Plan Would Protect Northwest In Utility Deregulation Gorton, Bumpers Introduce Bill Addressing Customers Who Benefit From Low Hydro Costs

Sens. Slade Gorton, R-Wash., and Dale Bumpers, D-Ark., introduced a bill Friday they said would help the Northwest to share in the benefits of the deregulation of the electricity industry nationally.

Bumpers said the bill includes special handling for customers who currently enjoy low rates because of cheap hydropower generated by the Tennessee Valley Authority and the Bonneville Power Administration.

“You have to admit, Bonneville and TVA are unique. They don’t quite fit in the way other utilities do,” said Bumpers, top Democrat on the Senate Energy and Natural Resources Committee.

“We want to bring them along to the competition business but we want to do it in a way that they are not handicapped or jeopardized,” he said during a news conference with Gorton at the Capitol today.

Overall, the bill would make a “very sharp move in the direction of opening up power marketing to competition,” Gorton said.

Deregulation and the anticipated resulting reductions in electric costs across much of the country are long overdue, he said.

“But not at our expense,” Gorton told reporters during a briefing in his office Thursday evening.

“We aren’t interested in the ideas of some other folks who think we are a cash cow. … We will be much better off if we’re at the cutting edge of drafting this legislation at the beginning rather than reacting,” Gorton said.

He also said he doubts Congress will be able to complete action on any deregulation bill before 1999.

The Northwest part of the bill is short on details, Gorton said, because he’s trying to win the support of as many Northwest members of Congress as possible.

For example, he said he’d like to eventually include a statutory cap on the amount of money the Bonneville Power Administration pays to protect Northwest salmon, but he left that out of this early version of the bill.

Perhaps the most important element of the Northwest section would make clear that hydropower qualifies as a “renewable resource,” Gorton said.

Most of the deregulation bills introduced in Congress would require power suppliers to find an increasing share of their power from renewable resources.

The region could make money by selling “renewable credits” to other regions trying to meet those new requirements, Gorton said.

He said that approach would be controversial among environmental groups that claim hydropower should not be considered renewable because of the toll it takes on salmon and other spawning fish that must traverse the dammed rivers.

“This will not sit well with New York environmentalists,” Gorton said.

The conservative Gorton won immediate praise from some unusual allies, including liberal former Rep. Mike Kreidler of Washington state.

Kreidler, now a member of the Northwest Power Planning Council, said he’s had important differences with Gorton in the past about protection of Northwest salmon but that it was important to get out front on the deregulation issue.

He said he viewed the language as “a place holder” and wasn’t taking details too seriously.

“Our real challenge now is seeing the region united. Our delegation, Gorton in this case, cannot succeed if the region is fractured,” Kreidler said.

“Our fear is national deregulation legislation will be passed that will not address the unique nature of the Northwest,” he said.

Gorton’s measure would stop short of the Northwest Power Planning Council’s recommendation to completely sever ties between BPA’s generation and transmission responsibilities, but moves in that direction.

Gorton said truly deregulated competition is not possible if Bonneville is able to control transmission, deciding when competitors are able to get their power to market.

The Federal Energy Regulatory Commission would make sure Bonneville doesn’t abuse that authority by discriminating against competitors, he said.