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HomeMy WebLinkAboutAgenda Packet 02/08/2005 UTILITY ADVISORY COMMITTEE PUBLIC WORKS CONFERENCE ROOM PORT ANGELESs WA gB362 FEBRUARY 8~ ZOO5 2.'nn P.M. AP-ENDA I. CALL TO ORDER Ill. APPROVAL FiF MINUTEG FOR -;ANUARY 1 1 ~ 2cns IV. LATE ITEMG V. DISI~UGSION ITEMS A. 2 GOOD ~:~ TOSS B. ELECTRIBAL APPRENTICE PROGRAM C. CONBERVATION PROGRAM REBATE ADUUGTMENTS - INfO ONLY D, BROWN AND CALDWELL CONSULTANT AGREEMENT AMENDMENTB E, SKILLIN[~s-CoNNOLLY AGREEMENT AMENDMENTS F. PARAMETRIX AGREEMENT AMENDMENT ~FI04 G. CSO REDUCTION PLAN UPDATE - ORAL H, CONSULTANT AGREEMENTS fOR WATER/~/ASTEWATER RATE STUDY AND FOR ELECTRIE: RATE STUDY VI, NEXT MEETING DATE: - MARCH By VII. AO4OURNMENT UTILITY ADVISORY COMMITTEE Port Angeles, Washington January 11, 2005 ~ L Call to Order: Chairman Rogers called thc meeting to order at 3:00 p.m. II. Roll Call: Members Present: Chairman Rogers, Allen Bentley, Mayor Hcadrick, Dean Reed, Councilmcmber Erickson Members Absent: None Staff Present: Mike Quinn (3:15), William Bloor, Glenn Cutler, Scott McLain, Gary Kenworthy, Cate Rinehart Others Present: Brian Gawley (3:25) - Daily News Paul Lamoureux - Citizen IIL Approval of Minutes: Chairman Rogers asked if there were any additions or corrections to the meeting minutes of December 14, 2004. Dean Reed moved to approve the minutes. Allen Bentley seconded the motion, which carried unanimously. IV. Late Items: Wastewater Fee Structure Executive Session V. Discussion Items: A. Waste}eater Fee Structure Paul Lamoureux, Citizen of Port Angeles, distributed a handout and gave a short presentation. Mx. Lamoureux advised his information was based on a citizen's point of view consisting of fairness, consistency, and value. Hc proposed a three tier rate structure which would reflect real water usage. There was a brief discussion. No action taken. Information only. UTILITY ADVISORY COMlVlITTEE January 11, 2005 B. Project Design For Utility Extension Glenn Cutler, Director of Public Works and Utilities, gave a brief overview of a proposed extension of utilities to the west of the City at the site of the Eclipse Industrial Park on Highway 101 and into the park. It was noted that of those owners contacted 78% support annexation. There was a brief discussion. No action taken. Information only C. 2005 Consultant Agreement With Parametric, Inc. For Engineering Services Gary Kenworthy, Deputy Director of Engineering Services, reviewed the information in the packet, responded to questions, and provided clarification. It was noted that the agreement would ensure that ongoing engineering services needed to support solid waste activities and landfill closure would continue. There was a brief discussion Dean Reed moved to recommend City Council authorize the Mayor to sign an Agreement for Professional Services with Parametrix in the not to exceed amount of $469,525.00. Mayor Headrick seconded the motion, which carried unanimously. D. Western Public Agencies Group (WPA G) Agreements For 2005 Scott McLain, Deputy Director for Power Systems, reviewed the agency group background noting that the funding request for this year is less than it was for 2003 and 2004. Councilmember Eriekson moved to recommend the City Manager sign agreements with Marsh Mundorf Pratt and Sullivan, and EES Consulting for WPAG services during the year 2005 for an amount not to exceed $15,000. Mayor Headrick seconded the motion, which carried unanimously. VI. Adjourn to Executive Session - 3:36p. m. Return to regular session - 4:00 p.m. with a continued brief discussion regarding the west utility extension proposal. VII. Next meeting date: February 8, 2005 VIII. Adjournment: The meeting was adjourned at 4:25 p.m. Chairman Rogers Cate Rinehart, Administrative Assistant 1/12/05 N :~P W KS\LIGHTxCONS~CATE\j an I 1 mect.wpd 2 pORTAI aELES W A S H I N G T O N, U. S, A. ADVISORY COMMITTEE MEMO UTILITY DATE: February 8, 2005 TO: UTILITY ADVISORY COMMITTEE FROM: Helen Freilich, Waste Reduction Specialist SUBJECT: Materials exchange website: "2good2toss" Summary: "2good2toss" is a Washington online materials exchange that promotes the re-use of building materials and large household items. Items that are posted have a maximum value limit of ;99.00. 