[Congressional Record Volume 141, Number 72 (Wednesday, May 3, 1995)]
[Senate]
[Pages S6026-S6027]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE POWER MARKETING ADMINISTRATIONS

  Mr. BAUCUS. Mr. President, Webster's define a tax as a requirement to 
pay a percentage of income from property or value for support of the 
Government. So we can see that a tax can come in many forms--a direct 
levy, or a hidden fee that sneaks up on the taxpayers under a cover 
name. That is precisely what the Clinton administration and some here 
in Congress have in mind for many Montana and western ratepayers.
  As you may be aware, the administration in their fiscal year 1996 
budget proposes to sell off four Power Marketing Sdministrations: 
Alaska Power, Southeastern Power, Southwestern Power, and the Western 
Area Power Administration, otherwise known as WAPA which brings low-
cost electricity to thousands of eastern Montana families, ranchers, 
farms, and small businesses. They have found enthusiastic allies in the 
new House leadership. And together they say they will privatize these 
electricity providers. They predict a windfall, a one-time profit of 
$3.7 billion. If anyone promises you a free $3.7 billion, we all know 
you had better think carefully. You had better look at it real close. 
There is no exception.
  I submit that privatizing the Power Marketing Administrations is a 
bad idea. It is shortsighted, and it hurts. It does not help. It hurts 
rural America. Privatization cannot work when its result is to simply 
create four huge monopolies which will gouge their capital market like 
any other monopoly.
  So at its core, the proposal to sell off PMA's is no more than back-
door tax repeal. To sell off the PMA's is no more than a back-door tax 
increase on the middle class. A tax hidden in the utility bill is every 
bit as much a tax as a gas tax, an income tax, or anything else. This 
is a tax, a tax increase on rural America.
  The chart, Mr. President, tells it a little bit; $129 is the monthly 
bill of a typical residential customer in this area in Montana. This is 
from Marais. Marais residents will find their bill will increase 45 
percent, which is $190 a month, as opposed to $129.72 every month.
  What does that mean? That means that Montana, like much of the West, 
which is built on hydroelectric power, will find their economies 
declining. By harnessing the Missouri River, Fort Peck Reservoir has 
provided water to small industries which use the affordable power to 
create jobs and build communities, and folks in rural areas get 
affordable power to heat and light their homes, an essential service. 
It is something that works and has worked ever since Franklin Roosevelt 
came out to break ground at the Fort Peck Dam and bring public power to 
rural Montana.
  Public power meant electricity an ordinary farm family could afford. 
It helped create Montana communities like Glasgow, Sidney, Shelby, and 
it keeps towns like these strong and healthy. As my friend Ethel Parker 
at Fort Shaw says,

       I have lived on a farm all my life; started out south of 
     Geyser in central Montana in a semiarid prairie farm. The REA 
     came to us in the early 1940's. Low-cost electricity has made 
     life livable for those of us who raise the food and fiber for 
     all Americans. Now Congress would knock our pins out from 
     under us.

  There are 100,000 Montana families, one in three of all the men, 
women, and children in Montana, that depend on WAPA and share Mrs. 
Parker's feelings, and they stand to see their power bills increased by 
25 cents on the average on the dollar if this proposal goes forward. 
You are talking about real tangible cuts in the living standards for 
towns like Fort Shaw and all over the country, and that is why I am a 
staunch supporter of WAPA and equally against the sale of the PMA's.
  The second point is that WAPA and the other power marketing programs 
take not one tax dollar. In fact, the Federal Government actually makes 
money off of these programs. WAPA is an example. The Federal Government 
has invested a total of $5.6 billion in WAPA, and each year the WAPA 
pays the Federal Government approximately $380 million for this loan, 
with interest, that is starting to be paid back. And so far the Federal 
Treasury has gotten back $4.1 billion on its initial loan. By the time 
this debt is retired in 24 years, the Federal Treasury will have made 
$14 billion on its initial investment of $5.6 billion. Even now, the 
PMA's run a profit for the Government. A recently released CRS report 
on the PMA's found that the Federal Treasury actually earns a profit of 
$244 million a year.
  To repeat, Mr. President, a recently released CRS report on the PMA's 
found that the Federal Treasury actually earns a profit of $244 million 
a year on the PMA's. It is a profit. It does not add to the deficit, 
Mr. President. It decreases the deficit. So you have to look hard and 
you have to look long to find a Federal program that provides a good 
service to the public and makes a profit. WAPA provides a service and 
it makes a profit.
  I find it incredibly shortsighted that the administration would want 
to sell America's infrastructure for a quick, one-time shot at cash--
joined, I might add, by the House leadership. They also want to sell 
WAPA. So what's next--our highways, our bridges, our national parks? 
The principle is the same. America's infrastructure up for sale. That 
is what they want.
  It does not make any sense to me, and I do not intend to stand by and 
let it proceed without a fight. And I serve notice, Mr. President, I 
intend to do everything I can to see that this proposal is defeated. We 
will shut the door on this misguided backdoor tax.
  Mr. President, I yield the floor.
  Mr. WELLSTONE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. I thank the Chair.


