Lawmakers from both parties had complained that the plan could boost energy prices in the region by as much 20 percent and cost Pacific Northwest rate payers $1.3 billion.
Besides the Portland, Ore.-based BPA, which supplies power to four states in the Pacific Northwest, the plan also would affect three regional agencies that supply power to dozens of states in the South and West: the Colorado-based Western Area Power Administration; Georgia-based Southeastern Power Administration; and Oklahoma-based Southwestern Power Administration.
Sen. Judd Gregg, R-N.H., chairman of the Senate Budget Committee, told his colleagues that the market-rate plan would not be included in a budget resolution to be approved this year, Sens. Larry Craig and Mike Crapo, both R-Idaho, said in a statement.
Calls for reaction were not returned by officials at the White House or the Energy Department.
In its Feb. 7 budget proposal, the Bush administration called for a major change in the way the BPA and other federal power suppliers charge their customers, to rates based on market prices at the time rather than the cost of producing the electricity.
Administration officials said the plan would take away unfair subsidies that have allowed BPA and other federal providers to supply cheap power at artificially low rates.
Energy Department officials cited studies by the Government Accountability Office and the Congressional Budget Office showing that the four federal power agencies were subsidized, mostly in the form of favorable interest rates unavailable to other providers, such as Indian tribes, municipalities and private companies.
The administration plan "levels the playing field" with nonfederal providers that are being undercut by as much as 30 percent, said Bruce Carnes, a top deputy to Energy Secretary Samuel Bodman.
But Northwest lawmakers said the plan could cripple a region still recovering from the West Coast energy crisis and a sluggish economy.
