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BPA Expects $6M Revenue Loss from Dry Weather

by William McCall, Associated Press
Seattle Post-Intelligencer, February 10, 2010

PORTLAND, Ore. -- The winter forecast for the Bonneville Power Administration is for light snow and possibly even lighter revenue.

The federal power marketing agency on Monday cut its revenue forecast for the fiscal year by about $240 million - from nearly $232 million in net revenue by the end of the year to a $6 million loss.

Bonneville says El Nino ocean warming likely will result in a dry winter and light mountain snowpack that will reduce spring runoff to feed the rivers that power Northwest hydroelectric dams.

With more than a month left until the end of winter, the outlook could change if more snow arrives than expected. But the current prediction by the National Weather Service calls for 79.2 million acre-feet of runoff from January through July - or about 74 percent of the 30-year average of 107.3 million acre-feet.

If the forecast holds, the melting snow would produce the lowest runoff in the Northwest since 2001.

"This is a very serious decline that impacts our power supply and therefore our finances," said BPA Administrator Steve Wright. "We're hopeful that the outlook will improve, but we cannot count on it."

But officials emphasize there will be enough electricity to meet demand.

"It's important to say the lights aren't going to go out," said Katie Pruder-Scruggs, a Bonneville spokeswoman.

The Northwest Power and Conservation Council, which oversees the regional power supply along with fish and wildlife management, says its most recent analysis shows plenty of power for Oregon, Washington, Idaho and Montana over the next five years.

Council analysts note the range for the runoff over the last 60 years extends from a low of about 54 million acre-feet to a high of 159 million acre-feet. An acre-foot is the amount of water needed to cover an acre of land to a depth of one foot.

The estimate for this year is "well within the range energy planners expect in a given year," said John Harrison, council spokesman.

Oregon State University oceanographer Jack Barth said the current El Nino cycle is rated as moderate overall but some of its effects locally have been stronger.

"I can tell you for sure El Nino's at work," Barth said.

Officials say it is too early to tell whether the dry forecast will affect rates. But they are comfortable in predicting there will be no repeat of 2001, when a low runoff combined with power shortages, deregulation and energy market manipulation by the defunct Enron Corp. were blamed for an energy crisis across the West.

The economic landscape for 2010 is also different from 2001 because the current recession has cut industrial demand for electricity at a time when energy prices are relatively low, said Bob Jenks, executive director of the Citizen's Utility Board of Oregon.

"It doesn't mean it won't cause rate hikes," Jenks said. "It's a significant increase in costs. But it's nothing like the energy crisis of 2001."

William McCall, Associated Press
BPA Expects $6M Revenue Loss from Dry Weather
Seattle Post-Intelligencer, February 10, 2010

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