Washington Water Power Co. Monday asked Washington and Idaho regulators for permission to open its transmission grid to large customers looking for a better deal on electricity.
The precedent-setting move anticipates what many say is the future of the energy business - wide open buying and selling between utilities, independent generators and power brokers on one hand and industrial, commercial and even residential customers on the other.
Just last week, WWP announced it would form a new subsidiary to pursue opportunities for power services all over the United States.
Tom Dukich, the Spokane-based utility’s manager for rates and tariffs, said by giving customers the freedom to buy power as they see fit, WWP will gain valuable information on the energy market.
“WWP embraces greater customer choice in the utility industry because we believe it ultimately will benefit all our customers by lowering energy prices and enhancing services,” he said.
The Direct Access and Delivery Service tariff would allow WWP’s 30 largest customers to buy up to one-third of their power from another supplier.
The tariff would establish rates for use of WWP’s transmission lines to deliver that power to a customer’s plant.
Neither Washington nor Idaho have such a tariff today, so customers are captive to the utility serving their area.
“This is the first time an investor-owned utility in Washington has proposed open access to power,” said Marilyn Meehan, spokeswoman for the Washington Utilities and Transportation Commission.
She said the commission favors competition, but would want assurances from WWP that as promised - the freedom given large customers to choose suppliers would not increase rates to residential and other small customers who have no options.
“That is something we have to make certain of,” Meehan said.
Dukich said the 30 big customers - Potlatch Corp. is among the largest - use an average of 112 megawatts, about 15 percent of WWP’s total load.
They would pay WWP 1.6 cents in Washington, 1.4 cents in Idaho, for transmission and other services required to deliver power purchased from another vendor.
The tariffs, if approved, would remain in effect from Sept. 1 to Aug. 31, 1998. Customers would have to agree to participate for at least three months.
At the end of the trial period, the utility would prepare a report on the results of the experiment and possible next steps.
One potential alternative supplier, Pan Energy Power Services Inc., welcomed the WWP filing.
Steve Kern, director of the company’s power services unit in Spokane, said WWP has already proven its willingness to compete by opening its natural gas distribution system to its industrial customers.
“This is a very similar model,” he said.
Kern said large electricity customers served by public utility districts and cooperatives have been able to shop for power for some time, giving them an advantage on companies unable to reach other sources.
He estimated some WWP customers might save 10 percent on their electricity bills, although the proposed transmission tariff is high by comparison with some others.
Dukich said WWP does not know how much its customers might save. But to get an honest reading on the market, he said, the utility will not try to retain customer load by bidding against alternative suppliers.
“It will cost us money,” he said, although power not sold to the major customers can be marketed elsewhere.