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BPA Rate Increase May Be Necessary by Editorial Board Seattle Post-Intelligencer - September 3, 2002

Electrical utility customers have every reason to take advantage of their opportunity the rest of this month to tell the Bonneville Power Administration not to raise rates a penny.

The BPA should listen carefully to price-jolted bill payers from around the Northwest. Even so, the BPA should avoid taking the messages too literally.

A no-way, no-how message may be effective for getting BPA's attention. But Steve Wright, Bonneville's administrator, must remember that a minimal wholesale rate increase -- something well less than the 9 percent floated for this year -- could be the best choice.

To paraphrase the anti-tax message of conservative activists, rate increases must be the regional power marketing and transmission agency's last choice. But this may be a time when some raise is necessary.

As Wright said July 2, he is deeply concerned about the prospects of continuing financial losses. Earlier assumptions now appear overly optimistic for issues ranging from nuclear generation costs to the revenue BPA will receive from its power sales outside the region. Terrorism even plays into the equation by driving up security costs.

Severe losses could force the agency to miss a debt payment to the federal treasury, playing into the political hands of states eager to grab the region's low cost hydro power.

BPA has outlined a series of strategies for dealing with the situation. The agency generally has done a good job of communicating with the public on the options. Wright personally heard Snohomish County Public Utility District customers talk about rates. If there has been a shortcoming, it was with early, simplistic options that seemed to pit salmon protection and renewable energy against ratepayers' wallets.

As Wright nears a final decision, expected in November, he must find ways that balance ratepayer protection, fish and renewable resources. More emphasis must go to internal cost cutting at BPA.

The energy crisis showed that ratepayers also have long-term interests in conservation, renewables and increased transmission capacity. Those realities make Wright's position even trickier. But if he continues communicating with the public -- which has until Sept. 30 to send in comments -- he can find a sensible, affordable option.

Related Sites:
BPA: www.bpa.gov
Snohomish County PUD: www.snopud.com