Trump’s proposed asset sale sparks fury on Hill

Source: Hannah Northey and Geof Koss, E&E News reporters • Posted: Thursday, June 8, 2017

The Trump administration is facing mounting backlash from both sides of the aisle after proposing to sell off federal power assets.

Twenty-one senators called on Energy Secretary Rick Perry yesterday to oppose a provision in President Trump’s fiscal 2018 budget proposal that would auction power marketing administrations — independent companies within the Department of Energy that sell wholesale electricity, mainly from federal hydropower projects, and oversee more than 33,000 miles of transmission, according to DOE.

Dismantling the PMAs — the Bonneville, Western Area, Southeastern and Southwestern power administrations — is “not sound government policy” given that the entities pump out cheap power and pay for themselves, the senators told Perry in a letter.

The PMAs have been a political lightning rod in past years. The Obama administration faced backlash when former Energy Secretary Steven Chu proposed using the entities to foster clean energy and smart grid technology. The senators in the letter said past efforts to sell off the assets failed. “This is not the first time this short-sighted proposal has come up and, as usual, it is being opposed on a bipartisan basis,” they wrote.

Republicans signing the letter were Sens. John Barrasso of Wyoming, John Boozman of Arkansas, Steve Daines of Montana, John Hoeven of North Dakota, Jim Risch and Mike Crapo of Idaho, and Mike Rounds of South Dakota.

The Democrats were Sens. Maria Cantwell of Washington, Kamala Harris and Dianne Feinstein of California, Heidi Heitkamp of North Dakota, Martin Heinrich of New Mexico, Michael Bennet of Colorado, Catherine Cortez Masto of Nevada, Amy Klobuchar and Al Franken of Minnesota, Claire McCaskill of Missouri, Jeff Merkley of Oregon, Patty Murray of Washington, Jon Tester of Montana, and Ron Wyden of Oregon.

In their own letter to Perry sent earlier this week, the American Public Power Association (APPA) and the National Rural Electric Cooperative Association (NRECA) registered “strong opposition” to selling off the PMA transmission assets.

The groups note that roughly 1,200 publicly owned utilities and rural electric co-ops in 34 states purchase hydropower produced from the PMAs.

“Through long-term contracts, PMA customers have repaid all power program expenses, plus the interest on any capital projects, and have ensured continued investment in the federal infrastructure,” they wrote. “For many decades, this arrangement has been a win-win for the federal government and for public power and rural electric cooperative utilities, their retail customers and their communities.”

APPA and NRECA “strongly disagree” with the budget’s rationale that the private sector is best-suited to own transmission lines and that doing so would encourage more efficient allocation of resources and lower taxpayer risks.

“Rather, it is much more likely that any sale of these assets to private entities would result in attempts by the new owners to charge substantially increased transmission rates to the PMA customers for the same service they have historically received,” they wrote.

“History has demonstrated that initiatives to privatize all or part of the PMAs do not have strong support in Congress because they are both economically unjustified and politically unpopular,” concludes the letter.