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BPA proposes 9.6 percent increase in power rates, 13 percent hike in transmission rates


From the November 14, 2012 issue of Public Power Daily

Originally published November 14, 2012

By Robert Varela
Editorial Director
The Bonneville Power Administration has proposed a 9.6 percent average increase in its priority firm wholesale power rates and an overall 13 percent increase in its transmission rates. The rate proposal will be considered during a public rate-setting process in the coming months, culminating in a July 2013 decision on final rates to take effect Oct. 1, 2013, BPA said. 

The proposed increase in power rates is needed to compensate for reduced revenue expectations from surplus power sales—due to shale gas pushing down prices—and to continue funding needed investments in the federal Columbia River Power System, BPA said. 

Construction of new lines and replacements to maintain reliability and facilitate the integration of renewable resources, such as wind, accounts for approximately 7 percent of the proposed transmission increase, BPA said. Increased mandatory compliance requirements and additional cyber and physical security requirements and other operational and maintenance expenses account for approximately 6 percent of the proposed transmission rate.

"In this economic environment any increase in the cost of electricity is difficult for consumers," said Public Power Council Executive Director Scott Corwin. "Consumer-owned utilities have worked in collaboration with the agency to identify areas where reductions in costs can be made so that the rate impact proposed now is lower than originally expected."

"We are acutely aware of the economic impact of our rates and have worked closely with the region to develop a plan that keeps rates as low as possible while making needed investments in infrastructure," said BPA administrator and CEO Steve Wright. "We remain committed to covering all our costs and providing timely repayment to the U.S. Treasury."

"Consumer-owned utilities will continue to work through the rate setting process that begins today to try to find additional ways to alleviate the rate impact," Corwin said.

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