Electric Rates to Remain Steadyby Erik Robinson
The Columbian, December 14, 2005
Electric customers of Clark Public Utilities will see their rates stay the same, despite the potential for big increases in the cost of natural gas and hydroelectricity.
The utility's three elected commissioners Tuesday unanimously approved annual budgets for Clark's electric, generating, water and sewer systems, with electric system expenditures of almost $333 million absorbed by current rates plus a residential exchange agreement with the Bonneville Power Administration.
The electric system is by far the largest of the Vancouver-based utility's four annual budgets, serving 172,000 homes and businesses.
Faced with spiraling costs for the natural gas fueling its River Road Generating Plant, Clark last year invoked a provision of the Northwest Power Act of 1980. The act enables Northwest utilities to exchange higher-cost forms of energy with electricity marketed by the BPA, the bulk of which is generated on the network of federal dams spanning the Columbia River basin.
Without the boost from BPA, Clark would have had to boost rates by about 5 percent to balance the books.
Instead, Clark is maintaining its base electric rate of 7.36 cents per kilowatt-hour for the third consecutive year. Residential electric bills show BPA's contribution as 0.59 cent per kilowatt-hour, which Bonneville spokesman Ed Mosey said will amount to $15 million over the next three years.
The cost of power sold to customers amounts to almost three-quarters of the utility's electric system budget. Utility managers expect costs to rise by about 10 percent from $228 million in 2005 to $251 million next year, due to higher natural gas prices. The River Road plant provides about half of the utility's energy load, with the rest purchased directly from the BPA.
"Everybody is struggling to maintain rates," Commissioner Nancy Barnes said. "And that is not easy to do."
Commissioners on Tuesday acknowledged that energy costs could rise in October, when Bonneville adjusts the rates it charges Clark and other Northwest utilities to reflect new demands for balancing power generation and salmon survival. U.S. District Judge James Redden is due to hear arguments this week in Portland over a petition by conservation groups to boost the amount of water dedicated to help juvenile salmon migrate to the ocean, a request the four-state Northwest Power and Conservation Council estimated could add as much as half a billion dollars to electric bills.
In addition, Clark faces continued uncertainty about the price of natural gas. Although the utility has locked in a set price for its gas supply over the next six months, it must wade into the market again during the second half of the year.
"We're hoping gas prices will moderate in the next six months and we'll be able to keep rates steady," General Manager Wayne Nelson said.
Commissioners also unanimously adopted budgets with expenses of almost $150 million for its generation system; almost $9 million for the water system and about $480,000 for the wastewater plant it operates for the city of La Center. Negotiations remain under way for the utility to turn the sewage treatment plant back to the city government, which wants a more direct role in expanding the plant to accommodate future population growth.
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