May 2001

ORECA's Legislative Day

News & Views from Your Elected Representatives

Minutes of the Meeting Held on:

March 20, 2001

The meeting was called to order by president Nancy Horn at 7 PM and all board members were present.
     Duane Soto, a Keizer resident, addressed the board about his concern for some senior citizens that get by on very little income. While he doesn't believe companies should be involved in providing social services, he asked that the board review the way in which capital credits are distributed to members. General Manager Bob Speckman explained to Mr. Soto that legal issues could arise if a change is made in the way that capital credits are currently distributed if it appeared to discriminate in favor of one group of members.
     Helen Findley, Salem Electric’s Special Services Representative, described her work with seniors in helping them receive assistance. Member Services Manager Terry Kelly said that many seniors Findley works with get weatherization measures installed for free.
     Regarding the involvement of companies providing social services, Speckman added that the deregulation legislation proposed to take effect October 1, 2001, has a requirement that investor-owned utilities set aside 3% of their gross revenue to be used for "public purposes," including low-income programs.
     Administrative Services Manager Jack Belleque reported on personnel changes in the front office. He said he is currently testing a check encoder machine to see if it will help improve the efficiency of handling customer payments.
     Roger Kuhlman, the Engineering and Operations Manager, briefly updated the board on the West Salem High School project and showed an illustration of the underground service installation.
     Kelly demonstrated the interactive portion of the Salem Electric website, which allows residential customers to view their account on-line. Members of the board were interested in the ability to view their energy usage and billing history.
     Speckman reminded the board of the ORECA Legislative Day on March 21, 2001. He also updated the board on a wind power development in Washington State. Salem Electric has been asked to be part of a group of co-ops that would look into developing the project.
     Meeting adjourned at 8:10 PM

     John Elliott

     Director

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ORECA'S 
Legislative Day

The Oregon Rural Electric Cooperative Association (ORECA) organized a legislative day at the Capitol for electric cooperatives on March 21. Sixty-two directors and managers representing Oregon’s seventeen electric cooperatives attended. Their objective was to meet with senators and representatives from all over the state about electric cooperative issues. Obviously the main issue was electric restructuring and concern about its effect on Oregonians at this time. ORECA has adopted a position of delay. That position is fully supported by the cooperatives and most members. That position is printed separately in this newsletter.
    The day started with a presentation by Eric Bloch who is Oregon’s representative to the Northwest Power Planning Council. The council is advisory and has little authority to mandate programs or changes. California’s energy crisis and the current drought conditions have caused BPA to go to the market to purchase power. BPA is proposing rate increases of 100 to 300 percent or higher to cover the cost of purchasing power. This will result in the increased cost being passed on to BPA's customers. The majority of these customers are public power companies, but BPA also has sales to Pacific Power, Portland General Electric (PGE) and direct service industries (DSIs), such as aluminum plants. Bloch pointed out that the increased cost of power to BPA would make it impossible to have the full range of fish recovery as planned. Other parts of the country are envious of the Northwest’s low-cost hydropower and may take advantage of BPA’s weakened financial position. There is a lot of discussion on methods to assure that the hydro asset stays in the Northwest.
     Rick Crinklaw, chair of the ORECA Government Affairs Committee, pointed out that the problem facing Oregon is creating social pressure on the state. Many people simply cannot afford the increased cost. He said that the low-cost power source had been created for public power usage. Yet, several years ago, BPA had negotiated a firm power sales agreement with Investor Owned Utilities (IOUs) and DSIs. The sale of low-cost power to the IOU's, such as PGE, and to the aluminum plants, has created problems. Especially when the DSIs turn around and sell that power back to BPA at market rates.
     Senate President Gene Derfler spoke to the group also. He strongly disagreed with ORECA’s position. He feels that restructuring is not a problem. He said the problems we are facing are because the environmental community has not allowed generation capacity to be built. He said if we delay the implementation of SB 1149 (restructuring) some potential generation builders may not come to Oregon. He said investors would not come if the return they want cannot be made and they expect market return. (Author’s note: The current guarantee of 9% is apparently not enough.) He feels that the electric industry would be like the telephone industry and competition will make many more products available. The senator said that he feels people are reacting out of fear. He stated that laws are not made out of logic but out of emotion.
     The last speaker was State Representative Tim Knopp, Vice-Chair of the Smart Growth and Commerce Committee. He doesn’t see electric restructuring as any benefit to residential customers. He warned that we don't want to compound what is happening throughout the Northwest and California by moving too quickly. There is no guarantee that the lights will stay on in Oregon this summer. We need to give time to allow supply to catch up with demand.
     The Salem Electric Board has been consistent in feeling that deregulation (restructuring) of the electric industry will not benefit residential and small business customers. We strongly support a two-year delay in implementation. There needs to be a thorough examination of the effect of the current crisis in order to determine if Oregon’s version is so much different than California’s version that we are assured we will not fall into the same severe problems. Lack of supply can only have the result of higher rates in an open market. We will experience that this fall when the combination of low water and lack of power supply will cause an increase in BPA’s wholesale rates. Senate President Derfler and the other members of the Senate and House need to hear our requests for a minimum two-year delay. Please write or call your senator and representative and let them know your opinion.

     Jim Dyer

     Director

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