[Congressional Record Volume 141, Number 135 (Friday, August 11, 1995)]
[Senate]
[Pages S12366-S12367]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


        THE WESTERN AREA POWER ADMINISTRATION SHOULD NOT BE SOLD

  Mr. DASCHLE. Mr. President, the tough part of the budget process is 
about to commence. Up until now, budget balancing has been all talk. 
Now comes the time for action.
  For example, the Senate Energy and House Natural Resources Committees 
have now been presented a budget blueprint and must move to make the 
hard choices that meet their spending targets. Their job is to decide 
what to cut and what to keep.
  There is no disagreement that we need to cut Government spending and 
eliminate the deficit. The real argument is over how to get there.
  Are we going for quick fixes that make the numbers add up, but are 
blind to the underlying policy problems that cause the deficit?
  Will we opt for a politically expedient formula that gets us to the 
bottom line now, and asks questions later?
  Or are we going to consider carefully all the consequences of our 
options before making final decisions?
  Mr. President, today, I would like to highlight one example that 
illustrates the dilemma we face, and demonstrates the need to look a 
little harder at some of the items on the chopping block.
  Earlier this year, President Clinton recommended in his fiscal year 
1996 budget that three Power Marketing Administrations be sold to 
private industry. He projected that this sale would save the Treasury 
over $4 billion.
  A number of Senators representing States served by these PMA's--and 
whose constituents' electric rates would likely rise significantly if 
the sale goes through--protested this proposal vigorously. I am one of 
those Senators.
  We have visited the President to make our case against the PMA sale. 
We have spoken on the Senate floor. And we have lobbied our colleagues 
on the Senate Budget Committee.
  Nonetheless, the Senate and House Budget Committees, eager to cobble 
together a plan that balances the Federal budget within 7 years, 
endorsed the President's idea and incorporated it into the 
congressional budget resolution. Why? Because it made their daunting 
challenge $4 billion easier.
  Where does that leave the opponents of the PMA firesale? It leaves us 
with the task of convincing the members of the Senate Energy Committee 
that the sale does not make sense, and that it does not save money.
  My State of South Dakota is served by the Western Area Power 
Administration [WAPA], which is one of the three power marketing 
administrations the President and the Budget Committees want to sell. 
The budget resolution passed by Congress will ask most South Dakotans 
to pay higher electric rates in order to fund another tax break for the 
wealthiest Americans.
  Meanwhile, the reality is that the sale of WAPA is a bookkeeping 
gimmick that helps make the numbers add up, but unnecessarily hurts 
working families. And it does nothing to address the underlying budget 
problem facing our country.
  The sale of WAPA is bad economic policy. It is not fair to South 
Dakota. And, in the long run, it does not even save any money.
  Let us look at the facts.
  First, WAPA pays its own way. In South Dakota, it guarantees a 
dependable and affordable supply of electricity for nearly half the 
people of my State. It is on solid financial ground, covering its 
operating expenses every year and paying off the original construction 
expense, with interest.
  If other Federal programs were as successful as WAPA, we would not 
have a deficit to deal with. The proposed sale simply would allow the 
Federal Government to collect the construction debt faster. But since 
that debt is now being paid back with interest, the sale will not 
result in any long-term financial benefit to the Government. Long-term 
revenue losses from the sale will offset any short-term revenue gains.
  Second, WAPA is a promise made to the people of South Dakota. Our 
State made a deal with the Federal Government, and WAPA is the 
Government's end of the bargain.
  The State of South Dakota sacrificed prime land to the construction 
of the mainstem dams along the Missouri River to provide critical flood 
control. Every year there is more erosion and more land lost. 
Affordable power is South Dakota's compensation for the loss of the 
land as well as the flood control it provides.
  A deal is a deal, and selling WAPA to private industry, with the 
inevitable rate increases that would follow, would 

[[Page S 12367]]
mean the Federal Government is reneging on its commitment.
  Mr. President, my colleagues and I have been making this case with 
anyone who will listen, and I am pleased that our arguments have not 
fallen entirely on deaf ears. The final version of the fiscal year 1996 
congressional budget resolution concedes that selling WAPA is not 
necessary to meet deficit reduction objectives.
  And our case keeps getting stronger. Since this scheme was first 
proposed, further evidence of its flaws have come to light.
  First there is the issue of river management. This year, South Dakota 
experienced much more rain than normal, causing flooding throughout the 
State and resulting in record levels of water accumulating behind the 
dams on the Missouri River. These high water levels caused considerable 
property damage and threaten to cause additional damage as water is 
released from the dams. Managing the water levels and releases on the 
river is a monumentally difficult and complicated task, where often 
competing economic and environmental issues must be balanced to 
minimize damage to property and land, and to maximize national 
benefits. Selling WAPA would complicate this already contentious 
process by increasing pressure to generate electricity at the expense 
of other objectives, so that the new owners of the system could 
maximize their profits.
  Second, it is my understanding that much of the thousands of miles of 
transmission lines that make up the WAPA system cross private lands. 
The rights-of-way held by the Federal Government for this purpose in 
many cases would revert to the private landowners if the WAPA system is 
sold into private ownership. Therefore, the sale could result in the 
need for the new owners to renegotiate many of the rights-of-way with 
private landowners, some off whom might be reluctant to do so.
  This added complication could diminish the value of the system to 
potential buyers, leading to less revenue than the Federal Government 
expects.
  And third, there is the problem of potential cherry-picking. The WAPA 
system is expansive, covering 14 States, and includes many different 
components. As these components are broken up for sale, what is to 
prevent some buyers from purchasing only the best and most profitable 
parts, leaving behind the older, less valuable parts, and thus 
preventing the Federal Government--and the taxpayers--from getting the 
full value from the system?
  In conclusion, Mr. President, the sale of WAPA is a bad deal for its 
current customers, and it is a bad deal for the American taxpayers. 
Beyond that are some very real practical problems with the execution of 
the sale of WAPA. These issues alone should be enough to sink the deal.
  No one will win if WAPA is sold, except perhaps a few select private 
interests who could exploit first the Federal Government, and later 
their customers to maximize profit.
  Since I have been in Congress, I have seen a lot of proposals that 
did not make sense for South Dakota. Selling WAPA is one of the worst. 
I urge my colleagues to join with me in this battle and do the right 
thing by the energy consumers of South Dakota and other Western States, 
and the right thing for the taxpayers of the Nation.


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