BPA rate plan to get comments

Representatives from the Bonneville Power Administration will be in Spokane tonight to listen to public comments about its plan to market power from the federal Columbia River Power System in the future.

Among those planning to speak are officials from local utilities that buy power from the BPA, conservation groups that want the agency to promote renewable energy resources and representatives from labor unions and energy assistance programs.

Most of the BPA’s power rates expire at the end of 2006, but many of the agency’s contracts continue through 2011. The agency has said that its first priority is to address the rate structure for its customers from 2007 to 2011. The BPA also is proposing a schedule to set rates for the period following 2011.

Central to the agency’s proposal is its plan to limit its future power sales to what the federal hydroelectric system produces. During the energy crisis of 2000 and 2001, the BPA committed to selling more power than the federal system produced and had to buy it in a market where prices were skyrocketing. Solving that deficit, the BPA said in its proposal, caused a 50 percent increase in the agency’s wholesale power rates.

The agency will accept public comment on its proposal until Sept. 22.

Many local utilities, including Inland Power and Light, Vera Water and Power, Modern Electric Water Co. and the city of Cheney, buy some or all of their power from the BPA. Avista Utilities generates its own power, buying less than 5 percent from the BPA.

Kris Mikkelsen is CEO of Inland and president of an organization of Northwest utilities that buy power from the BPA. Inland has enjoyed some of the lowest power rates in the country because of rates it locked in with the BPA in the late 1990s. Mikkelsen said the BPA’s proposal will cause Inland’s rates to rise substantially in 2007.

Despite that, she supports the proposal because she said the plan to limit power sales will bring a degree of stability to the agency. However, Mikkelsen said, right now, power resources approximately match demand in the region. As demand grows over time, she said, two big questions emerge. First, who is going to build additional resources to generate power? And second, how will the resources of the federal system be divided up?

The bottom line, she said, is: “How much are we going to get and what’s it going to cost?”

Conservation groups and others would like to see the BPA promote meeting that additional demand with energy efficiency and development of renewable resources, such as wind power.

The BPA plan pledges $21 million yearly to support new renewable energy projects, but doesn’t make it clear how that money will be spent, said Marc Krasnowsky, communications director for the NW Energy Coalition in Seattle. The Coalition is concerned that the BPA will leave it up to individual utilities to determine how to meet future demand, instead of taking the lead and promoting renewable resources, Krasnowsky said.

“More than 100 different utilities going their own way can lead to a crisis of overdevelopment of resources or underdevelopment of resources,” Krasnowsky said. “There are no assurances that the utilities will … look first at efficiencies and renewables rather than fossil fuels.”

A Coalition-sponsored study determined that 2,800 average megawatts — enough to power three cities the size of Seattle — could be conserved through energy efficiency programs. The study also identified the regionwide potential to develop 10,000 average megawatts of renewable energy, most of it wind power, at less than the price of power from natural gas-power plants.

The Spokane public meeting will be held from 6 to 8 p.m. tonight at the Airport Ramada Inn, 8909 Airport Rd. Registration for those who wish to speak begins at 5:30 p.m. More information about the BPA proposal can be viewed online at: www.bpa.gov/power/pl/RegionalDialogue/index.shtml.