Bush won’t give up on BPA rate proposal

WASHINGTON – President Bush will stand by his plan to raise electric rates from the Bonneville Power Administration despite opposition from Congress, his energy secretary told a key Senate panel Thursday.

Samuel Bodman infuriated Northwest lawmakers during an appearance before the Senate Energy and Natural Resources Committee by saying Bush has the power to look at such an increase, which some estimate would cost the region as much as $1.7 billion in higher power rates.

The senators suggested his stance was uninformed, silly and economically devastating. Senators of both parties had agreed Wednesday they would draft a budget without the proposed increase.

“This is economic poison for our region, and we are going to block it,” a visibly agitated Sen. Ron Wyden, D-Ore., told Bodman. “We are going to block you, Mr. Secretary.”

Sens. Maria Cantwell, D-Wash., and Larry Craig, R-Idaho, argued with Bodman over whether the proposal was even legal. Cantwell said it would violate a 1993 law designed to prohibit the Energy Department from conducting studies on BPA rate changes. But Bodman countered the law did not trump executive authority.

“The president under his constitutionally mandated authority does have the need to, on any topic he chooses, to make a recommendation to the Congress,” Bodman told Cantwell.

That failed to satisfy Cantwell, who repeatedly asked the newly appointed secretary to use some of his “MIT expertise” to evaluate the proposal. Bodman was an associate professor of chemical engineering at the Massachusetts Institute of Technology.

“Why should the Northwest ratepayers have to pay more simply because an Enron or somebody else can charge more money?” Cantwell asked. “That is not the philosophy that this Congress has had for decades.”

Bodman said the administration believes Power Market Administrations, including BPA, had created a taxpayer subsidy because they were funded at submarket rates from the 1960s to the 1980s. Changing BPA’s wholesale costs to market-based rates would “accelerate recovery” of these subsidies, he said, and help repay debt owed to the U.S. Treasury “while creating a more level playing field for the wholesale power market.”

Craig said that reasoning was misguided.

“BPA has made its Treasury payments in full, on time for 21 straight years, and in the last three years, BPA has prepaid the Treasury just over $1 billion,” Craig said.

The Idaho Republican also said the Northwest congressional delegation negotiated a deal nine years ago with the Office of Management and Budget, the Treasury and BPA to resolve subsidy criticism. Bodman said he was unfamiliar with the agreement.

“My message to you today is to pick up the phone and call OMB and ask them to read this and stop the silly argument,” Craig said. “There is no subsidy today. It has been effectively handled.”

Wyden also asked Bodman to explain why the Bush budget proposal cut $297 million from the Hanford Nuclear Reservation cleanup, the largest such effort in the nation.

Bodman gave several reasons, all of which centered on how clean is clean enough. He said seismic activity had delayed cleanup, and Bush had decided to request funding for projects only on which Washington state and the federal government agreed. Some aspects of the cleanup were complete and required no extra funding, he said.