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Governor's Letter

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Northwest Governors Lay Out Scope of Regional Review

In their letter announcing formation of a Steering Committee for the Regional Review, the Northwest's four governors included a document outlining their guidance on the goals, scope and procedures for the review. It is reprinted below in its entirety.

The Goal of this Review

THE GOAL OF THIS REVIEW is to develop, through a public process, recommendations for changes in the institutional structure of the region's electric utility industry. These changes should be designed to protect the region's natural resources and distribute equitably the costs and benefits of a more competitive marketplace, while at the same time assuring the region an adequate, efficient, economical and reliable power system. An important objective of the Regional Review is to involve and educate citizens of the Pacific Northwest about changes the power industry is facing and the implications of those changes.

The Review Process

This review should be viewed as an opportunity to work cooperatively on the issues created by the deregulation of, and competition in, the electric utility industry. Through an open, public process, the region will be able to find the best means of securing for its citizens the benefits of the region's power system. In that regard, a consensus approach will be essential to fostering administrative and legislative approval of Regional Review recommendations.

To help bring about consensus, the steering committee is charged with convening working groups to involve a broad range of participants representing, where appropriate, all segments of the power industry, agriculture, labor, low-income groups, affected industries such as sport and commercial fishing, transportation and others. The working group structure should ensure that all interested parties are given a full and timely opportunity to participate. If consensus on a particular issue is not achieved, the Review process will take specific care to ensure that minority views are appropriately noted.

While the extent of the hydroelectric system's obligation for restoration and protection of fish and wildlife may be debated in other forums, it should not be a subject for this Review. The Northwest Power Planning Council can assist the Review by providing logistical support, including public outreach assistance, and by channeling comments into the Review process through open hearings and other means. The council is charged with ensuring the Review has public participation. In addition, the council should, at the direction of the steering committee, analyze and prepare background material on specific issues. The committee also is encouraged to call on the expertise of the energy industry, agencies of government and constituent groups.

The Bonneville Power Administration will serve on the steering committee in the same ex-officio basis as the governors' representatives. As mentioned in our letter, the steering committee is also charged with maintaining a formal liaison with the region's Indian tribes, the administration and the Congress.

Scope of the Review

The scope of the Review is the entire Northwest energy system, but one key focus should be the role federal power generation and transmission assets will play in a competitive power marketplace. The following questions should be addressed:

What degree of separation of generation and transmission assets is necessary to ensure a competitive market?
Should there be changes in who owns and who operates the region's generation and transmission assets? Should one entity own both?
What standards should be applied to the pricing of the products from those assets?
How should the costs and debt related to federal assets be determined, paid and amortized?
How should the region provide for the power system's non-power obligations?
Which federal and state laws would require amendment if change is needed?

Finding a way to continue development of cost-effective conservation in a competitive marketplace should be a subject of the Review. The committee should also consider ways to continue a renewable resource development program.

While the extent of the hydroelectric system's obligation for restoration and protection of fish and wildlife may be debated in other forums, it should not be a subject for this Review. If the committee encounters fish and wildlife governance questions, it shall defer to the process the Power Planning Council is using to develop a report to Congress on appropriate measures to improve regional control over efforts to conserve and enhance fish and wildlife within the Federal Columbia River Power System.

While no institution in the energy industry, including the Bonneville Power Administration and the Northwest Power Planning Council, should be preserved for its own sake, the review should be mindful of the history of institutional relationships in the region and, in particular, the dependence of many of the region's smaller communities on the federal government for their power supplies. To the extent that the committee, on the basis of public input, believes that other issues need to be addressed to ensure a full and thorough review, it should explore them.

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