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Mac W&L Still Planning 8.5 Percent Rate Hike by Hannah Hoffman News-Register, August 13, 2011

The Bonneville Power Administration announced last week that it would be holding its wholesale power rate to Oregon utilities to an average of 7.8 percent, somewhat less than expected.

However, McMinnville Water & Light, which gets 95 percent of its power from BPA, plans to move forward with a proposed rate hike of 8.5 percent anyway. Its governing commission has a public hearing on the proposal slated for 6 p.m. Tuesday, Aug. 16, in the conference room at utility headquarters, off Riverside Avenue at 855 N.E. Marsh Lane.

In addition to raising its rates, Water & Light is also proposing to hike the basic charge it assesses all of its residential customers each month from $7.87 to $10, introduce a processing fee of $100 for applications for new construction hookups and raise the rate it charges for private lighting district services 8.5 percent. Altogether, the impact figures to run $6.53 a month on the average residential bill and $83 a month on the average commercial bill.

General Manager Paul Elias, said every utility is affected differently, depending on its size, type, customer mix and other factors. BPA may be holding the average to 7.8, he said, but the impact on Water & Light figures to run about 14 percent.

Elias said payments to BPA account for 70 percent of the cost Water & Light incurs to acquire and deliver electricity.

He said capital investment outlays for infrastructure and equipment account for the other 30 percent. It's only because needs are growing more slowly there that the utility can use an 8.5 percent increase to offset a 14 percent increase, he said.

Water & Light is trying to build up its cash reserve against future infrastructure obligations to $2 million, Elias noted in the board's July meeting. He said the rate hike would help do that.

In addition to BPA, Water & Light gets power from hydroelectric plants, Washington's Grant County Public Utility District operation on the Columbia River, plus a new Riverbend Landfill plant powered by the stew of gases released in the decomposition process.

The cost of the Bonneville component is rising for several reasons.

Elias said BPA operating costs have increased significantly because the dams on the Columbia require constant maintenance and one of its main hydro plants needs new generators running $50 million.

He said retrofitting its Columbia River dams for safer fish passage, and meeting other federal requirements for fish-kill migration, will cost BPA $400 million this year and next.

Elias said this year's heavy rainfall has also played havoc with the system by creating a larger flow in the Columbia.

He said spilling too much water increases the river's dissolved oxygen component, which is hazardous to salmon. The federal government limits releases for that reason, and that makes dam management a major challenge in a wet year.

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