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To: excardog who wrote (81197)	12/10/2000 1:53:29 AM
From: Douglas V. Fant	Respond to of 95453

excardog, That's not just a perception, but a reality! I work some with the Arizona Power Authority which handles the State of Arizona's allocation of hydro power from Hoover Dam. Hoover Dam is hydro power, preference power just like the major chunk of the Bonneville Power Administration (BPA). Almost every major Bureau of Reclamation hydroelectric project came with some sort of preferences attached to the project-i.e. who gets first crack at that cheap hydro power. BPA in its preferences has a lot more flexibility than does Hoover Dam- and if you look at a Ninth Circuit Federal Court of Appeals Court case called "Utility Reform Project v. Bonneville Power Administration" from 1989, BPA was given even more flexibility to handle its hydropower- which is both good and bad from the Pacific Northwest's perspective. Hydropower IMO is the most valuable of all power assets. It is dirt cheap, pollution free, and even more critically- can be turned on and off ("ramp" as they say in the power industry) at the flip of a switch and opening of a valve- and provide premier peaking power. This is a very important asset to the power systems of the Pacific Northwest for the next few years while power reserve margins are tight.... Now a lot of problems occurred in western power systems this year- and one was the continuing drought in the Pacific Northwest. For BPA, that reduced the amount of hydropower available to them to utilize since water flows were reduced- just when power demand was exploding and the West Coast also got an unusually hot summer- a triple bogey. So a premier peaking asset is reduced in capacity when demand has increased-from both northern and southern coastal regions. And-BPA IS a federal asset, a public power entity, so....It's fair game for California to make a run to take that asset away from the Pacific Northwest States in the US Congress. Since California has three or four times as many electoral votes as Oregon and Washington, then California will be worth a whole lot more to the current administration. Oregon's and Washington's Congressional delegation should make protection of BPA assets for the next few years a high priority I would imagine. California has been throwing its weight around on the Lower Colorado and Arizona, Nevada, Utah, and Colorado have had to fight to protect its piece of the water and power resources there. So Oregon and Washington have a tussle ahead of them -However BPA's hydropower plays a critical swing role in west coast power markets- a very serious resource allocation battle is looming there.... Meanwhile down south Hoover Dam throws off a monster 2100 megawatts of hydropower. 1200 of those megawatts are already committed to California and SCE and LADWOP handles them. However the remaining 800+ megawatts go to Nevada and Arizona, but weirdly we are technically prevented from the language of a 1928 Bureau of Reclamation Law from helping our brothers and sisters in California. We are like the sub in the movie "Das Boot"- Sitting yards away from drowning men- and by orders we can only watch and not pick them up! That anomoly in the Boulder Canyon Organic Act is a microcosm for the deregulation of the power markets geenrally. Previous laws and power market structures were not built up to accomomdate a deregulated electric market...So it will take a few years to work out the kinks- and that is why gas-to-power stocks look good going forward.... Next, are you familair with power exchanges, aggregation and power pooling agreements? There is a way to keep the value of BPA assets in the Pacific Northwest, yet simultaneously help California in its time of needs- always smart to help your neighbor IMO, since you never know when the roof of your own house may catch on fire.....