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Hydro Buyout Could Protect Region’s Ratepayers Mcclure, Others Say Buying Dams Could Provide Protection From Electric Rate Deregulation

Sat., Oct. 4, 1997

Pacific Northwest states might avoid soaring power bills if they buy federal dams in the region and keep the cheap hydroelectricity for themselves, a former U.S. senator says.

James McClure and others are floating the idea as the states consider how to cope with deregulation of the electric utility industry.

McClure, chairman of Gov. Phil Batt’s council on deregulation, and the Northwest Power Planning Council’s two Idaho representatives intend to present a detailed proposal, possibly in mid-November.

Their idea is for Northwest Indian tribes and the states of Idaho, Montana, Washington and Oregon to pool together money to buy federal hydroelectric projects along the Columbia and Snake river system.

Their intent is to preserve the region’s cheap hydropower for Northwest consumers rather than having it bought and sold to the highest bidder nationally in a deregulated marketplace.

Northwest Power Planning Council member Todd Maddock said deregulation is inevitable and Idaho should start finding ways to protect its interests, before Congress mandates what it does.

“What we are in a position to do, we feel, is get a little bit ahead of the curve in terms of thinking about this,” Maddock said Thursday.

State Sen. Laird Noh, R-Kimberly, said he likes the idea of buying the dams, but foresees a long road and lots of legal roadblocks.

“I think it’s a very challenging and important idea and I think it’s an appropriate idea under the circumstances, but one which will be very, very difficult to negotiate and execute,” said Noh, a member of an interim legislative committee studying deregulation.

The dams that could be purchased include Dworshak near Orofino; Hungry Horse in Libby, Mont.; Lower Granite, Little Goose, Lower Monumental and Ice Harbor on the lower Snake River in Eastern Washington; Grand Coulee and Chief Joseph on the upper Columbia River in Washington; McNary on the lower Columbia in Washington; and John Day, Dalles and Bonneville in Oregon and Washington.

To buy the dams, the states also might have to take on some of the Bonneville Power Administration’s $7 billion debt. And proponents of the idea are a long way from getting regional consensus. But Stan Grace, a Montana member of the Northwest Power Planning Council, said he likes the concept.

“Frankly, I’m of the opinion that if we’re going to reap the benefits of our system then we have to have some ownership in the system,” Grace said. “I’m not wise enough to tell you how best to do that, but I think the concept is good.”

Maddock said Congress seems “willing to give us additional time and deference to figure out how to solve this for ourselves, and that is encouraging to me.”

Both the federal government and many state governments are in the process of deregulating the sale of electricity. While the process will lower utility costs in many parts of the country, some experts are concerned that the effect will be higher rates in the Pacific Northwest. In a deregulated industry, consumers will not necessarily be served by the utility in their immediate area, but will be able to shop among several utility companies that might be competing in their market.

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