| Northwest Energy Review Transition Board | John Etchart, Montana |
| 851 S.W. Sixth Avenue, Suite 1100 Portland, Oregon 97204-1348 |
Roy Hemmingway, Oregon |
| Phone 503-222-5161 or 1-800-452-5161 FAX 503-795-3370 |
Mike Kreidler, Washington |
| Todd Maddock, Idaho |
NORTHWEST ENERGY REVIEW TRANSITION BOARD MEETING SUMMARY
Tuesday, March 3, 1998
NWPPC Conference Room, Portland, Oregon
The Northwest Energy Review Transition Board focused on reports from Washington, D.C. that national restructuring legislation may be on the move. The House could mark up a bill in March, and in the Senate, efforts to repeal the Public Utility Holding Company Act could trigger a full-blown restructuring debate. The board heard a number of opinions about how it should respond to the news. All board members were present, with Todd Maddock participating by telephone; the audience was about 45.
Next Meeting: March 19 at the Doubletree Hotel in Spokane, Washington.
• RESTRUCTURING WHEELS ARE TURNING IN D.C. -- A panel of Washington, D.C. insiders joined the Transition Board by telephone to give an update on what’s going on in Congress with regard to industry restructuring. Glynda Becker, a staffer for Representative Rick White, said the Republican leadership in the House has scheduled "floor time" in April to consider national restructuring legislation. A bill containing a Northwest chapter will likely be marked up in March, she reported. Phil Moeller, an aide to Senator Slade Gorton, said efforts in the Senate to repeal the Public Utility Holding Company Act could lead to "a full-blown debate" on restructuring some time after Congress’ Easter recess. The odds are still against a bill ending up on the President’s desk, but "we have to presume that is a possibility," he stated.
According to Bob Hayes, a private attorney, who represents several aluminum companies, it’s unlikely, but possible that a bill would reach the President’s desk. "This is something we ought to take very, very seriously," he added. I have to agree, stated Gary Barbour, who represents the Pacific Northwest Generating Cooperative. The question is, at what point does the region lose its ability to influence things in Washington, D.C., he said. The amount of dialogue on restructuring is intense, Barbour reported.
Roy Hemmingway questioned the Congressional staffers about when the Northwest would have an opportunity to review legislative language and give input on the bill. You can expect that we will push for a more deliberative public process as this moves along, he said. Moeller said that transmission and stranded cost issues are likely to be present in the legislation. The Administration has insisted that stranded costs be addressed, he added.
• AN ABBREVIATED WORK GROUP REPORT -- Consultant Al Wright said the Transmission and Transition Cost work groups "have not made much progress." He indicated that the groups are scheduled to meet again later in March. On the other hand, the Subscription work group is doing quite well, Wright reported. There are encouraging signs, and we’re seeing more enthusiasm for BPA products, he said.
• A DELIBERATIVE PLAN FOR WRITING THE NORTHWEST CHAPTER -- The Transition Board discussed how to respond to the news from Washington, D.C., and took recommendations from the audience. Hemmingway said the board has two choices: "abandon the field" or "try to make the deadline." If we abandon the field, we conclude that this situation is out of our control and that the action has shifted to Washington, D.C., he said. If we try to make the deadline, we would need to come up with a regional consensus; given the time frame, I don’t think that’s possible, Hemmingway said. He suggested the board aim for July 1 to complete a set of recommendations. We need to lay out a decision path with critical thresholds along the way to measure our progress, Todd Maddock suggested. I would be inclined to add an interim process to put out some "bookends" on transition costs and transmission, Mike Kreidler said.
We need to evaluate what we are trying to prevent and what we are trying to achieve, according to aluminum company representative Paul Murphy. If we make recommendations, "they should be better than the status quo," he said. Murphy suggested that proposals offered to date, such as a wires fee, would not improve things for some customers. Steve Weiss of the Northwest Energy Coalition said a BPA wires charge "is part of the status quo," but it works out to be fairly inequitable. It is incumbent on us to do better than that, he said
BPA is trying to complete its financial equation by April, in order to proceed to a rate case and subscription, according to Steve Hickok of BPA. That time frame is unchanged by these developments, he said. April is still our focus, and I worry about letting anything wander outside that schedule, Hickok added. He said that BPA must have a stranded cost mechanism, and the work group has not produced one. Perhaps the Transmission Board ought to hazard a strawman and see what the parties think, Hickok suggested.
Maureen Carr of the Public Power Council advised the board "to think about what you want to do if there is no consensus" on these issues. We would urge you to think about whether "you are willing to come to a consensus, if there is none behind you," she said. One way Congress can be made to accommodate our process is to say that by July 1, 1998, we will have a definitive product, according to Angus Duncan of the Columbia/Pacific Policy Institute. "We can insist on latitude in return for a drop-dead date," he said. You need to outline a deliberative process, Wright advised. The work groups have done good things and this ought to be communicated to Congress, he said.
Staff agreed to deliver an outline with problem definitions and a time frame before March 19. Kreidler suggested there also be a draft "of what we have done."
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Please Note: This summary is based on detailed reports of the meetings of the Northwest Energy Review Transition Board. The reports are prepared by Resource Writers Inc. and distributed by the Northwest Power Planning Council. The Pacific Northwest Utilities Conference Committee (PNUCC) contributes financial support for these reports. To request a copy, please call the Council at 1-800-452-5161 and ask for Public Affairs.