Good afternoon and thank you Nancy for that introduction. When I saw on your agenda that Steve Wright was going to be spending an hour and half with you, I said I’d only come if they put a long break between Steve’s session and mine. But I trust that you had a robust discussion that you’ve resolved all your differences with BPA, and I’m glad to hear it.
I know this is a difficult time for all of you, and today I want to share some ideas about how we can make the most of these challenging times. But first, I want to put this discussion in larger context, because the debates we’re having today are part of a much bigger picture.
For more than 70 years, public power has turned deserts into cropland, delivered light and power to rural homes, and brought economic development to every corner of our state.
Today, you are the stewards of that great tradition of public power. Each of you holds a special position of trust in our state and in your communities. You’ve been selected to manage one of our most important public resources, and I know that it’s not an easy job. But I also know that we need your leadership today.
Challenging Times
This is a challenging time for our country with the threat of terrorism, and with our men and women in uniform facing dangers around the world. And it’s a difficult time for our state. Many communities are seeing their economic base slip away. Long-standing employers are closing down. Local doctors are moving away, and our state is in danger of losing parts of our heritage and our history.
We’ve got to protect those communities and that’s why all of you are so important. You have provided power at cost – and that has driven the rest of our economy. But today rates are higher than they’ve ever been. As a result, we have local businesses closing, ratepayers out of work, and people on fixed incomes who can’t pay their bills. I hear about it every time I come home, but I know that you hear about it more.
And I know that high rates are just one of many pressures you’re facing. You’ve been hit by everything from a slow economy, to droughts, to market manipulation, and federal schemes that don’t make sense for our market.
After all that you may feel that there really isn’t anyone on your side – standing up for you and your ratepayers. Well let me tell you something, I have always stood up for public power in our state, and I always will. You create jobs, you create economic development, and you represent something even more powerful.
You carry out a Northwest ethic that goes back generations. It’s a promise that no matter what outsiders do — or don’t do – we’re going to take care of each other. We’re going to give our own communities what they need – whether it’s power or broadband or anything else. We’re not going to rely on others to take care of us. Instead we’re going to take our future in our own hands. That’s a principle worth fighting for. So when all these outsiders try to push us around it doesn’t discourage me. It motivates me. No political pressure And no threats from the White House or FERC Are going to stop me from standing up for our rate-payers. And I don’t care who I have to take on. I took on FERC when they sat on their hands during the energy crisis. I took on FERC again when they wanted to mandate Standard Market Design. I took on the Bush Administration when it objected to borrowing authority. And I even took on my own party — when President Clinton’s Budget Office tried to stop you from offering broadband.
My only standard is whether it helps or hurts Washington state. I know that public power means great things for our state. So I will fight anyone who stands in the way of public power, and I’ve been proud to be your advocate in the United States Senate.
Victories
Working together over the years, we have scored some victories. We got the federal government to provide more borrowing authority so we can invest in transmission. Against the odds, we got FERC to acknowledge that regional deference is important. We convinced Energy Chairman Pete Domenici that Standard Market Design must be delayed. And we created NOA-NET to deliver broadband to our rural communities. Friends, when we work together, we make progress.
Today I want to talk about how we can work together to get back to the low-cost energy that will drive our economic recovery. There are a lot of things we can’t control like how much rain falls or how cold our winter is. So we’ve got to focus on the things we can control and the first issue on your minds is the rate-case settlement.
Rate Case Settlement
I know you’re mad about rates, and I am too. I know there is division in the PUD community over how to proceed, and I’m not going to stand up here today and tell you what to do. Let me point out two things that I hope you’ll consider. First, we’ve got a lot of other issues that need to be addressed – from post-2006 allocation to Standard Market Design and RTOs. If we still have this litigation hanging over our heads, it’s going to be hard to move forward on those other issues. And here’s the second thing to keep in mind. Historically, when the region has come to the Northwest Congressional delegation with a consensus, we have all worked together to implement it. It was true in the days of Scoop and Hatfield, and it is true today. We can’t tell you what to do, but when the region picks a direction, we pursue it with everything we’ve got. We did it with borrowing authority, and we’re doing it in the fight against SMD and RTOs. We stand ready to carry out your vision, but we need to hear from you what your answer is to the litigation.
We’ve got to resolve the issues involved in the settlement discussions so we can address the other issues that will affect public power. Beyond the rate case, I believe there are three things we’ve got to do to strengthen public power, and bring rates down.
1. Defend Public Power
First, we’ve got to protect public power from those who attack us including FERC, market manipulators, and outsiders who just don’t get us. For decades, our hydro-electric system has been the engine driving our economy. It’s turned empty fields into productive acres, and it’s given businesses a reliable source of power. We can take pride in a system that has served our community well. And we have a unique view about energy here in the Northwest. To us, it’s not just a commodity. It’s not just another way to make a buck. It’s a public resource, not a profit center. But not everyone shares our view. Organizations like the Northeast-Midwest Coalition are working hard to undermine our system – and they’re not the only ones. There’s also the free-market crowd – the Texas oil companies – the Enrons. These folks look at our cost-based power and wonder why all of you would work so hard for no profit.
And then we’ve got FERC – which is probably the most dangerous of the bunch – because it’s got the force of law behind it. We know from its record that FERC is no friend of public power – and is no friend of the Northwest. FERC is supposed to keep energy rates reasonable. But it sat by while out-of-state companies manipulated the market – costing our utilities, businesses, and ratepayers millions of dollars. We’re still feeling the painful effects of that today. But FERC hasn’t just looked the other way while we’ve suffered. It’s trying to force us into a system designed to benefit out-of-state, for-profit energy providers who don’t understand our needs and who don’t share our values. Unless we stand together and fight back, we risk losing a system that has served our region well for decades.
