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Economic and dam related articles

No Hot Gas,
Just Northwest Hydro Power

by Editors
Seattle Times, July 14, 2006

Avert your eyes from the gas pump for a minute -- not all energy prices are soaring. Bonneville Power Administration, signaling the latest stage in the Northwest's long, slow recovery that sent rates soaring five years ago, announced it was cutting its rates for the fourth year in a row.

More than 140 Northwest utilities that buy Bonneville power should share those lower rates with their residential and business customers. Monday, the federal power marketing agency announced the average rate would be about $27.33 a megawatt-hour between 2007-09. That's a marked improvement from the crisis-fueled $32.64 rate in 2003.

Still, eight months ago, Bonneville had proposed a higher rate of $30. Be grateful for austere cost cutting and two financial mechanisms that will increase Bonneville's financial flexibility and reduce its need to keep so much money in reserves. The rates are adjustable, so they could increase if a bad water year reduces production from the system of 31 federal dams.

Effective Oct. 1, the new rate comes close to the $27 target advocated vigorously by a coalition of utilities, local governments and business groups. They argued Bonneville could do better.

Bonneville has done better. The agency found cost savings of $122 million in each of the three years.

But the lower rate also required broad collaboration across all of its customer base, which participated in an 18-month consultation process, a spokesman said. A key is that many are signing up for a flexible preference-rate program, which permits Bonneville to borrow money from the utilities and pay it back with interest.

The average rate still remains higher than the $24.50 per megawatt-hour charged before the energy crisis. But considering inflation, Bonneville's increased investment in infrastructure, fish-and-wildlife programs and the region's additional power demands, the new rate is an achievement.

No Hot Gas, Just Northwest Hydro Power
Seattle Times, July 18, 2006

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