2 good2toss will be available to all businesses and residents in Clallam County. The City's tnnual cost is $600.00 and a one time set up fee of $500.00 payable to "i WasteNotSystem." The Depmhnent of Ecology grant will pay 75% of both set up fee and annual cost. Recommendation: No action required. For information purposes only. Background/Analysis: 2good 2toss is a statewide recycling exchange program via the internet where residents and businesses can advertise items for sale such as reusable construction materials and household items that are valued at $99.00 or less. In 2004, 714,500 lbs. of material were exchanged in Washington State that would have otherwise ended up at landfills. Construction and demolition debris is a large component of the waste stream. In September 2004, the City completed the Clallam County Construction, Demolition, and Land-Cleating Debris Waste Assessment Study with funds fi-om the Coordinated Prevention Crmnt. This study identified "2good2toss" as one of the potential alternatives in Clallam County to deal with this type of waste stream. In order to implement this program within Clallam County, an MOU with the State and an annually renewable User Agreement with "i WasteNot Systems," the company administering the website, is required. The Department of Ecology, who originally set this program up in the State, has provided the Memorandum of Understanding (MOU) between State of Washington Depax tment of Ecology and Clallam County in partnership with the City of Port Angeles. The MOU was recently reviewed and signed by the Clallam County Board of Commissioners and has been forwarded to us for our signature. The City Attorney has reviewed the MOU and the User Agreement and has recommended the language in both as acceptable. The City Waste Reduction Specialist, Helen Freilich, will oversee the program and administer the site. Our research with Kitsap County and Mason County, who run the same program, indicate that it typically requires less than 15 minutes per day to administer. The Solid Waste Division has sufficient funds in the 2005 budget to support this program. N:\UAC~FinaI\UAC 2-8-05 2good2toss.doc pORTAI GELES UTILITY ADVISORY COMMITTEE MEMO DATE: February 8, 2005 To: UTILITY ADVISORY COMMITTEE FROM: Dave Ireland, Manager, Light Operations SUBJECT.' Addition of One New Apprentice Lineman Position Summary: The Light Operations Division currently has an aging workforce, with several employees approaching or already eligible for retirement. Recently, one employee resigned, two more have announced their retirement, and one has been put on disability with only a slim chance of returning to work. Recruitment for new linemen has been difficult due to high demand in other geographic areas. Recommendation: Forward a favorable recommendation to City Council, via the Finance Committee, to authorize the Director of Public Works and Utilities to add one additional employee to start as a groundman for six months and to advance to an Apprentice Lineman position when the new school year begins in September 2005. Background/Analysis: In the past six months Light Operations has lost one lineman by resignation and a foreman due to a medical condition. In March and April, two additional Journeymen will retire. Two additional Journeymen could retire at any time. This has reduced Light Operations to having only a single crew rather than the two that it normally runs. The response to our recruitment for replacement linemen has been meager at best due to high market demand for linemen outside of our geographic area. At the last semi-annual meeting of the East-West Electric Utilities Superintendents and Operations Managers, this was a topic of discussion. Almost every utility represented indicated that they were having large problems with recruiting qualified and experienced linemen, metermen, or substation technicians. One of the problems is that utilities in Southern California are offering large signing bonuses, high wages, and unlimited overtime to recruit linemen. Anoth~ problem is the average age of a lineman in the national market is over 60, which continues to cause the journeyman pool to decline. Light Operations Division is recommending the addition of another employee who will go through the Apprentice Program. It typically takes four years to produce a journeyman. Since the shortage of lineman is an industry-wide problem, it is imperative that Light Operations start to get more linemen into the pipeline in order to prepare for the future. Recently, Light Operations developed an employee contract for new apprentices which will require them to sign up for a long-term employment arrangement with the City before being accepted into the Apprentice Program. The contract will ensure that the City meets its objective of filling its journeymen ranks by requiring six years of employment with the City after graduation from the Apprentice Program. pORTANOELES W A $ H I N (3 T O N, U. $. A. UTILITY,~,DVI$ORY COMMITTEE MEMO DATE: February 8, 2005 To: UTILITY AI)VISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager SUBJECT: Conservation Program Rebate Adjustments ;ummar~: The City has offered its residential utility customers participation in the Bonneville ?ow~r Administration Conservation and R~newables Discount program since June 1, 2001. The Eity's total rebate expenses have been slightly above where they should be considering the luration of the program is five-years. A minor reduction to rebate levels will be made on ?ebmary 1, 2005 to help reduce program expenses. Recommendation: For information only, no action requested. Background/Analysis: On April 12, 2001, the City Council authorized the Director of Public