The Power Marketing Administrations (PMAs) are federal agencies housed within the U.S. Department of Energy that have responsibility for marketing electric power primarily from multiple-purpose water projects operated by the Bureau of Reclamation and the Corps of Engineers.

The four federal PMAs – Bonneville Power Administration (BPA), Southeastern Power Administration (SEPA), Southwestern Power Administration (SWPA), and the Western Area Power Administration (WAPA) - are important sources of power for electric cooperatives in 34 states. NRECA supports maintaining federal ownership of the Power Marketing Administrations, the “preference” clause and cost-based rates for PMA power -- cornerstones that keep electric rates for rural Americans affordable.

The PMAs hydropower projects provide very real, local economic development benefits. At the early stages of the hydropower program, electric cooperatives entered a partnership with the federal government. Despite the economic burden, cooperatives agreed to pay what were then significantly higher costs, in exchange for a guarantee of continued long-term access to this power. The federal power gave electric cooperatives independence from investor-owned utilities, which at the time, controlled much of the nation’s power supply.

Over the years, there have been attempts to sell the PMAs or shift them to a “market-based” rate from the cost-based rate structure. The effect of a shift to market-based rates would have been a $12 billion dollar tax increase on PMA consumers. These efforts have not succeeded.

De-bunking PMA Myths

A common misconception of the federal power program is that the PMAs are taxpayer subsidized. The fact is that the costs of the federal hydro system are recovered through the PMAs’ rates – in full with interest.

Selling power at cost-based rates is not a subsidy. For nearly a century, policy makers as far back as President Theodore Roosevelt have held that the nation’s water resources belong to the people, and that the government should not profit from the resources owned by the people.

To learn more about NRECA’s position affecting Hydro/PMAs, please select the links below.

News:

• Investing in Hydropower can Help Fill the Looming Gap between Energy Demand and Supply
  June 12, 2008 – Testifying before the House Natural Resources Committee Subcommittee on Water and Power NRECA CEO Glenn English called on Congress to shore up the nation’s investment in renewable hydropower. more >>

Documents:

•  Keep Hydropower Flowing into Rural America
  The Power Marketing Administrations (PMAs) are federal agencies housed within the U.S. Department of Energy that have responsibility for marketing electric power primarily from multiple-purpose water projects operated by the Bureau of Reclamation and the Corps of Engineers.
  Type: Fast Fact  Date: 2008-01-24  Size: 99KB