Price stability

Energy won’t be cheap this year, but the region shouldn’t have to brace for big price jumps to heat, cool and light homes and businesses.

Brian Hirshkorn, senior rate analyst at Avista, said the utility serving Spokane and North Idaho anticipates that declining natural gas prices may ease heating costs later this year and next winter.

The utility buys most of its natural gas well in advance to ensure that customers aren’t exposed to what can be volatile market prices.

The company plans to file an application with regulators in the middle of 2007 for a modest rate increase to recapture money Avista has spent upgrading transmission lines and turbines at two large Clark Fork River dams.

At this point, Hirshkorn said, electric rates should rise less than 10 percent.

With the mountains full of snow, spring and summer runoff should be ample to keep the region’s hydroelectric dams generating plenty of electricity.

The Northwest Power and Conservation Council, a four-state panel that works with government agencies and private utilities to develop long-range power supply plans, said this means low-cost hydropower will be available to displace electricity from higher-cost power plants fired by coal and natural gas.

That’s good news for the entire region, said Tom Karier of Spokane, chairman of the council.

The council said recently that the region is awash is electricity. The surplus is enough to serve two cities the size of Seattle, based in part on new power plants and upgrades occurring at the same time conservation measures are taking hold and many major electricity users such as aluminum smelters are no longer operating.

That should be a long-range relief for customers of regional electric cooperatives such as Inland Power & Light and Kootenai Electric, which have passed through rate hikes to their customers. Both buy electricity from the Bonneville Power Administration, the federal energy marketing agency that sells power from 31 federal dams in the region and one nuclear plant near Richland.

Bonneville raised its rates to cooperatives last year by 30 percent. The cooperatives then handed down the increases to their customers.

Inland opted to stagger its rate increase, passing along a 12 percent rise last April, with plans for a separate 6.5 percent rate rise in April 2007, said Chief Executive Officer Kris Mikkelsen. The Spokane cooperative serves about 35,000 customers, making it the largest electricity cooperative in Washington.

Mikkelsen said Inland’s new five-year contract with Bonneville should now help the cooperative keep rates stable.

Kootenai Electric, which serves about 22,000 customers, bumped its rates about 16 percent last September, according to spokeswoman Erika Neff. In 2007 rates are expected to remain stable.

The financial health of Bonneville has rebounded from the 2000-2001 West Coast power crisis. The agency, headquartered in Portland, Ore., set an earnings record in 2006 with $445 million. By comparison, BPA lost $700 million five years ago.