Works and Utilities to implement an energy conservation program that qualifies for the Bonneville Power Administration (BPA) Conservation and Renewables Discount (C&RD) program. The BPA C&RD program provides rebates to residential customers for electrical energy conservation improvements. The City's C&RD program officially began on October 1, 2001 and will conclude on September 30, 2006. The City's rebate expenses under the C&RD program qualify towards a credit against the City's BPA wholesale power bill. City energy conservation program expenses beyond the BPA C&RD would have to be financed by the City and would have an impact on electrical rates. As of December 31, 2004, total rebate expenses were 67.6% of the 5-year program budget. Rebate expenses are 2.6% above the 65.0% performance target. On February 1, 2005, rebates for' Super Good Cents Manufactured Homes were lowered from the $1000 rebate to a $500 rebate. All other rebates will remain at the 2004 levels. Expenses under the C&RD program will continue to be closely monitored to ensure that funding is available for the entire five-year program period. pO TA m WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO I I DATE: February 8, 2005 To: UTILITY ADVISORY COMMITTEE FROM: Stephen Spen', P.E., Engineering Manager SUBJECT: 2005 Consultant Agreement with Brown and Caldwell Summary: Brown and Caldwell, Inc. has been selected to continue to provide engineering services related to the City's wastewater and stormwater systems. The current agreement with Brown and Caldwell expired last month, though sufficient funds remain to continue until a new agreement is executed. A new agreement will provide that the ongoing engineering services of Brown and Caldwell will continue without delay, and that additional engineering needs related to the City's wastewater and stormwater systems will be met for the remainder of 2005. Recommendation: Forward a favorable recommendation to City Council to enter into an Agreement for Professional Services with Brown and Caldwell, Inc, and authorize the Mayor to sign the Agreement for an amount not to exceed $160,000.00. Background/Analysis: On May 2, 2003, the City signed an Agreement for Professional Services with Brown and Caldwell (B&C) to provide engineering support services for an I/I Roof Drain Disconnection Project, a Condition Assessment of the Sewer Collection System, a CSO Comprehensive Reduction Plan Update, as well as Directed Wastewater Services. The Agreement was amended once to add a fifth task, a Re-rating of the Wastewater Treatment Plant (WWTP). The CSO Reduction Plan is still under negotiation with the Department of Ecology (DOE), and the WWTP re-rating work is still underway. The remaining tasks have been completed. Based on the extensive involvement that B&C has had in providing engineering services for the City's wastewater and stormwater systems, including its involvement in issues that are continuing from the existing agreement to the proposed new agreement, B&C was selected as the best qualified to perform wastewater and stormwater system-related professional services. A new engineering services agreement has been negotiated. Under the new agreement B&C will continue to assist the City in negotiations with DOE for approval of an update to its CSO Comprehensive Reduction Plan, as well as complete the Re-rating of the WWTP. PW 0101_06 [Revised 07/24/03] The following is a table of the tasks in the proposed Agreement, with estimated budget and funding source. TASK IBUDGET IFUNDING SOURCE 1. CSO Comprehensive Reduction Plan $30,000 2005 Wastewater Utility Budget Update 2. Re-rating ofthe WWTP $80,000 2004 Wastewater Utility Budget* 3. Other Services as Directed $50,000 2005 Wastewater Utility Budget Total $160,000 Funds are being carried over fi:om 2004 budget, as unusual winter weather kept re-rating fi:om being completed in 2004. The duration of the Agreement will be through January 31, 2006, and based on the completion of all Tasks. 2005 Brown & Caldwell Agreement W ,~ S [-[ [ IN G T O ['q, UT[[.[TY ADVISORY COMMITTEE MEMO DATE: February 8, 2005 TO: UTILITY ADVISORY COMMITTEE FROM: Stephen Sperr, P.E., Engineering Manager SUBJECT: Amendment No. 4 to Consultant Agreement with Skillings-Connolly for Engineering Services Summary: It is necessary to amend thc agreement with Skillings-Connolly to provide additional engineering services related to the design of sidewalk and stormwater improvements along Park Avenue between Race Street and Peninsula College. A scope and budget for the work has been negotiated. Recommendation: Forward a favorable recommendation to City Council authorizing the Mayor to sign Amendment No. 4 to the Agreement for Professional Services with Skillings- Connolly, decreasing the total contract amount from $338,517 to an amount not to exceed $317,030. Background/Analysis: The original agreement for professional services with Skillings- Connolly for enginecuSng design services for various