BPA has seen lower demand for power from public utilities and major industrial customers, which all have been working to increase energy conservation. While sale revenue has sagged, BPA operating costs have increased.
Seattle electricity rates are expected to rise after the Bonneville Power Administration (BPA), the regional wholesaler of federal hydropower, said it expects average rates to increase 5.5 percent over the next two years.
The projection was disclosed in a draft document released last week, and is a significant bump up from an earlier forecast of a 3.5 percent increase. The rate for the two-year period that starts Oct. 1 will be set in July.
Seattle City Light obtains about 40 percent of its power from the BPA, while the Snohomish County Public Utility District gets about 80 percent. Officials from both utilities say they expect rate increases, but can’t yet predict the actual cost to customers.
“BPA will deliver, at some point, what the change is, and we will calculate what our pass-through is,” said Scott Thomsen, a Seattle City Light spokesman. “This is not something we control. It is based on what BPA does.”
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The BPA markets power from federal hydroelectric projects in the Northwest, as well as the Columbia Generating Station nuclear-power plant near Richland. It operates almost 75 percent of the high-voltage transmission in its service area that includes Oregon, Washington and Montana.
The BPA increases, in part, reflect lower demand for BPA power from public utilities and major industrial customers, which all have been working to boost conservation.
So while revenue from power sales is down, the BPA says operating costs have increased.
“This results in higher rates, as BPA has fewer sales over which to spread its costs,” wrote BPA Administrator Elliot Mainzer, in the preface of the draft document.
The BPA draft document also includes a controversial decision to retain a $2-per-megawatt charge along a 90-mile stretch of Montana power lines, a fee renewable-energy advocates oppose as a roadblock to developing the state’s wind power for export to Washington and Oregon.
Montana has a major wind-power resource. Renewable-energy advocates hope it can be ramped up to help replace coal-fired power now generated at the state’s Colstrip plant and sent via transmission lines to the Pacific Northwest.
They say the power-line charge, which comes in addition to another transmission fee, has undermined the economics of new wind projects. And they, as well, as regional politicians, including Montana Gov. Steve Bullock and Washington Sen. Maria Cantwell, both Democrats, urged the BPA to drop the fee to help jump-start more Montana wind development.
“The federal agency is holding back economic growth in rural Montana,” said Mike Scott, a Montana organizer for the Sierra Club, in a statement. Scott said the BPA still has time, in the final document, to do “the right thing, drop this fee and let Montana compete in a free market.”
Mainzer, in the draft document released last week, indicated his agency is willing to get involved in a “collaborative process” to review the barriers to renewable energy development in Montana. But the BPA opted to “make no changes at this time,” in the fee along the 90-mile line.
BPA staff have noted that a range of things should be considered in developing new energy sources in Montana, including how to allocate costs of new transmission service and contract issues.