The Northwest Energy Review Transition Board teleconferenced with Congressional and Administration staff about electricity industry restructuring legislation and received progress reports from various groups. All board members were present. The audience was about 40.

Next Meeting: October 9 in Portland.

• THE OUTLOOK FOR LEGISLATION IN THE 105TH -- Washington, D.C. staffers and lobbyists reported on what might happen during the 105th Congress and how that matches up with the Transition Board’s goal of having recommendations to the delegation by late March 1998. Joe Kelliher, House Commerce Committee staff, indicated that Rep. Dan Schaefer of Colorado and Rep. Tom Bliley of Virginia have said they want restructuring legislation passed in the 105th Congress, but if that isn’t possible, they’ll pick up where they left off in the 106th. "I hope that encourages early involvement," he said. Marty Kanner of the Public Power Council reported there is momentum building in the Senate, with Senators Slade Gorton of Washington, Dale Bumpers of Arkansas, and Don Nickles of Oklahoma all working on bills. "Don’t sit back -- the earlier you engage, the better off you will be," he advised. Gary Barbour of Enron/PGE said the odds of maintaining local control are better if you get in early. National forces, he stated, will make the restructuring debate coalesce faster. It’s going faster than people realize -- March is too late, Barbour said.

Bob Hayes of the Direct Service Industries said the likelihood of a bill passing in this Congress is relatively low. You are better off taking the time to come to a reasonably unified consensus and then bring it back to Washington, D.C., he recommended. Steve Wright of BPA said the key for BPA is maintaining local control and that the Transition Board is "our best shot" at getting regional consensus. It’s important the subscription process not be held hostage to issues like stranded costs, he added. Dan Adamson of the U.S. Department of Energy said because of the Comprehensive Review, "the Northwest is in very good shape in the eyes of the Administration and on the Hill." You should "stay ahead" and address other issues like stranded costs, he advised. If there is no regional consensus on stranded costs, it "will be done in Washington D.C. by the Administration or Congress," but we’d rather the region work it out, Adamson said.

• SUBSCRIPTION PROCESS: SO FAR, SO GOOD? -- Dick Adams of the Pacific Northwest Utilities Conference Committee and Syd Berwager of BPA reported that the Federal Power Subscription Work Group is about to finalize a list of products and services BPA would offer. The next steps are for BPA to start pricing products and services, decisions on alternative business relationships, and sorting out implementation issues, Adams said. Based on the work the group has done thus far, there is no need for legislation for a successful subscription, he stated, adding that some obstacles still need to be addressed. Steve Weiss of the Northwest Conservation Act Coalition (NCAC) said "so far the subscription process has been easy because the tough decisions haven’t been addressed." He listed issues that need resolution and urged the board to "watch us, keep the pressure on, and don’t let us sidestep these issues." Substantial progress has been made, but we are not a lot closer to resolving the most difficult issues, said Angus Duncan of the Columbia/Pacific Policy Institute. We’ve been "backing and filling" in the work groups until all the pieces are on the table, he stated.

• TRANSITION COST RECOVERY VOLUNTEERS CHECK IN -- Maureen Carr of the Public Power Council reported a customers’ working group met several times to discuss issues involved in "devising a workable, consensus-based regional approach to dealing with BPA transition costs." Transition Board members asked about the timing of the effort and for a description of "the product you are working on." The customer panel promised to bring a timetable and more information to the next meeting. Weiss presented an NCAC stranded cost recovery proposal under which customers would agree "to pick up some defined maximum of BPA’s above-market costs in return for a commitment from the federal government to accept deferral with interest of any excess needed to fully fund obligations of the system."

• TRANSMISSION SEPARATION GROUP: FULL SPEED ON FERC EQUIVALENCY -- Consultant Al Wright reported the Transmission Separation Group has decided to spend all of its time on "FERC equivalency" -- regulation of BPA’s transmission in a manner equivalent to FERC’s regulation of investor-owned utilities. We will bring recommendations on this to you before the end of the year, he said. The group has decided to avoid the question of splitting the Bonneville fund because it leads to the "huge black hole" of the security of the Supply System bonds, Wright noted.

• A PARTIALLY CLOSED DOOR FOR THE BPA COST REVIEW -- Staffer Dick Watson reported that the cost review management committee, which held its first meeting August 25, is "fully engaged in the problems confronting BPA." The committee will close most of its future meetings, he said, to facilitate "frank and comprehensive discussions" needed to get at BPA’s cost reduction issues. That doesn’t mean the review "will go dark for the remainder of its duration," Watson stated. He said that there will be an open comment period on the draft recommendations, consultations with different groups will continue, and summaries of the meetings will be posted on the Internet. _________________________________________________________________________

Please Note: This summary is based on detailed reports of the meetings of the Northwest Energy Review Transition Board. The reports are prepared by Resource Writers Inc. and distributed by the Northwest Power Planning Council. The Pacific Northwest Utilities Conference Committee (PNUCC) contributes financial support for these reports. To request a copy, please call the Council at 1-800-452-5161 and ask for Public Affairs.