water and wastewater projects was approved on May 21, 2002. The agreement included a scope and budget for two tasks, Front Street Water Main, and Peabody Creek Water Main. The Agreement was amended three times through January 31, 2005, adding four additional tasks: 2003 Sewer Main Replacement and Repairs, Crown Park Storm and Sanitary Sewer, Directed Services, and Park Avenue Sewer. The City was recently successful in obtaining a $141,5000 Transportation Improvement Board (TIB) Pedestrian Safety and Mobility Program (PSMP) grant to help cover ensts associated with sidewalk improvements along Park Avenue between Race Street and Peninsula College. Amendment No. 4 to the Agreement will expand the scope and budget of Task 6, Park Avenue Sewer, to include design of both sidewalk and related stormwater improvements along Park Avenue between Race Street and Peninsula College. In addition, the budgets for some of the other tasks will be adjusted to reflect final task amounts. PW 0101_06 [Revised 07/24/03] The table below summarizes the revised budgets for the tasks under the agreement through Amendment No. 4. Original Prior Amendment Task Contract Amendments No. 4 1. Front Street Water Main - done $28,886 $24,501 $24,501 2. Peabody Creek Water Main - done $112,315 $144,215 $118,587 3.2003 Sewer Main Repairs - done $36,351 $15,406 $15,406 4. Crown Park Sewer and Stormwater- done $0i $74,937 $78,714 5. Directed Services $0 $40,000 $3,041 6. Park Ave Sewer & Sidewalks $0 $39,458 $76,781 Total $186,552 $338,517 $317,030 Funding remains within amounts approved in the prior amendments. The agreement completion date will be extended to October 31, 2005 by this amendment. Staff will provide additional information on task 2, 3, and 6 at the UAC meeting. This additional information will be included in the memo to be forwarded to Council. Skillings-Connolly Amendment No4 UTILITY ADVISORY GOMMiTTEE ~EMO DATE: February 8, 2005 TO: UTILITY ADVISORY COMMITTEE FROM: Gary W. Kcnworthy P.E., Deputy Director of Public Works/City Engineer SUBJECT: Final Payment, Parametrix 2004 Engineering Services Agreement Summary: Parametrix was requested to provide added services during the past year. This added work, until the final billing, was covered by shifting funds between tasks and use of directed funding allowances within the agreement. The final billing has exceeded the agreement amount by $45,955 or 9%. Recommendation: Forward a favorable recommendation to City Council to authorize additional funding in the amount of $45,955 for final payment to Parametrix for 2004 engineering services. Background/Analysis: Parametrix was requested over the past year to provide added services to meet our solid waste and wastewater engineering requirements. These added services, in accordance with the agreement, were covered by shifting funds between tasks and use of directed funding allowances. The added work, until the final billing, remained within the not to exceed budget of $501,532. The final billing, task summary attached, has exceeded the original agreement amount by $45,955 or 9%. The following is a task specific breakdown of the added services requested of Parametrix during the 2004 services agreement: Task 1 required a significant increase in directed services to support requests made by the Solid Waste Utility and Engineering. These requests were detailed in the monthly progress letters. Also included in this task, but not included in the 2004 budget, were 9 monthly beach inspections. The total overage for this task was $17,514. Task 2 required a significant increase to support shoreline permitting efforts. The total overage for this task was $12,329. Task 3 required additional support during and after the RFP was issued. The total overage for this task was $29,792. Task 4 required significant additional design, particularly in the mitigation aspects of the project. The total overage for this task was $79,808. N:XlJACXFinaI~PMX 2004 final prnnt UAC.doc Final Payment, Parametrix Agreement Page 2 February 8, 2005 Task 5 included the redive and resampling of sediments to support N-PDES permits. The total overage for this task was $29,102. Task 6 was for construction support. This service was not required in 2004 and resulted in a reduction of $21,329. These funds were realloeated to other tasks. Task 7.3 was for optional services and two were not authorized during 2004. The total reduction for this task was $51,252. These funds were redirected to other tasks. Task 8, directed services in the amount of $50,000, was allocated to the above tasks as needed to cover ovemms due to requested changes in scope and effort. ORIGINAL FINAL COST % TASK CONTRACT BILLING CHANGE CHANGE AMOUNT i1. Engineering Assistance $89,075 $106,589 $17,514 +20% L Permitting & Compliance $45,046 $57,375 $12,323 +27°A L Waste Export System $56,477 $86,269 $29,792 +53°~ ~. Design Services $145,065 $224,873 $79,80~ +55o~ 5. NPDES Permit Suppo~ $9,114 $38,216 $29,102 +319~ ~. Construction