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Public Power Sees Threat in Trump Fire Sale

The Trump administration has proposed sales of federal energy assets - vital to a stretch of customers from Oregon to Tennessee and beyond.

By Martin Rosenberg

 

Rural America is split over President Donald Trump’s newly minted energy infrastructure plans.

They are pleased that the president has earmarked $50 billion for block grants to help governors build up needed assets in the rural reaches of America.

But a major segment of the utility world, and some politicians that represent them, were up in arms Monday over the president’s call to privatize federally owned power assets that for decades have kept down electricity prices in the Southeast, Northwest and other regions.

Utilities, already spending upwards of $100 billion on infrastructure, will be working with the administration defining what is needed to build a 21st digital grid laced with more renewable energy, distributed generation, and storage tied to electric vehicles and other innovations.

They will engage in formulating the path forward, said Tom Kuhn, president of the Edison Electric Institute, which represents large investor-owned utilities.

“EEI looks forward to working with President Trump and with all policymakers to develop legislation that supports investments in infrastructure, grows the economy, and recognizes the importance of maintaining reliable, affordable, secure, and increasingly clean energy for all customers,” Kuhn said.

The National Rural Electric Cooperative Association, which speaks for 900 non-profit, locally-owned electric coops serving 42 million Americans in mostly rural parts of 47 states, indicated it is encouraged by the president’s emphasis on infrastructure.

Jim Matheson, the chief executive officer of the association, said, “The president’s proposal to improve and expand rural energy, broadband, and surface transportation will help rural communities adapt and thrive in the modern American economy.

“As the president and Congress work together to finalize an infrastructure proposal, it’s important that the package continue to focus on more than roads and bridges,” he said. “A vibrant 21st century rural economy depends on expanded high speed internet access and electric grid modernization efforts.”

Meanwhile, a sister utility association, the American Public Power Association, voiced major concern about the president’s plans to sell public power assets around the country and raise the cost of inexpensive hydroelectric power churned out by federal dams.

In a statement, the association said:

“The American Public Power Association is disappointed to see that the fiscal year 2019 budget request released by President Trump proposes to divest the transmission assets held by the Tennessee Valley Authority (TVA) and three of the Power Marketing Administrations (PMAs): Southwestern Power Administration, Western Area Power Administration, and Bonneville Power Administration. We will adamantly oppose any effort by the federal government to privatize TVA and PMA assets that have been paid for by electricity customers.”

Those PMA entities sell wholesale electric power to 1,200 public power systems in 33 states.

The power infrastructure built with a strong federal assist nearly nine decades ago originally helped develop economically backward and under-electrified regions of the country during the Great Depression. The hydroelectric power in the Pacific Northwest helped spur development of aluminum manufacturing and shipbuilding that helped power the U.S. armed forces to victory in World War II.

Today, that inexpensive power is used by a fleet of computer server farms that have enormous energy appetites and help keep the Internet humming, as well as other new age industries.

President Ronald Reagan and other presidents over the years have looked into selling the federal energy assets but those efforts invariably ran into buzz saws of opposition.

In response to the Trump administration efforts to dust off those efforts, Sen. Ron Wyden of Oregon Monday said, “Oregonians raised hell last year when Trump tried to raise power bills for Pacific Northwesterners by selling off Bonneville Power, and yet his administration is back at it again.

“Our investment shouldn’t be put up for sale to free up money for runaway military spending or tax cuts for billionaires,” Wyden said. “I fought off efforts to privatize Bonneville a decade ago and I’ll do everything in my power to stop this misguided scheme.”

 

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