GUIDING PRINCIPLES The electric power problems confronting the Pacific Northwest can be fairly well identified and will be described shortly. What is at issue is their solutions. A systematic way to explore for ideal solutions and to assess their suitability can be found in the context of goals and objectives. What is it the region wants? BPA's goals as described above remain worthy. But goals tend to be broad and general. They are often the kind of "motherhood" and "apple pie" maxims to which most everyone can subscribe, but which lack sufficient specificity to lead directly to solutions. The following regional electric energy objectives contain a higher level of detail to help in the identification of ideal future policies under which BPA and the region as a whole might operate. Being more specific, however, means they may also be more controversial. They are, however, the product of an extensive environmental impact statement process, and extensive congressional hearings in Washington, D.C., and in the region. Additionally, the last four objectives represent specific provisions contained in recent legislative proposals. 1. Adequate Power Supply. The region should seek an environmentally acceptable and economically sound power supply which adequately balances electric energy supply and demand. BPA and regional utilities should provide system reserves necessary to insure a stable power supply. 2. Conservation as a Resource. Conservation should be viewed as an energy resource, all feasible cost-effective energy conservation should be encouraged, and conservation should be funded by ratepayers as an energy resource to reduce regional needs for additional generation. 3. Alternative or Renewable Resources. Where feasible and costeffective, development of alternative or renewable resources should also be funded as a resource to increase regional energy supply and reduce regional needs for conventional thermal resources. 4. Cost-Based Rates. Cost-based wholesale power rates should be retained as the basis for establishing rates, but a marginal-cost test should be used to evaluate and fund conservation programs and alternative or renewable resources. Rates should be kept as low as possible for all ultimate consumers by utilizing cost-effective and feasible conservation, renewable resources, and conventional resources. 5. BPA Responsiveness. The regional orientation of BPA and its interaction with State, local, and public interests should be strengthened in order for it to respond better to regional needs, consistent with national policy goals and objectives. 6. Regional Power Supply Planning. Coordination of regional, State, and local power supply and transmission planning should be encouraged. 7. Regional Participation. A mechanism for the Pacific Northwest ratepayers, the States, local government agencies, utilities, environmental and other interest groups, and BPA to participate jointly in power supply and transmission planning should be provided. Means for effectively involving the general public in regional power planning should also be improved. 8. State and Local Retail Rate Control. The responsibility of State public utility regulatory commissions and public, municipal, and cooperative utilities to set retail rates for regional consumers should continue. 9. State Control of Sites. Present State control over siting of generating resources should be retained to enable States to exercise their responsibility for protecting the local environment and regulating utility resource development, consistent with regional and national energy policy goals and objectives. 10. One-Utility Transmission Development. Development of the regional integrated transmission grid based on the one-utility concept should continue. 11. Self-Reliance. The region's ratepayers should bear the full costs of the regional power system without subsidy. 12. Preference Clause. The preference clause should be preserved, as should the right of the public to form new public bodies and cooperatives. 13. Power Purchase Authority. BPA should first invest in feasible and cost-effective conservation and renewable resources and, if these resources are insufficient to meet projected demand, BPA should then be authorized to purchase the output of conventional generating facilities. Costs of acquiring all resources should be borne exclusively by ratepayers. In turn, the region's ratepayers' investment in the Federal Columbia River Power System should be used to back future regional investments in energy resources. 14. Extend Regional Preference. The principle of regional preference should be extended to include not only Federal hydropower but BPA-acquired regional non-hydroelectric power resources as well, so that only power which turns out to be surplus to regional needs (because of abundant streamflow conditions, for example) can be exported outside the region. By 1937, Bonneville Dam was nearing the stage of initial power production. Several legislative proposals were advanced in the Congress to provide for administration of the project. Some proposals would have placed responsibility for development of the entire river basin in the Bureau of Reclamation. Others would have vested the transmission and marketing functions, as well as project construction, in the Corps of Engineers. Still others would have established a Columbia Valley Authority similar to the Tennessee Valley Authority. Because regional planners recognized that any administration of Federal hydroelectric projects in the Northwest should provide for a unified program of multipurpose development, and because there were conflicts as to which Federal agency, existing or new, should administer the projects, a compromise was struck by creation of a "provisional" agency within the U.S. Department of the Interior to market the power from Bonneville Dam (and subsequently from all Federal dams in the region, except for a small Bureau of Reclamation project--Green Springs--in southwestern Oregon). The new agency, created in 1937, was the Bonneville Power Administration (BPA). The Federal dams, however, continued to be built and operated by either the Corps of Engineers or the Bureau of Reclamation; BPA markets the power and recovers all of the power costs, including timely repayment of the Federal investment plus interest. BPA completed its first transmission line from Bonneville Dam to the City of Cascade Locks, Oregon, in July 1938. Gradually, a Federal transmission network took shape as additional Federal generating units came on line and additional publicly owned, cooperatively owned, and investor-owned utilities, plus some electroprocess industries, became customers of BPA. Pacific Northwest Electric Power System As of January 1, 1978, the Pacific Northwest's rated electric generating capacity totaled almost 37,000 megawatts, of which approximately 79 percent was installed in hydroelectric projects. More than 14,250 of the 31,000 megawatts were installed in Federal hydroelectric plants, the