Bpa Trims Rate Hike From 5 To 4 Percent But Some Northwest Utilities Remain Unhappy With Increase

Facing pressure from its customers and increased competition, the Bonneville Power Administration has reduced its new rate increase to 4 percent.

Most utilities signed a stipulation last week agreeing to the new rate proposal, which is to take effect in October and continue through September 1996, when the BPA plans to unveil a new rate structure.

But several utilities, including Clark Public Utilities of Vancouver, Wash., refused to sign.

“If they had said, ‘We need a rate increase because of this and this and this,’ that would have been one thing, but they basically said, ‘We’re going to raise it 4 percent and that’s that,”’ Clark spokesman Mick Shutt said. “That isn’t acceptable. Our customers expect more from us and we expect more from Bonneville.”

Clark’s stand was largely on principle. The utility still will have to pay the higher rate.

Jerry Leone, manager of the Public Power Council, said the BPA is buying time while it cuts costs and tries to come up with a rate structure that will keep it competitive.

The 1996 rate case “is probably going to be a highly contested rate case that will have all the trappings of the early 1980s rate cases,” Leone said. “In other words, every rate issue is a hot one.”

The Public Power Council, which represents nearly 100 publicly or consumer-owned utilities, signed the BPA’s stipulation.

The BPA, which markets power produced at Columbia and Snake river dams, had proposed a 5 percent hike but reduced the figure in negotiations with utilities.

“We wanted to be flexible,” BPA spokesman Perry Gruber said. “If we didn’t do that, we may have lost some of our customers.”

How much of the rate hike will be passed on to residential or commercial customers will vary, but historically it has been about half of the BPA hike, Gruber said.

The agency said it was able to hold down the interim rate hike because of budget cuts and the Clinton administration’s recent decision to take on most of the costs of new salmon recovery efforts.