WASHINGTON – Congress this year is expected to consider unleashing market forces in the electric utility industry, posing a severe threat to the Northwest’s cheap, relatively clean energy.
For the third year in a row, the legislative agenda includes proposals to restructure the utility industry to open it up to greater competition. Even the Clinton administration supports the goal, saying it would help reduce fossil fuel burning that contributes to global warming. Some congressional measures would create a free-market for power that in effect, would lead to a bidding up of prices in Oregon, Washington and Idaho.
Northwest senators doubt a bill will pass but predict advocates will make more headway than they did in 1997 and 1998, when they backed away from trying to win even committee approval.
Most Northwesterners probably take for granted the unparalleled system of public and private dams that fuel their economy and jobs and keep their air clean and their electric bills the lowest in the nation. High cost, fossil and nuclear fuel-burning areas, especially in the East, covet this resource and have fought to reduce federal government subsidies of the Columbia and Snake river hydrosystem.
Reflecting the fears of consumers and business alike, the congressional delegation can be counted on to band together to defend its vital energy resources. Primarily, that means keeping in place legal safeguards limiting the sale of federal power to outsiders.
But the delegation has yet to unite around a specific plan, and two factors threaten to undermine its solidarity – disagreement over how to structure competition within the region between public and private utilities and deep divisions over how to save salmon runs that are endangered mainly because of those same federal dams.
Writing new rules for electric utilities and Bonneville Power would mean changing the landmark 1980 Northwest Power Act, a hard-fought and carefully balanced compromise. Also, it probably would lead to the creation of new regional governing bodies for major aspects of energy and salmon recovery or alternately, giving the Northwest Power Council greater authority over them.
Fish advocates could use the vulnerability of the Northwest energy system in any congressional debate on restructuring to leverage greater concessions. In contrast, some Northwest politicians want to keep decision-making authority over both energy and salmon within the region and out of the hands of the federal government, even if that means overriding the Endangered Species Act and treaties with Indian tribes.
Sen. Gordon Smith, R-Ore., said it is the most complicated policy matter he has ever dealt with, including, when he was a state legislative leader, the Oregon health care plan. Its numerous facets impact the environment, energy, management of the Columbia and Snake rivers, treaties with Canada, navigation and transportation, irrigation and flood control. “It’s all of those things, and those are all unique to this basin,” he said last month at a conference on the economy and the environment sponsored by NorthwestLetter, a government affairs newsletter, in Portland.
Previously, House and Senate committee leaders agreed to allow the Northwest delegation to write its own section into any restructuring bill. Three competing versions were drafted.
The Northwest delegation is in a strong position to get what it wants in a Senate bill, with a total of four high-ranking members on the energy committee. In the new 106th Congress, which opened Jan. 6, it actually gained with Smith taking the helm of the water and power subcommittee. Committee Chairman Frank Murkowski, R-Alaska, who put off serious consideration last year, has put energy restructuring “fairly high” on his priority list this time, Sen. Slade Gorton, R-Wash., a committee member, said. Sen. Larry Craig, R-Idaho, chairs the forestry subcommittee, and Sen. Ron Wyden, D-Ore., is that subcommittee’s top Democrat.
On the other hand, the region lost all three of its seats on the House Commerce Committee, which has primary jurisdiction. Gorton, who also spoke at the Portland conference, said the lack of a House committee member is a disadvantage.
Congress is not expected to pass restructuring legislation this year, however, mainly because lawmakers are literally all over the map on the issue. The divisions reflect varying patterns of power production, ownership and use in the United States. Like the Northwest, “every part of America has its unique characteristics and history as well,” Smith said.
A former businessman, Smith generally supports deregulation and free markets, but said losing cheap energy would “tear the heart out” of his region’s economy. He doubts Congress will deregulate energy until the market place accomplishes it first. Forced to make a prediction for 1999, he said, “There will be a bill, and it will get hearings, and there will be a lot of noise. But there won’t be a (presidential) signature or perhaps even a passage.”
Gorton agreed deregulation will proceed at the state level. But because of federal laws that inhibit interstate transfer of power and some kinds of competition, “ultimately this is something Congress is simply going to have to deal with at one level or another,” he said.
Whenever it comes, it will be a supreme test of the ability of warring Northwest interests and members of Congress to work out their disagreements, deal with outside political forces and balance the needs of the economy and the environment.
By Larry Swisher, Political Columnist/Jan. 1999