6.3 ERMUSR 03-13-2018 - Laserfiche WebLink

Home Browse Search

IMMIIJJ The $9.5 billion that the federal government might receive for selling off these publicly-owned transmission assets will not move the needle much in a $4.5 G trillion budget, but the negative impact - R on the public and not-for-profit entities that rely on those assets will be felt for decades. D N A 11 t Many of these transmission assets i . •� � . have been in place for years and are t "` substantially depreciated. A new owner, likely a for-profit transmission company, would seek to recover the full purchase price plus a rate of return in rates. The result will likely be sharp increases in transmission costs for public agencies, WAPA power is crucial to the 47 Minnesota municipal electric utilities, small town municipal utilities, and rural including the city of Madison,that serve over 200,000 people in the electric co-ops. The modest one-time western part of the state. benefit from selling these assets is simply not worth the ongoing increased cost to not-for-profit entities across the country. because hydropower is a renewable resource and most dams were constructed long ago, when Second, the Administration estimates that the material and labor costs were much lower than federal government could raise an additional $1.9 today. billion over 10 years by charging PMA customers market-based rates instead of the current cost- The Administration's proposal would impose an based rate structure. This proposal would violate unwarranted $1.9 billion rate increase on small current federal law in addition to upsetting the municipal utilities and other not-for-profit and long-standing beneficial partnership between government PMA customers. WAPA and its preference customers. MMUA Position In accordance with federal law, PMA"cost-based" MMUA urges Congress to reject proposals that rates are set at the levels needed to recover the would disrupt the stable, low-cost, and emission- costs of the initial federal investment (plus interest) free power that WAPA provides to so many in the hydropower and transmission facilities. Minnesota communities. For well over half a The PMAs annually review their rates to ensure century there has been a successful partnership full cost recovery. None of the costs are borne between federal power marketing administrations by taxpayers. If a deficit is projected, rates are and the communities that receive a federal adjusted to eliminate any deficit. Power rates also hydropower allocation, which has helped keep help to cover the costs of other activities authorized costs low for our customers. The Administration's by these multipurpose dams such as navigation, proposals to sell off PMA transmission assets and flood control, water supply, environmental require PMA power to be sold at market rates programs, and recreation. PMA power is generally should be rejected. low-cost in relation to other sources of electricity 2018 Federal Position Statements/9 241