Bonneville Power the focus of AFL-CIO forum

PORTLAND, OR -- "To BPA or not to BPA," that was the question posed by labor leaders to representatives of public and private utilities, industry, government and environmental organizations in a discussion about the future of the Bonneville Power Administration (BPA).

Views on whether to maintain it as a non-profit public entity or sell it off were as wide as the Grand Coulee Dam at the daylong conference in Portland, hosted by the AFL-CIOs of Oregon, Washington, Idaho and Montana.

The only real consensus reached was that a decision on how BPA will operate as electrical deregulation takes hold in the Pacific Northwest has to be made soon.

"Selling BPA to the highest bidder might be good for Wall Street investors, but it surely won't continue to keep electric rates low and workers employed in related industries in the Northwest," said Irv Fletcher president of the Oregon AFL-CIO, who joined AFL-CIO leaders in denouncing deregulation of the electrical industry.

With deregulation, the electrical industry is being carved up and everyone wants a piece of the pie, Fletcher said.

President Franklin D. Roosevelt and Congress created BPA in 1937 to market and transmit power produced at Bonneville Dam. Its programs are funded by Northwest ratepayers, who enjoy some of the lowest electrical rates in the world.

BPA markets the power from 29 federal dams and one non-federal nuclear plant in the Pacific Northwest. The dams and the electrical system are known as the Federal Columbia River Power System. Decisions about its management are made independently by three different federal agencies -- BPA, the Corps of Engineers and the Bureau of Reclamation.

BPA's service area includes Oregon, Washington, Idaho, western Montana and small parts of Wyoming, Nevada, Utah, California and eastern Montana. BPA sells wholesale power to publicly-owned and investor-owned utilities, as well as to some large industries.

Jerry Leone, manager of the Public Power Council, said that groups have a love-hate relationship with BPA and that BPA has the pressure of having to deal with 130 public utility districts, six investor-owned utilities, ratepayers, fish interests, environmentalists, conservationists, 3,000 employees, Washington Public Power Supply System (WPPSS) bondholders, union representatives, government representatives, and others.

"Federal money is divvied up among each of these regional interests. That money will be undivvied by deregulation," Leone said.

"They tell us deregulation is coming, but we're not so sure," stated Al Link, secretary-treasurer of the Washington State Labor Council. He said citizens of the Northwest aren't clamoring for change and that lawmakers are having to stuff dereg bills in other legislation to get it passed. "Consumers are keeping tabs," he said.

Link said the power industry was regulated in the first place because power companies said it wasn't cost effective to provide juice to rural customers.

"Just look at the airlines (deregulation). It costs me more to fly to Boise than it does to Washington, D.C. That's deregulation at its finest," Link said.

Don Judge, executive secretary of the Montana labor federation, said soon after the 1997 Legislature passed an electrical deregulation bill the Montana Power Company put all of its generation facilities on the sales block. "There was successorship language written into the bill (to protect employees)," he said, "but successorship clauses are only as good as the old employer. New employers don't always honor it." Now, labor and its allies are working with Democratic and Republican lawmakers trying to pull together a special session to roll back the law.

Reliability and safety standards are at stake, voiced Dave Whaley, president of the Idaho AFL-CIO. "It's a genuine concern of people," he said, explaining that many rural areas in his state already experience brownouts and lax service, which likely would worsen under private owners.

U.S. Representative Earl Blumenauer, D-Oregon, said it's inevitable that some elements of deregulation will come and that the Pacific Northwest "stands to lose the most if the cards aren't played right."

Describing the Northwest's congressional delegation as "the weakest it's been in 75 years" (in terms of committee assignments and seniority), Blumenauer said labor and its allies have a perfect opportunity to work with politicians from throughout the country to see to it that BPA isn't sold and that the Northwest's regional interests are protected.

"The debate is about more than just electricity generation and transmission," Blumenauer said. "There is the entire Columbia River ecosystem to consider," explaining that outdoor recreation, salmon recovery, the environment, farm irrigation and wildlife "will be profoundly affected."

Bruce Lovelin of the Columbia River Alliance explained that because of the continuing decline of salmon, "removal of some dams on the system is squarely on the table." Such action would have a major impact on jobs and rates at which the BPA could sell power, he said.

BPA has about 2,900 employees, with 2,000 of those members of various local unions. BPA officials said it is the fewest it has employed since 1965. During the 1960s BPA built a lot of the main transmission grid and the intertie, but the agency had no fish and wildlife programs, no energy conservation, no nuclear projects, and no WPPSS debt. Now, the agency is maintaining a larger power grid and all the added responsibility of the Northwest Power Act with the same number of employees as 30 years ago.

Claude Leinbach of the United Power Trades Organization said for the last five years employees have accepted wage freezes and fewer benefits in order to keep BPA competitive. "We say privatization is the worst thing that can happen," he said.

Acting BPA Administrator Jack Robertson acknowledged that reduced expenses and two good water years have allowed BPA to "turn the road to being very competitive."

BPA power rates are an average 17.6 percent lower today than they were two years ago, he said. Adjusted for inflation, rates are the lowest since 1983.

"We take for granted the enormous value we have in our backyard," Robertson said. With fresh water becoming one of the most precious commodities around, the Columbia River is considered one of the most complex environmentally-valuable power and river systems in the world.

Without hydropower, he said, tens of millions of tons of pollutants would be emitted into the air, lakes and rivers.

Ted Strong of the Columbia River Inter-Tribal Fish Commission said American Indians "are running out of patience waiting for federal agencies to restore salmon runs. Northwest politicians don�t have the political will to do what is right."

He said management of the ecosystem in the Columbia River Basin "has nothing to do with nature...human nature, maybe."

He said money spent breaching dams to help fish would create construction jobs at the dams.

Rochelle Lessner, director of government affairs for Portland General Electric, said "no one really sane is talking about ripping apart Bonneville."

She said a cost review panel's recently-released 13-point recommendation plan on how BPA can shave about $159 million from its annual $2.3 billion budget "is positive for us, and for labor."

She said labor is at the table as restructuring takes place in Colorado, Nevada, Illinois, Maine and Massachusetts. In Maine, dislocated workers will receive two years of health care benefits and retraining at the University of Maine.

Lessner said that the "continued uncertainty" of BPA's future "is the death spiral that most threatens the agency. If we don't do it (find solutions), someone else will do it for us."

Brett Wilcox, owner of unionized Northwest Aluminum plants in The Dalles and Goldendale, Wash., supports deregulation. He acknowledged that in the short term big corporations will reap the most benefits, but "in the long term that's definitely not true. It's irrefutable that everyone will benefit from competition."

Wilcox said his mills probably would not survive long term without deregulation. He said the ability to buy power in the open market will allow him to plan years into the future. "I commit to you we will be here in 2010 and on," he said, then announced plans for spending $100 million in capital investment at the two plants.

"You can't stop deregulation, but you do have the ability to shape the details," he said.

Bill Miller, business manager of Portland-based Electrical Workers Local 125, said there is no doubt that service will decline under deregulation. "It's nothing more than leveling rates and marketing cheap power," he said. "Large industrial consumers will buy in big blocks to get the best bang for the buck, subsidized by higher rates for small users."

Brian Baird, congressional candidate from Washington State's Third District, said in a luncheon speech that Congress shouldn't even be considering selling the agency. "If it ain't broke, don't fix it," he said, adding that taxpayers of the Northwest have been paying for BPA for years. "You don't pay on a home mortgage for 30 years, and then when that mortgage is about to be paid off have the bank come in and say you don't own the house."

� Oregon Labor Press Publishing Co. Inc.