Trump Is No FDR: Public Electricity Proves it

Bryce Oates

Trump is no FDR, no matter what he claims. To see why, we need look no further than his efforts to dismantle one of FDR’s greatest achievements: public investment in electric power.

I live in the Pacific Northwest, where the Bonneville Power Administration (BPA) sells electricity from 31 federally owned hydroelectric dams along the Columbia River Basin. This publicly-owned utility also operates three-quarters of the Northwest’s high-voltage transmission lines.

Thanks to the BPA, electric rates for Northwest families and entrepreneurs are more affordable than in many other parts of the country. And like many of the New Deal’s public-sector programs –  which successfully lifted this country out of the Great Depression, and still meet the needs of millions of Americans – the BPA is now under attack by the Trump administration.

The Trump budget specifically singles out the BPA for sale and privatization, reasoning that “Ownership of transmission assets is best carried out by the private sector where there are appropriate market and regulatory incentives.”

Selling off the BPA, the budget says, “would encourage a more efficient allocation of economic resources and mitigate risk to taxpayers.”

The New Deal’s Legacy

The BPA owes its existence to Roosevelt’s commitment to federal investment in publicly owned electric infrastructure, one of the New Deal’s most popular programs. This program contained two key elements that directly improve the lives of rural communities:

Rural Electrification

The Rural Electrification Act created a system of low-cost loans that allowed farmers and rural communities to develop member-owned rural electric cooperatives that would build transmission infrastructure. This was necessary because private energy companies were failing to meet the needs of the more geographically dispersed rural populations.

Generating Additional Supply with Publicly Owned Hydropower

In order to generate additional electricity supply, as well as for “development” of water resources, the Roosevelt Administration facilitated building a network of hydro-driven turbines and dams on many rivers. The dams and generating capacity were also tied to a series of publicly-owned electric delivery lines. This system of electricity production and distribution, known as the Power Marketing Administrations, remains in operation today generating approximately 7 percent of U. S. energy supplies.

Keeping the Power On

With respect to the BPA, a bipartisan coalition of Senators is speaking out against the proposed selloff of the publicly owned Power Marketing Administrations. My Representative in the House, Derek Kilmer (D-WA), also understands that privatizing the BPA is a bad idea, as he wrote in an email to constituents.

For decades, the Bonneville Power Administration has provided affordable and reliable power to over 12 million people and businesses. As a guy who worked professionally in economic development, I’ve seen firsthand what that’s meant to the effort to grow jobs in our region. Dismantling the BPA as the Trump administration has proposed would hike up electric bills for homeowners and local employers, and would hurt jobs in the Northwest. That’s why Democrats and Republicans have said that we intend to work for a smarter budget that isn’t built on the backs of local ratepayers.

Trump’s proposed sell off of the BPA contains some very specific, and odd, numbers. Ted Sickinger, of the Oregonian, reports that the Trump budget undervalues the BPA assets compared with industry experts by a huge number: a sale price of $4.9 billion compared with a value of $15.2 billion on the BPA balance sheet.

Energy economist Robert McCullough of Portland told Sickinger the BPA valuation in the Trump budget is “an unheard of low price” and asked the question:

“Why would they discount it below minimum market price out of the chute?” he asked. “Has the negotiation already happened? If it was any other president I wouldn’t fall into this conspiracy, but given what we’ve seen in the first 100 days, I’m far less trusting in common sense than I was when I started.”

Trump’s Budget

In looking for answers to these valid questions, it’s instructive to dig into the details of the budget proposals to understand where the President and his team are headed. it’s also important to remember that President Trump outsourced his budget to right-wing “experts” that stand behind the principles of privatizing public resources to further bolster the super-rich.

The Republican-allied Cato Institute and Heritage Foundation have long called for privatizing the BPA and other public resources. The Republican Study Committee also lists BPA privatization as one of its key proposals. Given these advisors, selling off the BPA for a fraction of its value is a predictable outcome.

It’s not that the BPA and other public energy developments are perfect. Damming rivers is an environmental mess with serious impacts to fish and riparian ecology. Siting and accessibility of resources has been an historical challenge. The BPA has had an often-contentious relationship with our region’s Native American tribes. Still, despite these challenges, the BPA and other public sector infrastructure projects have successfully met the needs of many Americans.

Learning from Our Grandparents

I grew up in an agricultural family in West Missouri in the 1980s. We farmed and worked in a small-town butcher shop that my grandparents owned. My grandparents had direct interactions with “the government,” as we described it, who operated daily meat inspections. While normally not a problem, the sometimes inconsistent and arbitrary manner in which the regulations were applied was a consistent thorn in my Grandpa’s side.

As this was the 1980s, Grandpa and his sons were solid Reagan Republicans, in the small-business mode.

That said, nearly all of the members of my grandparents’ generation spoke with deep reverence about the Democrats of old. West Missouri is Harry Truman country, after all, and the memory of the New Deal and President Roosevelt’s track record for supporting rural communities was still alive and well.

As we move forward with developing the next generation of energy assets, hopefully from wind and solar production feeding an updated energy transmission system, we’ll learn from our grandparents.

We’ll embrace public infrastructure so that affordable, clean energy becomes a reality. And we’ll reject the Trump administration’s pro-privatization agenda that sells off public resources for a pittance.

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