The Bonneville Power Administration, from which the Cowlitz PUD purchases most of its power, on Thursday announced a proposed wholesale power rate increase of 2.9 percent and an average transmission rate increase of 3.6 percent for fiscal years 2020 and 2021.
BPA said its final decision will be made in July, with new rates taking effect Oct. 1, when fiscal year 2020 starts for the federal government. Cowlitz PUD General Manager Steve Kern said the PUD is pushing BPA to bring the wholesale power rate increase to zero.
“We, the Cowlitz PUD, have been leading the charge, pushing very hard to get Bonneville to do cost controls,” Kern said Thursday. “We believe at this point in time that BPA can get to 0 percent. We think that’s attainable.”
Kern said it was too early to forecast how BPA’s proposed rate increases would affect PUD rates. Any Bonneville rate hike typically leads to unavoidable rate increases at the PUD, because the utility buys between 80 percent and 90 percent of its power from the BPA.
BPA is a federal agency that markets power from the federal hydroelectric dams in the Columbia River basin, making it the largest and lowest-cost energy provider in the region. Its new proposed increases are smaller than previous recent years: 5.4 percent in 2017, 7.1 percent in 2015, and 9 percent in 2013.
BPA attributed the relatively small projected rate increases to “significant program cost reductions.” BPA says it found $66 million in future annual spending cuts, according to the release.
Kern praised Bonneville’s progress so far but said the federal agency has more room to improve.
“I do want to give them credit, that they’ve taken some significant steps,” Kern said. “But it’s not something you can do in one year. ... For a big organization like BPA, they’re kind of in year one of what I believe is a several-year effort.”
In the release, BPA Administrator Elliot Mainzer agreed, saying Bonneville “made real progress in bending the cost curve” but “must continue to ... find additional savings and new sources of revenues.”