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<br />12 THE WALL STREET JOURNAL, Friday, May 4, 1984
<br />
<br />Hoover Dam's Power Buyers Will Keep
<br />Below-Market Rates Under House Vote
<br />
<br />By DENNIS FARNEY
<br />,"'laff Rcpor/CT of THE WALl. STREf;'... JOURNAl.
<br />
<br />WASHINGTON-The House turned back
<br />an effort to impose sharply higher costs on
<br />the so-called Hoover Club, the Southwestern
<br />public utilities receiving low-cost hydroelec-
<br />tric power from the Hoover Dam,
<br />After an emotional debate. it rejected a
<br />proposal that would have required that Hoo-
<br />ver-generated electricity be auctioned off to
<br />the highest bidders, This would have boosted
<br />Treasury revenue an ..estimated $3,5 billion
<br />over 10 years. Instead, it elected to stay
<br />with the system that's heen used for the past
<br />H years, one that allocates electricity from
<br />lhe giant hydroelectric project to public uti!,
<br />Hies and rural cooperatives at rates far be-
<br />low taday's market prices,
<br />The 214,176 vote against the provision
<br />turned more on regional interests than on
<br />ideology or party affiliation, Even within the
<br />West, whose representatives generally voted
<br />against the provision, the issue produced
<br />sharp splits-for example, pitting a handful!
<br />of San Francisco Bay-area representatives,
<br />wbose districts don't directly benefit from
<br />Hoover-generated power, against represen.
<br />tatives from Los Angeles and most of the
<br />rest of the state,
<br />The provision IS sponsor - Democratic
<br />Rep. Barbara Boxer, a liberal from Marin
<br />County near San Francisco-argued that it's
<br />time to end "50 years of bargain-basement
<br />benefits , , , to the Hoover Club," A Bay-
<br />area ally, California Democratic Rep,
<br />George Miller, appealed for Midwest and
<br />Northeast votes by noting that many indus,
<br />tries have deserted those regions for the
<br />cheap power of the West. I
<br />But opposing the bill was Interior Com,
<br />mittee Chairman Morris Udall (D" Ariz,) , ~,
<br />who pleaded against "regional polarization"
<br />and warned that tbe provision would "de- C
<br />stray" intricate power-sharing arrange- r
<br />ments worked out over decades.
<br />
<br />Since 1937, power from Hoover Dam has
<br />been allocated under a 50'year contract tbat
<br />expires in 1987, California gets roughly 64%
<br />of tbe power, with Arizona and Nevada
<br />equally dividing tbe remaining 36%, In 1979,
<br />tbe Energy Department served notice that it
<br />might cbange the formula after 1987, This
<br />triggered a round of.lawsuits wbicb, in turn,
<br />led to Congressional efforts to resolve the (
<br />dispute. t
<br />
<br />Under the House,approved bill, similar to r
<br />one passed by the Senate last August, publiC v
<br />utilities and cooperatives currently receiv-
<br />ing Hoover power- would continue to have
<br />first claim on it for another 30 years beyond
<br />1987, The existing state shares would also re'
<br />main in effect.
<br />
<br />by an Energy Department regulation limit-
<br />ing such purchases to utilities that own tbeir
<br />own distribution systems.
<br />The bill now goes to a House-Senate con,
<br />ference committee, which will iron out dif-
<br />ferences between the two versions.
<br />
<br />Originally,lbebill would bave autborized
<br />$77 million to increase ge,n,er~~~g c, ~l'foWty
<br />at_tfooyer, and anaacmjQifa[ ^_~~.!!1~n to
<br />build newy_ powe.tJacilities ~_L~X!m.~ q~er
<br />westerri' dams, But Rep, Udall movea to
<br />: drop these provisions from the bill yester-
<br />day in a concession to critics. They want
<br />more study of the issue of whether tOe I e1:l1.
<br />oT tne natIon IS unnecessanlySi:l1iSldizTIlg ,
<br />wesiern~Eowef'.-----'" ~.."" __,~.'~'C,~~"."___"., ","
<br />..' B;r;;;~ il~;i passage, tbe House rejected
<br />an amendment that would bave allowed San
<br />Diego's utility to eventually buy power from
<br />Hoover Dam. That utility has been barred
<br />
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