PUD to Get Break on Electricityby Lukas Velush, Herald Writer
The Herald, August 19, 2004
It's too early to tell if local electricity rates will go down,
Snohomish County PUD says.
Snohomish County PUD's largest supplier of electricity intends to lower its rates up to 7.5 percent on Oct. 1, but PUD officials say it's too early to know if that means the utility's 295,000 customers will see their rates go down.
Calling it good news for utilities all over the Northwest, the Bonneville Power Administration on Wednesday announced its first major rate reduction since the 2000-2001 West Coast energy crisis. As a result of the energy crunch, the PUD's rates increased 50 percent, which left it with some of the highest electricity rates in the state.
PUD leaders have been leaning on BPA to reduce rates for two years. But they had a tepid response to Wednesday's news.
"We're encouraged that Bonneville is considering lowering its rates," said Ed Hansen, the PUD's general manager. "We can't calculate what impact it will have on our rates until there is a final announcement."
Hansen said he recognizes that customers want to know if this will mean a rate decrease.
"We're well aware of the impacts on our customers," he said. "That's why we're working hard on keeping Bonneville's rates low."
BPA spokesman Mike Hansen said: "This is good news to virtually every utility in the Northwest. Snohomish is by far and away our largest customer, so a 5 to 7.5 percent rate decrease would mean a lot to them."
Mike Hansen said there is no doubt that there will be a rate reduction, it's just a question of whether it will be 5 percent or 7.5 percent.
It will be closer to 7.5 percent if BPA estimates that revenues from electricity sales out of the region will be high, and closer to 5 percent if those revenues are projected to be low.
Mike Hansen said BPA will be able to reduce rates despite a low water year on the Columbia River hydroelectric system because the price for excess power has been much higher than expected. It also saved money by settling a dispute with the region's large privately owned utilities and by cutting costs internally.
However, if BPA is too aggressive with its rate reduction, it could be forced to raise rates in 2006, he added.
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