Information you won't see anywhere else!
The Bonnevile Power Administration sells any excess power that it generates, on the open market. Excess power is defined as the power that BPA generates, over and above what is needed to fulfill its contractual obligations to various public power coops in the Columbia River Basin. In a year with average water flows, the revenue that this generates can be very significant. It has in fact generated hundreds of millions of dollars for the BPA system. This money is then used to benefit Bonneville, public utility customers and the economy of the Pacific Northwest in various ways. It is used to build up the BPA reserves, to pay off debt to the federal government and to reduce the cost of the electricity that BPA sells to its Northwest customers.
Both the Bush and the Clinton administrations have suggested that Bonneville should turn over all of this money in excess of $500 million to the federal treasury as a way of accelerating the repayment of BPA's federal bond debt. This would benefit the US Treasury by increasing the amount of money flowing into it. Unfortunately, it would also decrease the beneficial impact that this revenue has for the ratepayers here in the Northwestern U.S.
This plan would cause electricity ratepayers in the NW to annually lose around $109 million in benefits. Electricity rates would have to increase to make up that amount. Analysts have estimated that Bonneville would have to raise rates by 7% in 2008 (for instance) in order to make up for this revenue shift to the treasury. The impact on the area economy would be significant.
The congressional delegations of the effected states have been near unanimous in their stenuous objections to these proposals. And with good reason. No one wants to absorb this kind of negative economic impact. In March of 2007, a letter signed by Governor Schweitzer (and two other Northwest governors), pointedly asked for the withdrawal of the proposal.
That is all well and good. But what seems so strange in light of this objection by Governor Schweitzer, is the lack of outrage by him about another problem that is already having nearly seven times the impact on Northwest electricity customers as the federal proposal. And looming on the horizon is an environmental lawsuit that would rachet up that impact even further.
The estimated annual base cost of operating and maintaining the Bonneville dam system is $378 million per year. Compare that with the cost of the Endangered Species Act requirement that Bonneville open its dams and flush fish down the Columbia River. When BPA does that, the water bypasses their generators and the resulting reduction in electricity generation has the impact of reducing excess electricity sales by nearly $700 million annually. As if that isn't bad enough, a lawsuit filed by Oregon environmentalists is making its way through the courts. That lawsuit would require an additional $350 million in foregone revenue be flushed down stream.
The total tab for Endangerd Species Act compliance would come to well over a billion dollars a year. This is forgone revenue that could go to benefit the household budgets of families throughout the BPA system. It has a financial impact that is ten times that of the administration proposals. Yet there has been nary a peep about that from Governor Schweitzer.
Could it be that protestations of outrage are being decided, not upon whether the ox is being gored (for surely we are all paying for this irrationality) but rather upon who is doing the goring?