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Public Statements

NW Energy Caucus Leaders Call on Administration to Withdraw Rate Raising Plan

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Date:
Location: Washington, DC


NW Energy Caucus Leaders Call on Administration to Withdraw Rate Raising Plan

02/06/06

Co-Chairs of the Northwest Energy Caucus Congressmen Doc Hastings (R-Wash.), Peter DeFazio (D-Ore.) and Greg Walden (R-Ore.), wasted no time in calling on the Administration to withdraw a provision in its budget proposal for next year that would increase power rates in the Pacific Northwest by 10 percent or more.

February 6,2006
Joshua B. Bolten
Director
Office of Management and Budget (OMB)
725 1 7th street NW
Washington, DC 20503
Dear Director Bolten:

As co-chairs of the bipartisan Northwest Energy Caucus, we are writing to express our
strong unified opposition to OMB's proposal to increase near terrn electric rates in the Pacific
Northwest by accelerating Bomeville Power Administration (BPA) federal debt repayment. We
ask that you suspend the pursuit of this ill-conceived plan, which will negatively impact the
Northwest economy.

As you know, BPA has made timely payments to Treasury for more than 20 years running.
In fact, BPA has voluntarily made more than $1.46 billion in early payments on its federal debt.
There are numerous built-in protections to assure this timely repayment of federal debt continues.
We believe this proposal to use a portion of BPA's secondary sales revenues for accelerated
debt repayment is a disguised rate increase. By capturing secondary revenues in this manner,
electric rates throughout the Northwest will increase - perhaps by ten percent or more. This runs
counter to the President's interest in reducing energy costs for Americans and will negatively
impact electricity-intensive industries. Under this direction, millions of dollars will be pulled out of
our region's economy today to pay a federal debt obligation that is already ahead of schedule for
repayment.

We are especially disappointed that this proposal has been made with no consultation with
the Northwest congressional delegation. We have repeatedly requested, in correspondence and in
congressional oversight hearings, greater consultation with OMB on these BPA budget issues.
Without this communication, OMB has repeatedly issued proposals that reflect a lack of
understanding of BPA's role in the Northwest economy. These proposals create tremendous
uncertainty at a time when BPA and regional stakeholders are making significant decisions
regarding near term rates and long term system allocation.

Our region's ratepayers are still recovering from the dramatic electric rate increases that
followed in the wake of the 2001 California electricity crisis and associated market manipulation.
Successive years of drought and increasing fish costs have also reduced hydro generation and
increased power rates. The families, farrns, and job-creating businesses of the Pacific Northwest
can ill-afford another rate increase at this time.

We request that you postpone indefinitely further consideration of this accelerated debt
repayment scheme.

Doc Hastings
Member of Congress

Peter DeFazio
Member of Congress

Greg Walden
Member of Congress

http://hastings.house.gov/Read.aspx?ID=592

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