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RNP Press Release
February 28, 1995

BPA Cost Cuts Are Triage in Reverse:

Efficiency, Renewables, Salmon on the Chop List But the Nuclear Rathole Will Stay Open

A Better Idea:
Groups Propose BPA Financial Security Plan to Cut Costs, Keep BPA Competitive, Pay Off Debts, Protect Forward-Looking Investments
An orderly financial security plan for the Bonneville Power Administration was proposed today by a coalition of consumer, utility, and environmental organizations seeking continued BPA commitment to forward-looking investments in energy efficiency, renewable energy resources, and wild salmon restoration, the core of BPA’s mission.

The plan was developed to counter BPA’s proposed $250 million per year budget cutting strategy, announced Friday, February 24. The plan is being proposed the Northwest Conservation Act Coalition, and supported by Renewable Northwest, Northwest Environmental Advocates, and the Emerald People’s Utility District.
“Bonneville’s cost cutting priorities are upside-down,” said Rachel Shimshak, director of Renewable Northwest, and advocacy group for renewable energy. “Rather than preserving their statutory priorities of conservation and renewable energy, they appear to be cutting those first, and preserving their bloated nuclear program, which constitutes nearly one-third of BPA’s expenses.”
“What’s worse is that BPA may let some of its customers leave the Bonneville system and walk away from their share of the nuclear debt that BPA ran up on their behalf. That would shift huge costs onto the customers who remain behind, and possibly onto the nation’s taxpayers,” said Jeff Shields, general manager of the Emerald People’s Utility District.
“The Columbia River system can produce abundant power and abundant fish. It can also generate ample revenue for BPA to repay the debt on the dams, and invest in energy conservation and renewables so that our children enjoy a power system as clean and affordable as we have,” said K.C. Golden, policy director for the Northwest Conservation Act Coalition.
Here is what Bonneville must do to safeguard its financial health and carry out its statutory mission:
• CLOSE THE NUCLEAR RATHOLE: Bonneville can’t continue to be a sponge for bad nuclear debt and Washington Public Power Supply System (WPPSS) cost overruns. The Northwest’s last remaining nuke, Washington Nuclear Plant 2, costs 3.5 cents to 4.1 cents per kilowatt-hour just to operate, 20 to 40 percent higher than the going rate for power. Bonneville and WPPSS say these costs will come down. Bonneville should off nuclear energy as a separate product line to anyone willing to believe these promises. If Bonneville can’t find enough customers for this product, the plant should be closed. In either case, BPA would save up to $80 million per year.
• SPREAD THE NUCLEAR COST BURDEN FAIRLY: BPA is liable for more than half a billion dollars annually in nuclear power plant debt. Bonneville must allocate the debt costs so that the burden does not impair its central mission: economical and environmentally sound energy for the Northwest. Bonneville must enforce its contract rights to keep customers on its system if their leaving would harm the agency financially. Those rights must not be waived unless Bonneville can close uneconomical power plants, resell abandoned power at a rate that makes it whole, or collect nuclear debt costs from departing customers.
• STOP THE IRRIGATION GIVEAWAY: Bonneville must charge federal irrigation customers the same pumping power rate that other irrigators served by BPA utilities pay. Currently, the Bureau of Reclamation is charged less than one-tenth of a penny per kilowatt-hour. This absurd subsidy costs Bonneville $32 million a year, and rewards wasteful water usage. Irrigation water withdrawals already cost Bonneville up to $300 million a year in foregone power sales.
• STOP THE ALUMINUM GIVEAWAY: If Bonneville offers the aluminum smelters new power sales contracts, they must ensure that the smelters pay the full cost of their service. That would eliminate a subsidy that costs the rest of the ratepayers $170 million annually.
• TERMINATE HIGH-COST GAS PLANT: As customers leave Bonneville’s system, the high-cost Tenaska combustion turbine will not be economical. The project should be canceled.
• RECOMMIT TO ITS MISSION: Bonneville’s central mission is to deliver economically and environmentally sound power to the Northwest. The agency must continue funding its successful energy efficiency programs, go forward with renewable resource development, and fully implement the Northwest Power Planning Council’s salmon recovery recommendations.
For more information contact:
Rachel Shimshak, Director
Renewable Northwest Project
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