Support $21,329 $0 ($21,3291 0°~ 7.3 Optional Services $85,426 $34,174 ($51,2521 -40°~ ~1. Di~cted Services $50,000 $0 ($50,0001 -100~ TOTALS $501,532 $547,487 $45,95: +9% Parametrix has been responsive to requests for added permitting, design, and RFP support needed to meet our solid waste needs. It is recommend that Council authorize additional funding in the amount of $45,955 for final payment to Parametrix for 2004 engineering services. The added funds required would be from the solid waste utility. N:\UACWinaI~PMX 2004 final pmnt UAC.doc pO ANGELES W A S H I N G T O N, U, S, A, UTILITY ADVISORY COMMITTEE MEMO DATE: February 8, 2005 TO: UTILITY/M)VISORY COMMlXTEE F~OM: Scott McLain, Deputy Director for Power Systems SU~JEC'r: Rate Studies for Water/Wastewater and Electric Utilities Summary: The financial performance of the City's utilities is analyzed about every three years to determine the appropriate rate levels for the utility. The Water/Wastewater utility was last reviewed in 2002 and the study needs to be updated this year for any necessary changes starting in 2006. A limited review of the Electric utility was completed in 2002 and a limited revision based on the loss of our LG&E power supply was completed in 2003. Rate studies for these utilities need to be completed during 2005. Recommendation: Forward a favorable recommendation to City Council authorizing the Mayor to sign agreements with HDR Engineering, Inc. to provide a rate study for the Water/Wastewater utility for a cost not to exceed $19,635, and a comprehensive electric rate study for a cost not to exceed $30,000. Background/Analysis: All of the City's utilities are reviewed every three years to evaluate their financial performance and to assure that the retail rates are appropriate over the following three- year period. The analysis normally looks out five years in the future, and establishes rates for a three-year period. The comprehensive rate study for the Watcr/Wastewater utility that was completed in 2002 confirmed that allocations between the various customer classes were appropriate. The rate study proposed this year will review revenue requirements and capital projects over the test period. If any changes are required, the recommendation would be that they be implemented equally among the rate classes. The proposed study for the Electric utility would be a comprehensive study that reviews revenue requirements, capital projects, along with a functional and classification study that determines the appropriate rates for each class of customer. It has been some time since a comprehensive study has been performed for this utility, and several major components of our costs have changed. N:\UAC~FinalL2005 rate studies.doc Rate Studies Page 2 February 8, 2005 Any changes to the rate for Water/Wastewater would be proposed for implementation in January 2006. Proposals to change the Electric utility rates would change the rates in October of 2005. Economic and Engineering Services, Inc. (EES) has worked on our rate studies for several years, and has now merged with HDR Engineering, Inc. (HDR). The company is now known under the HDR name. The proposed contract for the Water/Wastewater study is $19,635, and for the Electric study is $30,000. The 2005 Budget included $30,000 for a Water/Wastewater study, and $30,000 for an Electric utility study. N:\UACWinal~2005 rate studies.doc UTILITY ADVISORY COMMITTEE GUEST SIGN UP SHEET PRINT NAME ORGANIZATION N: \PWKS \LIGHT\CONS \ CATE \ SIGNUP.wpd CLEAI~IG UPm February 7, 2005 · No. 1171 · Page 14 The Federal Energy Regulatory Commission reports product through 2025, said the EIA, with the strongest that 40 LNG terminals are currently in various stages of growth--1.8 percent annually--in electricity consump- planning throughout the nation, tion. However, the report said competition will drive Concerns about the safety of tankers carrying lique- down electricity prices, from 7.3 cents/KWh in 2003 to fled natural gas and oil prompted House members last 6.6 cents/KWh by 2011. A slight increase--to week to ask the Government Accountability Office for 7.3 cents/KWh-is expected by 2025. an assessment of the vulnerability of the tankers to ter- Natural gas resources will grow, but not enough to rorist attacks, offset resource depletion and increased demand, ac- The request comes almost a month after a Depart- cording to the report. Renewable fuel consumption also ment of Energy study showed that a terrorist attack on will increase, at a rote of 1.5~percent per year LNG tankers, although unlikely, could result in a huge [Ly~n Frn~dsco and Steve Ernst]. fireball that could sear skin and damage buildings up to a mile away (CU No. 1167 [5/23]). Deadliner Rep. Edward Markey, D-Mass., helped organize the request and said the "GAO study was the next step in [22] Bush to Propose Market. Based ensuring that we are doing everything we should to Rates for BPA, PMAs protectLNG terminals and other energy infrastructure The Bush