Bush plan would force BPA to sell at going rate.

Byline: David Steves The Register-Guard

SALEM - Oregon political leaders from both parties vowed Monday to fight a Bush administration proposal that could raise the Northwest's electricity rates by as much as 20 percent.

President Bush's $2.57 trillion budget for 2006 included a proposal to require the Bonneville Power Administration to sell electricity at the market rate, which historically is much higher than the cost-based rate at which it currently sells its hydropower from dams on the Columbia and Snake rivers.

Gov. Ted Kulongoski said such a move would "cripple the state's economy and its ability to recover" from the recession.

Oregon's congressional Democrats, including Rep. Peter DeFazio of Springfield and Sen. Ron Wyden, were joined by Republican Sen. Gordon Smith - a strong backer of the Republican president on most issues - in vowing to derail the proposal.

Smith said the plan would cost the Northwest hundreds of millions and possibly billions of dollars, which would come on top of recent rate increases. The majority of power sold to ratepayers by many Lane County utilities, including the Eugene Water & Electric Board, the Springfield Utility Board and Lane Electric Cooperative, come from the BPA's dams.

"I am going to exhaust every right and privilege I have, as a senator, to kill this proposal," Smith said.

The BPA plan was the most prominent Northwest issue in the Bush's spending package to draw immediate fire as the White House released the complex budget document. Lawmakers and other experts on Monday said they were just starting to examine the potential impact of many other federal spending issues important to the region.

Smith praised the president's inclusion of $15 million for Columbia River channel deepening, a project he promised to fund while campaigning in Oregon last year.

But DeFazio broadly slammed the Bush budget. He criticized it for continuing to expand the budget deficit, and for extending tax cuts and harming programs such as education and veterans benefits, as well as increasing utility costs in the Northwest.

The Eugene Water & Electric Board gets 70 percent to 75 percent of its power from the Bonneville Power Administration, and increased costs would be passed on to ratepayers, spokesman Lance Robertson said.

"It would have a fairly large impact on our power costs," he said. "How big is hard to say."

Many of the president's proposed domestic spending cuts could ripple down to the state budget that Oregon legislators are beginning to craft for 2005-07. Bush's proposed cuts would extend to many programs - such as Medicaid, housing and education programs - that are administered through state agencies.

Kulongoski's budget analysts are assessing how Bush's budget may affect state-level spending, spokeswoman Anna Richter Taylor said.

"Some of the major health and human services programs take a pretty big cut, but we can't yet say what this means for Oregon," she said.

Complicating the analysis for states such as Oregon is the fact that the president's budget represents a starting point, and that by the time Congress is done reworking the federal spending plan, its impacts on Oregon's own budget may look drastically different, said Mike Beard, a spokesman for the state Department of Administrative Services.

Among the proposed cuts that could affect programs in Oregon:

Passenger rail's future in the Willamette Valley would be in doubt if Bush succeeds in eliminating federal support for Amtrak. The twice-daily round trips of the Amtrak Cascades train between Eugene and Portland is funded by passenger revenue and the state of Oregon. But the federally supported Amtrak rail company is responsible for securing access to freight lines that the passenger service runs on, and provides indirect services such as equipment, ticket reservations and maintenance, said Jonathan Hutchison, state passenger rail coordinator.

College student aid would be revamped under Bush's proposal to eliminate Perkins student loans. Savings from that move would help fill a $4.3 billion shortfall in the Pell grant program. Bush wants to boost the maximum Pell grant by $500.

The so-called healthy forests law would be further implemented with $867 million for thinning and other activities. That represents a $56 million increase over current spending. Most of the work involves removing dense underbrush, cutting smaller trees and setting prescribed fires. That work would take place throughout the West, and it is unclear how much of it would take place in Oregon.

The Pacific Coastal Salmon Recovery Fund would receive $90 million. The five-state effort aids salmon conservation and recovery efforts along the West Coast.

The Associated Press contributed to this report.