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Old Lies About Bonneville

by Editors
Seattle Times, February 10, 2005

The Bush administration should keep its hands off the Bonneville Power Administration.

While the president's commitment to deficit reduction is admirable and necessary, administration officials have dredged up an old lie to raise about $3.2 billion off the backs of Northwest power users over five years. They allege falsely that federal taxpayers subsidize Northwest power. It is malarkey.

True, federal investment built the 31 dams in the Columbia-Snake federal hydropower system, which generates power at relatively low cost to Bonneville's customers. But federal taxpayers are getting a return on that investment with market-rate interest. Northwest ratepayers, whether residential or industrial, have been paying off that debt to the U.S. Treasury about $1 billion every September.

Those facts demolish the budget crunchers' premise that Bonneville and other federal marketing agencies should begin charging market rates with the proceeds going to reduce the deficit. Bonneville, which provides about half of Northwest energy, now sells power for about $32 a megawatt-hour about $13 under the market price of $45.

Seattle City Light customers would pay an additional $100 million a year, representing rate increases of 6 to 12 percent. Tacoma Power's residential customers might see a 35-percent increase, while industrial customers might pay as much as 75 percent more.

Substantially higher rates could convulse the Northwest economy, which is still reeling from Bonneville's 46-percent rate hike after the Western energy crisis of 2000-01. Several aluminum companies remain shuttered and other energy-dependent businesses remain cut back.

Not only businesses have been hurt. Snohomish Public Utility District, which gets about 80 percent of its power from Bonneville, reports its 2004 rate of disconnections for nonpayment was almost double that of 2000. And the 14 Snohomish County school districts paid $10 million in power costs in 2004 about 50 percent more than in 2000. That's $3.4 million not spent in classrooms.

The good news is the Northwest congressional delegation, including Republicans and Democrats, is of one mind against the proposal.

And New Mexico Sen. Pete Domenici, Republican chairman of the Senate Energy and Natural Resources Committee, dismisses the proposal as "politically untenable."

It is ironic the Bush administration, which has touted its tax cuts as a spur for the nation's economic recovery, would propose such an anti-business policy in a region with an economic foundation built on low-cost power.

Old Lies About Bonneville
Seattle Times, February 10, 2005

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