[Congressional Record Volume 141, Number 72 (Wednesday, May 3, 1995)]
[Senate]
[Page S6129]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       SELLING THE POWER MARKETING ADMINISTRATIONS IS BAD POLICY
  Mr. DASCHLE. Mr. President, the administration's proposal to sell 
three of the Nation's five power marketing administrations includes the 
Western Area Power Administration, which markets power from the main 
stem dams on the Missouri River to South Dakota utilities and 
cooperatives.
  As others have indicated, the sale of the power marketing 
administrations or PMA's would result in an expected one-time savings 
of $3.7 billion. However, basing the decision on that fact alone is a 
case of false economy.
  PMA's return far more money to the Federal Government each year than 
they cost to operate. In 1995, for example, the Western Area Power 
Administration cost $225.1 million to operate, but returned $378.5 
million to the Treasury. Other power marketing administrations showed 
even greater returns. And, beyond that, the sale is likely, ultimately, 
to increase electricity rates for consumers by up to 300 percent in 
some areas.
  This makes no sense.
  Obviously, we need to reduce the budget deficit, and Democrats are 
ready to do that. But we should not do it indiscriminately. Before we 
start cutting Government programs, we have a responsibility to evaluate 
their utility and consider the consequences.
  I am concerned that, in proposing this sale, proponents have fallen 
prey to the allure of short-term savings and missed the larger point 
that power marketing administrations are good examples of exactly how 
Government should work.
  It has been said that the purpose of Government is to do those things 
that are essential but which we cannot do as individuals. That is 
exactly what the power marketing administrations do. They bring 
affordable electricity to communities that otherwise might not be able 
to afford it. And they do it cost-effectively.
  I have heard the claims that the power marketing administrations can 
be sold without causing substantial rate increases. Frankly, I'm 
skeptical of these claims.
  In South Dakota, the Western Area Power Administration, or WAPA, 
markets power from the main stem dams along the Missouri River and has 
for years ensured a consistent and affordable supply of electricity. 
The program pays for itself.
  If WAPA and the other PMA's are sold, rates are likely to increase 
substantially. That is because those with the deepest pockets--those in 
the best position to purchase the assets--will be out-of-State 
financial interests, whose primary objective will be to maximize their 
return on investment.
  Like any business, the buyers of PMA's will want to maximize their 
bottom line--profits. And electric rates for existing Federal power 
customers will rise as a result. Customers in South Dakota and other 
States now served will pay much higher costs for power, with much of 
the money going to out-of-State financial interests who bankroll these 
purchases.
  Farming, ranching, and small businesses dominate the prairie economy, 
providing modest incomes for most South Dakotans. The economic fate of 
our State or any other should not be placed in the hands of those whose 
only interest is in making higher profits.
  As you would expect, the proposal to sell the power marketing 
administrations is unpopular in South Dakota and, I believe, in many 
other States as well.
  I have received more than 10,000 letters from people opposed to the 
sale--and only two letters in favor of it. Ten thousand to two.
  I believe that people generally know what is best for themselves. And 
when they speak this clearly, in such overwhelming numbers, Congress 
ought to listen.
  And let there be no mistake. The sale of the power marketing 
administrations will have a negative effect far beyond the economy of 
South Dakota. PMA's sell power in 34 States across the country. I urge 
every Member of this body to take a long look at the potential impacts 
of this sale on customers in his or her State. Read the fine print in 
this proposal, and I believe you will see the folly in this idea.
  In conclusion, Mr. President, PMA's work. Instead of selling them 
off, we should be holding them up as an example of how the Federal 
Government can work for the people and the national economy.
  PMA's provide affordable power to States like South Dakota without 
any subsidy. The Federal Government gets a return on its investment. 
Customers have access to reliable, affordable electricity.
  What more can one ask of a program?
  Like other States, South Dakota sacrificed great tracts of prime 
wildlife habitat and farmland so that dams could be constructed. 
Selling the PMA's now would deprive us of equitable compensation for 
those sacrifices. Given that, and given the almost certain rate 
increases that would result from the sale, as well as the likelihood of 
out-of-State ownership and, thus, the export of State resources, the 
sale of the PMA's is not a policy that I can support. I urge my 
colleagues to join me in opposing this ill-conceived sale.
  Mr. President, I yield the floor and, as I understand it, we are now 
going into recess.

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