Letter to the Honorable Rob Portman, Director Office of Management and Budget
Letter to the Honorable Rob Portman, Director Office of Management and Budget
Rob Portman
Director Office of Management and Budget
725 17th Street NW
Washington, DC 20503
Dear Director Portman:
We are writing again this year to voice our continued unified opposition to the proposal included in the Office of Management and Budget's (OMB's) Fiscal Year 2008 budget request. This proposal would raise Bonneville Power Administration (BPA) electricity rates and undermine decades of regionally-based decision-making on issues critical to the Northwest economy.
The latest proposal by OMB would redirect approximately $646 million in projected BPA revenues over the next five years to accelerate payment to the U.S. Treasury, beginning in fiscal year 2008. This ill-advised plan is but the latest in a long line of proposals - offered by both Democratic and Republican Administrations - that would erode the value of the Northwest's cost-based hydropower system. Immediate rate increases will negatively affect Northwest consumers and businesses. Moreover, this proposal undermines the regional consensus necessary to balance our fiscal responsibilities with providing the electricity necessary for economic growth and investing in our energy future.
It is disturbing that the OMB has included this proposal again after it was explicitly rejected by the Congress last year. As you know, Northwest ratepayers continue to recover from high power costs resulting from the Western energy crisis, which increased regional wholesale electricity rates by 46 percent. Six years after that crisis, our region has been working to ensure that BPA's future rates will be stable and predictable. Under an innovative agreement, a number of BPA's customers will pay more under emergency adverse financial conditions for BPA, in exchange for modest rate relief under normal conditions. The latest OMB proposal changes this dynamic by eliminating any benefit derived from this unique agreement. OMB's proposal would increase regional electricity rates by an estimated 5.5 to 11 percent. It would also set a dangerous precedent of unwarranted, administrative micromanagement on decisions that must be achieved through Northwest consensus.
BPA and regional stakeholders are in difficult discussions about the long-term future of the agency, and how best to maximize the value of this important asset with its limited resources. These decisions will depend on compromises made by Northwest stakeholders who value fiscal responsibility, building the regional economy and managing the system to meet a complex array of public purposes. OMB's continued advocacy of its rate increase plan undermines the careful process of collaboration that the Northwest has been developing.
Lastly, it is also important to note that Northwest ratepayers have long been responsible stewards of BPA. For more than two decades, Bonneville has successfully made its payments to the Treasury. Even as our region has grappled with the economic aftershocks of the Western energy crisis, Bonneville and its customers have voluntarily made almost made almost $1.8 billion in early payments to the Treasury in recent years. Bonneville's stakeholders place a high priority on prompt payment of financial obligations to the federal government.
We appreciate the desire for discussions on this net secondary revenue proposal in the region. However, we remain concerned that the assumption of revenues from this proposal for fiscal year 2008 will leave little time for these discussions to occur. Please know that we have noted and very much appreciate the Administration's decision not to pursue legislation to restrict the use of creative public-private partnerships to finance Northwest transmission facilities.
Thank you for your attention to this issue, which is of great concern to our constituents.
Sincerely,
[Signed] U.S. Senators Gordon Smith (R-OR); Maria Cantwell (D-WA); Patty Murray (D-WA); Mike Crapo (R-ID); Jon Tester (D-MT); Ron Wyden (D-OR); Larry Craig (R-ID); Max Baucus and (D-MT).
http://cantwell.senate.gov/news/record.cfm?id=269179&&days=30&