BPA plans rate increase, citing rising fish, hydro costs

Bonneville Power Administration proposes its first wholesale power rate increase in six years, citing increased costs including the expense of salmon mitigation and of operating and maintaining its hydropower system.

BPA announced Feb. 11 it likely will need to increase its rates for the first time since 2003, beginning in October. If adopted, the rate proposal would result in an average increase of 7 to 8 percent for BPA’s public utility customers for the period beginning Oct. 1.

BPA cited four primary drivers for the rate increase:
o substantial increase in funding for projects to boost protection and survival of threatened and endangered Columbia Basin salmon developed through a regional collaborative effort responding to court orders (HNN 5/6/08);
o increased costs for operating and maintaining the hydro system to maintain and improve reliability and output;
o increased costs for operating the Columbia Generating Station nuclear plant; and
o the economic downturn, which is reducing prices for BPA’s surplus power sales in Western Electricity markets.

BPA noted the Columbia River Basin is headed for its ninth year of below average water in the last decade, further exacerbating the situation. It said revenues from surplus power sales are used as a credit to keep rates low for BPA’s Pacific Northwest firm power customers.

While expenses are driving the proposed rate increase, BPA said its rate proposal also includes infrastructure investments. Planned capital investments will have minimal rate effects because the costs are financed and recovered over time, BPA explained.

Central areas of investment include capital investments in the hydropower system to maintain and improve its reliability and output. Increased capital investments also are planned to implement the newly signed Columbia Basin Fish Accords with participating states and tribes.

BPA invites written comments on its 2010 BPA Rate Case through April 24. Comments can be made via BPA’s Internet site www.bpa.gov/comment or by mail to Bonneville Power Administration, P.O. Box 14428, Portland, OR 97293-4428. BPA said it anticipates filing a final rate proposal with the Federal Energy Regulatory Commission about Aug. 1.

BPA, a not-for-profit federal electric utility, markets more than a third of electricity consumed in the Pacific Northwest. The power is produced at 31 federal dams and one nuclear plant, and is sold to more than 140 Northwest utilities. BPA also operates a 15,000-mile transmission grid in Washington, Oregon, Idaho, and Montana.

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