The Pacific Northwest’s abundant, low-cost hydropower has for decades been the envy of other regions, powering local economies by attracting lucrative industries — from the aluminum smelters that produced the skins of World War II fighter jets to the server farms sprouting for the likes of Google, Apple and Facebook.
But a recent scandal over hiring practices at the Bonneville Power Administration has exposed long-standing tensions over control of the agency and its economic benefits.
The federal utility is self-financed, so it enjoys autonomy unusual among federal agencies. The independence comes from its control of three-quarters of the Pacific Northwest’s electric grid and power sales amounting to more than a third of the electricity used in the region.
The power from 31 dams in the Columbia River Basin flows to 140-plus utilities in Washington, Oregon, Idaho and Montana.
Some local stakeholders fear the U.S. Department of Energy could use the agency’s hiring scandal as an excuse to centralize decision-making in Washington, D.C., raising Northwest energy rates and hampering the region’s economy.
“The risk is that regional ratepayers might be asked to fund things that are not a benefit to the region, or fund things that should be federal obligations,” said Scott Corwin, executive director of the Public Power Council, which represents BPA’s public utility customers.
Oregon Sen. Ron Wyden, a Democrat who chairs the Senate Energy Committee, vowed at a press conference to do everything he can to fight a takeover of BPA — and said he had won enough reassurances from federal officials.
“This cannot be used as a Trojan horse to take Bonneville out of our region, to take over its independence,” Wyden said. “No one can use the problems at BPA as an excuse to interfere with policy decisions made in the Northwest for the residents of the Northwest.”
The Department of Energy announced the week of Oct. 21 that it would assume control of the agency’s human resources and legal staffs, although it noted the agency still had control over policy-making and could determine its staffing needs independently.
The agency was established in the 1930s to provide low-cost electricity to poor, rural areas at a time when most of the nation didn’t have electricity. The dams did extensive damage to salmon runs, something BPA and its 13 million residential and industrial customers are spending millions to mitigate.
While other regions struggled with high power costs, low energy prices led to decades of growth in the Pacific Northwest — and to open declarations that hydropower is the region’s birthright.
Critics have long blasted the agency for providing cheap power to only one region, and it has faced regular attempts to shift control to Washington, D.C., including proposals to meld the agency into a national power grid, privatize it, auction off the system and sell energy at market rates.
Critics and the U.S. Energy Department link the hiring scandal to BPA’s independence.
A report from the Energy Department’s inspector general released earlier this month blasted the agency for “widespread and pervasive” discrimination against veterans and retaliation against whistleblowers. It followed a highly critical audit of human resources work and the suspension of two top administrators. The report said the hiring problems resulted partly from a management culture that distanced the organization from Department of Energy procedures and processes and deflected federal oversight.
BPA says it is working to address the hiring violations, but critics say that’s not enough.
“This latest crisis should force Washington to rethink what kind of role it should play at BPA,” said Autumn Hanna, a policy analyst with the budget watchdog group Taxpayers for Common Sense. “We think it makes sense to have more oversight and accountability at Bonneville.”
The agency should move toward market rates, Hanna said. “The BPA continues to provide generous public subsidies to the Northwest — subsidies that other regions of the country do not enjoy,” she said.
BPA’s contracts would prevent any moves to privatize the agency for at least 15 years. But the fear among utilities and Northwest politicians is that the federal government could take much greater interest in day-to-day policies on salmon recovery, wind power and Columbia River management, said Randy Hardy, an energy consultant and former BPA administrator.
“lf you don’t have the highest confidence level in the agency’s leadership and its personnel decisions,” Hardy said, “it’s very easy to say you don’t have confidence in its policy decisions either.”