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Walden Turns Up Heat on Administration Over Power Rate Plan

Location: Washington, DC

Walden Turns Up Heat on Administration Over Power Rate Plan
Tuesday, March 15, 2005

WASHINGTON, DC - -Oregon Congressman Greg Walden (R-Hood River) blasted the Administration's plan to raise power rates in the Northwest by as much as 20% a year during a hearing today in the Water and Power Subcommittee of the House Resources Committee, of which he is a member.

Walden, who co-chairs the bipartisan House Northwest Energy Caucus, is leading the effort in the House to block the plan, which would force the Bonneville Power Administration (BPA) and other federal power marketing authorities to sell power at "market-based" rates, rather than at the cost of production, an increase amounting to $1.7 billion in only three years.

He has won assurances from leadership in the House of Representatives that this proposal will not be included in the House version of the budget, which is expected to come before the full House for a vote this week.

In his opening statement during this morning's hearing, which focused specifically on federal power marketing authorities, Walden reiterated his strong opposition to this plan, one that would not only fall short of raising money for the treasury, but would be economically devastating to a region already hard hit by recession and unemployment:

"It is no secret that those of us in the Northwest believe the Administration's proposal to drive up the cost of electricity in our region is not only misguided, but also will not achieve the intended goal of raising money for the treasury.

"It will cost jobs in a region that has consistently maintained the highest unemployment rates in the nation. And those job losses will translate into hundreds of millions of dollars in lower tax payments to the federal treasury and more burdens on the safety net as unemployed families seek help.

"A $1.7 billion average increase in electricity costs is estimated to result in a $1.3 billion decrease in personal income and a loss of 13,000 more jobs in the region. All of this would result in a reduction of federal income tax by $217 million.

"Since 2000, we've seen base power rates rise by 50%. This proposal would jack up power rates by as much as 20% a year, or until the market could stand no more. Thanks to the crooks at Enron, the West has suffered mightily from inflated energy costs. We've witnessed the burglary and mugging of a market that lacked proper oversight. I've seen the loss of family-wage aluminum jobs in The Dalles, the hardship endured by farmers paying more to pump water, the hit on the average family struggling to make ends meet.

"If implemented today, the Administration's proposal would extract roughly $480 million from Pacific Northwest communities in the first year and would more than double rates currently charged by the Bonneville Power Administration over the next five years.

"I did not come to Washington to raise the electricity rates by as much as $40 per month as this plan would do. I came here to help make America more competitive and prosperous by developing an energy policy that increases conservation, promotes cleaner technologies, encourages development of renewables and enhances domestic production of gas and oil.

"We need an energy policy that encourages a robust electricity grid, not one that penalizes those, such as Bonneville, who are actually trying to make sure new power production can get to where the demand is without the bottlenecks we've seen elsewhere.

"Finally, let us be clear here. Bonneville is a self-financing organization whose costs are borne by the ratepayers, not subsidized by federal taxpayers. There is no federal appropriation for Bonneville. BPA pays its bills, covers its costs, pays for fish and wildlife conservation, and for 21 years has consistently paid down its debt.

"While the Congress has an obligation to hold Bonneville-and the other PMAs-accountable, we also have a responsibility to make sure ratepayers are protected from manipulation and fraud in the market, as well as misguided and costly policy proposals, regardless of who puts them forward."

Bonneville provides 45% of the region's power, mostly from hydroelectric facilities. An analysis of the Administration's proposal to shift BPA to market-based rates by the Northwest Power and Conservation Council found that the proposal would cost our region 13,000 jobs, result in a decrease in personal income of $1.3 billion, cause a $24-$40/month increase in electricity bills and reduce tax payments to the federal treasury by as much as $217 million.

In addition to being co-chair of the House Northwest Energy Caucus, Walden is also vice chair of the Congressional Renewable Energy Caucus. He serves on the Water and Power Subcommittee of the House Resources Committee and on the Energy and Air Quality Subcommittee of the House Committee on Energy and Commerce. This year he began his fourth term in the House representing the 2nd District of Oregon.

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