News from the Front #85:

Whither Public Power?

"Ah, consensus . . .  the process of abandoning all beliefs, principles, values and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved, merely because you cannot get agreement on the way ahead.  What great cause would have been fought and won under the banner 'I stand for consensus'?"

Margaret Thatcher

Public power utilities face unprecedented challenges to protect their rural constituents from shocking power price increases that more and more cannot afford to pay.  By law, public power utilities have first rights to the low-cost hydroelectric power from federal dams that supplies the rural Northwest.  A statutory "preference" for public power means the Bonneville Power Administration (BPA) can't sell the power to others if public power entities want it.  Under the Northwest Power Act of 1980, some benefits may be provided to residential customers of private utilities, but the rates BPA may charge public utilities are capped by section 7(b)(2) of the Act to protect public utilities from subsidizing the private utilities.

In practice, the statutory rights of public power have been trampled by corporate power interests ranging from Enron to PacifiCorp, such as the scandalous decision of former BPA Administrator (and now PacifiCorp CEO) Judi Johansen to give $300 million a year in illegal "exchange" payments to  corporate utilities to reduce their residential rates.  Nearly all the public power entities in the Pacific Northwest quietly acquiesced in this and other patently unlawful transactions, at least initially.

The environmentalists, who know the surest and proven way to remove dams is to remove their economic benefits first, have managed to raise BPA's wholesale power rates by nearly 30% in the last few years to cover ever-expanding "fish costs".  They sought and obtained an injunction this summer that wasted $100 million or more on a spill program that shut down the entire Snake River adult salmon run for four days, offering no countervailing benefits for juvenile fish.  They are poised to impose nearly $300 million a year in additional costs, and public power has no effective response.  

How did it all come to this?  The primary problem is a lack of leadership in the public power community, and a lack of unity behind a single, commonsense, strategic plan.  BPA has masterfully divided the public utilities by creating different rate classes, contract terms, and "products", like "slice of the system", causing the public utilities to fight each other about who gets the slightly bigger deck chair on the Titanic.  Once upon a time, BPA was run by electrical engineers who built things.  Now it is run by a lobbyist who has applied his political engineering talents to divide and conquer the public power interests that would ordinarily control BPA.  

At the same time, environmentalists have gained control of some of the largest public power utilities in urban areas such as the City of Seattle, and they are happy to sacrifice their own ratepayers to the holy grail of dam removal.  The voices of smaller, sensible public utilities are drowned out in public power associations by larger, urban entities.  A constant quest for consensus produces least-common-denominator decisionmaking.

Perhaps worst of all, the present stewards of the public power system have entangled themselves in foolish alliances with their historic enemies, the corporate, investor-owned utilities.  Once upon a time, investor-owned utilities (IOUs) were widely recognized as the enemy of low-cost power in the Pacific Northwest.  Men and women of courage and determination devoted their lives to building the institution of public power, and had to fight IOU representatives at every step of the way to do it.  They were not afraid to confront the lies and distortions peddled by the IOUs.   The remarkable complex of dams providing clean, renewable, low-cost electricity they bequeathed to the citizens of the Pacific Northwest is their heritage, but their heritage is being squandered.

The ugly truth is that the IOUs and their allies could care less whether BPA is plundered and dismantled.  The higher BPA's rates, the greater the competitive advantage of the corporate utilities.  Yet public power representatives hire IOU lawyers and advisers to represent them on fish issues, as if their interests were congruent with the IOUs.  

The IOU lawyers do mount a vigorous and expensive defense against misinterpretations of the Endangered Species Act that might adversely affect the IOUs.  But they make little effort to prove that the dams upon which BPA and public power rely have essentially no impact upon the trajectories of Pacific Northwest salmon runs.  Nor does the United States Department of Justice tell the truth about the dams.  

When the Ninth Circuit recently reviewed Judge Redden's $100 million injunction, the following exchange occurred:

Judge:    Plaintiffs have said in their briefs that anywhere from 80-90% of the juvenile chinook will die as a result of dams, citing your study.  Do you agree with that figure or not?  

Justice Department Lawyer:    Well, I . . .

Judge:    They cite, I believe, to the 2000 report.  It may be in the 2004 report as well, and they can elaborate.  It's not only just the dams kill fish, the dams are killing 80-90% of the species.

Justice Department Lawyer:    Well I guess I'm having a hard time understanding why . . . where that gets us because ...

Judge:    But I mean I just want to understand as a baseline, do you agree generally with their figures, so we know where they are?

Justice Department Lawyer:    At a maximum, worst case.

Judge:    It looked like the mean was about 85% in that table . . .

The Ninth Circuit Judges might be excused for confusing total in-river mortality with mortality caused by dams, for they have no reason to know that roughly 70% of juvenile migrants die migrating downstream in all rivers, with and without dams.  But the lawyers cannot be excused.  The lawyers supposed to be representing public power stand mute as astounding lies about the dams reverberate through federal courtrooms.  

And public power itself stands mute.  The great advantage of public power, its ability to speak directly to hundreds of thousands of ratepayer/voters, has been squandered.  The public relations "experts" favored by the IOUs and urban interests counsel the avoidance of controversy, even as the enemy forces carpet-bomb the hydropower dams in a ceaseless and utterly one-sided PR war.  Public power's failure to defend its interests, and the interests of its ratepayers, has reached truly astounding proportions.

Unless and until public power utilities can disentangle themselves from the IOUs, and disentangle themselves from their own brethren in thrall to the dambusters, the slow dismantling of the Federal Columbia River Power System will continue.  It is long past time for sensible public power utilities to band together in a way that can represent their interests without conflict and dilution, and spearhead a spirited defense of the dams. 

James Buchal, September 6, 2005

You have permission to reprint this article, and are encouraged to do so. The sooner people figure out what's going on, the quicker we'll have more fish in the rivers.

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