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PUD Budget OK'd Without Touted Rate Cut by Christopher Schwarzen Seattle Times, December 21, 2005

EVERETT -- The question isn't whether Snohomish County residents will face higher electricity costs next year, pending the outcome of a lawsuit over how best to protect Columbia River salmon.

It's most likely a question of when, say officials at the Snohomish County Public Utility District, which on Tuesday approved a $588 million 2006 budget without a touted rate reduction.

Instead of using $18 million in reserves and cost savings to lower customer rates by 4 percent as initially suggested, the PUD will sink about $10.5 million next year into reserves.

The money would offset cost increases associated with a potential ruling in favor of environmentalists over energy producers such as the Bonneville Power Administration, which provides about 80 percent of the PUD's electricity.

The National Wildlife Federation and other environmental groups want more spill water from Columbia and Snake river dams to increase flows for juvenile salmon migrating downstream.

Lost water means less sales for the Bonneville Power Administration, which produces electricity at the dams. That means higher prices to meet its costs.

While a ruling is weeks away, indicators suggest a partial win for the plaintiffs. The PUD probably won't know how much that could increase its costs until April, when Bonneville re-evaluates its energy prices.

If Bonneville can stretch its reserves, said Al Aldrich, the PUD's governmental-affairs director, the PUD might be able to return next year with a rate reduction, or at least reduce the chance of a rate increase.

"We've been told what the maximum costs to Bonneville might be," Aldrich said, referring to a study suggesting Bonneville would pass about $347 million in losses to utilities.

The PUD isn't alone in its concerns over higher energy prices.

Tacoma Power and Seattle City Light both stand to lose money if the ruling favors the environmental groups.

PUD commissioners said Tuesday a potential rate-reduction plan was only temporarily shelved.

"We're disappointed," said PUD Commissioner Kathy Vaughn. "But we better hold off until we see what happens with the lawsuit."