BPA, power groups squabble

By Sarah Skidmore, Associated Press Writer
Thursday, August 02, 2007 | No comments posted.

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PORTLAND - Energy stakeholders from across the Northwest expressed passionate but discordant feelings Wednesday night about how to resolve a top energy issue facing the region - the residential exchange program.

“Now is not the time for acrimony; now is the time for honest, interest-based negotiations,” said John Prescott, president and chief executive officer for PNGC Power, a power-generating cooperative.

But that proved easier said than done in a meeting that brought together roughly 200 representatives of utilities, consumer groups and others affected by an issue that affects almost everyone in the Pacific Northwest.

The Bonneville Power Administration manages the program, which allows utilities to share access to the cheap hydropower the federal agency manages.

The issue pits investor-owned utilities against publicly owned utilities as to what benefits should flow to each.

Public utilities help pay into BPA, giving them preferential access to its power. But the residential exchange program allows private utilities to access the power, letting them swap the higher-cost power they generate for the lower-cost hydropower from BPA. The exchange is a financial payment that is passed on to consumers as a credit in their monthly bills.

Debate over the program intensified in May when the 9th U.S. Circuit Court of Appeals said the BPA overstepped its authority when setting its annual subsidy to reduce the rates of residential and small farm customers of privately owned utilities.

Because of the ruling, the BPA decided to suspend payments of $28 million a month in residential exchange benefits, raising rates for private utility customers across the Northwest.

Private utilities fought back, asking for another court hearing, but there is no timeline for that. The BPA and some utilities were in negotiations, but those have stalled.

So the BPA called a public meeting to try and reach a regional consensus. It was the first chance for all stakeholders to have their say.

Some requested the BPA reinstate the credit, others demanded refunds. Advocates for elderly and low-income residents complained that their clients would have to make a “heat or eat” choice under the new rates.

After hours of discourse, one member of the public suggested all the stakeholders be locked in a room with no food or water and that would help speed along the process of reaching an agreement.

“The consensus is 'Go faster',” said Steve Wright, administrator of BPA. “The message we're giving them is, 'We can go faster if you'd all agree.”'

The BPA says if some sort of regional agreement is reached, they could begin rate relief by the winter. But if no agreement is reached, relief might not come until October 2008.

The BPA said it plans to hold several more workshops through the summer and fall.
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