Bonneville Power Hikes Rate 46% for Electricity in Pacific Northwest

Bonneville Power Administration on Friday announced a whopping 46% electricity rate increase for its wholesale customers in the Pacific Northwest but lauded vigorous conservation and load-reduction agreements for sparing the region a rate hike that was expected to top 250%.

“Normally, a 46% wholesale rate increase is not something to cheer about. But in this case, it’s an outstanding accomplishment,” said Steve Wright, acting administrator of Portland, Ore.-based BPA, which markets about half of the power produced in the Pacific Northwest from a series of federal dams and a nuclear power plant.

The rate increase, which will translate into a roughly 23% boost for retail electricity customers, will save its utility customers about $4 billion a year and prevent about 25,000 job losses, Wright said.

BPA’s utility and industrial customers committed to use nearly 2,300 fewer megawatts, which allows BPA to reduce its electricity purchases in the volatile spot market. Three aluminum manufacturers agreed to curtail production in exchange for continued salary and benefits for its workers, paid by BPA.

The six-month rate increase, which begins Oct. 1, does not affect electricity transactions between BPA and California, BPA spokeswoman Dulcy Mahar said.

Except for isolated sales of rare excess power, BPA is not selling electricity to California this summer because the region’s drought has reduced reservoirs to historically low levels, Mahar said.

Instead, BPA recently agreed to help California when blackouts loom by exchanging what power it has available with the state, she said. Under that arrangement, BPA sends electricity to California during times of highest need, and California returns that power with a little extra when demand is low, at a ratio to be determined at the time of the transaction, Mahar said.