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BPA to Raise Rates; Tri-City Suppliers May Follow by Drew Foster Tri City Herald, July 24, 2009

Many Mid-Columbia residents could see higher energy bills next year as area power suppliers weigh increasing rates in response to a new Bonneville Power Administration wholesale power rate increase.

BPA, which supplies power to Benton PUD, Franklin PUD, Richland Energy Services and Benton REA, has announced it will increase wholesale power rates between 6 and 7 percent beginning Oct. 1.

Wholesale rate increases will vary for each customer, said BPA spokeswoman Katie Pruder.

Customers buying only power transmission from BPA will not see a rate increase.

Benton REA spokesman Troy Berglund said the 10,000 customers it serves will not see a rate increase at least through 2010.

"A lot of planning went into this," he said. "The BPA rate increase was not unexpected."

Berglund said Benton REA will consider rate changes in 2011.

Benton PUD and Franklin PUD officials said they expect to increase customer rates starting Jan. 1, but they aren't sure how much those increases will be.

"I'm sure it's going to impact us," said Debbie Bone-Harris, Franklin PUD spokeswoman. "The actual percentage is hard to say. Ballpark, it's usually half but it could be 4 or 5 percent."

Jim Sanders, Benton PUD general manager, said, "We don't have a full analysis of what the impact will be." But he added, "By Jan. 1, we will be needing a rate increase of some kind."

Sanders wasn't sure when Benton PUD would decide how large a rate increase would be or if one will be necessary.

Ray Sieler, Richland Energy Services director, said his department will begin looking at how BPA's rate increase will affect its costs and revenues and decide this fall if a rate increase is needed.

"(Rates will) go up or remain level," Sieler said. "At this point, we haven't made a determination."

Pruder said BPA's decision to raise rates was spurred by rising costs and decreasing surplus revenues.

Rising costs include projects to improve safety and reliability at the Columbia Generating Station nuclear power plant outside Richland operated by Energy Northwest. BPA also is dedicating more money to salmon protection.

In April, BPA proposed increasing wholesale rates between 15 percent and 20 percent. That figure was reduced after the regional power provider found more than $100 million in cost reductions, Pruder said.

BPA also has been affected by the national recession and poor water conditions in the Columbia River Basin, which Pruder said adds to BPA's difficulties to use surplus power sales to help keep rates lower.