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BPA Reaches Deal with Investor-Owned Utilities by Staff Portland Business Journal, April 19, 2004

The Bonneville Power Administration has forged a deal with PacifiCorp and Puget Sound Energy that would modify existing power contracts in a way that reduces the federal agency's costs by $200 million in 2005-2006.

The two investor-owned utilities would forgo about $100 million in BPA payments and defer the remaining $100 million with interest until 2007-2011. Portland-based BPA is also offering similar terms to Avista, Portland General Electric, Idaho Power and NorthWestern.

In return, all Pacific Northwest investor-owned utilities' customers would get certainty about the range of benefits they would receive in 2007-2011. BPA provides the benefits under a federal law that requires a sharing of low-cost federal hydropower value with the small-farm and residential customers of IOUs.

Steve Wright, BPA administrator, said, "We continue to strive to find responsible ways to keep our rates as low as possible. This proposal is the single greatest action we can take to help our rates situation for next year."

The proposed agreement contains some of the features contained in a litigation settlement rejected by public utilities in January. Some public utilities have sued the BPA over the level of benefits going to the investor-owned utilities. The proposal does not resolve this litigation.