Utilities Allowing BPA to Defer Paymentsby Staff
Portland Business Journal, February 17, 2003
The Washington Utilities and Transportation Commission is expected to grant Puget Sound Energy's request to defer a payment from the Portland-based Bonneville Power Administration. Two weeks ago, the Oregon Public Utilities Commission approved a deal between BPA and Portland General Electric to defer $10.6 million BPA promised to pay the utility during the current fiscal year.
Investor-owned utilities receive a "residential and farm energy benefit," a payment from the BPA for benefits from the federally financed Columbia River hydroelectric system. Customers of public utility districts get power from the BPA at cost, while customers of investor-owned utilities get a subsidy.
BPA is facing a $1.2 billion budget shortfall over the next three years and would like to defer the payments to help save money in the short term.
Under the plan, the BPA would stop making its residential and farm energy payment to Puget beginning Feb. 15, 2003. Under the current proposal, those payments wouldn't restart until September 2003.
Puget would lose about $27.6 million over the seven-month period. Puget's customers could see their bills climb 75 cents each month until September.
PGE has said it anticipates it will file for an adjustment to its rates effective April 1, 2003. PGE estimated the effect of the deferral equates to a 1.7 percent increase in rates for residential and small-farm consumers.
According to the agreement, Bonneville could defer payment of the energy benefit beyond fiscal year 2006. At that point, the debt would be paid throughout 60 months with a 3 percent interest rate.
Collectively, the deals being pursued between BPA and Northwest investor-owned utilities would save BPA more than $100 million.
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