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BPA Can't Raise Rates to Fund Dam Removal Jim Barnett, The Oregonian - September 30, 1999

A new law still will allow the agency to increase its electricity prices
to cover its federal debt payments

WASHINGTON -- A new law will block the Bonneville Power Administration from collecting any money to pay for dam removal.

But the agency still plans to increase the price it charges for electricity to add $1 billion in reserves by 2006 to ensure that it can meet debt payments to the Treasury.

Sen. Slade Gorton, R-Wash., included the restriction to head off removal of four federal dams on the Snake River in Eastern Washington. Federal agencies are studying whether dam removal could halt the decline of several endangered fish runs.

The new restriction on BPA rates is attached to an annual spending bill for energy and water projects. White House officials said Wednesday that President Clinton was expected to sign the bill before the start of the fiscal year Friday.

The BPA soon will begin setting rates for the 2001-2006 period. Agency officials said the restriction would have little effect on their plans because reserves would be collected to prevent default on annual debt payments, not to prepare for dam removal.

"Our proposed rates are consistent with this amendment," said Steve Wright, a senior vice president of the agency, which is based in Portland.

Gorton said he objected to other federal agencies' suggestion that the BPA start collecting rates in anticipation of removing dams in the next decade.

Northwest ratepayers, he said, "should not have to pay for something they do not want."

The BPA sells more than $2 billion a year of power generated by 29 dams and one nuclear power plant in the Northwest. Its rates are based on costs,including recovery of fish that must pass the dams to return to their spawning grounds.

Regardless of whether dams are removed, the BPA's wildlife recovery costs, and therefore its rates, are likely to go up in 2001. In some scenarios calculated by the agency, stepped-up barging and other recovery efforts would be more expensive than removing the four dams and restoring the Snake to a free-flowing river.

Separately, Gorton said the spending bill included $67.5 million for the Columbia River Fish Mitigation Project. The project received $60 million in fiscal 1999, down from $95 million in 1998.

Last year, the project became a target of lawmakers from outside the region, who called it ineffective and recommended study of dam removal. Gorton said this year's bill eliminated money for studies of dam removal.