BPA Announces Increased Rates
Portland Business Journal, July 21, 2009
The Bonneville Power Administration announced Tuesday increased rates that are expected to take effect Oct. 1.
Rates for customers that buy power and transmission will increase on average by 6 percent. Transmission rates will stay the same. Power rates will increase by an average of 7 percent. This is the first power rate increase since 2002 and it's driven by both rising costs and decreasing surplus revenues, the nonprofit federal Portland-based electric utility said.
The power rate increase is down from the initial proposal of 9.4 percent in February, and it is considerably lower than the potential 15 to 20 percent increase anticipated in early April. At that time, BPA's financial picture had deteriorated significantly due to below average water and the poor economy.
Power customers will also receive $163 million in returned overcharges due to a 2007 U.S. Ninth Circuit Court decision. Financial benefits for residential and small farm consumers of investor-owned utilities, which are based on BPA's power rates as well as other factors, will be $173 million.
BPA's new rate for wind integration services has been reduced from the initial proposal due primarily to efforts from the wind power industry to improve their operational practices.
The new rates cover the agency's fiscal years 2010-2011. Under the rates, the average priority firm rate for wholesale power is $28.77 per megawatt hour. That compares to the previous rate of $26.90 per megawatt hour.
"Nobody wants a rate increase, and we have worked very hard to keep the increase as low as possible," BPA Administrator Steve Wright said in a statement. "We tightened our belt and worked with stakeholders to keep the increase to a minimum, while honoring our commitments to fish, wildlife and maintaining system reliability."
In other developments, BPA has instituted a wind integration rate of $1.29 per kilowatt per month, which was reduced from the initial rate proposal of $2.72 per kilowatt per month. This is due primarily to actions taken by wind generators to reduce their use of BPA generation for reliability when wind power ramps up or down unexpectedly.
The new rates will remain in place until October 2011.
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