administration this week is expected to re- from a terrorist attack." lease a bud. get proposal that would require the nation's The letter requesting the study was signed by Markey power marketing agencies (PMAs), including the Bon- and the heads of several house panels including Joe Bar- neville Power Administration, to sell power at market- ton, R-Texas, chair of the House Energy Commerce Cern- based rates. The budget directive could add as much as mittee; Christopher Cox, R-Calif., chair of the House $2.5 billion to ratepayers bills over the next three years. Homeland Security Committae; John Dingell, D-Mich., Jerry Leone, manager of Public Power Council, re- ranking Democrat on the Energy and Commerce Com- ported the ~lan at Fridafs mee~ngof BPA's review on mittee; and Bennie Thompson, D-Miss., ranking Demo- fish costs. It sucks bilguwater, she said. crat on the Homeland Security Committee. Under the plan, PMA rates would increase by In the Senate, a bipartisan coalition called on the 20 percent e,ach year until reaching a cap of the market Bush Administration to release $100 million in funds for prices. BPA s average rate is now about $31/MWh. Ac- the Low Income Home Energy Assistance Program, cording to a PPC analysis that assumes market prices which provides help with heating bills. Congress appro- stay at $45/MWh, a 20 percent increase would add priated $300 million in December, but the administration $480 million the first year and bring the average rate to has released only $200 million. Bingaman and several other $37/MWh. The next year's 20 percent increase would Democrats promised to seek an increase in the LIHEAP add $960 million, the third's $1.1 billion budget, from the current $2 billion to $3 billion. The Secretary of Energy was working last Friday to The Senate Energy Committee heard from the U.S. organize a phone conference among the nation's PMA Energy Information Administration last week as the leaders to share details of the plan [Ben Tansey]. agency released its 2005 Energy Outlook. Total energy consumption will grow at one-half the gross domestic Copyrlghl ©2005, Energy NewsData Corporation From: Jerry Leone <jleone@ppcpdx.org> To: <jleone@ppcpdx.org> Date: 02/07/2005 1:27:12 PM Subject: D.C. Update: Cantwell & Murray blast Bush Adm'n Date: Mon, 7 Feb 2005 16:14:02 -0500 From: "Nicole Case" <ncase@KANNERANDASSOC,COM> WA Senators Cantwell and Murray vow to use every tool at their disposal to defeat the Administration's market rate proposal. For Immediate Release February 7, 2005 Contact: Charla Neuman 202-224-8277 202-309-3447 (ceil) Cantwell, Murray Blast Bush Administration Plan That Could Double Northwest Power Rates Senators Will "Use Every Tool at Our Disposal" To Defeat Bush Administration Plan WASHINGTON, D.C. - U.S. Senators Maria Cantwell and Patty Murray (D-WA) today vowed to defeat a new Bush Administration plan that could double Northwest electricity rates. The proposal, included in the Administration's Fiscal Year 2006 budget, would increase the rates of the Bonneville Power Administration (BPA) until they are roughly the same as rates being charged elsewhere in national power markets. The budget proposal itself is sparse on details, suggesting the Administration will "propose legislation to very gradually bring [power marketing administration] electricity rates closer to average market rates throughout the country." Meanwhile, trade reports today suggest the Administration would raise the rates of BPA and other federal power marketing administrations by 20 percent per year to achieve this goal. Over the next two years, this could raise BPA rates by over $1 billion, and nearly double Bonneville's rates within the next five years--depending on the market price for power. About 70 percent of the electricity consumed in the state of Washington is BPA power, which today is sold at cost--rather than market-based---rates. "This is the same as a billion dollar tax hike on Washington state, and as far as I'm concerned, it's dead on arrival," Senator Cantwell said. "To think we'd arbitrarily pay more for power generated right here in the Northwest is ludicrous. This is an outrageous attempt to fleece Northwest ratepayers, and I will not stand idly by while this Administration attempts to dismantle BPA." "The Administration's attempt to pay down the national deficit on the backs of Washington state ratepayers is both misguided and wrong," Senator Murray said. "Washington families and businesses need help rebuilding our economy, not added burdens." Cantwell and Murray today sent a letter to President Bush, asking that the Administration immediately abandon the new plan. (follows below) AP STORY: Northwest lawmakers vow to fight Bush plan on BPA, Matthew Daly (AP), http:~~seatt~epi.nws~urce.com~~~ca~~ap~~ca~-st~ry.asp?categ~ry=642~&s~ug=Bush%2~Budget%2~BPA February 7, 2005 The Honorable George W. Bush President of the United States The White House 1600 Pennsylvania Ave. NW Washington, DC 