And we are fighting back. Public power has helped fund a nationwide alliance that’s leading the fight against FERC’s efforts to standardize transmission. Your contribution is making a difference in Washington, D.C., and I thank you for stepping up to the plate and leading this national fight.
In the Senate I’ve been working with my colleagues from the Northwest and Southeast to fight FERC. Earlier this year, several of us met with Chairman Domenici of the Energy Committee to express our strong concern about FERC’s direction – and the need to stop them. I made the case in meetings with Chairman Wood and two other current FERC commissioners. Now — after all our efforts — FERC is finally talking about regional deference. That’s progress, but we’re not going to take their word for it. We want to see that commitment in form of a rule.
We also got language in the Energy Bill that called for a delay in Standard Market Design, and that was progress. Unfortunately, as you know, the energy bill also contained language strongly promoting RTOs. If I had supported the energy bill, it could have given FERC cover to impose an RTO on us. I’m not going to let FERC give with one hand — just so they can take away with the other. FERC has got to understand that we’re going to do what’s right for our ratepayers and that means no SMD and no RTO unless it will benefit our rate-payers.
There is no way that in the middle of our economic crisis, I’m going to let people who don’t understand our system come in and destroy it and leave us to pick up the broken pieces. So first, we’ve got to work together to stop the attacks on public power.
2. More Flexibility To Get Results
Second, we’ve got to give you the flexibility to get results instead of just forcing you to follow bureaucratic demands. We can be more innovative on meeting ESA requirements, on relicensing, and on the Columbia River biological opinion.
When it comes to challenges like fish recovery, you have expertise that can help us achieve good results. But too often, your hands are tied by regulations and orders. For years, you’ve been telling me that you don’t have a chance to apply your expertise in managing your systems and protecting and recovering salmon. What really matters is getting results, and I’ve been proud to work with you to find innovative ways that are more flexible and more efficient.
Innovation in ESA Requirements
The Chelan and Douglas County PUDs have been leading the effort for an outcome-based approach. I’ve sat down with Bill Dobbins from Douglas County, Roger Purdom from Chelan and many, many others to work with them through this process. Chelan and Douglas PUDs have told the feds, “Tell us what you want you to accomplish, and we’ll find the best way to do it.”
That’s a complete turnaround from the typical “command and control” style of federal regulations. And it hasn’t been easy for these agencies to accept. For 10 years, I’ve been pushing the agencies to be open to this new approach. I’ve written letters to the Department of Commerce and Interior. I’ve met with officials at those agencies, and I’ve made the case at every level. Today, we’re just a few signatures away from implementing those Habit Conservation Plans.
Grant County PUD decided to take a slightly different approach, but one that is also based upon results. I’ve met with Don Goddard and the Grant County Commissioners, and I’m excited about supporting their efforts.
Innovation in Relicensing
We can apply that same, outcome-based approach to dam re-licensing. You told me you wanted more of a voice on how to achieve results. You told me that when a federal agency demands something, you deserve an explanation. And I agree. That’s why I worked with Senator Larry Craig on the Hydro-electric title of the energy bill. I was working toward trying to find a consensus position with Senator Craig and Chairman Domenici when the bill took a left turn. In the end, I believe the final conference report reflects some of the spirit of the consensus I worked to build.
Innovation in the Biological Opinion Rewrite
I think we can take this same approach as federal agencies re-write the Columbia-Snake river biological opinion. I think we can both improve the efficiency of salmon recovery, and improve the cost-efficiency electricity production. So the second thing I’m working on is empowering you to use your expertise in new, flexible ways whether it’s meeting ESA requirements, relicensing, or the Bi-Op. You have ideas and expertise, and I want you to be able to use it.
3. Planning for the Future
Finally, we’ve got to plan for the future and that means preparing for the post-2006 allocation. Early last year, a large group of utilities both public and private came back to D.C. to champion the joint-customer proposal. You told me that BPA should not be responsible for meeting load-growth demand. You said BPA would not make the best investments. And you wanted to be able to plan for the future. Today, it’s hard to find any remnant of this mutual agreement, but the need to plan for what happens after 2006 has not gone away. We haven’t dealt with it because we’re focusing on the rate case litigation. That’s why I hope we can resolve the litigation quickly and get back to an issue that you told me must be addressed, and I stand here ready to help.
So let me return to that question I posed earlier, how do we get back to the cheap energy that will power our recovery?
First, we deal with the rate case. Our Congressional delegation is ready to support the region’s consensus.
Second, we defend public power from those who would attack it – whether it’s the out-of-state coalitions that want to take our power, the free-market crowd that wants to sell our power, or the FERC Commissioners who want to standardize our power.
Third, we reform the way we do things at federal agencies by giving you a greater voice on meeting our environmental goals.
Finally, we plan for the future by deciding who will generate new power three years from now.
That’s the agenda you’ve shared with me time and again. I’m working to carry it out because I know how important public power is to Washington’s future. Other people may not “get it,” but as long as I’m around, I’m going to fight for you and the families and communities that you serve.
So we’ve got a lot on our plate, but so did the generations who came before us and who built the system we’re defending today. We are part of that great Northwest tradition. It’s a tradition that says public resources should serve the public good. It’s a tradition that says we won’t wait for someone else to provide what we need. And it’s a tradition that says we are strongest when we stand together. The full story of the triumph of public power in Washington state is still being told. And friends, now it’s time for us to write our chapter in that great history. And I’m not going to let anyone stand in our way!
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