5.4. ERMUSR 03-20-2007 - Laserfiche WebLink

Home Browse Search

further the goal of a healthy and competitive marketplace. "The PM.As also help to ensure market diversity and lower the risks associated with market consolidation of generation assets. Most importantly, they assist in keeping power rates low for millions of electric consumers. The annual appropriations process involves issues of importance to the PMAs. The PNIAs must receive yearly funding levels from Congress for purchasing and wheeling power that will then be paid for by the PMA customers through their receipts. Also, PMA customers must continue to address the almost yearly efforts by the Office of Management and Budget (OMB) to increase the rates of PN1~~ customers so that more money will flow to the Treasury. In FY 2007, OMB proposed a rate increase (incorporated in the Administration's budget) for BPA by stipulating that any "profits" BPA makes over a certain amount because of high water years need to go to debt repayment rather than to reducing customers' rates. This would have the effect of raising rates for BPA's customers indefinitely. OMB also proposed to raise the. interest rate for new projects at facilities in the SEPA, S4VI'A and WAPA territories -this proposal is known as "Agency rate." In a change from past OMB initiatives on the PMAs, these proposals can be implemented administratively, without the need for congressional approval. Therefore, Congress has to act to block the implementation of the proposals rather than choosing not to act on an OMB proposal as in years past. The BPA proposal was blocked for one year in an emergency "supplemental" spending measure passed in 2006, but the Agency rate proposal must still be addressed. Language blocking the proposal was included in the Senate committee-passed version of the FY 2007 Energy and Water Development Appropriations bill, however, the Energy and Water bill was not completed before adjournment of the 109th Congress, and as of this writing is awaiting action in the current 110th Congress (it will likely get rolled into a broader omnibus bill or continuing resolution). We expect similar proposals to the BPA rate increase and Agency rate to be included by ONIB in the Administration's FY 2008 budget request. APPA has also worked to limit the ability of the Bureau of Reclamation to impose security costs at federal dams only on water and power customers given that the heightened security measures benefit all project beneficiaries. Also, security costs have continued to rise since 9/11 with no predictability and little oversight. In the House, a bill was introduced in September of 2006 by then-House Water and Power Subcommittee Chairman Radanovich (R-C.~1) and then-Ranking Member Napolitano (D-CA) to amend the Safety of Dams Act to limit the amount of funds to be paid by water and power customers to 15 percent and to provide additional congressional oversight. A similar bill was introduced in the Senate in December 2006 by Senators Hatch (R- UT) and Cantwell (D-W.~1), among others. Although the bill was not considered before Congress adjourned, the groundwork has been laid for this Congress, and the bill is expected to be reintroduced by new House Water and Power Subcommittee Chair Napolitano and new Ranking Member Cathy McMoms-Rodgers (R WA) as well as by Senators Cantwell and Hatch. APPA supports the continued existence and federal ownership of the PMAs, the sale of federally-generated hydropower at cost-based rates, and increased customer involvement in funding critical operation and maintenance activities. APPA also continues to strongly oppose any action by Congress or the Administration that would modify the federal power program in ways that could result in substantial, unjustified electric rate increases for APPA members, create adverse economic impacts, or reduce competition. f