Electric Co-op Today

Maintaining the Northwest’s hydroelectric system and protecting fish are some of the factors that the Bonneville Power Administration says will lead to a 7.8 percent increase in the cost of wholesale power.

Bonneville Power Administration will be raising wholesale power rates from its dams and other facilities by 7.8 percent. (Photo By: BPA)

The hike, which BPA announced July 26, takes effect Oct. 1. The agency supplies power for 146 customers, including 57 electric cooperatives. Most consumer-owned utilities expect to pass at least a share of the increase to ratepayers.

BPA said it staved off a larger boost by relying more heavily on its ability to borrow from the U.S. Treasury, adopting a new rate adjustment mechanism and settling a dispute that determines the allocation of benefits from the federal hydropower system.

Administrator Steve Wright said a rate increase is needed to replace and refurbish equipment at 31 dams and the Columbia Generating Station, a 1,150-megawatt nuclear plant in Washington.

John Prescott, president and CEO of PNGC Power, a G&T in Portland, Ore., that provides power to 16 distribution co-ops in seven states, said BPA’s decision to invest in its facilities is understandable, but added that the timing of the hike is “disappointing.”

“We hope that with BPA’s rate increase, the planned re-investment in the infrastructure of the federal hydropower system and the Columbia Generating Station pays future dividends in increased reliability for the region,” he said.

“This rate case process went more smoothly than expected and we thank BPA for that. However, in the midst of this difficult economic time, it’s disappointing to have any wholesale power increase.”

Wright added that BPA will not need to impose an additional in-year rate increase because of higher-than-normal levels of water in the region. The agency’s initial rate plan had estimated the possibility of an additional surcharge at one in three.

BPA also said it will reduce the rates it charges to integrate wind farms into the grid by 4.7 percent. Wind interests have challenged a BPA decision to reduce wind generation at times of excess hydropower in recent months to keep the grid in balance.

Tags: Bonneville Power Administration, Business and Finance, Power Rates