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Drought Portends Electrical Rate Hikes

by Christian Wihtol
The Register-Guard, May 8, 2010

Without a "banner" snow year in 2010-11, EWEB expects sharp increases late next year.

The region's low snowpack this winter may cause local utilities to increase their electricity rates during the next few years.

Citing the exceedingly low snowpack, the Bonne-ville Power Administration on Friday said it probably will finish the fiscal year with a $230 million shortfall, which could prompt it later to raise rates to the power retailers it serves.

Reduced stream flows cut the BPA's ability to generate power at its network of dams, which reduces the amount of surplus electricity the agency had available to sell on the open market, the agency said.

In the short term, the BPA is coping with the shortfall by dipping into its reserves. But in the longer term, rates could rise, it said.

The Eugene Water & Electric Board, which buys much of its power from the BPA, is expecting the BPA to impose potentially "significant" rate increases in late 2011, when EWEB's contract to buy power from the BPA comes up for renewal, EWEB spokesman Joe Harwood said Friday.

"This low water year will probably contribute to the size of rate increase that we expect to see from Bonneville in October 2011," he said.

"Unless next year is a banner (snow) year, we could see some significant rate action by Bonneville on the wholesale level," Harwood said.

EWEB typically passes on to customers about half the BPA rate increase, he said.

BPA Administrator Steve Wright said this past winter's snow levels were particularly abysmal.

"This is a bad situation that has just gotten worse," Wright said. "We had hoped a wet spring would help snowpack across the Columbia River Basin, but that didn't happen. We are now looking at the fifth lowest runoff since the hydro system has been in existence."

The chance for precipitation to build the region's snowpack typically is over by the end of April.

Christian Wihtol
Drought Portends Electrical Rate Hikes
The Register-Guard, May 8, 2010

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