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BPA Will Raise Rates for Lower Valley Energy by Tram Whitehurst Jackson Hole News & Guide, August 12, 2011

Before members of the Lower Valley Energy board of directors made a decision about new residential rates at their meeting in June, they wanted to know what kind of charges the cooperative would be facing from its own energy provider.

Now they do.

Lower Valley recently learned that Bonneville Power Administration, its federal energy provider, is increasing average wholesale rates by 7.8 percent starting in October.

The higher rate is part of a larger change in how Bonneville will charge customers that is expected to have significant implications for Lower Valley and its members.

In its August newsletter, Bonneville said the higher rate will help support needed improvements to its system, which includes dams and a nuclear power plant.

Under a new long-term contract that will take effect Oct. 1, Lower Valley's share of power from Bonneville will be limited to a benchmark amount set by its 2010 usage. Any energy consumed above that level will result in a higher charge for Lower Valley.

"This is a brand new way to charge," Lower Valley CEO Jim Webb said. "We're still working through the numbers to see what this will mean."

In response to the new model, Lower Valley's board of directors voted in June to change the way the cooperative charges residential customers.

Instead of paying a flat rate throughout the year based solely on energy use, Lower Valley customers will pay a higher rate in the winter and a lower rate in the summer.

The seasonal structure will more closely match Lower Valley's own charges from Bonneville.

With the new rate from Bonneville finalized, Webb said he expects the board to be able to set specific residential rates at its meeting later this month.

Customers should expect at least a 4 to 5 percent increase, with those who use more energy in the winter to face higher costs.

Webb said this year's increase is not a surprise.

Bonneville upped its rates by 7 percent two years ago, an increase Lower Valley absorbed without hiking residential rates.

Lower Valley customers currently pay about half the national average for energy use.

Related Pages:
BPA Sets 7.8-Percent Average Rate Increase by Ben Tansey, NW Fishletter, 8/5/11
Energy NW Nuclear Power Restart Delayed Again by Annette Cary, Tri-City Herald, 8/3/11