Otter Tail Pushes PMA Privatization Pilo

Otter Tail Power Co. (OTP) has asked to manage the operations and marketing activities of the Billings Marketing Area of the Western Area Power Administration's (WAPA) Eastern Pick-Sloan system (a multistate region). According to OTP president John MacFarlane, the proposal aims to smooth the transition to privatization. Although he believes selling the power marketing administrations (PMAs) is the best way to get the government out of the electricity business and create a level playing field, MacFarlane recognizes the concerns of the rural electric co-ops and municipals served by WAPA: "Our proposal is a pilot project that would determine whether the concerns of those opposed to the sale are justified. It would bring hydro prices to market rates and, perhaps more important, establish the ground rules for private ownership of the other PMAs." Studies conducted by OTP conclude that 90 percent of WAPA's customers would

experience rate increases of less than 5 percent;

8 percent, increases of 5 to 10 percent; and only

2 percent, increases of 10 percent or more. t

Lori A. Burkhart is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.