Subject: Western Issues
From: [email-masked]
To: [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Mon, 14 May 2001 02:05:00 -0700 (PDT)

Executive Summary:
? BC's NDP Leader Publicly Concedes Defeat to Liberals
? BPA seeks Federal Loan for Improvements, Future Fish Credits Limited  
? Washington House Extends Aluminum Smelters' Power Re-Sale Rights by 1,500 
MWs 

BC Elections
According to our information, the BC government is preparing for the Liberal 
take this week.  The election is slated for 16 May 2001 and it appears likely 
that we are looking at a near Liberal sweep -- they are currently leading 41% 
to 25% at the polls.  There is about a three-week lead time between the 
general election on May 16th, the Final Count on May 29th, and the Return Day 
on June 7th -- so there will be a period of jockeying around some issues.  
The New Democratic Party (NDP) leader, Ujjal Dosanjh, has effectively 
conceded the election in a public announcement.  Dosanjh is making public 
pleas to voters not to desert the NDP in favor of the Greens so that the NDP 
can retain official party status (4 seats).  Dosanjh has stated that he "will 
be happy if the NDP gets 10 to 15 seats."

The following are likely to be the key energy policy officials once the 
Liberal Party takes power in BC:

? Richard Neufeld, Minister of Energy, Mines and Northern Development 
(replacing NDP Minister Glenn Robertson)
? Dan Jarvis, Deputy critic on Energy, Mines and Northern Development Murray 
Coell, Minister of Environment, Lands and Parks (replacing Ian Waddell) 
? John Van Dongen, Fisheries Neufeld, Jarvis, Coell and Van Dongen are 
currently Members of the Legislative Assembly (MLAs).

While Gordon Campbell, the probable incoming premier, will have been 
effectively muzzled in the interim when it comes to talk about energy 
deregulation, the opposition will likely have plenty to say about it.  The 
people we'll need to be looking at this regard are:  Glenn Robertson - 
Minister of Energy and Mines, and Ian Waddell - Minister of Environment, Land 
& Parks.  

It appears certain that the Liberals will move to privatize at least some of 
the power crown corporations almost immediately.  They have promised a 
balanced budget and a chunk of  money to do it their way; they have made 
campaign promises about privatization to stir the economy; and they have 
tight back channels with the crown corporations' management who want "a 
straight privatization plan instead of coop approach to deregulation."  
Sources report that, if elected, the Liberals promise a referendum on land 
claims treaties with the local native Indians (or "First Nations").  These 
treaties result from overlapping claims to land and serve to block land 
development, forestry, mining, etc.  While the NDP has been supportive of the 
First Nations land claims process while in office, the promised Liberal 
referendum would seem to suggest that the Liberals intend to backtrack and 
not recognize the First Nations' rights.  In other words, there would be an 
increased impetus for mining and forestry.  This development is surprising 
since the Liberals have traditionally enjoyed strong Indian support, and the 
land claims process was originally started under a Liberal government.  If 
the Liberals press forward with a referendum on the process, there is the 
potential for violent flare-ups between the First Nations and the 
government.  (These flare-ups have occurred in the past, though not recently.)

BPA
BPA is urging the White House to increase its authority to borrow from the 
federal Treasury by $2 billion to build over 20 new projects for 500-kilovolt 
transmission lines and substations online between 2003 and 2006.  BPA 
officials hope the new borrowing authority will be included in a 
comprehensive energy strategy the Bush administration is expected to release 
next week, although federal officials have yet to give the final word on the 
BPA request.  Energy Secretary Spencer Abraham, key members of Congress and 
the staff of Vice President Dick Cheney, who has taken charge of developing 
the administration's energy strategy, all have been briefed on BPA's 
proposal.  BPA has been building a case for a budget item that officials say 
would be a significant boost to the region's power infrastructure in the near 
term. If the administration doesn't include it in its energy strategy, BPA 
officials say they will nevertheless press for the increased borrowing 
authority in Congress.   BPA plans for the first time to use more "fish 
credits" than cash to meet its annual debt obligation, reducing its cash 
outlay by some $400 million.  BPA had expected its borrowing authority to be 
sufficient until 2006, but given the energy situation, BPA could hit the 
ceiling by 2003. 

BPA will be spilling water over its dams as a part of the salmon protection 
plan.  To make up for the shortfall, the agency will have to repurchase 
approximately $1.2 billion on the electricity spot market -- these costs will 
be passed on to energy consumers as a part of the subscription rate hike in 
October.  Oregon Governor Kitzhaber is pushing for more spills.  Steve Wright 
& other BPA officials are considering the effects of keeping water in the 
reservoirs as a safety net, should there be a cold spell next winter, which 
has precipitated a federal lawsuit from 12 environmental organizations 
against the National Marine Fisheries Service.

Earthjustice Legal Defense Fund is leading this charge, a coalition which 
includes Trout Unlimited and the Sierra Club.  The official line is they want 
to disallow the Federal Caucus and BPA from declaring a 'fish emergency' 
which would allow them to determine the amount of water spilled over the 
dams, among other things.  However, by exercising a 'fish emergency', BPA 
becomes qualified for additional federal credits - which is probably the real 
source of contention here.

Aluminum Smelters
The bill passed by the House Energy Committee  yesterday does extend the 
resale rights of the smelters to 1500 megawatts of  power beyond the October 
2001 termination date.  BPA is negotiating, even though they have no legal  
obligation to serve the smelters.  New attack ads paid for by the  aluminum 
companies are running to build political pressure to continue to  receive and 
resell 1500 megawatts of power beyond October 2001, in addition to  receiving 
other payments for staying offline.