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Douglas Electric Cooperative

Douglas Electric is owned by the members it serves! More than just another electric utility with miles of power lines, transformers and meters, it is in fact the customers’ cooperative. Along with our dedicated office and operating staff, you are its greatest asset.

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Member Message

President's Budget Takes Aim at BPA

Two proposals in the President's fiscal year 2006 budget hit like shock waves in the Northwest, recently. Both proposals have the potential to cause serious rate increases and disruption of the way Bonneville Power Administration (BPA) conducts business.

The most extreme of the two proposals would move BPA and other power marketing administrations (PMAs) from cost-based rates to market rates. If that mandate were in place today, your rates would be 25 percent to 30 percent higher than they are currently. Immediately following the release of the market rate proposal, the Northwest Congressional delegation reacted with strong opposition. While previous Administrations have proposed this as part of their budgets without success, the severe nature of the current proposal also calls for a loud response from all cooperatives and their members.

The proposal out of the White House Office of Management and Budget presumes that there is a federal subsidy to the Federal Columbia River Power System. This 'system' includes the various Northwest dams and one nuclear plant. However, Northwest ratepayers pay for all capital costs - plus interest - of the system. They pay all of the costs to operate the system, maintain the system and meet all other statutory obligations imposed upon BPA. BPA annually reviews those rates to ensure full cost-recovery.

The proposal requires new legislation to be passed into law, an outcome that looks unlikely in light of the fierce opposition from legislators in all areas with power marketing administrations. Nevertheless, electric cooperatives will need to rally to insure that costbased rates continue.

In addition, there is concern about another proposal in the President's budget. This proposal would mandate that BPA's use of third-party financing count against its statutory borrowing limitations. Again, this proposal is misguided since this type of BPA financing is not an obligation of the U.S. taxpayers. Crippling BPA's ability to do this could mean that much-needed infrastructure improvements are delayed even longer.

Douglas Electric Cooperative opposes these proposals that will arbitrarily raise the cost of power we buy from BPA.

Best Regards,

Dave Sabala
General Manager