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Economic and dam related articles

Electric Bills may Increase

by Lukas Velush, Herald Writer
The Daily Herald of Everett, WA, December 7, 2005

Snohomish County PUD's power supplier faces higher costs for salmon protection.

EVERETT - Snohomish County PUD General Manager Ed Hansen on Tuesday withdrew his recommendation that the utility pursue a 4 percent rate reduction in 2006.

Instead the utility may have to raise rates by 4 percent.



A proposal before a federal judge would force the PUD's main electricity supplier to step up salmon protection on the Columbia River.

The Bonneville Power Administration estimates that it will have to collect an extra $347 million per year from utilities like the PUD to pay for stiffer fish protection measures being considered by U.S. District Court Judge James Redden in Portland, Ore.

Others put the potential BPA bill somewhere between $150 million and $500 million per year.

Redden could make a decision on Dec. 15. Although his decision likely will be appealed, Bonneville and its customers will have to start paying for any changes on Jan. 1.

Fish bill a surprise

The potential new fish costs shocked the PUD's governing commission, which had planned to spend Tuesday celebrating a 4 percent rate reduction.

It would have been the utility's first rate decrease since a 5 percent reduction in 2002. It would also have been a slight reprieve from rates that jumped by more than 50 percent in 2001 because of the West Coast energy crisis.

"Talk about taking the wind out of our sails," said PUD Commission President Dave Aldrich. Upon hearing the news from Hansen, he said, "I literally had to sit down."

The PUD can expect to write BPA a $35 million check if, as Bonneville expects, the fish bill ends up costing an extra $347 million. The PUD likely would pay $35 million because it buys about 10 percent of the electricity Bonneville sells.

Using the same math that the PUD was using to try to turn an $18 million surplus into a 4 percent rate reduction, the utility would have to raise rates by 8 percent to collect $35 million per year.

The hike likely would be reduced by half - to 4 percent - because the $18 million surplus is still available. If that happens, average PUD customer's rates would go up $38 per year.

"The bottom line is I am respectfully withdrawing my recommendation for a rate reduction," Hansen told the PUD commission on Tuesday.

Suit seeks to save fish

The National Wildlife Federation and a coalition of other environmental groups in late October asked the federal judge for stricter protections for threatened chinook salmon and other migratory fish. Their proposal is part of a lawsuit environmentalists have brought against BPA over how the Columbia River is managed.

"We're concerned about the public and the rates they have to pay, but there are a lot of factors that affect (rates), not just the way the river is managed for fish," said Paula Del Giudice, director of the National Wildlife Federation's Western Natural Resource Center.

BPA says the greatest expense under the proposal would be tied to extra water that would be spilled over four dams on the lower Columbia during spring and summer. Redden required similar releases this summer, something Del Giudice called a great success.

The environmental groups also asked for higher flows in the late spring and early summer to help juvenile salmon find their way out to the Pacific Ocean. A strong current makes it easier for fish to reach the sea, Del Giudice said. If saving fish has become too expensive, the federal government should remove the four dams on the lower Columbia Snake, she said.

She said those lower river dams produce the least amount of power and cause the biggest problems for fish. "We have to provide natural conditions for those fish to survive," she said. BPA offers cheaper option

Bonneville submitted a more "targeted" plan to the judge, one that protects juvenile salmon by trucking them downstream, past the dams, to the Columbia River's estuary. That would leave more water to spin turbines and produce power, said Mike Hansen, a BPA spokesman.

BPA's proposal would cost somewhere between $43 million and $90 million per year. Using the 10 percent rule, that means the PUD would be responsible for $4.3 million to $9 million of that new cost.

PUD commissioners said they believe the environmental community is pushing so hard on one issue that they're missing the bigger picture. The less hydroelectricity, the more need to burn fossil fuels.

"Don't the environmental groups understand the consequences of their actions?" asked Commissioner Kathy Vaughn. "I don't believe the environmentalists connected the dots."

When you cut production of clean hydroelectric power, she said, you force utilities to buy more fossil fuels. With natural gas prices high right now, that means burning more coal, which is particularly dirty.

Del Giudice said utilities can use conservation or buy renewable energy to make up for their shortfalls. "Don't make us the scapegoat for burning fossil fuels," she said. "We need some leadership on this issue."

The PUD may hire a consultant to study the financial impact on the region of the proposed $347 million salmon protection plan, Hansen said. It also will try to rally forces to fight against the expensive fish program.

BPA already pays $615 million per year to protecting Columbia River fish. Energy officials say half that cost is in revenue lost when surplus water is spilled over dams.

What is happening?

Snohomish County PUD's proposed 4 percent rate reduction may instead turn into a 4 percent rate hike.

Why may rates go up? A federal judge may order more water to be spilled over dams on the Columbia River to protect threatened salmon runs. The Bonneville Power Administration calculates that could cost $147 million per year.

What will it mean for PUD customers? The PUD may have to pay $35 million more for power purchased from BPA. That will mean $38 more a year for the average customer.

Lukas Velush
Electric Bills may Increase
The Daily Herald, December 7, 2005

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