BPA Says Demand Too Strong
The Bonneville Power Administration says that customer demand
under new 10-year wholesale power contracts is so strong that it
will have to purchase power on the open market to augment its
supply. To recover its costs, BPA also proposes to add a 15% charge
onto its wholesale rates going into effect Oct. 1, 2001.
BPA said that even with the new charges, its wholesale rates
still will be "well below" wholesale market prices currently
forecast for the next five years along the West Coast.
BPA signed new 10-year wholesale contracts two weeks ago with
Northwest utilities and industries, pushing the agency's total firm
energy load to 11,000 MW. The amount was higher than earlier BPA
predictions and nearly 3,000 MW more than the federal Columbia
River Power System can generate on a firm basis. BPA said 135
public customers signed up for 6,600 MW, including 2,000 MW of
slice and about 1,200 MW of block sales. Of 135 customers, 127
signed 10-year contracts and eight signed five-year contracts. Six
investor-owned utilities signed contracts for 1,000 MW, five for 10
years and one for five years.
"Costs in the deregulated wholesale power market have become
very volatile," said Paul Norman, BPA senior vice president.
"Recent steep increases and an apparent upward trend in market
prices have prompted utilities formerly purchasing power in the
market to bring their business back to BPA." BPA will have to
augment its supply in that same market, officials said. The
proposed 15% charge is because of higher prices for purchased
power; other utilities in the Northwest already have announced rate
Earlier this year, BPA filed proposed power rates with the
Federal Energy Regulatory Commission for the Oct. 2001 to Oct. 2006
period. The rate for public agency customers and the residential
and farm customers of investor owned utilities was set at 2.2 cents
a kWr, nearly unchanged from rates in effect since 1996, BPA said.
The proposed 15% wholesale increase would affect each customer's
retail rates differently, depending on that entity's other costs.
BPA also announced that its administrator, Judi Johansen is
leaving to become executive vice president for government affairs
and regulation at PacifiCorp. Steve Wright, currently BPA's deputy
administrator, was named acting administrator.
Carolyn Davis, Houston
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