The Bonneville Power Administration says that customer demandunder new 10-year wholesale power contracts is so strong that itwill have to purchase power on the open market to augment itssupply. To recover its costs, BPA also proposes to add a 15% chargeonto its wholesale rates going into effect Oct. 1, 2001.

BPA said that even with the new charges, its wholesale ratesstill will be “well below” wholesale market prices currentlyforecast for the next five years along the West Coast.

BPA signed new 10-year wholesale contracts two weeks ago withNorthwest utilities and industries, pushing the agency’s total firmenergy load to 11,000 MW. The amount was higher than earlier BPApredictions and nearly 3,000 MW more than the federal ColumbiaRiver Power System can generate on a firm basis. BPA said 135public customers signed up for 6,600 MW, including 2,000 MW ofslice and about 1,200 MW of block sales. Of 135 customers, 127signed 10-year contracts and eight signed five-year contracts. Sixinvestor-owned utilities signed contracts for 1,000 MW, five for 10years and one for five years.

“Costs in the deregulated wholesale power market have becomevery volatile,” said Paul Norman, BPA senior vice president.”Recent steep increases and an apparent upward trend in marketprices have prompted utilities formerly purchasing power in themarket to bring their business back to BPA.” BPA will have toaugment its supply in that same market, officials said. Theproposed 15% charge is because of higher prices for purchasedpower; other utilities in the Northwest already have announced ratehikes.

Earlier this year, BPA filed proposed power rates with theFederal Energy Regulatory Commission for the Oct. 2001 to Oct. 2006period. The rate for public agency customers and the residentialand farm customers of investor owned utilities was set at 2.2 centsa kWr, nearly unchanged from rates in effect since 1996, BPA said.The proposed 15% wholesale increase would affect each customer’sretail rates differently, depending on that entity’s other costs.

BPA also announced that its administrator, Judi Johansen isleaving to become executive vice president for government affairsand regulation at PacifiCorp. Steve Wright, currently BPA’s deputyadministrator, was named acting administrator.

Carolyn Davis, Houston

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