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PUDs urge BPA to cut costs, avoid additional rate hike

State association passes resolution urging BPA to avoid hikes.

The Washington Public Utility Districts Association last week passed a resolution "emphatically urging" the Bonneville Power Administration to reduce its costs and avoid a power-rate increase in October.

BPA increased its wholesale electricity rates by 46 percent on October 1, 2001. Most PUDs that buy power from BPA in turn raised the rates they charge retail customers. BPA has informed its utility customers that an additional rate increase may be necessary this fall.

"Our community is crying for relief," said Don Berkey, who represents customers as a Snohomish County PUD commissioner. "We want BPA to do everything possible to avoid an additional rate hike."

Berkey, who also serves as secretary-treasurer of the state PUD association, said PUDs want BPA to reduce its nonpower costs.

The association also wants BPA to enforce "take or pay" provisions in the power agency's contracts with its large aluminum-company customers. The provisions call for the aluminum companies to pay a certain amount for the power BPA is obligated to provide even if the companies are not using it.

"BPA had to sign contracts to purchase power at high market prices in order to serve the aluminum companies," Berkey explains. "If the companies back out now, other businesses and families will be left holding the bag. That's not fair."

The PUDs also hope that ongoing negotiations will lead to a reduction in payments BPA is scheduled to make to private utilities beginning October 1 of this year. As a public agency, BPA makes the Northwest's federal power available first to not-for-profit, publicly owned utilities like PUDs and city-owned utilities. To help keep rates low for everyone in the region, BPA also provides power or cash to privately owned utilities such as Puget Sound Energy. PUDs believe that current BPA contracts obligate the BPA to pay too much to the private utilities.

The Washington PUD Association represents 23 not-for-profit, publicly owned utilities that provide electricity to nearly 800,000 customers in Washington.


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