                             SALE OF PMA'S

  Mr. WELLSTONE. Mr. President, I shall be brief. I was one of the 
first Senators--and I am glad to be out here with colleagues on both 
sides of the aisle--to oppose the idea of selling the PMA's. I have 
spoken with the President. I have spoken with Alice Rivlin at OMB. I 
have spoken to relevant Budget Committee members and written letters to 
other Senators.
  I basically see it this way. If you sell the PMA's, if the Government 
should sell the PMA's above current value, the only people who would 
want to buy them, some of the private investor-owned utility companies 
would want to buy them in order to raise rates. That is the only way 
they can make up the difference, in which case the ratepayers suffer. 
If you sell the PMA's at below current value, then this is a loss for 
the taxpayers. If you sell the PMA's at exactly the current value, 
insulating both the taxpayer and the ratepayer, then the only thing you 
are doing is privatizing for the sake of privatizing. So this proposal 
makes absolutely no sense.
  Mr. President, I believe in the mission of the PMA's and the 
longstanding contract of the Western Power Administration with 
Minnesotans, and I think to sell these PMA's would be a serious mistake 
for greater Minnesota. 
[[Page S6027]] In western Minnesota, WAPA provides hydroelectric power 
at production costs to rural electric cooperatives, municipal 
utilities, hospitals, school districts, and Federal facilities. Without 
this program, the energy bill for people in greater Minnesota could 
rise as much as $400 a year per customer--could rise as much as $400 
per year per customer.
  In this time of budget cutting, it is important to point out that 
WAPA is not an example of wasteful Government spending. In fact, 
through WAPA we actually pay off a Government loan. And more 
importantly, WAPA is a Government program that recognizes the unique 
needs of rural communities that lack the access to affordable energy 
enjoyed by their metropolitan neighbors.
  Rural Minnesota is willing to do its part as our country works to 
reduce the Federal deficit, including selling wasteful Government 
operations. But eliminating a program that does not cost money and 
actually contributes to the health of the rural economy is an example 
of cutting for cutting's sake. It makes neither economic sense nor 
common sense, and that is why, as a Senator from Minnesota, I put this 
battle at the very top of my list of priorities.
  I yield the floor.
  Mr. DORGAN and Ms. MOSELEY-BRAUN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I have been in the Chamber some while. It 
is my intention to speak for 5 minutes on the PMA matter and then claim 
the additional 3 minutes on the morning business that was reserved.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized 
for 8 minutes.
  The Chair would advise the Senator from Illinois that she does have 
reserved time to speak for up to 10 minutes and prior to taking the 
additional 5 minutes, we would recognize the Senator from North Dakota 
for the remaining 3 minutes and then the Senator from Illinois.
  Mr. DORGAN. Mr. President, I would ask if the allotted time for 
morning business then allows for the full complement of time reserved 
for the Senator from Illinois; is that correct?
  The PRESIDING OFFICER. That is correct.
  Mr. DORGAN. I thank the Chair.


