CEO’s Report: #NoPMASaleMay 31, 2017
Proposal to sell PMA transmission assets is troublesome for power customers and providers
President Trump recently outlined his proposed budget for fiscal year 2018. In it, he proposes to divest the transmission assets of the federal power marketing administrations, including Western Area Power Administration (WAPA).
Many of Heartland’s customers receive reliable, cost-based power generated at the federal hydropower dams through WAPA. Millions of Americans served by public power utilities and rural cooperatives depend on the PMAs and they are crucially important to rural communities.
This is not the first time this short-sighted proposal has come up and, as usual, it is being opposed on a bipartisan basis.
PMA rates are set to cover all generation and transmission costs, as well as repayment, with interest, of the federal investment in these hydropower projects. None of the costs are borne by taxpayers.
Federal power rates financially support the flood control, navigation, irrigation, water supply, wildlife enhancement, recreation and salinity control functions at these multipurpose federal dams. In many cases, federal water projects would not have been built but for the anticipated revenue associated with the sale of the power that is generated.
WAPA and the other PMAs also own and operate thousands of miles of high-voltage transmission lines. These transmission facilities, in large part, were built and are operated to deliver the hydropower generated at federal water projects to the PMA customers. They serve as a backbone of the electric grid in our states. The sale of these PMA transmission assets would threaten the integration of these facilities with the PMAs’ power marketing responsibilities, raising rates and impairing grid reliability.
Sale of the PMAs’ transmission facilities would not advance the President’s infrastructure objectives. In fact, privatization of existing assets could affect opportunities for new infrastructure investments. Moreover, any private entity buying PMA assets will want to recover their investment. The resulting rate increases would take money out of the pockets of consumers and businesses in our states.
While work remains to ensure that PMAs are both transparent and accountable to customers, simply dismantling them is not sound governmental policy.
Heartland will be advocating on behalf of our customers to ensure the PMAs stay intact. We will be working with the Mid-West Electric Consumers Association to bring our message to Congress.
The American Public Power Association has also expressed their support of the PMAs as public power utilities across the country benefit from their cost-based generation.
We will also be working to raise awareness of this issue through social media campaigns, using the hashtag #NoPMASale, and will submit letters to the editor in your local papers.
I would encourage you to reach out to your members of Congress and remind them of the benefits received from WAPA and the other PMAs. The ratepayers in our communities cannot afford the drastic rate increases that would come from this proposal. If you need assistance in drafting a message or locating contact information for your Congressional members, please let us know. Working together, we can ensure the president’s proposal doesn’t gain traction.