PR 74 05
BONNEVILLE POWER ADMINISTRATION
FOR IMMEDIATE RELEASE:
THURSDAY, Sept. 8, 2005
BPA announces wholesale power rate decrease
PORTLAND, Ore. -
The Bonneville Power Administration announced today that it will reduce its fiscal year 2006 wholesale power rates by 1.6 percent beginning Oct. 1, 2005, despite the ongoing effects of below average precipitation in the Columbia River Basin and additional spill for salmon migration. The rate decrease is due to better-than-expected revenues from surplus power sales and agency cost cutting.
"This is the third year in a row that we have reduced our wholesale power rates, which is good news for our customers and the Northwest economy," said Steve Wright, BPA administrator. "It reflects our continued commitment to control costs while maximizing revenues from surplus power sales to the benefit of ratepayers."
BPA expects to exceed its revenue forecasts for surplus power sales by about
$20 million due to effective marketing and high market prices on the West Coast. Water volume in the Columbia Basin is about 75 percent of normal for the entire year, which reduces the amount of electricity generated at federal dams. But unusually heavy spring rains came just in time to take advantage of high market prices.
"We also appreciate the public's effort to conserve energy during a very dry year. Conservation reduces the risk that BPA will have to purchase energy in these high-priced markets," said Wright.
Also contributing to the rate decrease was BPA's ongoing focus on cost management, which brought BPA's 2005 power expenses more than $50 million below initial targets for the year.
BPA sells surplus power in the West Coast market and uses the revenue to help hold down rates for its Northwest utility customers. High natural gas prices and hot weather have combined to push up wholesale prices. Natural gas is a fuel used in combustion turbine generators.
The wholesale power rate decrease does not apply equally to all of BPA's public utility customers. In particular, the product known as the "slice of the system" will not see this rate decrease directly. Whether local utilities adjust their retail rates to reflect the changes depends on many other utility-specific factors. For more information on retail rates, contact local utilities.
In October, BPA will release an initial proposal in a separate rate proceeding for fiscal years 2007 through 2009 wholesale power rates. A final decision is expected next summer.
The Bonneville Power Administration is a not-for-profit federal agency that markets about 45 percent of the electricity consumed in the Pacific Northwest. The power is produced at 31 federal dams in the Northwest and one nuclear plant and is sold to over 140 Northwest utilities. It operates a high voltage transmission grid comprising more that 15,000 miles of lines and associated substations in Washington, Oregon, Idaho and Montana.
Submitted for distribution on 09-08-2005 at 2:05 PM
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