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BPA rate reduction will cost PUD more

Monday - August 16, 2021 12:00pm

Although Bonneville Power Administration (BPA) will implement historic power rate decreases, the Okanogan PUD will also receive less power, which they will have to replace at a higher price on the open power market.

BPA announced earlier this summer that it would reduce power rates for the first time in decades by an average of 2.5%, and reduce its transmission rate increase to an average of 6.1% (originally predicted to be 12%). That applies differently across the various utilities who purchase power from BPA. New rates are effective Oct. 1.

For Okanogan County PUD, which purchases about two-thirds of its power from BPA, the 2.5% reduction in prices will mean some savings, but the PUD will also lose about 16,408 megawatt-hours of power for the year. The only way to recover that power is through sales on the open market, which on average are twice what the PUD would pay to BPA. Staff expect it to take at least $1 million to replace those megawatts, more than what the savings would be in the reduced rates. Most of the megawatts to be replaced occur during times of high demand, when the power on the market is even more expensive.

The reduction in megawatts comes due to fish passage mitigation measures, which allows for less power production across the BPA system.

The BPA’s 6.1% transmission rate increase will also cost the PUD about $160,000 more for the year.

In other business during an Aug. 9 meeting, the PUD board:

  • Surplussed a 1996 backhoe and 1986 gas-powered air compressor to auction, as well as a variety of unneeded items from the warehouse.
  • Heard from Director of Power Resources and Broadband Services Ron Gadeberg that wholesale power sales in July were again far under budget, similar to June. Excessive heat meant the PUD had to buy more power than anticipated, so that wholesale power revenue is now about $600,000 under budget for the year. Retail sales, however, as of June are about $127,000 over budget after high usage especially in the June heatwave.
  • Also heard from Gadeberg that broadband continues to grow, with 3,816 total end users, and fiber connections up to 73 so far in 2021, more than in any other full year as demand increases.