output of which is marketed by BPA. Almost 10,000 of the total 31,000 megawatts consists of non-Federal hydroelectric capacity. The remaining approximately 6,500 megawatts consists of existing non-Federal thermal generating capacity, 80 percent of which is installed in five large generating projects--the Centralia coal-fired plant located between Portland and Seattle, the dual-purpose N-Reactor on the U.S. Department of Energy reservation at Hanford, Washington, the coal-fired Jim Bridger Units 1, 2, and 3 at Rock Springs, Wyoming (two-thirds of the output of which is used to meet Pacific Northwest loads), the coal-fired Colstrip Units 1 and 2 in Montana (half of which is used to meet PNW loads), and the Trojan nuclear powerplant 42 miles north of Portland at Rainier, Oregon. The remaining existing thermal powerplants in the Northwest are either new combustion turbines or new combinedcycle units used primarily for short-term peaking or during periods of poor water conditions, or small and relatively old steam and diesel SETTING Comprehensive Planning The Pacific Northwest, consisting primarily of the States of Idaho, Oregon, and Washington, plus that portion of Montana that lies west of the Continental Divide, has approximately one-third of the total hydroelectric potential of the United States, more than any other region in the Nation. From the standpoint of electric power planning and development--past, present, and future--this unique characteristic, more than any other, has served to influence the development of the power supply system in the Northwest, distinguishing it from other regions of the country. Until it became technically and economically feasible to build dams across the mainstem of the Columbia River, most of the water resource development in the Pacific Northwest proceeded on a relatively haphazard and uncoordinated basis. But as technology improved and the region's economy expanded, additional development of its water resources became progressively more attractive to farsighted planners. And it also became clear to them that comprehensive, rather than piecemeal, river basin development should be investigated and pursued. First, they saw that many of the potential hydro projects could be built to serve immensely beneficial multiple purposes and would be the least cost way to achieve those purposes. And second, they concluded that, rather than approach water resource development on a project-by-project basis, comprehensive development throughout the river basin could substantially increase overall benefits and yield optimum returns on investment. What was needed was a coordinated plan for the entire Columbia River basin. Except for some modest interutility power connections, little if any coordinated planning occurred in the Northwest prior to 1927. In that year, the Corps of Engineers launched a comprehensive study of the development potential of the Columbia River basin in the United States. The study, called the "308 Report," recommended 10 major hydroplants along the mainstem of the Columbia River starting at Bonneville, 146 miles upstream from the mouth, and ending at Grand Coulee, 597 river miles above the mouth. In addition to the proposals for mainstem projects, the "308 Report" recommended a plan to meet requirements for flood control, navigation, hydropower, and irrigation. Additionally, it recommended a number of storage projects for construction in the upper reaches of the basin. The "308 Report," published in 1932, was the first official plan for large-scale comprehensive development of the basin. Construction of Bonneville Dam was begun by the Corps of Engineers in 1933, during the depths of the Great Depression. The next year, the Bureau of Reclamation began construction on Grand Coulee Dam. Both of these Federal dams were started as emergency public works projects. By 1937, Bonneville Dam was nearing the stage of initial power production. Several legislative proposals were advanced in the Congress to provide for administration of the project. Some proposals would have placed responsibility for development of the entire river basin in the Bureau of Reclamation. Others would have vested the transmission and marketing functions, as well as project construction, in the Corps of Engineers. Still others would have established a Columbia Valley Authority similar to the Tennessee Valley Authority. Because regional planners recognized that any administration of Federal hydroelectric projects in the Northwest should provide for a unified program of multipurpose development, and because there were conflicts as to which Federal agency, existing or new, should administer the projects, a compromise was struck by creation of a "provisional" agency within the U.S. Department of the Interior to market the power from Bonneville Dam (and subsequently from all Federal dams in the region, except for a small Bureau of Reclamation project--Green Springs--in southwestern Oregon). The new agency, created in 1937, was the Bonneville Power Administration (BPA). The Federal dams, however, continued to be built and operated by either the Corps of Engineers or the Bureau of Reclamation; BPA markets the power and recovers all of the power costs, including timely repayment of the Federal investment plus interest. BPA completed its first transmission line from Bonneville Dam to the City of Cascade Locks, Oregon, in July 1938. Gradually, a Federal transmission network took shape as additional Federal generating units came on line and additional publicly owned, cooperatively owned, and investor-owned utilities, plus some electroprocess industries, became customers of BPA. Pacific Northwest Electric Power System As of January 1, 1978, the Pacific Northwest's rated electric generating capacity totaled almost 37,000 megawatts, of which approximately 79 percent was installed in hydroelectric projects. More than 14,250 of the 31,000 megawatts were installed in Federal hydroelectric plants, the output of which is marketed by BPA. Almost 10,000 of the total 31,000 megawatts consists of non-Federal hydroelectric capacity. The remaining approximately 6,500 megawatts consists of existing non-Federal thermal generating capacity, 80 percent of which is installed in five large generating projects--the Centralia coal-fired plant located between Portland and Seattle, the dual-purpose N-Reactor on the U.S. Department of Energy reservation at Hanford, Washington, the coal-fired Jim Bridger Units 1, 2, and 3 at Rock Springs, Wyoming (two-thirds of the output of which is used to meet Pacific Northwest loads), the coal-fired Colstrip Units 1 and 2 in Montana (half of which is used to meet PNW loads), and the Trojan nuclear powerplant 42 miles north of Portland at Rainier, Oregon. The remaining existing thermal powerplants in the Northwest are either new combustion turbines or new combinedcycle units used primarily for short-term peaking or during periods of poor water conditions, or small and relatively old steam and diesel |