Power Planners Urged To Go Back To The Future Hatfield Says Old System Could Be A Good Model For New One

Some of the answers to the Northwest’s energy future may lie in its past, former Sen. Mark Hatfield told regional planners Friday.

Many of the issues now on the table were vehemently debated at the dawn of the federal power system in the 1930s, Hatfield said at a conference on energy deregulation.

Officials then wrestled over who would get the benefits of cheap power from Bonneville Dam, he said. Eventually public power got the nod over private interests.

As planners reassess those choices in a newly-competitive energy market, Hatfield said, they should keep in mind the solutions and the values that their predecessors applied decades ago.

“The current debate is being driven by money,” he said.

Hatfield said the free market allocates economic resources efficiently. But raw competition may push aside rural interests, assistance to low income families, fish and navigation, he said.

Any changes must weigh those issues in the balance, Hatfield said.

He warned that stripping the discussion down to economics would have undesirable side effects, notably the loss of control by the region.

If money does the talking, Hatfield said, big money from states where power is more expensive will have the floor.

“We may find the old system is a pretty good model for the new one,” Hatfield said.

Hatfield was one of more than 20 speakers and panelists convened to review the state of the Northwest electricity system as Congress and several state legislatures discuss and enact measures that are opening markets to competition where monopolies had always ruled.

With its low-cost power the Northwest faces unique risks. Many speakers urged swift action to minimize those risks and keep critical decision-making within the region.

K.C. Golden of the Washington Department of Community and Economic Development agreed with Hatfield that the past offers lessons, good and bad, for today’s planners.

“A good power system is still in many respects a common enterprise,” he said.

But mistakes were made in the past, he added, and Northwest officials must acknowledge those errors, specifically the Washington Public Power Supply System debacle, and face up to their costs before approaching Congress with plans that try to protect the region’s low-cost resources.

Any failure to reconcile the demands for low-cost power and money to restore salmon runs, he said, will be one of resolve and not of resources within the region.”We are all going to have to give a little,” said Oregon Rep. Peter DeFazio.

He said there has been tremendous pressure in Congress to move forward, but some lawmakers have begun to hesitate as the potential impacts on residential customers emerge.

Some municipal utilities in California, for example, estimate that rates may go up as much as 20 percent as large industrial customers leave their systems.

California will completely deregulate utilities at the end of the year.

DeFazio suggested the region watch activity there to learn what pitfalls can be avoided.

But Bonneville Power Administration head Randy Hardy urged haste. His hard-pressed agency, which markets power from federal dams on the Columbia River, bought time two years ago by cutting its budget by $600 million, and taking other steps, he said. Still the agency barely remains competitive.

With all of its customer contracts expiring in 2001, Hardy said, major decisions must be made soon on fish costs and other items that will allow Bonneville to negotiate replacements with the certainty that prices won’t escalate.

“Don’t put us in a position where we squander our time,” he said.

, DataTimes