PUD Earns $19 Million Refund
by Lukas Velush, Herald Writer
The Daily Herald, December 18, 2007
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EVERETT -- The Bonneville Power Administration wants to write Snohomish County PUD a $19 million check, a refund of sorts for overcharging for the electricity it sells the utility.
PUD leaders are expected to look over the proposal today and would not say Monday how the money would be spent if the agreement is accepted.
"We're pleased that funding could come our way, but at the same time we need to look at the terms of the agreement," said Neil Neroutsos, a spokesman for the utility district.
The PUD and other Northwest public utilities have long held that the federal energy wholesaler gives too large a share of the hydroelectric and nuclear power it manages to private utilities.
The 1980 Northwest Power Act said that private utilities must get a share of the electricity generated by dams on the Columbia River and from a nuclear power plant in Richland. A formula was established on how to do that. Since there was a limited amount of electricity, private utilities would get cash that would be paid by public utilities.
In its decision, the court ruled that since 2002, BPA has given private utilities too much compensation, said Stuart Clarke, a senior account executive at Bonneville.
So in May, BPA stopped sending private utilities their payments, forcing them to scramble and raise rates to pay for the cash shortfall. In the meantime, thanks to the way its rates are set, they have had to keep collecting the money from the public utilities.
The check to the PUD, which likely would be sent in January or February, doesn't solve the inequity between public and private utilities that the court identified, but it does allow it to help those affected while it tries to find a solution, Clarke said.
"Our goal is to get money back to the public utilities and to provide the investor-owned utilities some money that they can use to give some rate relief to their customers," Clarke said.
The $19 million the PUD would get is a one-time payment for being overcharged from Oct. 1 through Sept. 30, 2008, essentially this fiscal year, Clarke said. Overall, BPA wants to send checks totaling $191 million to public utilities. Private utilities, which are supposed to get some money, would get $131 million.
Compensation for the period from 2002 to until Sept. 30, 2007, still has to be resolved, Clarke said. He said BPA is trying to figure out how to make the public utilities whole for that five-year period as it tries to figure out what the new payment to private utilities should be starting on Oct. 1, 2008.
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