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Decreased Runoff Could Cause Bonneville Power Administration Revenue Shortfall by PennWell Hydro World, February 10, 2010

Decreased runoff could cause Bonneville Power Administration revenue shortfall PORTLAND, Ore., U.S. -- The Bonneville Power Administration has reduced its expectations for hydroelectric power revenue this year by more than $200 million because of new forecasts for a continued depressed runoff in the Columbia Basin.

Based on the forecasts, BPA now estimates it will finish the fiscal year with a loss of $6 million in modified net revenues instead of the $231.9 million in positive revenues projected at the start of the fiscal year in October, the agency reported.

BPA markets power from dams in the Federal Columbia River Power System, and water serves as the fuel that turns hydroelectric turbines.

BPA is a federal agency headquartered in Portland, Ore., that markets wholesale electricity and transmission to the Pacific Northwest's public and private utilities as well as to some large industries.

BPA compiled the new estimates as part of its Quarterly Business Review. However, runoff projections have further declined since the estimates were developed.

"This is a very serious decline that impacts our power supply and therefore our finances," said BPA Administrator Steve Wright. "We're hopeful that the outlook will improve, but we cannot count on it. The reality is that water is the fuel that provides much of the Northwest's electricity."

The reduced estimates result from a persistent El Nino weather pattern that has brought unusually dry conditions to the Northwest. The February forecast from the National Weather Service's Northwest River Forecast Center called for 79.2 million acre-feet of runoff from January through July as traditionally measured at The Dalles, Ore. That represents 74 percent of the 30-year average of 107.3 MAF and would be the lowest runoff since 2001.

BPA provides about half the electricity used in the Northwest and operates over three-fourths of the region's high-voltage transmission.

While BPA is part of the Department of Energy, it is not tax-supported through government appropriations. Instead, BPA recovers all of its costs through sales of electricity and transmission and repays the U.S. Treasury in full with interest for any money it borrows.