Electricity bills for Avista Utilities customers will jump an average of $6.69 a month beginning in June after a federal court wiped out a special cash credit that gave some people in Northwest — including most citydwellers — a break on their power bills.
Though Avista had no hand in this unexpected cost shift, its customers will pay the price along with those of the other six shareholder-owned utilities in the Northwest.
Together they sell power to 60 percent of the region’s population, and are stinging from an announcement by the Bonneville Power Administration that it would suspend payments of $300 million each year that acted as a credit on the bills of their customers.
The money was considered a benefit created by the federal government’s massive dams that generate electricity that is marketed by Bonneville. Since many shareholder-owned utilities such as Avista own and operate their own dams and power plants rather than buy cheap power from Bonneville, the agency awards their customers the cash credit in lieu of subsidized electricity.
It was a good deal for those customers, but resulted in higher bills for members of rural electric cooperatives.
So, while Avista and other companies complain that the U.S. Ninth Circuit Court of Appeals erred when it found that this cash credit program, called the Residential Exchange, didn’t comply with federal law, rural cooperatives are cheering the decision as restoring balance.
“While I have sympathy for the fact that many customers will see their bills go up, the fact of the matter is that the public utilities saw huge price increases,” said Kris Mikkelsen, chief executive officer of Inland Power and Light. “That’s the other side of the story.”
Indeed, Bonneville has raised the cost of power to most electric cooperatives, often serving rural areas, by nearly 50 percent in the past few years. Bonneville didn’t say what effect the decision would have on public utility districts and cooperatives.
Electricity, once the cheap commodity that helped industrialize the Northwest, has become more expensive in the wake of the 2000-2001 electricity crisis.
Larry La Bolle, Avista’s director of federal and regional affairs, said the company and the other shareholder-owned utilites may ask that the entire appeals court reconsider the rulings handed down by three of the judges that heard the case as a special panel representing the whole court.
He said Bonneville and the companies agreed to the cash credit as part of a hard-fought legal settlement.
Having that deal undone by the court was a mistake, he said. He also said Avista and the other companies believe the court misinterpreted the 27-year-old Northwest Power Act.
Avista President Scott Morris called the court ruling “patently unfair to our customers.”
He said the company may work with others to encourage changes in federal law to return the credit.
The decision will not affect the bottom line of the companies, said Avista spokesman Hugh Imhof, since the cash credit program was a business deal between Bonneville and utility customers.
The other companies include Portland General Electric, Pacific Power, Puget Sound Energy, Idaho Power, Rocky Mountain Power, and NorthWestern Energy. Together they serve 3.35 million customers.
The $6.69 per month hit to Avista’s Washington customers pales to the $10.66 per month extra to be paid by customers of Portland General Electric, or the $10.28 per month increase to customers of Puget Sound Energy.
Bonneville spokesman Mike Hansen said the agency also believes the court erred.
He said Bonneville executives are studying the ruling and may appeal. The agency also might ask both the companies and the dozens of public utilities who initially sued to try and reach a regional compromise and avoid renewed legal action.