Bonneville Contracts Stalled By Late Changes Customers Reject Conditions, Await New Proposal From Bpa

With a deadline for signing power-supply contracts near expiration Thursday night, spokesmen for major industrial customers of the Bonneville Power Administration expressed frustration with last-minute interference by officials in Washington, D.C.

Bonneville was supposed to ink the contracts Wednesday, but begged off while Administrator Randy Hardy met with U.S. Department of Energy officials.

Thursday morning, said a spokesman for the Direct Service Industries, members were told the federal power-marketing agency would not sign the contracts unless significant changes were made.

“They made a proposal that was dead-on-arrival with the companies,” Steve Waddington said.

Most of the DSIs are aluminum smelters, but several other companies also take their power directly from Bonneville, which was offering a fixed 12.7 percent rate cut in contracts that will take effect Oct. 1, 1996.

The companies would have to commit to taking the power for five years, over which time Waddington estimated the companies would pay Bonneville $1.5 billion.

But the changes proposed Thursday morning would have allowed Bonneville to adjust its rates any time within the five-year contract period, he said.

“They’ve turned the contract into something that was uncompetitive,” he said.

Waddington said Bonneville Senior Vice President Steve Hickok, who hand-delivered the letter outlining the changes, notified Department of Energy officials the DSIs found them unacceptable.

Also, department officials met with members of the region’s congressional delegation.

In midafternoon, he said, a second letter canceled the first and advised the companies to await a third containing substitute language.

Waddington said the companies were losing patience.

“They’ve got options,” he said. “They’re not going to sit around and wait for the (Clinton) administration to unring this bell.”

Pete Forsyth, regional manager for Kaiser Aluminum & Chemical Co., blamed the Department of Energy, not Bonneville, for refusing to sign the contracts as they had been drafted.

The department’s interference with process sends disturbing signals to businesses that are willing to work with Bonneville, but know they can negotiate with independent power producers without political or bureaucratic second-guessing.

“I’m concerned about who I’m negotiating with,” he said. “This is no way to run a railroad.”

Washington Sen. Slade Gorton issued a statement ripping the Clinton administration for a step he said would deprive BPA of revenues necessary to fund salmon restoration.

Other Bonneville constituencies will also suffer, he said.

But it was unclear whether the statement was issued before the first Bonneville letter was rescinded.

, DataTimes