PUD urges BPA to reduce rates

Federal agency to announce decrease today

The Bonneville Power Administration (BPA) should eliminate any power rate increase for its customer utilities to keep its safety net, Grant County PUD commissioners said in a resolution passed Monday.

The PUD buys about 44 percent of its power from the BPA, and any fluctuations in the federal agency's rates directly affect the PUD, Gary Garnant, PUD spokesman, said.

"What they do is a concern to us," he said.

A concern to the tune of $3.1 million, which is how much PUD officials say the safety net recovery adjustment clause is costing the district for 2004, according to the resolution.

Other BPA customers throughout the Northwest have passed similar resolutions with the goal of influencing the federal agency, PUD General Manager Tim Culbertson said.

"It sends a message to Steven Wright that we need a rate reduction now," Culbertson said.

Culbertson's words, it seems, will soon be heeded. Mike Hansen, press officer for the BPA, said the federal agency will hold a workshop Wednesday morning where a rate reduction will be announced. The exact amount could not be released before morning deadline.

The BPA currently charges utilities $32.40 per megawatt-hour for power, Hansen said.

The purchase of priority-firm power from the BPA amounts to 27.4 percent of the PUD's electric-system budget and are expected to account for 23 to 25 percent of the 2005 electric-system budget, according to the resolution.

The BPA first warned area utilities of a potential rate increase early in 2003. The agency implemented its safety net cost recovery adjustment clause after the energy crisis at the early part of this decade to make sure it could always make its payments to the U.S. Treasury Department, Hansen said.

However, commissioners disagreed with at least one of the tactics used by the BPA to accomplish that goal. Bonneville should not "pre-charge" its priority firm customers, such as Grant PUD, for possible future bad water years because current reserve can handle those costs, according to the resolution.

Utilities feared a rate increase as high as 15 percent in 2003 but ended up seeing a slight reduction. Grant PUD commissioners requested a decrease of at least 7.7 percent for 2005, according to the resolution.

BPA rates have been 40 to 50 percent higher than rate-case projections made in 2001, according to the resolution.

The PUD has a contract to buy power from the BPA through 2011, Garnant said.