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Rate Hike Not Pacific Power's Idea by Leah Beth Ward Yakima Herald-Republic, May 31, 2007

Don't blame this one on the big bad utility company, pleads Clark Satre, regional manager for Pacific Power in Yakima.

"Don't take this out on our meter readers. It's not our company that's doing this. We're fighting this as hard as we can," Satre said in a meeting with the editorial board of the Yakima Herald-Republic.

Investor-owned utilities such as Pacific Power, which is owned by Portland-based Pacificorp., are faced with passing on a 13 percent rate increase because of a recent ruling by the 9th U.S. Circuit Court of Appeals.

In this latest twist on the friction between public and private power, the Bonneville Power Administration has decided the court ruling means it can no longer give a credit from its coffers to residential and small-farm customers served by the likes of Pacific Power.

The credit was authorized by the 1980 Northwest Power Act. The law says the benefits of inexpensive hydropower should be shared by all residents of the region regardless of whether they are served by a public utility district or a private utility owned by shareholders.

The litigious sticking point has always been: What is the right formula to determine the credit, known as the "residential exchange?"

At more than $300 million a year, private utilities can't be expected to swallow the sum, Satre said. They are just providing the mechanism to pass on the credit, which is funded by BPA's power sales.

Barring a compromise, the $0.884 per kilowatt hour credit will zero out some time after June 6, when the three-member state Utilities and Transportation Commission meets to consider the request from Pacific Power, Avista Corp. and Portland General Electric.

Pacific Power serves 99,000 customers in Yakima County. The average residential bill of $68.15 a month in Yakima County could jump by $11.49, according to Pacific Power.

The commission has routinely allowed the credit to pass through to customers but hasn't been faced with ending it.

"In the past this has been a noncontroversial issue, but I think there will be a lot of discussion this time," said Marilyn Meehan, spokeswoman for the commission.

Satre said Pacific Power may join BPA in appealing the ruling to the full 9th Circuit bench. A three-judge panel issued the controversial decision May 3.

Washington state's congressional delegation has also entered the fray, along with senators from Oregon and Idaho. They have called on BPA to avoid the fight.

Satre said the Northwest could be hurt if public and private utilities continue fighting over the credit. Congress, envious of the region's cheaper hydropower, periodically threatens to take BPA's benefits and distribute them nationwide.

Public utility districts have faced their own rising bills from BPA and have sued to alter the residential exchange program. Benton REA, with 20,000 customers -- including many in Yakima County -- joined in the litigation to stop BPA from paying "any more than the federal law required," according to a statement.

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