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Some Clark Utility Bills Likely to Rise by Allan Brettman The Oregonian, December 10, 2003

The public utility's 2004 budget avoids a jump in power rates,
but water and sewer increases are expected

VANCOUVER -- Clark Public Utilities commissioners approved a 2004 budget Tuesday that calls for no rise in electricity rates but may provoke an increase for water and sewer customers.

Looking ahead, however, Commissioner Nancy Barnes said she is concerned that other public utilities will negate $500 million in potential electricity rate reductions if they reject an out-of-court settlement of a lawsuit against the Bonneville Power Administration. Some utilities think they can get a better deal by pursuing the lawsuit, though Clark officials are undecided.

Commissioners approved separate budgets for the electricity, water and wastewater systems.

The electricity operating budget forecasts $296 million in spending, about a 1.4 percent increase over $292 million in actual and budgeted spending this year. Electric system capital spending would increase about 18 percent, from $17.3 million to $20.5 million. That would include construction of a substation to serve the Ridgefield and La Center areas and upgrades of several substations.

The water system operating budget would increase from $8.75 million this year to $10.3 million, about 17 percent. But revenue for next year is forecast to be $9.6 million -- $673,000 short of expenses. The water system serves about 26,500 customers in communities outside Vancouver, which has a municipal system.

Mick Shutt, a utilities spokesman, blamed the gap on growing debt service payments in the water system. A rate increase is expected next year to help close the gap.

Wastewater system expenses are expected to increase from an estimated $301,000 to $544,000. The utility serves about 725 customers in La Center.

After adopting budgets, commissioners discussed the pending federal lawsuit by 72 public utilities against the BPA that claims the agency illegally offered energy and monetary rebates to private utilities, driving up the cost for public utilities -- such as Clark.

Bonneville has offered to settle the lawsuits by paying the public utilities with $500 million in rate reductions and finding $100 million in expense cuts next year. The reductions would mean a one-year cut of nearly 10 percent in wholesale rates.

For the settlement to be binding, all 72 utilities must sign by Jan. 24.

But Snohomish County PUD, the largest in Washington with 290,000 customers, adopted a resolution in November rejecting the offer. Snohomish and Clallum County PUD, which later rejected the settlement in November, contend the settlement would be short-lived and BPA should make more cuts and find ways to reduce and stabilize costs.

Barnes said she feared public utilities will pass up a lucrative out-of-court deal in favor of an expensive trial with an unknown outcome.

"This is a full-employment act for attorneys if I've ever seen one," Barnes said, criticizing legal advice that has been cited for some public utilities' opposition to the proposed settlement.

Clark, the second-largest public utility in Washington with about 160,000 customers, has not taken a position on the proposed settlement.

Commissioners are scheduled to discuss the issue at an as-yet-unscheduled workshop.

Clark buys about half of its electricity from the BPA. The other half comes from the utility's River Road Generating Plant.