News
9/2/2009
To BPA: Stop Harming Your Real Customers
An Op-Ed
By Werner Buehler, OTEC General Manager
The Bonneville Power Administration (BPA) continues to go down a road that is bad for its traditional customers, like Oregon Trail Electric Cooperative (OTEC).
OTEC received a letter, dated August 19th, indicating that BPA wants to continue subsidizing the aluminum industry, specifically Alcoa and Columbia Falls Aluminum Company (CFAC), despite the added pressures this places on OTEC’s member’s rates.
According to the letter, BPA is proposing a power sale of up to 320 average megawatts at the Industrial Firm power rate (IP rate) sufficient to meet a portion of Alcoa’s load at its Intalco smelter. This would be a 7 year contract beginning October 1, 2009. CFAC is still in negotiations with BPA, but it would be surprising if an agreement is not reached in the near future.
In November 2008, OTEC submitted official comments to BPA on this issue and those comments are still very valid. “Alcoa chose not to receive low cost, long-term BPA power from a “qualified” BPA utility, and instead chose to be served as a Direct Service Industry (DSI) to save money - a situation that was short sighted at best? Now that the economic dynamics have shifted and BPA no longer has surplus power, Alcoa is looking to BPA to provide them the same cheap power causing public utility customers to subsidize them. This subsidy amounts to about $145,000 per job for the 480 positions Alcoa will be obligated to maintain.”
It’s not a coincidence that BPA’s recent rate increase to OTEC becomes effective October 1, 2009. Has BPA already made up its mind about subsidizing the aluminum industry? What does this mean for you, the average OTEC member?
This plan will ultimately result in a rate increase to BPA customers like OTEC of 2-3 percent, or about $100 million for all BPA customers. BPA just raised its rates by 7.6%. Though we are fortunate OTEC was able to minimize its increase to its members, just how much more fortunate would we be if the rate increase were 2-3% less?
The reality is that the BPA is attempting to subsidize an industry that is struggling right now and is looking for inexpensive power. We are all too aware that industries and individuals within the OTEC service territory are struggling as well though, so why is BPA placing a higher value on those in the aluminum industry?
It’s time for BPA to wake up and do what’s best for its traditional customers, like the electric cooperatives in the Northwest. Stop subsidizing non-traditional customers who chose unwisely in the past at the expense of our members today.
To OTEC’s members, please know that OTEC is fighting for the interests in OTEC’s service territory, but your help is needed. Don’t sit idly by as BPA places greater value on aluminum industry jobs instead of your job. Let BPA know what you think.
BPA’s proposed power sale contract with Alcoa will be available for public review and comment through September 9, 2009, on BPA’s web site at http://www.bpa.gov/power/pl/regionaldialogue/implementation/documents/
