6.1. ERMUSR 03-09-2010 - Laserfiche WebLink

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Background The Western Area Power Administra- tion (WAPA or Western) is one of four federal power marketing adminis- trations (PMAs). WAPA markets and delivers reliable, cost-based hydro- electric power within a 15 state region of the central and western United States. WAPA is critical to Minnesota municipal utilities, providing wholesale power allocations to 47 public power systems serving over 200,000 people in the western part of the state. WAPAs 17,000-mile transmission system car- ries 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 prefer- ence in selling federal power to certain types of non-profit organizations including cities, rural electric coopera- tives, state and federal agencies, irriga- tion districts, public utility districts and Native American tribes. WAPA customers in Minnesota are served by the Upper Great Plains Region office located in Billings, Montana, which, in turn, provides electric service from the seven dams of the Pick-Sloan Mis- souri River Program, developed as a result of Congressional authorization in 1944. Approximately 1,200 public power systems and rural electric cooperatives throughout the country buy low-cost, zero-emissions hydropower from the federal Power Marketing Administra- tions that market this power from the federal multi-purpose dams. While these utilities pay for funding for operation and maintenance for the hydropower facilities at these dams through their power rates, that money gets returned to the U.S. Treasury and must then be appropriated annually to the Bureau of Reclamation and the U.S. Army Corps of Engineers. Unfortunately, these funds have not always gone back into the hydropower facilities, but have instead been used for other purposes. Therefore, a main- tenance backlog exists on many of the turbines and other machinery that enables these dams to produce hydro- power.Whenever these federal assets are not being used at their full capabil- ity,other forms of power generation, including fossil fuels, must be used to make up the difference. Congressional Action Unfortunately, every year opponents of the federal PMA program have sought to renew legislative and administrative challenges to the way PMAs provide service to municipal utilities and rural electric cooperatives. For example, over the last several years, as part of the White House budget proposal, the Office of Management and Budget (OMB) has recycled a number of proposals that were soundly rejected in the past: requiring the PMAs to sell power at market rates; reallocation of Pick-Sloan irriga- tion costs to power customers; and an administrative increase in the inter- est paid on new PMA investments. Additionally, OMB proposed drastic reductions in Western's construction budget. These Administration propos- als needed Congressional approval and were consistently rejected by bipartisan efforts in both chambers. MMUA Position MMUA urges Congress to: • support the continued existence and federal ownership of the PMA program, including increased customer involvement in funding, and oppose legislative or administrative efforts that could result in substantial and unnecessary rate increases, including proposals to require the PMAs to sell power at market rates. Protecting the Interests of WAPA Custonners