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Rate Hikes Loom for Northwest Utilities by Steven Johnson Electric Co-op Today, December 8, 2014

Electric cooperatives and other consumer-owned utilities in the Northwest face an upturn in their bills, as the Bonneville Power Administration said it will seek a 6.7 wholesale power rate increase for 2016-2017.

The agency also announced plans to boost its transmission rates by 5.6 percent, partially to pay to integrate wind power into the Northwest grid.

BPA Administrator Elliot Mainzer said he is aware that the agency's rates affect Northwest utilities and the communities they serve.

"However, these rate increases are necessary to sustain the tremendous value of the federal power and transmission system and to meet the electricity needs of the Northwest in a reliable and environmentally sustainable way," he said in a Dec. 4 statement.

The announcement is the first step in a rate-setting process that is scheduled to culminate in July 2015, with new rates to take effect Oct. 1, 2015. BPA sells power from 31 federal dams and one nuclear plant to 54 electric co-ops, among other customers.

"Any rate increase is difficult for our member cooperatives," said John Prescott, president and CEO of PNGC Power in Portland, Ore. "In the coming months, PNGC will work closely with BPA to focus spending on critical needs, such as the infrastructure investments that are necessary to keep the system reliable and efficient."

Scott Corwin, executive director of the Portland-based Public Power Council, said stakeholders have worked with the agency in recent months to try to cushion the impact of the rate hikes.

"Wholesale costs increases can be a hit to consumer-owned utilities," Corwin noted. "That said, this is about at the level expected coming out of the BPA budget process last summer, where some reductions helped bring the level of increase down somewhat."

He said the council will take a close look at BPA's numbers to determine what issues remain in the ratemaking case.

BPA attributed about 5 percent of the proposed 6.7 percent wholesale jump to a $94 million annual increase in costs associated with past capital spending. Factors in the transmission increase include the costs of adding wind and renewables to the BPA system, and meeting new requirements for cyber and physical security.