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NW Fishletter #315, March 29, 2013

[7] The Wright Stuff: An Exit Interview With BPA's Steve Wright

In public speeches during the closing weeks of his tenure as BPA Administrator, Steve Wright repeatedly warned that his biggest concern was not the agency's Oversupply policy, salmon or FERC, but an email someone sent him last June. It reported that during a recent meeting, "folks didn't bring their policy people but their lawyers."

"It should be obvious by now," Wright explained in a wide-ranging, two-hour interview ten days before he left office, "I love my attorneys; couldn't live without them. But I don't think using attorneys is the right way to solve problems."

Parties say they can't risk discussing something because they're petitioning FERC or the courts and believe something they say could be used against them, he explains. "That's completely different from the way the system's been managed for 75 years." Referring problems to FERC or other third parties as a first resort "is culturally different than the way we've operated."

That also goes for Congress. Wright, who's been in over a thousand meetings with members of Congress in the last ten years alone, said it's hard for members or their senior staff to devote the time needed to solve BPA's characteristically complex problems. The onus "falls to us who are engaged in them."

"It's easy to drift" into litigation, Wright added. "Lawyers will say you must protect your interests. But it's more than that. It fundamentally alters the course of discussion. Nonetheless, "the crescendo of litigation" continues.

It's true Wright's 12 years as administrator were marked by an increase in BPA litigation, but the trend began before he took over. Not counting bankruptcies, 265 federal petitions were filed against BPA over the past 12 years, compared to 184 in the dozen years before that and 68 between 1977 and 1989.

A significant percent of the filings were over REP-related disputes [Residential Exchange Program] that have simmered hot and cold since the REP's creation over 30 years ago. Wright doesn't take credit for the 2011 REP settlement, but believes BPA "laid the foundation. At the end of the day, the key to that settlement was the publics' and privates' decision that they wanted it. For much of that conversation, we were out of the room."

But parties saw how BPA struggled with REP issues in its rate cases. The REP was built around how the power system worked in 1979, he noted. A lot has changed. "There was no clearly right or wrong answer." He concluded "settlement would be better than arguing about endless esoteric minutia" and said as much in his introduction to the 2009 rate case ROD.

Another chunk of litigation related to biological opinions on salmon. In 2008, six tribes and three states responsible for much of it agreed, in exchange for a billion dollars in salmon recovery measures, to cease further filings for 10 years. Wright said the key to the Accords was the people involved.

Ron Suppah, chair of the Confederated Tribes of the Warm Springs, "made a commitment to try to make this work," as did Ralph Sampson, Yakama tribal chairman and John Ogan, the Warm Springs' attorney.

Wright recalled in particular a meeting in about 2006 during which Tim Weaver, a non-native Yakama tribal attorney, decided in favor of what later became the Accords "after years of fighting" with BPA.

"I started the meeting saying 'Look, we get it, you won the litigation. We're trying to figure out how to solve this and to have the most candid conversation we can about what you want.' Weaver replied, 'This is the conversation we have always wanted to have. Litigation is not our preferred route. We want to do something for fish and if you are serious about that, we are ready to try to work this out.'"

Shortly before he died in 2010, Weaver told The Oregonian, "I've had a lot of fun beating up the BPA in the Ninth Circuit. And I softened them up enough that they wanted to take a seat at the table."

So, while it may seem litigation was a necessary condition to settlement, Wright says it was not. The key was "we finally figured out how to have a real discussion that led to a trusting relationship. Once you have trust, you can get a lot done. We should have tried that earlier."

So why didn't he? "It's not all that easy when you have the trappings of the office to walk in and expose yourself in that way. There were times when we had meetings with tribes that were very unfriendly, and I think both of us walked out pretty steamed. If you walk in a bit guarded, that is what you get back. It's when you let down some defenses and don't worry, 'Can this be used against me in the next meeting?' . . . For me that was the moment."

But he acknowledged the conversation wouldn't have occurred without the adverse ruling, or at least, "it would have taken more time on my part." A party may believe "my decision is so solid and theirs so ridiculous" that the dispute is allowed to go on. The lesson, he said, is: "Why wait? Is there another way to solve this and get us out of the courtroom?"

As for what happens after the 10-year Accords terminate, that goes on the list of unfinished business for the new administrator--a list that new Administrator Bill Drummond, during comments at his swearing in, said got longer with every farewell speech Wright gave.

Wright said it's not too early to think about what happens post-2018 and believes that the National Oceanic and Atmospheric Administration's effort to begin conversations about a recovery plan that considers all human sources of mortality is ripe. "That will be a difficult and extended conservation," but he would not concede it is bound to result in added BPA's costs, because the capital investments already made at the dams will continue to add value after 2018.

