From staff and wire reports
The Bonneville Power Administration will cut its contract power rates by an average of 2.5% for the electricity produced from federal dams in the Columbia River basin and a nuclear power plant near Richland.
The rate cut for Northwest public utilities, which takes effect Oct. 1 and extends until the fall of 2023, is the first in more than a decade.
It comes at a time when the agency has been under pressure from officials of regional utilities to improve cost controls after a series of rate increases over the past two decades.
“We heard that message from our customers loud and clear, and are doing our level best to cut costs and pass the benefits on,” said Doug Johnson, a BPA spokesperson.
The Bonneville Power Administration is a federal agency that markets the power generated by 31 hydroelectric projects along the Columbia River and its tributaries, which comprise the Federal Columbia River Power System. The largest is Grand Coulee Dam.
The agency also operates about three-quarters of the high-voltage transmission lines that distribute power across its broad service area, which includes Washington state.
In addition to hydroelectric projects, BPA also markets power from a nonfederal nuclear power plant.
Inland Power and Light Co., a cooperative that purchases power from Bonneville Power Administration, serves 12 counties in Eastern Washington and North Idaho.
However, Avista Utilities does not have a long-term contract with the BPA, Avista spokeswoman Annie Gannon said, although the utility had, for many years, received power from the BPA.
“This contract has recently expired,” Gannon wrote in an email. “Avista also purchases transmission rights from BPA to facilitate the delivery of energy to customers from owned or contracted for generators, or energy purchased from the market.”
Johnson, the BPA spokesman, cited two important things that made the rate cuts possible – reducing some expenses and better than expected revenues from surplus sales to Northwest and other western utilities during the past two years.
The rate cut also resulted from a change in plans in how the BPA would deal with debt, according to Scott Simms of the Public Power Council, an association which represents more than 100 utilities in the Pacific Northwest.
BPA had initially proposed to use $95 million a year in projected power revenues to pay off additional debt.
But BPA eventually accepted a proposal by public power utilities to pay off no more than $40 million a year – a savings of $110 million over the two-year period
“This balancing effort allows BPA to retire debt while returning noticeable near-term savings back to the region at a time when many Northwest communities are hurting,” Simms said in a written statement.
BPA also initially proposed an 11.6% increase in the power transmission rates through its regional grid.
But in the final record of decision, that rate increase was pared back to 6.1%.
“Confronting and solving these issues demonstrates that BPA, its customers and the region benefit from a tariff designed by the Northwest for the Northwest,” said John Hairston, BPA’s administrator.
BPA was created in 1937 to deliver and sell the power from Bonneville Dam on the Columbia River.
Today, it provides about one third of the electricity consumed in the Pacific Northwest from its network of federal dams and a nuclear power plant.
BPA also owns and operates the nation’s largest high voltage transmission systems, according to agency officials.
The Seattle Times contributed to this report.
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