Bpa To Cut Power Rates 13 Percent Inland Customers Will Benefit From Reduction

Rates the Bonneville Power Administration charges its utility customers will drop about 13 percent Oct. 1, likely triggering relief for thousands of residential and business customers of Inland Northwest cooperatives.

Washington Water Power Co. consumers will not be affected.

Bonneville’s reduction, subject to approval by the Federal Energy Regulatory Commission, would remain in effect for five years.

The rollbacks were proposed last July, and have been the subject of intense negotiation since.

“Our goal was to meet the needs of our customers while at the same time fulfilling Bonneville’s financial and legal obligations,” Administrator Randy Hardy said.

Beset by soaring fish-recovery costs and nuclear plant debt, the federal power-marketing agency has not been able to offer its customers in the Northwest such a long period of rate stability since the 1970s.

Ken Husted, Bonneville’s sales manager for a district extending from Central Washington to Western Montana, said prospects for continued improvements are bright.

“We’re really excited about being the low-cost provider after the turn-of-the-century,” he said, when wholesale prices could drop below 2 cents per kilowatt-hour.

The rate set Monday is 2.44 cents, down from the 2.81 cents that has been in effect since last Oct. 1.

Power costs represent about half the expenses of most Bonneville customers, Husted noted, so a 13 percent wholesale reduction could translate to around 6 percent to homeowners and businesses.

But Inland Power & Light Co. General Manager Dick Heitman said his customers may get the benefit not just of the Bonneville cut, but of his cooperative’s cost-cutting efforts as well.

He said Inland has hired a consultant to study its costs and rates. Results are due late this summer.

As part of its plan, Bonneville will eliminate or reduce some of the discounts to some customers. The irrigation discount, for example, will be dropped entirely.

Farmers served by Inland may be spared the full impact of that change, depending on the outcome of negotiations now under way, Heitman said.

Inland buys all its power from Bonneville. Although the changes announced Monday would allow the agency’s customers to buy as much as 12 percent of their power from other suppliers, Heitman said costs associated with such transactions would negate much of the savings.

Although Kootenai Electric Cooperative General Manager Bob Crump welcomed the Bonneville plan, he said “We’re still looking to buy power from non-Bonneville sources.”

Kootenai last fall retained a broker to help locate other suppliers.

Like Inland, Kootenai has an outside firm assessing its cost structure to determine how rates might be reset. Crump noted that a 4 percent hike imposed by Bonneville last fall was not passed along to the cooperative’s members.

Inland serves 28,000 customers, Kootenai 14,000.

There are some losers.

A system that enabled private utilities to share low-cost power from federal hydroelectric projects will be phased out over the next five years.

Benefits to the participating utilities this year reached $190 million. WWP, which has significant hydroelectric operations of its own, was not included in the so-called residential exchanges.

Also, utilities who use Bonneville’s transmission system to deliver power to other utilities will pay more. But the increase was halved from the level first proposed.

Husted said Bonneville’s cutbacks are the result of internal savings, lower debt-service costs, and the capping of direct and indirect fish expenditures at $435 million per year.

About 1,000 employees and contractual workers have been trimmed, most at the agency’s Portland headquarters.

, DataTimes