20500 Dear President Bush, We write in strenuous opposition to legislation contemplated in your Fiscal Year 2006 budget, which could nearly double electric power rates charged by the Bonneville Power Administration (BPA). Your proposal would deal a severe blow to the economy of the Pacific Northwest---essentially levying a $1 billion tax on our region's ratepayers over the next two years alone. In addition, it would upend the more than 50 years of law, policy and valued Northwest tradition that has made reliable, cost-based power the backbone of our regional economy and fabric of our rural communities. In short, your proposal is a non-starter, and we will use every tool at our disposal to prevent its implementation. As we understand it, your budget proposes to fundamentally alter BPA's traditional cost-based rate structure and increase the Northwest's power rates until they are equivalent with market rates throughout the country. According to press accounts, the Administration intends to raise the rates of BPA and other federal Power Marketing Administrations by 20 percent per year until this goal is achieved. Decades ago, the Northwest delegation and ratapayers of the Pacific Northwest rejected this notion---and instead chose to devise a system of laws and contractual agreements that would ensure the public benefits of the Columbia River would be shared in a manner designed to power the economic development of our region and balance our environmental priorities. Today, we remain united in protecting these values. Unfortunately, this proposal would turn the Northwest power system on its head. By our calculations, fundamentally altering BPA's rate structure in the manner you have proposed would extract an additional $1.05 billion from the wallets of regional ratepayers during the first two years, and more than $2 billion over a four-year period. This, despite the fact our regional power rates are already at historically high levels--a result of the Western energy crisis of 2000-2001, precipitated in large part by the market manipulations of Enron and others: There is no question in our minds that your Administration has to date turned a blind eye to the economic damage done by the Westem power crisis--and this new proposal would only make matters significantly worse. Already, power rates in Washington state have risen by more than 90 percent in some areas; we have lost thousands of jobs; our Iow-income home energy assistance programs cannot keep pace with demand for services; and utility disconnection rates are at all-time highs. A near-doubling of regional power rates would only serve as an additional tax on every economic activity that requires electricity--further dampening the prospects for a healthy economic recovery in a region still struggling with the nation's highest unemployment rates. Quite simply, the economy of Washington state and the Pacific Northwest as a whole cannot sustain the additional damage this new proposal would inflict. As such, we ask that you immediately abandon your plan to double electricity rates in the Pacific Northwest, Thank you for your attention to this matter, which is of such extreme importance to our constituents. We look forward to your timely reply. Sincerely, Senator Maria Cantwell Senator Patty Murray From: Jerry Leone <jieone@ppcpdx.org> To: <jleone@ppcpdx,org> Date: 02/08/2005 8:39:45 AM Subject: D,C. Update: Market rates; Energy bill 1. Below is Sen. Pete Domenici's (R-NM) statement on the President's budget. Domenici is Chair of both the Senate Energy Committee and the Senate Energy and Water Development Appropriations Committee. Thus the President's proposal to require the PMAs to sell at market-based rates would have to be approved by his committee. Domenici's opposition is a key factor in the fight to stop this proposal. "President Bush called for an energy bill in his State of the Union address last week. As he promised in that speech, the President today sent to Congress a budget that provides for increased domestic production of oil, more renewable energy and the development of clean-coal technologies and hydrogen-powered cars. "Now, Congress must pass an energy bill that incorporates those initiatives and more. We must pass a bill that expands our use of clean and safe nuclear power and modernizes our electricity grid, as the President urged in his speech last week. I agree with President Bush. Four years of debate is indeed enough. It's time to pass an energy bill. "1 am not happy with every aspect of the President's budget request. I think the push to make Power Marketing Administrations charge market-based rates is politically untenable. Every once in awhile, administrations of either party come up with this idea and I won't support it. "But this budget lays an important foundation for our energy bill work. I continue to meet with Republicans and Democrats on the energy committee to craft a bipartisan energy bill we can pass through the Senate this year." 2. Date: