Legislation threatens Vermillion Light & Power

Legislation threatens Vermillion Light & Power The U.S. House of Representatives July 27 approved a funding bill that could jeopardize the power supply of utilities throughout the region, including Vermillion Light & Power.

The Energy and Water Appropriations bill passed by the House includes no funding for the Western Area Power Administration (WAPA) to purchase power and delivery services from other utilities. WAPA is the federal agency that markets the power produced at hydroelectric projects along the Missouri River. Vermillion Light & Power is one of dozens of municipal utilities and rural electric cooperatives throughout the region that buys power from WAPA to meet much of its local electricity needs.

Because of the varying operations of the river, WAPA at times must purchase power from other utilities to meet its firm power supply contractional obligations during periods of low hydropower generation. Congress annually appropriates money to WAPA to make these purchases, and the WAPA repays the Treasury within the same year from revenues raised from the resale of this power to its customers.

Even though this program pays its way, the Clinton Administration eliminated funding for WAPA power purchases in its fiscal year 2000 budget. This plan failed in the Senate, where South Dakota Democratic Senators Tom Daschle and Tim Johnson and others restored funding for the program.

In the House, Representative John Thune (R-SD) and others requested funding for this program, but the House Appropriations Committee failed to restore the funding. If funding for WAPA's purchase power account is not restored, WAPA will be unable to fulfill its contractual commitments to us come Oct. 1, and Vermillion may have to scramble to secure replacement power supplies and pay higher rates. A conference committee will now consider the legislation.

The House also included in its version a provision that prevents WAPA from providing system maintenance or repairs for other utilities. This provision could threaten system reliability, since small utilities have long depended on WAPA to maintain substations and do other work for which it is inefficient for utilities to maintain a dedicated crew.

Eliminating government waste makes sense. Cutting programs that pay for themselves, promote affordable electric service and maintaining reliability doesn't. Vermillion Light & Power appreciates what our delegation is doing to ensure that the final version of this legislation restores the purchase power funds and eliminates the restriction on WAPA maintenance and repair work.

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