The Washington Public Power Supply System (WPPSS) is back and wants a return to blank-check spending of ratepayer dollars. After staggering cost overruns finally brought down four out of the agency's five proposed nuclear plants, Washington voters responded by passing the Don't Bankrupt Washington initiative (Initiative 394) in 1981, which requires voter approval before any public agency can embark on building a large power plant in the state.
WPPSS, now called Energy Northwest, has joined forces with a group of public utilities to gut Initiative 394. The law created important checks and balances intended to protect ratepayers from a repeat of the now-infamous nuclear debacle — a mistake that boosted the Bonneville Power Administration's rates by 600 percent.
Since 1981 when the Don't Bankrupt Washington initiative was passed, there has been little need for new, large energy projects, so the law has never been tested. Now, with pressure building to add new power resources in Washington, I-394 is being challenged. The risks and uncertainties inherent in today's topsy-turvy energy market, however, are precisely the chaotic circumstances the state's citizens feared when they voted for the initiative. Don't Bankrupt Washington should be tested by allowing it to do the job it was intended to do, not by attempting to repeal it.
Legislation (SSB 5292) is moving in Olympia that would amend I-394 so voter approval would be required only for public financing of nuclear power plants. Current law includes natural gas-fired generation, the predominant technology used in new power plant construction. The House version of the bill (SHB 1221) goes further, stripping out a requirement that ratepayer-funded power plants undergo an independent cost-effectiveness test. This common-sense review is intended to ensure proposed plants, which cost hundreds of millions of dollars to build, are on sound financial footing.
Backers of I-394 repeal are sounding the alarm over the need for new energy resources in Washington. Their urgent pleas echo those made by WPPSS backers in the late '70s before their campaign to build five nuclear power plants collapsed under the weight of the largest municipal bond default in U.S. history.
It's true that Washington and the Northwest need additional energy resources. And we're going to get them. Enough new gas-burning power plants are in the construction phase in Washington state alone to power more than 1.5 million homes. And many more privately financed projects are in the planning stages.
Proponents argue that publicly built energy projects are essential as an alternative to the kind of cut-throat, sell-to-the-highest-bidder energy merchants who reaped windfall profits during last year's energy crisis. They might be right, although state and federal officials took major steps last spring to repair the worst flaws in California's failed deregulation experiment. Power prices dropped to pre-crisis levels almost immediately as a result and have remained relatively stable since.
Because ratepayers are taking the risk, publicly financed power plants should be subject to a cost-effectiveness review. This would ensure a proposed energy project is sound financially, and it would provide an important economic stamp of approval for its public-agency proponents. A well-designed test would compare proposed plants to reasonable alternatives, including energy efficiency and renewable energy investments. State regulators require private, or investor-owned, utilities to undergo an equivalent process.
Whether additional publicly owned power plants are needed as insurance against future price gouging is a difficult question. The answer to whether Washington citizens should retain the right to vote on new power plants they're expected to pay for, however, is an emphatic yes.
Judy Hedden is president of the League of Women Voters of Washington. Sara Patton directs the NW Energy Coalition, an alliance of utilities and community organizations. Steve Zemke was chair of the Don't Bankrupt Washington Campaign, which sponsored Initiative 394.