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BPA to Cut Power Rates by Erik Olson, Herald staff writer Columbia Basin Herald, August 20, 2004

Announcement will save Grant PUD about $2.5 million

The Bonneville Power Administration (BPA) has announced a probable power rate decrease for 2005, which will mean savings for the Grant County PUD.

The rate decrease, which will take effect Oct. 1, is expected to range between 5 and 7.7 percent. The BPA charged $32.40 per kilowatt hour for power in 2004.

"The proposed wholesale power rate decrease is good news for the Northwest's economy and reflects BPA's continued commitment to control costs to the benefit of consumers and ratepayers," said Kyle McSlarrow, deputy secretary for the U.S. Department of Energy, in a BPA news release.

The BPA is a federal agency that markets wholesale electrical power and transmission services in the Pacific Northwest.

BPA proposed the wholesale power rate decrease to customers and other regional stakeholders at a rate case workshop held Wednesday in Portland, Ore. Affected parties have until Aug. 27 to comment on the proposal, and a final decision will be announced in September.

"We have worked very hard with our customers and other regional stakeholders to reduce costs," said BPA Administrator Steve Wright. "This hard work is paying off in terms of a rate reduction that should provide a boost to the Northwest economy."

The BPA attributed the rate decrease to cuts in expenses. Last spring, the settlement of a lawsuit between the BPA and investor-owned utilities saved the federal agency $200 million.

The BPA saved an additional $150 million thanks to suggestions brought forth by a joint sounding board that included the BPA, customers and other regional stakeholders, according to the news release.

BPA's announcement came just days after PUD commissioners passed a resolution urging the federal agency to forgo its safety net in favor of a rate reduction. That resolution was similar to that passed by other public utilities throughout the state.

"It sends a message to Steven Wright that we need a rate reduction now," Grant PUD General Manager Tim Culbertson told the Herald after the resolution passed.

PUD spokeswoman Sarah Morford said the rate decrease will save the PUD about $2.5 million if it reaches 7.7 percent. Pending PUD commission approval, the funds will go into savings for power purchases, Morford said.

About 44 percent of the power sold by the PUD was purchased from the BPA.

Wright said rates could be either higher or lower in fiscal year 2006 depending primarily on water and market conditions in the next year.

"We continue to live in a very volatile world. In keeping our rates as low as possible now, our future rates will need to be flexible to respond to changing circumstances," he said in a news release.

The BPA announced the possibility of initiating the safety net last year, which would have meant a rate increase as high as 15 percent from the previous year. That number fell until it became a slight rate decrease as the BPA cut its costs.