BPA Eyes Rate Increases

Bonneville Power Administration, the wholesale power supplier for Lower Valley Energy, announced last week that it is considering a 9.6 percent average wholesale power rate increase to compensate for reduced revenue expectations from surplus power sales resulting from low natural gas prices.  The company is also proposing a 13 percent increase in transmission rates which would be the first transmission rate increase in eight years.  The actual disposition of those rates will be discussed early next year, and LVE Spokesman Brian Tanabe says what it will mean for LVE consumers will remain to be seen.  Tanabe says this is not “uncharted territory” for the cooperative.  He says LVE has a long time to determine how to handle the rate increase – but the standard method of handling rate increases is to pass along ½ of the increase to customers since it actually accounts for half of what it costs LVE to provide power to its owner/consumers. Tanabe points out that in a number of occasions, the cooperative has simply absorbed the rate increase entirely.  BPA anticipates a final decision on the increase to be made by next October, and between now and then, Tanabe says the co-op board will have plenty of time to review its alternatives for dealing with the increase.  Currently, Tanabe says, electricity rates here are about 5¢ per kilowatt hour.  He says the state average is over 8¢ per kilowatt hour while the national average is above 11¢. BPA says any rate changes would be effective in the 2014 and 2015 fiscal years.