Tue, 8 Feb 2005 08:46:45 -0500 Date: Tue, 8 Feb 2005 08:46:45 -0500 The schedule for House consideration of an Energy bill is slipping, in part because of Ways and Means Committee Chairman Bill Thomas' refusal to act on the legislation before action on a Budget Resolution. We are hearing that budget pressures are affecting the Energy bill in another way. As you'll remember, the high price tag of the bill was one factor contributing to the bill's successful filibuster in the Senate. There is an effort to trim the bill this year and, as a result, we've picked up news that the reliability title has been amended to add a restriction that the resulting programs cost no more than $500 million (the Congressional Budget Office had previously scored the reliability provision at $1.2 billion). Of course, it is unclear what programs, policies or activities will be eliminated as a result of this directive, and I can imagine Democrats needling Republicans over it (only half as many blackouts??). From: Jerry Leone <jleone@ppcpdx.org> To: <jleone@ppcpdx.org> Date: 02/07/2005 8:48:39 PM Sub,ject: D.C. Update: Sen. Smith & Rep. Walden oppose budget proposal FOR IMMEDIATE RELEASE CONTACT: Chris Matthews February 7, 2005 2021224-8329 Smith Opposed to BPA Provisions in President's Budget Washington, DC - Today, Senator Gordon Smith (R-OR) responded to provisions in President Bush FY 2006 budget which would gradually force Bonneville Power Administration (BPA) ratepayers to pay market-based rates rather than the cost-based prices currently in use: "If this plan is implemented, it would cost the Northwest hundreds of millions and possibly billions of dollars," Smith said. "BPA's customers are still recovering from the West Coast energy crisis and a sluggish economy. They've already been hit with rate hikes and they can't afford any more. I am going to exhaust every right and privilege I have, as a Senator, to kill this proposal." Monday, February 7, 2005 Contact: Angela Wilhelms For Immediate Release Phone: (202) 226-7338 Cell: (202) 744-7974 Walden Statement on Budget Proposal Increasing Rates for Northwest Power Users Washington, D.C.U.S. Congressman Greg Walden (R-OR), co-chair of the bipartisan Northwest Energy Caucus and a member of the House Energy and Commerce Subcommittee on Energy and Air Quality as well as the House Resources Subcommittee on Water and Power, today issued the following statement in response to the Administration's new budget proposal that would negatively affect northwest ratepayers with increased costs for power: "It makes absolutely no sense to artificially and substantially jack up power rates, especially in a part of the country that has suffered from other misguided federal land management policies costing tens of thousands of.jobs throughout rural areas in the last 20 years. "1 will use every tool at my disposal to put a stop to the BPA rate increase and will bring this critical issue up personally with Energy Secretary Bodman this week when he comes before the Energy and Commerce Committee. "While this power rate proposal is a misguided one, there are many aspects of the proposed budget I welcome, including the President's continued support for responsible forest management practices outlined in the Healthy Forest Restoration Act, for the citizens in the Klamath Basin whose livelihood was dramatically impacted when their water was unfairly shut off in 2001, and for health care in underserved areas through expanded support for the effective community health center program." From: Jerry Leone <jleone@ppcpdx.org> To: <jleone@ppcpdx.org> Date: 02/07/2005 3:51:20 PM Subject: D.C. Update: Hastings, McMorris oppose budget scheme This is excerpted from a longer budget reaction statement by Rep. Doc Hastings from central Washington: BPA Rates "I'm incredulous and outraged by the proposal to unfaidy increase Northwest power rates. This is a tax increase of the worst kind - one that would beat down our region's economy and destroy jobs. Should the Administration insist on pursuing this ill-advised proposal, our congressional delegation will be unified and emphatic in opposing it at every turn." Freshman Congresswoman from eastern Washington, Cathy McMorris, opposes the Administration's proposal: Office of Congresswoman Cathy McMorris Press Release FOR IMMEDIATE RELEASE Contact: Connie Partoyan February 7, 2005 202/225-2006 Congresswoman Cathy McMorris issued the following statement today regarding the proposal to increase power rates in the Pacific Northwest. "This proposal is going nowhere fast. It is simply the wrong approach and one that will cost jobs, cost consumers and stifle economic growth throughout our region. "Our region's economy was built on inexpensive hydro power from our dams and rivers. I will work with our Northwest delegation to oppose any effort to unfairly increase our region's power rates and I will work to preserve the natural resources that sustain the economies of the Pacific Northwest."