6.2. ERMUSR 03-12-2019 - Laserfiche WebLink

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111111111111111 IIIIIII11:20 Many of these transmission assets have been in help to cover the costs of other activities authorized place for years and are substantially depreciated. by these multipurpose dams such as navigation, A new owner, likely a for-profit transmission flood control, water supply, environmental company, would seek to recover the full purchase programs, and recreation. PMA power is generally price plus a rate of return in rates. The result will low-cost in relation to other sources of electricity likely be sharp increases in transmission costs for because hydropower is a renewable resource public agencies, small town municipal utilities, and and most dams were constructed long ago, when rural electric co-ops. The modest one-time benefit material and labor costs were much lower than from selling these assets is simply not worth the today. ongoing increased cost to not-for-profit entities across the country. The Administration's proposal would impose an unwarranted $1.9 billion rate increase on small The administration estimates that the federal municipal utilities and other not-for-profit and government could raise an additional $1.9 government PMA customers. billion over 10 years by charging PMA customers market-based rates instead of the current cost- MMUA Position based rate structure. This proposal would violate MMUA urges Congress to reject proposals that current federal law in addition to upsetting the would disrupt the stable, low-cost, and emission- longstanding beneficial partnership between WAPA free power that WAPA provides to so many and its preference customers. Minnesota communities. For well over half a century there has been a successful partnership In accordance with federal law, PMA"cost-based" between federal power marketing administrations rates are set at the levels needed to recover the and the communities that receive a federal costs of the initial federal investment (plus interest) hydropower allocation, which has helped keep in the hydropower and transmission facilities. costs low for our customers. The Administration's The PMAs annually review their rates to ensure proposals to sell off PMA transmission assets and full cost recovery. None of the costs are borne require PMA power to be sold at market rates by taxpayers. If a deficit is projected, rates are should be rejected. adjusted to eliminate any deficit. Power rates also Any disruption to the federal hydropower program would harm ''.'I' the successful partnerships * ,,, .,°; * „ ,, between the power marketing wt t agencies and the cities and . ..t , z rural electric cooperatives that #'". to It have supported hydropower '. .. # development for well over half a ` e :, !' , ,` century. - .. r . l aihk. } Y ' Ally h talite . !: 'IL_ _ ... ;� _.ems a"'. .4 hi , 2019 Federal Position Statements/11