California congressman want to halt BPA's preferential sales

Ann de Rouffignac
OGJ Online

Congressman Brian Bilbray, San Diego, is introducing a bill today in Congress intended to stop the Bonneville Power Administration, a federally owned power company, from preferentially selling its cheap hydroelectric power to other public entities.

The bill is supposed to �level the playing field� and allow any company, including investor-owned utilities, to buy the federally generated power at the same low prices that public entities like the Los Angeles Department of Water and Power enjoy.

Rep. Bilbray (R-Calif.) accuses Bonneville of profiting from the scarcity of electricity in California that has driven the prices to unheard of levels�especially in California. The congressman alleges that BPA is selling its cheap power in California at the current higher market prices and pocketing the difference.

�It�s bad enough this federal agency is profiteering at Californians� expense. BPA uses the profits to hold down electric rates in the Northwest which already have the lowest rates in the US because of the cheap federal electricity,� Rep. Bilbray said in a statement.

The bill will allow investor-owned utilities such as San Diego Gas & Electric Co. access to BPA power so savings in generation costs can be passed through to San Diego residents, he said.

Attention is focused on the Los Angeles Department of Water and Power, a municipal-owned utility, that buys power from BPA at below the California market price. Critics allege the Los Angeles utility is turning around and reselling power to the California Power Exchange (PX) for a handsome profit.

Bilbray notes residents of Anaheim who receive power from LA currently pay the lower rate of 6.7�/kw-hr compared with San Diegans who pay 14�/kw-hr. LA Department of Water and Power has not commented on its power deals with BPA.

Bonneville admits it has been selling some excess power to the California Power Exchange and to the LA Dept. of Water and Power. BPA said it does not have figures for sales to LA. But BPA does deny selling power to the California Power Exchange at inflated prices.

�We bid into the exchange at prices less than $60/Mw-hr a much lower than other bids,� says Ed Mosey, spokesman for BPA. �We get the market clearing price from the exchange that is higher.�

�In order for BPA to win big from such a market as was suggested, one would have to assume we had a lot of power to sell and we were always selling,� he says. �Neither are accurate assumptions.�

BPA maintains that its total sales of $21.6 million into the California Power Exchange for the month of June represent only .6% of total California Independent System Operator (ISO) and California PX sales of $3.6 billion. For July, BPA sold $26 million of power to the California PX, or 1% of the total ISO/PX sales of $2.6 billion, according to figures provided by BPA.

�We hardly wag that market,� says Mosey.