ERMUSR MISC. ITEMS 02-10-2004 - Laserfiche WebLink

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C 3� nswniIlia 12805-_-way 55 • State 212 • Plymouth MN 55441-3359 • 763.551.I 23 • 300.422.01 19(MN) • Fax 763.551.0459 Protecting the Interests of WAPA Customers The Western Area Power Administration (WAPA) is one of four federal power marketing administrations (PMAs). WAPA markets and delivers reliable, cost-based hydroelectric power within a 15 state region of the central and western United States. WAPA's 17,000-mile transmission system carries electricity from 55 hydropower plants operated by the Bureau of Reclamation, the U.S. Army Corps of Engineers and the International Boundary and Water Commission. In marketing electricity, WAPA must follow many laws, regulations and policies, some of which are unique to that agency. Included in these laws is the Reclamation Project Act of 1939,which requires WAPA to give preference in selling federal power to certain types of non-profit organizations including cities, rural electric cooperatives, state and federal agencies, irrigation districts,public utility districts and Native American tribes. WAPA customers in Minnesota are served by the Upper Great Lakes Region office located in Billings, Montana, which, in turn, provides electric service from the seven dams of the Pick Sloan Missouri River Program, developed as a result of Congressional authorization in 1944. The conference report to the comprehensive energy bill (H.R. 6) includes several provisions impacting PMAs. We support these provisions: • Authorization for WAPA and SWPA to engage in certain new financing and operation arrangements for existing and new transmission. • A requirement that transmission-owning PMAs provide open access to their transmission lines to other market participants at rates comparable to what they charge themselves and under terms and conditions comparable to those they apply to themselves. • Authorization for the PMAs to join regional transmission organizations. The energy bill also includes a provision that allows for the use of PMA receipts to fund power- related operation and maintenance costs at Corps of Engineers-operated hydro facilities. This language was amended in the final conference committee report to limit this action to FY 2004 only. However, the establishment of this limit was based on a Congressional Budget Office analysis that attached an unreasonably high cost to the use of PMA customer receipts. When this issue is revisited in 2004, Congress should authorize the Corps to use PMA customer receipts to fund Corps projects on an indefinite basis. Additionally, the issue of whether or not the PMAs should be required to pay for all or a portion of federally mandated security measures at dams run by the Bureau of Reclamation will receive increased attention in the FY 2005 appropriations process. These security costs should be paid for by the BuRec's general budget and not borne by the PMAs and their customers. Congress should support the continued existence and federal ownership of the PMAs, the use of cost- based rates, and increased customer involvement in funding critical operation and maintenance activities. Congress should also strongly oppose any proposed action that would modify the federal power program in ways that could result in substantial electric rate increases for MMUA members, create adverse economic impacts, or reduce competition.