Twenty Years After the Act (almost)

Keynote address of Rep. Al Swift

Before a Conference on "Columbia River: Power and Benefits"
Sept. 29, 1998

• I’m happy to have the excuse to come home to the Northwest, especially in early fall, when we can almost count on good weather.

• Flew in over the Columbia. Good to see the cool green of the Gorge and magnificence of the river.

• And the river, of course, is why we’re here today.

Its wonderful that the Northwest is again recognizing the value of power from the Columbia River and the federal hydroelectric system.

I certainly agree with all of you that the region can significantly benefit from this in the future.

We have this value today here in the Northwest because our legislative forefathers had the foresight to frame laws based on two fundamental principles:

• cost-based rates, and
• regional preference.

The debates that are emerging today are very similar to the debates that occurred in the late 1970s leading up to the Northwest Power Act. Perhaps, indeed, "Those who cannot remember the past are doomed to repeat it." (Or maybe even those who can remember.)

In any case, it is, as Yogi Berra said, "Deja vu all over again."

• Then, as now, we were most concerned about how to share the benefits of the federal system.

• Then, as now, there didn’t seem to be enough to go around.

Those debates were only resolved when people put away their greed and came to the table with reasonable views.

• They understood that to preserve the system’s benefits for the Northwest they needed to be equitably shared.

• That process may have been motivated more by fear than by wisdom, but, either way, it worked. By agreeing to share the system, we kept it.

Last time around on this story, we had a little extra help.

• Agreement was greased by key members of the Northwest delegation who had the positions of influence in Congress to forge and sometimes force consensus.

• If the key players think the magic hand of Senator Scoop Jackson is going to resolve this, they know more than I do about resurrection.

Now, our strength is in numbers. Divided, we will certainly fall.

• While the Northwest does have significant political leaders, none of them has the position of authority on the key authorizing committees that existed in the 1980s.

• Northwest members care passionately about these issues and can be effective in the Congress. But they need your help in developing the consensus.

As I see it, if we don’t come together now, and agree again on how to share the river among us, we have two choices:

• Chaos, or
• Having decisions dictated to us, probably by other regions of the country.

• We need to recognize that if we do not come together we have lot to lose.

• Those who believe the benefits of the federal power system are not at risk are sadly mistaken.

Remember the two principles of our system,

• cost-based rates, and
• regional preference.

Both of these principles are in jeopardy today.

A little more history. In 1984, when Senator Barbara Boxer was a Member of the House from California, she proposed requiring that power from Hoover Dam be sold at market based prices.

There were four key arguments that were used by the Boxer proponents. They said market-based prices would:

• Reduce the deficit,

• Eliminate subsidies,

• Enhance the environment by encouraging conservation,

• And they said Federal power gives advantages to some regions at the expense of others, particularly through the loss of jobs.

These arguments will be made again. They’re being made today. The question is, will we again have the strength to refute them?

• We have made progress on some of these issues since the 1980s.

• As a country, deficit reduction is less of a problem than in the 1980s.

• Also, importantly, in 1996, Bonneville debt refinancing was enacted. That aided the Northwest in countering the arguments of subsidies because BPA’s interest rates were raised to market levels.

• And BPA has further strengthened defenses against the subsidies argument by directly funding the Bureau of Reclamation and Corps of Engineers, and by paying all the post-retirement costs of its employees.

But since 1984 the opponents of PMAs and federal power have become much better organized.

• The Alliance for Power Privatization is a lobbying organization devoted to privatizing federal power. Many Congressional members have been flown to warm weather locations to discuss the benefits of privatizing Federal power.

• Radio ads are run in drive time hours in Washington D.C. urging the Congress to eliminate federal power.

• A Northeast-Midwest coalition has been formed to attack Federal power.

These interests are moving on their agenda. In the House of Representatives, members from the Northeast-Midwest coalition were able to amend the Energy and Water Appropriations Bill for fiscal year 1999 was amended to eliminate the twin prohibitions against studying selling the federal power marketing administrations or requiring the PMAs to use market based rates. Fortunately the Senate was able to rebuff this effort just last week, but the attacks are certain to escalate!

Moreover, some of our traditional arguments have been weakened.

• In many parts of the country, electricity restructuring has led to market-based pricing.

• In the past we could make the argument that in no place else in the country are others subject to market based pricing and that every region received the benefits of its indigenous resources.

The whole nation is moving toward three integrated power grids, with free-trading of power within each – WSCC, the Eastern Connection. The only place that’s walled off electrically is Texas.

• The Northwest, in contrast, stands right between Canada’s cheap hydropower and the high-cost markets of the Southwest.

• The Northwest is no longer the isolated "Far Corner" of the country. It’s smack in the middle of the West Coast power freeway. If we don’t keep our eyes open, we’ll get run over.

So, here’s what should you watch for:

• National environmental organizations continue to support a transition to market pricing for Federal power,

• Northeast-Midwest states continue to want power prices raised in the West and South to eliminate any economic advantages,

• Groups such as the National Taxpayer Union continue to support measures which can enhance revenues without "raising taxes"

National electricity restructuring legislation in some form is going to happen at some point in the future.

When the legislation hits the floor of the House and the Senate, we’ll face the key point that will determine:

• whether the day-to-day decisions about how the benefits from this system are to be divided will be made in the Northwest, or

• whether those decisions will be made inside the Beltway.

I hear that some regional players occasionally revert to the threat that if they do not get what they want they will support efforts to move to market based pricing.

I urge those folks to think about two things:

• Your immediate self interest.
• Your place in history.

In your own immediate self interest, consider.

• Will you really be better off in the long run if you have to compete with the rest of the Western United States for Columbia River Power?

• Because it’s not just cost-based rates that are at stake. It’s also regional preference and regional self-determination.

• Will the environment be better off if market based pricing leads to BPA ratepayer dollars being used to fund the Federal deficit.

• The Northeast-Midwest coalition is proposing to share the benefits of the Federal power system between taxpayers and the environment and leave no benefit for Northwest consumers. If that happens environmentalists will be fighting the Federal Treasury to get investments in environmental objectives. The devil you know may well be better than the devil you don’t.

And if there are those who think their immediate self interest might not be harmed, I urge them to consider how history will look back at them.

• We have a system which has provided low electric bills for real people, including low-income folks.

• It has created thousands of jobs through industrial expansion.

• It created an investment of more than $1 billion in energy conservation, the benefits of which are still being enjoyed.

• It has also funded a massive fish and wildlife recovery program which we certainly hope will someday soon reverse the declines in salmon in our rivers.

This sharing of benefits has been the hallmark of the Northwest. Any group seeking to maximize its gain to the detriment of all others should consider how history will remember them.

Quotes:

-- "Those who cannot remember the past are doomed to repeat it." George Santayana (BPA library found citation on El Paso Holocaust Museum and Study Center web site)

-- "Deja vu all over again." Yogi Berra (BPA library found citation on a Yogi Berra web site.)

-- "A house divided against itself cannot stand." Abraham Lincoln, citing Mark 3:25. (Bartlett’s)

-- United we stand; divided we fall. Common paraphrase of "By uniting we stand, by dividing we fall." the Liberty Song, John Dickinson, 1768. (Bartlett’s)