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BPA Rates Could Cost 60,000 Jobs

by Associated Press
The Register-Guard, February 15, 2005

SEATTLE -- A White House proposal to boost power rates for the Bonneville Power Administration could cost Oregon and Washington tens of thousands of jobs by the end of the decade, according to a new report commissioned by U.S. Rep. Jay Inslee, D-Wash.

The Bush administration's pitch to increase BPA electricity rates from wholesale prices to levels charged on the open market sparked protests from Northwest politicians, businesses and utilities.

Robert McCullough, an energy consultant who prepared the report, warned that the proposed increase would, in some ways, mimic the effects of skyrocketing prices witnessed during the West Coast energy crisis of 2000 and 2001.

McCullough works for a number of private companies and utilities that buy power from the BPA, a federal power marketing agency based in Portland. The BPA supplies the Northwest with nearly half its electricity, most of it from a system of federal dams along the Columbia and Snake rivers.

The Bush proposal, spelled out in the president's budget released earlier this month, would raise BPA prices 20 percent a year over three years.

McCullough's report, released Saturday, said Oregon stands to lose from 19,600 to nearly 30,000, and Washington could lose 21,000 to 32,000 jobs.

He noted that the 2000-01 energy crisis cost the Pacific Northwest more than 70,000 jobs in primary industries dependent on electricity.

A Bush administration official cautioned that it was too early to make detailed projections about what the proposal would do.

"I believe any firm number at this time is premature,'' said Joe Davis, a spokesman with the Department of Energy, which controls the BPA.

Davis said any rate increase probably would not have a huge impact because charges would be raised over several years. He also said the increases wouldn't affect prices set in long-term contracts held by major buyers of BPA power.

Several Northwest lawmakers jumped on McCullough's report as another piece of ammunition in their fight to preserve cheaper power. The idea has drawn bipartisan criticism in the Northwest.

"The Bush administration wants to pull the rug out from underneath the foundation of the economy of the Pacific Northwest,'' Inslee said Sunday as he stood outside the Nucor Steel plant near West Seattle.

The factory is the largest single customer of Seattle City Light, which buys roughly a third of its power from the BPA.

Doug Jellison, vice president and general manager at the Nucor plant, said higher power rates could dampen growth at the plant, which recycles scrap metal into steel bars and employs 285 people.

Electricity prices also will influence where Nucor builds a new mill to produce sheets of steel, Jellison said.

Associated Press
BPA Rates Could Cost 60,000 Jobs
The Register-Guard, February 15, 2005

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