Snohomish County PUD, Other Utilities
by William Mccall, Associated Press
PORTLAND -- Public utilities have rejected an electricity rate decrease proposed by the Bonneville Power Administration and endorsed by four Northwest governors, officials said today.
Bonneville was sued by 72 public utilities after power prices soared during the Western energy crisis of 2001.
The BPA offered to settle the lawsuits by rolling back wholesale electricity prices by 7.4 percent, but all 72 utilities had to sign the agreement by yesterday in order for it to take effect.
Several Washington state utilities, most notably the Snohomish County Public Utility District (PUD), the largest of Bonneville's public customers, were among those that rejected the settlement.
"We felt it was shortsighted for consumers and the region," said Neil Neroutsos, spokesman for the PUD. Despite the rate relief, the settlement would have imposed other costs on a number of utilities, Neroutsos said.
Bonneville had planned to change its system of credits to investor-owned utilities to a mixture of cash and electricity, but public utilities argued the rebates were unwarranted and would forced the BPA to raise wholesale rates. Under the terms of the agreement, the private utilities would have agreed to defer receiving an additional $269 million in BPA payments until 2007, when the agency's next rate period begins.
The payments also would have been limited to between $100 million and $300 million in the 2007-11 rate period, down from about $400 million a year in current contracts.
Public power customers in the region would have seen wholesale electricity costs cut by $190 million, local utility managers said.
Managers of other utilities that had approved the agreement said they were disappointed by the decision to reject the settlement.
Rick Crinklaw, general manager of Lane Electric Cooperative in Eugene, said Snohomish and other utilities believe they can get a better settlement in court.
"For them, successful litigation would result in greater benefits," Crinklaw said.
"But from our standpoint, the benefits of a settlement would be certain if approved, and for us not markedly different than what litigated solution would be," he said. "And favorable rulings by the courts are by no means certain, so for us it was only 50-50 chance, and a settlement makes much more sense."
It was unlikely the settlement offer would be renegotiated, said BPA spokesman Ed Mosey.
"It's full speed ahead, it's not back to the drawing board," Mosey said.
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