Wright also addressed BPA's relationship with FERC and the Department of Energy. Asked about FERC, he said "Sometimes folks in the rest of the country don't like it when we say we are different," but in fact, the Northwest electric system does operate differently than the rest of the county. As with other issues, the key is to not wind up before FERC in the first place.

With respect to DOE, Wright said BPA employees are civil servants who work for the president. When the president is interested in electricity, as now, the administrator's job is to translate that interest within the context of BPA's statutes and customer impacts. "Go back to the Chu memo," he said. BPA already knew where the administration was going and had been operating responsively.

"Surprisingly enough," Wright says, the Oversupply ROD was the hardest decision of his tenure. "There just wasn't a clear good answer to that one." If BPA agreed to negative prices, its market exposure was unlimited. But curtailing, especially wind, also had "a bunch of problems. It was a difficult set of bad choices. We turned it over and over and over internally.

"I will admit to one mistake," in that he got internal warnings that Oversupply could be a problem but "didn't pay enough attention to it." Having a surplus of emission-free power just did not seem like a problem. But it was, one that remains unsolved, though "tremendous progress has been made" as FERC seems willing to support an oversupply protocol limiting BPA's price exposure.

He couldn't come up with a "second hardest" decision, but said "managing for excellence" was the hardest part of the job. His skills and "natural bent" are policy, not "operational excellence. I don't naturally think about moving people in the organization around. To balance my weaknesses," he turned to Steve Hickok, Ruth Bennett and Anita Decker, who all served as chief operating officer during his tenure.

Wright said he had to learn the importance of what a leader pays attention to. "When the CEO pays attention to something, the organization will also." It means picking out and tracking the big projects, setting milestones and expectations, and getting in front when projects head off course. It means knowing when to ask questions or intervene. "It sounds simple, but really is not. It takes a lot of learning. I got better at that through time."

He also did say he wishes he'd spent more time "getting out and talking to employees."

Overall, "I don't think I got it right every time. I made mistakes along way."

As for certain controversial decisions, "we did everything we could to get a regional solution, but there were times when we ran out of time." Oversupply was one, he said. Water was coming down the hill and a decision had to be made. Nor did the REP settlement "resolve all the issues." But in both cases, BPA helped "set a course to solve them in time."

Wright has no serious concerns about the Regional Dialogue contracts themselves. "We can't know how markets will evolve over time."

Sometimes, the contracts will look quite valuable and at others, less advantageous. That's why there are no exit clauses.

"The bargain was you are going to get access to a cost-based product through the term of the agreements based on the [operations] of the [Federal Columbia River Power System], and you don't know what that cost or rate will be," he said. "You can't be entirely certain they will at all times be below market, but, boy, we know the cost of new resources. The long-term marginal cost is always going to be high. And what the federal government got was a very high probability that its costs will be covered, but it gave up the right to charge market-based rates."

Wright elaborated on what he said was treasured political advice from former Sen. Slade Gorton. "In the world of public service, you are trying to meet the public interest. Some people will say, sixty percent of people support this, so it is clearly in the public interest. But it is not just the total number of people that matters. It's the intensity of emotion that is important too."

Someone may have an opinion on river flows, but that's not the same as someone who lives on the river and is directly affected by it, he said. "The intensity of emotion is not the same as people whose community or livelihoods are at stake."

Challenged, Wright emphasized that "intensity" is not the same as being loud or "making noise. A better way of saying it is 'impact;' it's the level of impact on peoples' lives. You can tell the real from the not-so-real, by how people talk to you about something."

"Politics are part of the situation, but folks who think [the job] is all about politics are wrong." Wright said about 20 percent of the job is political, but put the estimate in a broader context. There are five things the administrator pays attention to, all equally weighted: 1) good business decisions; 2) good environmental decisions; 3) staying within statutory authority; 4) reflecting the public interest (the political part); and 5) impact on the BPA work force and work place.

"A good decision balances those things in equal proportions." Some decisions may have no impact on the work place, while every decision may impact the economy. "I know I need to consider impacts on business, especially regarding rates and the ability to finance, and yet, when you're a public sector organization, that is not what it's all about. You have these other factors."

Wright said he'll always be grateful to have had "a job that has as much importance to real people as this one. Doing something meaningful and important. That is the motivation for me rather than money or other things that come along with it. This has been beyond my wildest expectations of what I could have done with my life. I walk out feeling very comfortable with the choices I made in terms of trade-offs, and feeling like I have been lucky to do it." -Ben Tansey

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