U.S. Rep. Peter DeFazio, D-Ore., expressed his concerns during a town hall meeting Tuesday about how Oregon has been caught up in the energy crisis plaguing the Northwest.
DeFazio, along with Jeff Stier of the Bonneville Power Administration and Mat Northway of the Eugene Water and Electric Board, spoke at the Energy Town Hall. The trio discussed Oregon’s losses in energy because of California’s deregulation, the unanticipated Northwest drought and the high demand for energy, which have driven up wholesale energy market costs.
Stier said the BPA, which provides half the power used by the four Northwest states, is now having to buy power at $300 per megawatt hour that used to cost $30 per megawatt hour. This is the cause for Bonneville’s rate increases, which will take effect this fall.
“The rate increases could have a significant effect on the region’s economy,” Stier said.
Stier said the problems will only get worse in the next two years, with Bonneville having to decide between environmental concerns and energy production.
“Our agency could be broke by this summer,” Stier said.
DeFazio expressed his concerns and shared his goals with a gathering of about 50 people.
His short-term goals included seeing that the wholesale market rates, which have risen from 3 cents per kilowatt hour to 30 cents per kilowatt hour, become more reasonable and that more support comes from Congress.
His long-term goal is to repeal deregulation. In 1992, Congress passed the Energy Policy Act, which gave states the right to deregulate their energy markets, giving energy companies control of power production.
Several politicians, including Sen. Ron Wyden, D-Ore., blame California’s deregulated market for the energy crisis.
Historically, Oregon, California and Washington provide energy for each other during each state’s peak months of use. Washington and Oregon have the greatest need during the winter months, but since the energy crisis ensued, California has been taking energy when normally it would be providing energy.
“California’s deregulation has triggered a huge, speculative market for wholesale energy,” DeFazio said.
Oregon passed its own deregulation bill during the 1999 Oregon legislative session, which will go into effect Oct. 1, 2001.
Oregon’s deregulation bill gives Oregon energy consumers who have a 30-megawatt energy demand, such as small and large businesses, the option of direct access to the wholesale energy market. This would give businesses that are customers of investor-owned utilities the option of bypassing these utilities and possibly paying less for their energy.Publicly owned utilities, such as EWEB, are not required to offer this option to their customers. Northway said if a large company were to come to EWEB and ask to buy from the wholesale market, the board would vote on it.
If EWEB allowed that company to buy directly from the market, it would have to give every company that uses the same amount of energy the same option.Northway, the manager of energy management services for EWEB, said with the way the market prices are now, there won’t be any businesses wanting to buy directly from the market any time soon.
“We’re already providing the best service at the lowest cost possible, so the businesses that might want to go into the market will only find higher prices,” Northway said.
DeFazio expressed concern for any form of deregulation, whether it directly affects a city or not.
“If we have some severe weather, or anything that would create a necessity for reserve energy, in a deregulated market the private power companies decide how much to charge for that reserve energy,” DeFazio said. “It opens the market up for profiteering.”