Bonneville to reduce wholesale electricity rates

PORTLAND — The Bonneville Power Administration said Wednesday it plans to cut wholesale electricity rates between 5 percent and 7.5 percent during its next fiscal year, beginning Oct. 1.

BPA chief Steve Wright warned, however, that rates could be either higher or lower the following year, depending on water and market conditions in 2006.

“We continue to live in a very volatile world. In keeping our rates as low as possible now, our future rates will need to be flexible to respond to changing circumstances,” Wright said.

Bonneville had predicted it would reduce rates after it reached agreement in June with investor-owned utilities, including Avista Corp., PacifiCorp and Puget Sound Energy, to settle energy contract disputes and allow the BPA to trim costs by $200 million for the 2005-06 federal fiscal years.

“It was certainly a move in the right direction,” said Kevin Wells, general manager of Vera Water and Power, which serves about 9,000 customers in Spokane Valley. Wells said the wholesale rate decrease would translate to a $2-$4 monthly savings for his average power customer. “We’ve long thought they could reduce their rates if they really wanted to.”

Local utilities that buy power from Bonneville include Inland Power and Light, Vera, Modern Electric Water Co. and the city of Cheney. However, several of them, including Inland and Modern, signed contracts locking a rate and exempting them from rate fluctuations until 2007.

The reduction will not significantly affect rates at Avista Utilities, which buys less than 5 percent of its power from Bonneville.

The proposed rates are open to public comment until Aug. 27 with a final decision expected in September.