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Proposal to Change BPA Hits Brick Wall by Jeff Kosseff The Oregonian, February 8, 2006

Electricity - The plan would require Bonneville
to make early payments directly to U.S. Treasury

WASHINGTON -- The Bush administration's proposal to change Portland-based Bonneville Power Administration hit a bipartisan brick wall at a Senate Energy Committee hearing Wednesday.

The plan, part of Bush's annual budget released Monday, would require the federal agency to use revenues from surplus energy sales that exceed $500 million to make early payments on its debt to the U.S. Treasury. Currently that money is used to reduce wholesale energy rates in the Northwest.

The budget proposal is the third in a row that proposes significant changes to BPA, a move that Northwest senators said is an attempt to use the regional power agency to reduce the federal deficit. BPA provides about half of the region's wholesale energy.

Sen. Maria Cantwell, D-Wash., described her reaction as "Groundhog Day frustration" during testimony from Energy Secretary Samuel Bodman.

"This kind of impact to the Northwest, we believe, is in the hundreds of millions of dollars," she said, "and basically a rate increase if it went through."

Bodman said little about BPA, but he said the proposal to pay down debt early is "prudent business practice."

Sen. Ron Wyden, D-Ore., said that in the most recent fiscal year, BPA paid more than $342 million of its debt in advance.

"We are just not going to accept Bonneville being used as some sort of payday loan program for this administration," Wyden told Bodman. "That's really what this is all about."

Sen. Larry Craig, R-Idaho, said he didn't want to spend much time discussing the proposal because Congress would simply remove it from the budget. He suggested that the White House Office of Management and Budget, not Bodman, places it in the proposal annually.

"OMB puts it back in," Craig said. "You shouldn't make apologies anymore. We'll just take it out. OK?"

Cantwell asked whether the administration has the authority to make such a change without congressional approval, and Bodman said he didn't know.

This year's proposal is different than last year's because it would allow BPA to receive private financing that wouldn't count toward the cap on its federal debt. That, in turn, would allow the agency to borrow for expansion of the electricity system.

Two years ago, Bush's budget plan received even more congressional opposition because it would have required BPA to charge market-based rates.

Both plans were defeated by Democrats and Republicans from the Northwest. Wyden warned Bodman of the intense opposition to such changes.

"I am aware of the intense feelings," Bodman said.