(WASHINGTON, DC) -- President Trump’s fiscal year 2020 budget proposal marks the third time the administration has included an unpopular scheme to sell-off the transmission assets of government-owned utilities, and the third time that utility groups, and their supporters in Congress, will wage war against it.
“The Hill consistently turns this idea away for a reason: It’s bad policy,” Desmarie Waterhouse, vice president of government relations for the American Public Power Association, tells John.
Her group represents publicly-owned utilities throughout the U.S. and tens of millions of customers that rely on the federal power authorities’ transmission assets being targeted in the budget.
The federal power utilities, including Bonneville Power Administration, Southeastern Power Administration, Southwestern Power Administration, Tennessee Valley Authority, and Western Area Power Administration, are all APPA members. All are targeted by the budget.
The basic argument against the proposal is that privatizing the transmission lines operated by these large federal power authorities will drive up costs for consumers by basing their operations on profits, rather than the public interest.
Many of the federal power companies like Bonneville and the Tennessee Valley Authority cover large stretches of rural areas, which private firms have traditionally avoided due to low numbers of customers and lack of revenue potential.
Also, these government power companies, although federally owned, do not rely on taxpayer dollars to run their operations. They are run just like any company, except their goal is to provide low-cost power while maintaining operations and investing in infrastructure to better serve its customers, say officials.
Almost immediately after the budget was proposed, APPA and the National Rural Electric Cooperative Association, two of the three largest utility groups representing the power sector, sent a letter to the White House laying out the problems with continuing to propose the privatization scheme.
The administration’s budget argues that “ownership of transmission is best carried out by the private sector where there are the appropriate market and regulatory incentives,” which the utility groups say is not based in fact. “These arguments are merely a pretext for actions that would raise electricity costs for millions of people and businesses nationwide, many of whom can least afford it,” the letter from the groups read.
Waterhouse tells John that the administration hasn’t responded.
Battle lines were drawn this week on Capitol Hill: With no response from the White House, lawmakers began to pounce on administration officials at this week’s several budget hearings. Sen. Ron Wyden, D-Ore., scolded Energy Secretary Rick Perry on Tuesday before the Energy and Natural Resources Committee, vowing to make sure the policy is killed off and does not return a fourth time.
Wyden wants Perry to put his foot down and “stop the administration from putting forth such a proposal again,” a Wyden aide tells John.
Wyden is particularly concerned with selling off the Northwest’s Bonneville Power Administration’s assets, which is one of the largest federal utilities overseen by the Energy Department.
Perry suggested this line item will end up as it did the other two times it was proposed. But he would not say he would oppose the plan, as Wyden wished. Instead, Perry said the decision rests with lawmakers.
Wyden vowed to “make sure it ends up on the cutting room floor,” while also saying he will be watching Perry to ensure he does not revive it.
