing bottlenecks and jeopardizing reliability and impeding the region's ability to integrate new generation, Sen. Maria Cantwell, D-Wash., said.

Besides financing much-needed transmission improvements, the added borrowing authority also will allow BPA to fund new conservation and renewable energy initiatives and make improvements at existing hydroelectric dams on the Columbia and Snake rivers, to make them more efficient and fish friendly, Cantwell said.

The agency has not built any major new transmission since 1987, while load growth and deregulation of wholesale power markets has boosted traffic on the system by 2 percent per year. The Northwest Power Pool estimates that the winter peak load has grown 12 percent since 1998.

BPA recently announced it is beginning construction of a $150 million project - an 84-mile transmission line between Grand Coulee Dam on the Columbia River and the Spokane area.

Crystal Ball, Washington, D.C., liaison, said the agency is allowed to use its borrowing authority for capital investments in hydroelectric efficiency projects at dams, conservation and transmission infrastructure.

BPA's original $2 billion 10-year plan was developed during the energy crisis when efforts were being made to increase power generation and conservation and developers were proposing to build a number of new power plants that would have required new or expanded transmission lines.

With the subsequent recession, the picture has change, with a number of proposed plants on hold or abandoned. "But if the economy picks up, we'll be right back in the same situation," Ball said. "So the $700 million is very helpful."

"We're moving forward with our infrastructure program as we have it today," but the impending exhaustion of BPA's current borrowing limit constrains its flexibility, she said. "If we have the increase we're much better off."