The White House has been studying a proposal that would increase the electricity rates substantially for homeowners who plug into federal hydropower systems. And, like a growing number of proposals that are the slightest controversial, it won't be offered up, if at all, until after the Nov. 2 elections.
Under current law residential customers who receive electricity generated by the Tennessee Valley Authority, the Bonneville Power Administration and four other federal hydropower producers pay rates based on the cost of their power. The administration is considering a plan to charge them "market rates," which would increase the cost by about 25 percent to TVA customers. Nationwide, the change would bring in about $1.2 billion a year in new revenues.
Council of Economic Advisers member William A. Niskanen Jr. told Congress' TVA Caucus Wednesday that a task force he is heading expects to make its recommendations in December. He said the date was chosen partly because of the political sensitivity of the issue, but maintained that the "timing would have been essentially the same whether or not there was an election this fall."
Niskanen said his study is concerned with the "long-term economic efficiency" of marketing federal power. But Rep. Albert Gore Jr. (D-Tenn.), who chairs the caucus, said yesterday, "This is another example of arcane economic theory driving public policy in irrational directions." Asked if Congress would go along with the idea, Gore replied, "I would hope not, but then I didn't think Reaganomics would get though Congress either."