BPA reaches deal on regional rate hike

PORTLAND – The Bonneville Power Administration has reached an agreement on Northwest power rates it hopes will end years of dispute over the way consumers share the benefits of low-cost hydroelectricity from the Columbia River system.

The agreement affects the federal power marketing agency’s residential exchange program, established in 1981 to provide customers of private utilities such as Portland General Electric, PacifiCorp and Puget Sound Energy with a share of the electricity sold mostly to consumer-owned public utilities around the region, The Oregonian reported.

The agreement includes all the investor-owned utilities in the region, their state regulators, ratepayer advocates for public and private utilities, and the consumer-owned utilities representing 88 percent of BPA’s public utility demand.

BPA Administrator Steve Wright praised regional utility leaders and others who set aside long-standing litigation and its uncertain effect on power rates to support the settlement.

“Northwest citizens are far better off as a result of the time and patience the parties invested in the negotiations,” Wright said.

The BPA also announced plans to raise wholesale power rates for its consumer-owned utility customers by 7.8 percent in October, a bit less than the increase the agency was talking about a month ago, and far less than the 12 percent to 20 percent range that was discussed last year.

“A 7.8 percent rate increase is still a big, painful increase, but it’s better than what Bonneville was suggesting initially,” said Kevin O’Meara, deputy director of the Public Power Council, an advocacy group for publicly owned utilities.

The BPA said the rate hike was needed to help cover the costs of fixing aging dams, fuel purchases and repairs at the Columbia Generating Station nuclear plant, and fish and wildlife conservation.

A higher rate increase was avoided by the settlement agreement and by borrowing more from the U.S. Treasury, adopting a mechanism that will adjust rates when financial reserves become depleted.

The BPA also said it will reduce the rate it charges for integrating wind power with its transmission grid by 4.7 percent. The integration cost has been a hot-button issue, and the agency said those costs are increasing.

The agency said the rate reduction is possible because of some additional geographic diversity of the wind projects on its system and changes to the calculation of necessary reserves.

In addition to marketing power from 31 dams and a nuclear plant, Bonneville operates three-quarters of high-voltage transmission lines in the Northwest and funds wildlife protection and restoration programs.