Idaho Firms Delay Wwp Rate Plan Measure Recommended For Approval In Washington

A proposed Washington Water Power Co. test of new rates for its largest customers has drawn a passing grade in Washington, an incomplete in Idaho.

The staff of the Washington Utilities and Transportation Commission Monday recommended the plan be approved.

But in Idaho, questions raised by Potlatch Corp. and Idaho Power Co. may delay implementation until hearings can be held.

The Spokane utility last month unveiled a plan that would allow 30 big industrial and commercial customers to buy up to 30 percent of their electricity on the open market.

The proposal, WWP officials said, would allow the company, its customers and potential alternative power suppliers like brokers or other utilities to get a feel for how a deregulated energy market might work.

The experiment would last two years.

The Washington commission could approve the plan as early as Wednesday. If so, customers could begin taking power from other suppliers Sept. 1.

Although WWP says no other customers will be hurt by the plan, the Bellingham-based Energy Project suggested that, long-term, the focus by all utilities on cutting rates to their biggest customers will eventually mean higher costs for other rate-payers.

“There is likely to be some significant cost-shifting,” said spokesman Chuck Eberdt.

The project is part of a coalition of community groups and the Washington Department of Commerce, Trade, and Economic Development.

He said a more worthwhile experiment might examine ways of lumping enough residential customers together to create the economies of scale that would lower their rates.

“If we’re going to experiment, let’s experiment with something that’s hard to do,” Eberdt said.

Commission rate research specialist Jim Miernyk said taxes are another potential problem. Because Washington law imposes electricity taxes on utilities, but not non-utility suppliers, the state and municipal governments could lose as much as $200,000 in annual taxes and fees if WWP customers took the maximum amount of energy off the company’s system.

WWP rates manager Tom Dukich said the same problem arose when natural gas was deregulated. The Legislature solved it by creating an energy use tax that applied to all natural gas suppliers, he said.

He said that when WWP is not involved in a transaction, it would be up to the buyer or seller to collect whatever taxes apply.

Dukich said issues raised by Potlatch and Idaho Power could take four months to resolve.

Potlatch has asked the commission to look at the way WWP determined how much it will charge to deliver power from other sources to its customers.

Dukich said the utility is not prepared to take on that complex a task. The experiment was designed to be limited and workable for the short term, he said.

“Just about everyone is protected,” Dukich said, adding that the alternative vendors have accepted the proposed ground rules.

But Jerry Myers, Potlatch manager for corporate energy services, said WWP has set the price of its delivery services so high switching to a third-party electricity supplier may not make sense.

Power, he said, is the last product industry buys from regulated suppliers. “We think it’s kind of a monumental jumping-off point for the industry.

“The jury’s still out on what the benefits will be.”

Idaho Power raised a series of legal questions the company would like resolved before the WWP plan goes into effect, attorney Larry Ripley said.

, DataTimes