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Economic and dam related articles

BPA Chief Should Jump at Chance
to Forge Trust

by Editors
The Daily Herald, November 14, 2005

The relationship between the Northwest's primary electricity wholesaler and its customers, has been a touchy one the past five years. The federal Bonneville Power Administration insists it has done what it can to hold rates down. Its biggest customer, the Snohomish County PUD, is one of many that don't buy BPA's claims.

Certain pressures, like the energy crisis of 2000-01 that jolted rates skyward, didn't help. Markets that were criminally manipulated by Enron made it hard for utilities to trust anyone.

Now, with contracts signed during the power crisis about to expire, power customers are calling for significant rate relief. Before rates began to climb in 2000, BPA was charging about $23 per megawatt hour. (A megawatt hour is enough electricity to power 600 homes.) BPA is proposing raising rates starting next year from the current $29 per megawatt hour to a fluctuating three-year average of about $30. A coalition of its biggest customers want BPA to set a target of $27.

The sides aren't that far apart. An opportunity exists to raise the level of trust between BPA and its customers, to have them work together for the benefit of ratepayers, whose interest they all represent. BPA should seize it.

The price of power depends on a number of factors, some of which can't be controlled. River levels affect the cost of hydropower, as do regulations regarding the protection of fish. BPA revenues fluctuate depending on what it's able to charge other regions for surplus power. But BPA's customers argue that many other costs can be controlled, and that BPA could do more to bring down wholesale power prices.

To his credit, BPA Administrator Steve Wright has told customers that if they have ideas on how BPA can control its costs, he'll listen. Wright should follow through by sharing with customers detailed, line-item budget information on BPA's program costs.

Eighteen members of the Northwest congressional delegation, Republicans and Democrats, have asked Wright to do just that. They also asked him to present customers with various rate scenarios, ranging as low at $27 per megawatt hour, so they can understand the tradeoffs involved. That "would further ensure a credible and transparent rate process for the region," the delegation said in a letter to Wright last week.

Credibility and transparency. That could even lead to trust. In the world of public power, that would be a remarkable and welcome change.

BPA Chief Should Jump at Chance to Forge Trust
The Daily Herald, November 14, 2005

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