trending Market Intelligence /marketintelligence/en/news-insights/trending/H55EOPlUuarvrk1mNEIOEw2 content esgSubNav
In This List

Western lawmakers decry Trump proposal to spin off federal transmission assets

Blog

Over 150 state-level energy-related measures enacted during Q2'21

Blog

Insight Weekly: Earnings learnings; Duke Energy hits back; PE activity surges

Blog

Q&A: Data That Delivers - Automating the Credit Risk Workflow

Blog

Insight Weekly: Banks' efficiency push; vacuuming carbon; Big Pharma diversity goals


Western lawmakers decry Trump proposal to spin off federal transmission assets

A group of 15 U.S. congressmen from Oregon and Washington urged the Trump administration not to pursue the sale of three federal power marketing administrations', or PMA's, transmission assets, saying the move would raise rates for consumers and threaten grid reliability for rural communities.

As part of his full fiscal-year 2018 budget request, President Donald Trump proposed selling the transmission assets of the Bonneville Power Administration, Southwestern Power Administration and Western Area Power Administration, or WAPA, as well as repealing WAPA's borrowing authority. The three entities along with a fourth PMA, the Southeastern Power Administration, sell electricity in 33 states, mostly from federally owned hydroelectric dams. The request drew a swift rebuke from public power producers, including the American Public Power Association and the National Rural Electric Cooperative Association.

The president's budget cannot become law without authorization from Congress, which crafts spending legislation that usually differs substantially from the White House's proposal. Some aspects of Trump's budget could be incorporated into congressional spending bills, but the proposed PMA sale has landed flat with lawmakers, particularly in states that are dependent on federal transmission lines.

"Divesting these assets to the highest bidder could transfer the benefit and equity of these investments from Northwest consumers, who have financed the system, to distant investors," the Oregon and Washington congressmen said in a June 5 letter to Energy Secretary Rick Perry and Office of Management and Budget Director Mick Mulvaney. "This proposal will lead to a certain rate increase for consumers, imposing increased costs on families and economic development, potentially jeopardizing the ability of the [Bonneville Power Administration] to repay the costs of the Federal Columbia River Power System."

The lawmakers said the sale would undermine BPA's ability to coordinate transmission and power marketing functions in the Pacific Northwest, divide the regional grid and and cause lines that serve rural areas and provide grid reliability to be abandoned. They noted that BPA, which owns 75% of transmission in the Pacific Northwest, is self-funded and actually provided $32.5 billion in payments to the U.S. Treasury.

"Selling off BPA's transmission assets is bad public policy that undermines the President's economic objectives and betrays a lack of understanding of the Northwest," the letter said.

Congress rejected proposals in the 1990s to sell or privatize federal power marketing administration assets. Lawmakers also rebuffed former President Barack Obama's requests to divest the Tennessee Valley Authority, meaning Trump's pitch to sell the three PMAs is unlikely to gain steam in Congress. But proponents of PMA sales, including conservative think tanks such as the Heritage Foundation, say that electric power production and distribution should be managed by private or local entities rather than the federal government.