                           SALE OF THE PMA'S

  Mr. DORGAN. Mr. President, I should like to add my voice to the 
thoughts expressed today by the Senator from South Dakota and the 
Senator from Montana and others on the matter of the sale of the Power 
Marketing Administrations, the PMA's.
  This does not mean much to a lot of people because we hear the use of 
acronyms and titles of organizations with which most people are not 
familiar. But the power marketing administrations, along with WAPA, 
which is the PMA that serves our region of the country, provide a very 
important mission and role for our region of the country and help 
provide, for a couple hundred thousand North Dakotans, reasonably low-
cost power that has been a Federal promise to them for a long, long 
while.
  We produce power through hydroelectric facilities that were built in 
conjunction with the construction of dams and reservoirs. Those 
projects have many purposes, including flood control and a range of 
other critical needs.
  Part of the promise in the construction of those dams and the public 
works projects over time was the promise of being able to use the 
electricity from the hydropower generators and distribute it regionally 
at a reasonable cost. That has been of enormous benefit to rural 
consumers in my State, who, without this opportunity, would see their 
electric rates skyrocket.
  The President has proposed selling the PMA's. The leaders of the 
House have proposed selling the PMA's. It does not make any sense, in 
my judgment, to do that. These are investments we have made. Payments 
have been made under these investments, on time and with interest. The 
PMA's are a $21 billion investment. The customers of the electricity, 
the ratepayer in rural America, have repaid $5.1 billion in principle 
and have paid $8.8 billion in interest.
  For those in Washington to force the sale of the PMA's would be kind 
of like a hostile takeover when somebody comes along and says, ``Well, 
it is true, you made your payments. You bought this. Now we are going 
to sell it out from under you.''
  It is not the right thing to do. I do not know why the President 
included it in his budget recommendation. It was, in my judgment, 
foolish to have done so. It does not make good economic sense. I think 
it breaks a Federal promise, and I think it is actually moving in the 
wrong direction. I hope, on a bipartisan basis, that we will find a way 
here in the Senate to put the blocks against these wheels and say, ``No 
more. You are not going to move this forward.''
  If someone happens to think that selling the PMA's is going to reduce 
the Federal budget deficit, they should understand that, according to 
our budget law, you cannot sell assets and claim that you have now 
reduced the budget deficit. It does not do that under our budget rules.
  But, I hope that the Senator from South Dakota, Senator Pressler, 
Senator Baucus, Senator Conrad, Senator Wellstone, myself, and so many 
others who care a great deal about this, will be able to work together 
in a bipartisan way with the President and the leadership in the U.S. 
House, to show that that is an idea whose time has never come and one 
that we must defeat this year.
  The PRESIDING OFFICER (Mr. Santorum). The Senator's time has expired.
  The Senator from Illinois.
  Mr. DORGAN. Mr. President, I ask for the remaining 3 minutes of my 
time under the order. When the Chair indicated that my time had 
expired, I assume the Chair was speaking of the 5 minutes under the PMA 
discussion.
  The PRESIDING OFFICER. The Senator had 3 minutes remaining, and that 
time has expired.
  Mr. DORGAN. When I sought the floor, I sought to use the 5 minutes 
under the PMA discussion that was under a previous unanimous-consent, 
after which I had 3 minutes remaining in morning business.
  The PRESIDING OFFICER. There was time for a list of speakers. My 
understanding is that you have used up all of your time under that 
list.
  Mr. DORGAN. Mr. President, there was how much time reserved for 
Senator Baucus and Senator Pressler to discuss PMA in morning business?
  The PRESIDING OFFICER. Senator Baucus had no time, and spoke under 
the normal 5-minute limit under Senate rules in morning business. 
Senator Pressler had 30 minutes.
  Mr. DORGAN. How much of that time was used?
  The PRESIDING OFFICER. Senator Pressler had 20 minutes remaining.
  Mr. DORGAN. My understanding is that is available in 3-minute 
increments for those of us who wish to speak about PMA's.
  The PRESIDING OFFICER. The Parliamentarian advises me that there was 
no such order that allows that to be done under Senator Pressler's 
time.
  Mr. DORGAN. I disagree with the Parliamentarian.
  Let me ask unanimous consent that I be allowed to speak for 3 
additional minutes as per the previous agreement in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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