Utilities Hope to Keep Rates Flat

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Byline: SCOTT MABEN The Register-Guard

Beset with financial losses that are expected to persist for years, the Bonne- ville Power Administration is considering raising wholesale power rates again this fall.

That could spur Northwest utilities to pass the increased costs on to customers, as they did last fall with rate hikes of 20 percent to 40 percent. The municipal utilities serving Eugene and Springfield, however, hope to spare residents another jump in rates this year, representatives said.

"We'll try to hold the line and not have any rate increase at all," Eugene Water & Electric Board spokesman Lance Robertson said. "Barring something unusual happening, we may be able to skate through and absorb any Bonneville increase."

The same goes for the Springfield Utility Board, spokeswoman Meredith Clark said.

"Our goal right now is to do anything we can to not pass along a rate increase," Clark said. "But we also have found in the past that predicting these things is really difficult."

The BPA, a federal power supplier that adjusts its prices every six months, raised wholesale rates 46 percent last October, then scaled back that increase to 41 percent starting April 1.

As market prices have dropped, so have the BPA's costs for supplying power to its customers. The agency predicts that it will drop its rate increase to about 33 percent for October through March 2003. A preliminary forecast for April-September 2003 shows the rate increase bouncing back up to 39 percent.

For utilities that rely on the BPA for some or all of their electricity, the downward trend in what's known as the "load-based cost recovery adjustment" is good news, but it's only half the picture.

The BPA also is considering raising its "financial-based cost recovery adjustment" - a power rate adjuster based on the agency's financial health - up to its 11 percent cap in October. That would cancel out the rate decrease and result in an overall increase of about 3 percent.

"Our financial picture continues to get worse and worse," BPA spokesman Mike Hansen said.

A little over a year ago, the BPA had cash reserves of around $800 million. That gave it good odds of making its annual payment to the U.S. Treasury for loans financing hydro and transmission system improvements.

"We think come the end of this fiscal year, we'll be down around $128 million, which gives us about a 50 percent probability of making our treasury payment, which is not good," Hansen said. …