February 1, 2001

California utilities say they may not pay BPA back

WASHINGTON - Two of California's biggest utilities wouldn't promise a Senate panel Wednesday that they could repay a $130 million debt to the Bonneville Power Administration for energy supplied during the state's energy crisis.

"We are surely hopeful that we will be in a situation to make those payments," said Steven Kline, vice president of PG&E Corp., the parent of Pacific Gas & Electric.

The head of Oregon's PGE says that people are not taking the power problems seriously.

"People don't believe this is real," Peggy Fowler said. "Even in California they don't believe it is real yet, and it's very real."

Fowler hopes the Northwest can learn from California's mistake.

"That's what I would hope for is we put together a process that allows the right people to work in a short time frame to make sure we an avoid in the Pacific Northwest and Oregon what has happened in California," she said.

Some Oregonians have already started to conserve power, from turning down the heat to turning off the lights on the state Capitol's gold pioneer.

Fowler says that whatever the governors devise, there is no short-term solution. The Northwest's power woes will continue for the next two to three years, she said. "We are more than anxious to make the payments," Southern California Edison President Steve Frank said.

But, Kline told the Senate Energy and Natural Resources committee, everyone is aware of the utilities' financial situation.

Both PG&E and SoCal have been on the verge of bankruptcy as they struggle through a botched deregulation process. Under federal mandate, the region's utilities have to ship them their excess power until Feb. 7. Both report they are $12.7 billion in debt.

BPA, a federal agency that sells wholesale hydroelectric power from the 29 federal dams in the Columbia River Basin, needs the money to make its annual payment to the U.S. Treasury for federal investments in the region's hydroelectric system.

"Part of the moral of that story is our problems are the Treasury's problems, and the taxpayers' at large," said Jeff Stier, BPA vice president of national relations.

"The consequences tend to be more political. People believe that power in the Northwest is subsidized, which we disagree," he added. "They could use that as proof of their point."

California is facing an energy crunch that, experts testified, could spread to the Northwest and beyond.

They pointed to a host of reasons for the region's situation - California's dysfunctional energy market, not enough construction of new power plants in the last decade and decreased rain and snow vital to hydroelectric power.

"We just can't raise our rates fast enough to keep up with what we're seeing in these markets," said Mark Crisson, director of Tacoma Public Utilities, which added a 50 percent electric rate surcharge at the end of December.

This summer, PacifiCorp Executive Vice President Judi Johansen said consumers in the West may have to brace themselves for the blackouts which have already plagued California.

"Our utility and I know other utilities are looking at procedures for implementing blackouts, which is something we've never had to do," she said.

http://www.katu.com/news/news_story.asp?ID=8706

-- Martin Thompson (mthom1927@aol.com), February 01, 2001