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BPA Aims to Reduce Power Rates by Matthew Evans Idaho Falls Post Register, October 25, 2003

Legal settlement may benefit I.F. customers

It's a little early to tell, but a proposed legal settlement involving the Bonneville Power Administration could mean lower rates for Idaho Falls Power customers.

If the deal is approved, BPA's wholesale rates would fall 9.6 percent. If passed straight through to Idaho Falls Power customers, that would mean a 5.5 percent decrease.

Three of the region's bigger utilities have already signed off on the agreement, and BPA officials have received letters from the entire Northwest congressional delegation and the region's four governors commending the agency for "working diligently" to reduce rates.

The settlement calls for tossing out a legal challenge to the way BPA reimburses for-profit utilities for the benefits of the low-cost Northwest hydropower system BPA controls.

The credits it now pays have been in place since 1980, and were made as cash payments until recently.

This year, when BPA changed the way it reimburses those utilities - paying cash and giving them electricity - 72 public utilities challenged the change in court. They questioned the for-profit utilities' entitlement to the electricity, since it comes from the federal hydropower network.

If approved, the deal would eliminate $200 million in costs and defer an additional $269 million in credits to the for-profit utilities until at least 2007. The benefits would then be passed along to BPA's wholesale customers.

Idaho Falls Power wasn't involved in the lawsuit, but its customers stand to benefit.

Before the deal becomes official, though, all affected utilities must sign it within 90 days.

BPA provides about half the Northwest's electricity from hydroelectric dams in the Columbia Basin and one nuclear power plant in Washington. Idaho Falls Power gets about 75 percent of its power from BPA. It's contracted to buy $26.4 million from the agency in the current fiscal year.

Idaho Falls Power customers have seen their rates soar in recent years.

In 2001, rates rose by 25 percent.

Another 28 percent hike followed in October 2002.

Since summer 2001, the average utility bill in Idaho Falls has gone from $52.05 per month to $95.64.

The rate hikes have mirrored those at BPA, which has lost about $1 billion since the energy crisis, which peaked a few years ago. BPA is on track to lose another $300 million this year.

Idaho Falls Power Director Mark Gendron has said repeatedly that Idaho Falls Power's rates will fluctuate along with BPA's. But, he said, it's still too early to tell what might happen over the next three months.

"It sounds like there are enough people behind this proposal, but it's a work in progress," Gendron said. "It's really premature to address how it will affect our rates."