Unplug the Subsidies
Bonneville Power Administration

$N/A

"BPA is selling federal property that rightfully belongs to every U.S. taxpayer to a favored minority of businesses and communities for less than two-thirds of its market value. The result is no different than had northwesterners picked the collective pocket of the rest of us." Richard Munson, Northeast Midwest Institute

The Bonneville Power Administration (BPA) is a federal agency that sells approximately 45 percent of the electricity consumed in the Pacific Northwest and owns about 75 percent of that region s transmission lines. BPA markets power from 31 federally-owned hydroelectric projects in the Pacific Northwest at cost-based rates, resulting in substantially lower electricity costs for its customers when compared to other regions of the country.

BPA imposes a significant financial burden on U.S. taxpayers. According to its 2001 Annual Report, BPA currently has more than $13.5 billion in debt, including over $7.3 billion owed directly to the federal treasury and an additional $6.2 billion in liability for debt to non-federal bond holders of failed nuclear power plants. BPA, supported by several members of Congress from the Pacific Northwest, has requested a $2 billion increase in its ability to borrow taxpayer dollars from the federal treasury.

Green Scissors Proposal
Congress should reject the proposed increased borrowing authority for BPA. Instead, BPA should identify alternate means to ensure that resources in the Pacific Northwest are available to conduct a cost-effective capital investment program, financed by the beneficiaries of the system rather than by the federal Treasury.

Current Status
A provision in the Senate s Fiscal Year 2002 Energy and Water Appropriations Bill (S. 1171) would have granted BPA $2 billion in new borrowing authority. The Bush administration opposed the provision, as did the House of Representatives. The final FY02 Energy and Water conference report specifically rejected the Senate language on borrowing authority.

The Bush Administration s FY03 budget request includes a proposal to provide BPA with $700 million in new borrowing authority.

Project Hurts Taxpayers

BPA's $13.5 billion liability represents a tremendous burden on U.S. taxpayers, while the benefits accrue to only one region of our country.

In 2001, BPA used $580 million in "fish credits" (an increase of more than 800 percent from previous years), shifting those costs onto U.S. taxpayers through creative interpretation of federal law. BPA claimed this credit for lost revenues due to fish protection measures, at the same time that it drastically reduced actual implementation of required fish protection measures.

BPA distorts the electricity market by selling power only to preferred customers. Customers without access to federal power must develop higher-cost energy resources.

The existing fish programs funded by BPA are not helping to recover imperiled salmon. Should the salmon go extinct, federal taxpayers could be liable for billions of dollars in compensation payments for abrogating treaties guaranteeing the region's Native American tribes a perpetual right to harvest salmon.

Project Hurts the Environment

BPA relies too heavily on environmentally destructive forms of electricity generation. Increasing non-hydroelectric renewable generation, efficiency measures, energy conservation and other demand-side management programs can reduce the burden on the Columbia and Snake Rivers.

The federal dams which generate electricity for BPA are the primary cause of decline of endangered salmon in the Columbia and Snake Rivers, inflicting approximately 80 percent of human-caused mortality for lower Snake River runs.

The 2001 juvenile salmon migration suffered the poorest survival rate since salmon were listed for protection under the Endangered Species Act-- due in part to BPA's refusal to abide by the river operation requirements set forth in the current federal salmon recovery plan for those fish.

Contacts

• Shawn Cantrell, Friends of the Earth, (206) 297-9460;
• Autumn Hanna, Taxpayers for Common Sense, (202) 546-8500 x112;
• Dick Munson, Northeast-Midwest Institute, (202) 544-5200.