Northwest Newspaper Hydropower Articles

GAO:Region's dams should pay more for use of federal land

GAO:NW ratepayers affected most

By Dan Wheat
The Wenatchee World

WENATCHEE - The Federal Energy Regulatory Commission should charge hydroelectric dams more for use of federal lands, the General Accounting Office says.

If payments more fully reflected the fair market value of federal lands dams use, dam operators most likely would have to increase rates to consumers, says the report, which was released Wednesday.

The GAO is recommending the Grant County PUD be charged up to $28 million this year for using federal lands behind Priest Rapids and Wanapum dams. In 2002, the PUD paid $49,000.

The Chelan County PUD should pay up to $2.7 million this year for federal lands used by Rocky Reach and Rock Island dams, the GAO says. In 2002, the PUD paid $4,000 for use of the lands.

"Consumers who buy power from these utilities have historically enjoyed some of the lowest electricity rates in the country," the GAO report states. "Consequently, any increase in annual charges to better reflect the fair market value of the land would most likely increase rates to a level that would be closer to the national average."

The impact of higher payments would be felt most in Idaho, Oregon and Washington state, the report said.

The GAO is an audit and investigative arm of Congress. The report will go to a subcommittee, said Gregg Carrington, director of licensing at the Chelan County PUD.

According to GAO's analysis, FERC is collecting less than 2 percent of the annual fair market value for use of the lands. The report says fees have been based on right of way use of power lines, pipelines and the like, not hydroelectric production.Leon Hoepner, hydro director at Grant PUD, said 'the utility pays SI million a year in FERC license fees on its dams, based on power capacity. He wasn't aware of charges on land.

Carrington said the GAO is basing its calculations on the percentage of federal land in the dams or their reservoirs and the mistaken theory that the PUD is making profits from selling power on the open market.

He said virtually all of the PUD's power is sold at cost. He said the exception was in 2000 when high demand in California led to big profits for excess power on the open market.

The amount of federal land used in the reservoirs behind Wanapum and Priest Rapids is 8 percent. The amount behind Rocky Reach and Rock Island dams is 1 percent.

"One percent of nothing is nothing," Carrington said. "I don't think the report makes much sense at all. We filed a comprehensive comment to them (GAO) in March and most of it was ignored."

On the Web:www gao.gov; then search for report No. GAO-03-383Dan Wheat may be reached at 664-7150 or by e-mail at wheat@wenworld.com

The Wenatchee World
Wenatchee, WA
May 22, 2003

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