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Hearing of House Committee on Energy and Commerce - Department of Energy's Fiscal Year 2006 Budget Proposal and the Energy Policy Act of 2005: ...

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Location: Washington, DC


HEARING OF HOUSE COMMITTEE ON ENERGY AND COMMERCE - DEPARTMENT OF ENERGY'S FISCAL YEAR 2006 BUDGET PROPOSAL AND THE ENERGY POLICY ACT OF 2005: ENSURING JOBS FOR OUR FUTURE WITH SECURE AND RELIABLE ENERGY

February 9, 2005

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Mr. Walden. Thank you, Mr. Chairman.

Mr. Secretary, it is good to see you again. I enjoyed our meeting yesterday, and I commend you for your patience today. It is a long hearing, and welcome to the committee.

Secretary Bodman. Thank you.

Mr. Walden. I want to make a comment at the outset, because you took a lot of grief about the administration's position on reliability standards and not moving an independent bill. And I think it is important for the record to point out that, when my friend, and colleague, the ranking member of this committee, had an opportunity to offer an energy bill on the floor of the House when we considered this bill that we took up in 2003, his provisions struck the energy title, but did offer no reliability standards. And when we had a motion to recommit, a second opportunity to offer reliability standards on the electricity grid in this country, he offered an alternative on hydro-relicensing instead. And so it--I think there is an issue of fairness here about saying when given the opportunity, our friends on the other side of the aisle did not offer reliability standards. Only this administration and the Republicans offered reliability guarantees in our legislation, which most of--or many of our colleagues on the other side opposed. So I didn't think it was really fair to just leave you hanging out there as the new member, perhaps, without that----

Secretary Bodman. Thank you.

Mr. Walden. [continuing] history.

Secretary Bodman. I appreciate your comment.

Mr. Walden. Now that I have come to your--rushed to your aid and your defense, you might imagine----

Secretary Bodman. Now we are going to even it up.

Mr. Walden. Yeah, now I have got to even it up.

I want to just tell you that there have been some ideas that have come out from time to time over the years regarding power marketing authorities around the country, and obviously, representing one in the Northwest, the Bonneville Power Administration, you know, as I talked to you yesterday, that I have deep concerns about this proposal. Our delegation in the Northwest is pretty spirant. You have my colleague, Mr. Inslee, on the left. He would not object to that characterization. My colleague, Mr. Otter, on the right, he would not object to that description. And me somewhere here sitting between them. There are seldom things that actually----

Secretary Bodman. Let me say, only the Northwest seems to be still here, other than the chairman.

Mr. Walden. And we are not leaving until we get this fixed.

Secretary Bodman. No, I understand.

Mr. Walden. Seldom there are things that actually pull us together where there is no light between our shoulders, and this is one of those issues. And with all seriousness, Mr. Secretary, the notion that this administration is going to propose taking PMAs, wherever they are, in the Northwest, Southwest, to full market rates, is a notion that would spread economic devastation in our region. We already have the second--the highest unemployment rates in the Nation in Oregon and Washington. We are not booming out there attracting jobs. We are trying to hold on to the ones that we have.

Mr. Secretary, these dams that are really at the heart of the issue here with Bonneville, are not solely to produce power. They are multiple purpose. And I think you understand that, obviously, given your background. The 1980 Northwest Power Act dealt with some of these issues. And when it comes to fish credits, it said, you know, really about 73 percent of what happens at the dams is power, 27 percent is dealing with fish. And yet, I know coming out of the Office in Management of Budget, there is an issue about whether these fish credits amount to a subsidy. Do you think they amount to a subsidy?

Secretary Bodman. I have never thought about it, and I would not want to make a quick----

Mr. Walden. Okay.

Secretary Bodman. [continuing] response, but I don't know. I am unaware of the concept of a fish subsidy.

Mr. Walden. Okay.

Secretary Bodman. I do know of the importance of fish. I do know if what----

Mr. Walden. Well----

Secretary Bodman. I mean, in your region, I----

Mr. Walden. Right.

Secretary Bodman. Not fish generally, but fish in your region, and I understand that, having dealt with that when I worked at the Commerce Department. So I am aware of that, but I am unaware of the economic----

Mr. Walden. The issue----

Secretary Bodman. [continuing] concept of a fish subsidy.

Mr. Walden. It is alleged--I am trying to tell you it ain't so.

Secretary Bodman. Okay.

Mr. Walden. And then----

Secretary Bodman. I understand, but I have never heard that.

Mr. Walden. Well, and the argument that is made against us is that we get this fish credit of 27 percent. And the other argument is elsewhere in the country, the Fish and Wildlife Service takes money out of the treasury to pay for the kinds of things that ratepayers pay for in the Northwest when it comes to managing for a fish recovery and all. So that is an issue that I think is an important one to watch.

And when you look at the bonding authority, there is another part of the administration's proposal that is deeply concerning, and that is that we will treat any private entity lending that occurs in a leaseback at--against the treasury debt that Bonneville is given. As you know, a number of years ago, we ran into constraints of bottlenecks in the Northwest in the various planes to get power across to where it is needed. It is obvious as we see renewable energy coming online, one of the biggest challenges I face with all of the wind generation that is being built in my District, and it is some 400 megawatts that are--that is planned and under construction, is being able to connect. And so our delegations have worked together with the President directly and the administration to expand the bonding authority of Bonneville to build out the grid so we don't have the bottlenecks.

And so this proposal that is buried in the budget would basically diminish that bonding authority at a time when that is the last thing we need for a reliable and sufficient grid in the Northwest. So I draw your attention to that one as well. You are going to find a fight from some of us on this committee in the notion of going to the market-based rates, because we think we are paying our fair share, and perhaps more than our fair share and reaching back into the 1940's and 1950's to pay back bonds at a different interest rate when that issue was dealt with in both 1996 and elsewhere. We think it is unfair.

And so I know you are new to the job, but my job is to help provide my little share of education.

Secretary Bodman. Thank you. I appreciate being educated. My position on this is that these proposals are meant to give the management of all of these authorities the flexibility to run their business and to do it in a fashion that is more business-like. That is the goal.

Mr. Walden. Yeah.

Secretary Bodman. And there is no doubt that it will adversely impact to varying degrees, some, frankly, not very much, but I have no doubt other individuals will be affected much more. And so I think the $200 a year that was given before, I think that is on the high side, from what I know in having looked at it.

Mr. Walden. 20 percent a year is the cap.

Chairman Barton. The gentleman's time----

Mr. Walden. Okay.

Chairman Barton. [continuing] has expired.

Mr. Walden. Thank you, Mr. Secretary.

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