NEMW Report Criticizes BPA for Role in California Energy Crisis -- California Capitol Hill Bulletin - Volume 10, Bulletin 12 -- May 1, 2003

On Friday, April 25, 2003, the Northeast-Midwest Institute issued a report blaming mismanagement at the Bonneville Power Administration (BPA) for the financial problems it currently faces, and, in a chapter entitled, "Bonneville Sticks It To Californians," it alleges that BPA continues to gouge California with its federally-subsidized electricity.

The report states that "Bonneville sells federal electricity in the Pacific Northwest at low rates and offers the very same federal electricity in the Golden State at high rates. Northwest officials, of course, love the arrangement, since sales to California account for roughly 20-25 percent of BPA's total revenue. By paying to keep Northwest rates low, Californians unwittingly provide their northern neighbors with a significant economic advantage."

The NEMW report's authors state that BPA Administrator Steve Wright admits that it benefits greatly from profits in the state. California, he reportedly says, "is far and away the key variable in determining our financial fate." He reportedly adds, "This (high-priced sales to California) is what helps keep (Northwest) firm power rates down."

The House Committee on Government Reform found that, during 2000, BPA sold power to California at a 300-percent markup. In October 2000, BPA Vice President Steve Oliver said that BPA's sales to California produce "more than $400 million in net revenues per year to help keep rates in the Pacific Northwest low." The NEMW report says, "Logic might suggest that BPA's California profits go to the U.S. Treasury since Bonneville is a federal agency selling federal property. In reality, BPA uses those profits to cover its costs and maintain artificially low rates for its northwest customers." The report's authors later ask "if BPA sells federal power at market rates in California, shouldn't it sell the same government electricity at market rates in the Northwest?"

For information, visit http://www.nemw.org or call 202/544-5200.

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