<HTML> <HEAD> <TITLE>96 BPA and Utilities Hope to Settle Subsidy Dispute, Jordan Kline, The Daily World</TITLE> </HEAD> <body bgcolor="FFFFFF" text="000000" link="0000FF" vlink="FF0000" alink="0000FF"> <basefont face="Arial, Tahoma, Times New Roman" size="3" color="#000033"> <TABLE border="0" width="100%" cellspacing="0"> <TR align="left" valign="top"> <td><small> <A href="https://sgi25.netservers.net/bluefish.org/thefilm.htm">the film</A><br> <A href="forum.htm">forum</A><br> <A href="library.htm">library</A><br> <A href="tutorial.htm">tutorial</A><br> <A href="contact.htm">contact</A> </small></td> <TD> <A href="economic.htm"><img src="images/economic.gif" border="0" width="110" height="110" align="center" alt="Economic and dam related articles"></a> <TD> <CENTER><FONT FACE="Arial, Helvetica" COLOR="0000FF"> <strong><BIG><H2 align="center">BPA and Utilities Hope
to Settle Subsidy Dispute</H2> </BIG></STRONG></FONT><FONT COLOR="FF0000">by Jordan Kline <BR>The Daily World, July 2, 2007</FONT></CENTER> </TABLE> <HR> <P align="left"> Negotiations between the Bonneville Power Administration, public power and the region's private utilities continue this week in an attempt to settle a dispute over a rate subsidy the private utilities have received for nearly 25 years.

The groups have been in a standoff since a 9th Circuit Court of Appeals ruling in May said Bonneville stepped outside its authority when the federal power marketer began to collect arbitrary dollar amounts from public power to pay for "residential exchange benefit" payments.

The payments went to residential customers of private power in the form of a rebate intended to offset the then-higher costs of generation for private power relative to their public counterparts.

The total payments from public power went from $40 million to as much as $400 million over the last seven years.

The benefit costs each residential customer of the Grays Harbor PUD 13 percent of their energy charge per month. Bonneville continues to collect the money.

The dispute won't be easy to settle. Public power won the lawsuit, and while those involved in the negotiations have signed confidentiality agreements, public power's likely demand is to ask Bonneville to return to the original 1983 formula.

Private power interests say the power generated from federal hydroelectric dams should be cheap for everyone, not just public power. But public utilities like the Grays Harbor PUD say the federal dams are paid for by their ratepayers, not all the region's taxpayers, and accuse Bonneville and private power companies of inciting public outcry via rate hikes in order to attract a congressional rescue.

Meantime, Bonneville says it just wants the groups to agree on a payment amount so negotiations for post-2011 power contracts can resume. Members of the Northwest congressional delegation have also pleaded for a speedy resolution.

While only six investor-owned utilities serve 60 percent of the region's power customers, dozens of PUDs or municipal power systems serve the rest. Getting everyone to unite behind demands, strategies and messages can be difficult.

"Public power is democratic," says Steve Johnson, the Washington PUD Association's executive director. "The way we work is kind of a messy process ... And within my organization there's a full range of opinions and strategies about this issue."

Scott Corwin, the Public Power Council's executive director, says there are differences of opinion from one public utility to the next, "but at the same time we all have the same interests here, which is to keep rates low and to provide safe, reliable power to the customers."

Public power's negotiators are general managers from utilities across the region, including the Grays Harbor PUD's Rick Lovely.

"We think this is an issue that can be solved within the region, and we're trying to avoid litigation or legislation. From our side, it's a matter of finding the right number," Corwin said.

"The only way anything will come out of this is if the publics get to a unified position," Lovely said.

Corwin and Johnson say private power's "knee-jerk" response to the ruling may have hurt them.

"They didn't get the type of public reaction that they wanted," Corwin said. "I also think it strained some of their relations with the congressional delegation."

They said public power's more measured - or disorganized, depending on which utility you ask - response won them points.

Commissioners from Grays Harbor PUD aren't putting much faith in the success of the negotiations.

"They're not going to result in a meaningful solution, so we want to be ready," said Commissioner Jim Eddy.

"I think we need a backstop to these current negotiations," said Commissioner Tom Casey. "I think the parties are a long way off. Public power isn't going down the $300 million road, and that's what (private power) is proposing."

He says public power needs to take a strong stance, or nothing will change. "They're saying, 'We still want this money and we'll figure out a way to get it.' Hopefully, we in public power will make it clear that they're going to at least get punched in the nose if they do."

Casey thinks it's ridiculous that public power is tasking Bonneville and the private utilities - "the same people that got us in to this mess," he says - with resolving the situation. He wants to have an alternative to the negotiations, one that involves his idea to funnel the payments into projects that would fight global warming and reduce our dependence on foreign oil.

"Millions of dollars could go to projects that would never get that kind of money, things like electrifying the transportation system for example," Casey said.

He knows the idea hasn't caught fire with his peers, and he fears they may not be paying much attention because of the district's outspoken stance.

"I'm willing to hand this off," Casey said. "I've played the role of maverick elected official and this is not something that role can accomplish."

Casey wants to get someone with across-the-board credibility throughout the region, someone who can attract environmental and political leaders interested in an alternative settlement and money for renewable energy projects.

"We should be asking ourselves 'What's the best policy, the best way to use this money?' Should it be something we fight over for the next 20 years or should we invest in a system that benefits the entire Northwest and beyond?"

Related Pages:
Casey Wants Payments to Have a Purpose by Jordan Kline, Daily World, 2/27/7

<HR> <strong>Jordan Kline</strong><br> <A href="http://www.thedailyworld.com/articles/2007/07/02/local_news/02news.txt"> <I>BPA and Utilities Hope to Settle Subsidy Dispute</I></a><BR> <strong>The Daily World</STRONG>, July 2, 2007 <HR> <P align="center"><CENTER> <BIG><strong>See what you can learn</STRONG></BIG><P> <A href="topic.htm">learn more on topics covered in the film</A><BR> <A href="https://sgi25.netservers.net/bluefish.org/video.htm">see the video</A><BR> <A href="script.htm">read the script</A><BR> <A href="songs.htm">learn the songs</A><BR> <A href="forum.htm">discussion forum</A><BR> <IMG src="salmon_swimming_md_wht.gif" width=150 height=70 alt="salmon animation"> </CENTER> </basefont> </body> </HTML>