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Many in Northwest to Lose Power Subsidy by Staff Wall Street Journal, May 22, 2007

PORTLAND, Ore. -- Homeowners and farmers who get their electricity from investor-owned utilities in the Northwest are about to lose a power subsidy they have enjoyed for decades.

The federal government's Bonneville Power Administration told the region's seven for-profit utilities yesterday it is immediately suspending payments that reduce rates for 3.4 million residential and small-farm customers, because of a May 3 ruling by the Ninth Circuit Court of Appeals.

A 1980 U.S. law requires Bonneville to share benefits of its cheap hydroelectric power with residential and small-farm customers of the for-profit utilities, but the credits must not cause higher rates for municipal utilities, which have first rights to Bonneville's power.

In 2000, Bonneville and the investor-owned utilities agreed to terms that resulted in a subsidy of about $300 million annually between 2002 and 2005. Municipal utilities appealed, saying BPA was transferring costs to them.

The appeals court agreed with the municipal utilities.

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