Having reached the halfway point of its goal of 2,400 MW of load reductions in the near future, the Bonneville Power Administration’s (BPA) acting administrator Steve Wright last week urged utilities and industries that have yet to commit to reduce their power purchases from BPA to get off the sidelines and do so. NGI April 16)
“If we stopped where we are today with about 1,200 MW of load reductions, the rate increase would be more than 150% in year one,” Wright said last Wednesday. On the other hand, Wright said that if BPA pushes ahead and gets another 1,200 MW in load reductions, the agency could reduce the rate hike below 75%. “We need those utilities and industries that have not yet taken action to step up to the plate,” he said.
The acting BPA administrator noted that BPA wholesale customers have 16 days left to make commitments to reduce their purchases from BPA. The goal is for all customer groups to reduce their overall purchases by 2,400 MW. To date, the aluminum industry has been the biggest contributor to the load reduction effort, according to BPA, having met 75% of its share of the load reduction target. In contrast, public and private utilities so far have contributed 11% and 25%, respectively, of their share, BPA said. In addition, private utilities are also negotiating long-term agreements to reduce their purchases from BPA. Wright noted that some customers can cancel their load reduction commitments if enough other customers do not sign up, which increases the urgency for the region to achieve the additional commitments.
BPA is scheduled to issue a final decision related to its rate structure on June 20. Once that decision has been reached, the rate structure will then be submitted to the Federal Energy Regulatory Commission for approval. The rate could include adjustments every six months based on market conditions. BPA needs about 3,700 average MW of additional supply to meet all of its customers’ loads in the six months starting Oct. 1.
Meanwhile, the four Northwest governors recently sent a joint letter to BPA supporting the agency’s actions to avoid huge, wholesale rate increases and resulting damage to the Northwest region’s economy. “Curtailments of aluminum company operations and cuts in utility purchases of federal power will impose significant costs, but a nearly four-fold increase in BPA rates will do even greater harm to Northwest households and businesses,” the governors said.
In their letter, the Northwest governors urged all Northwest utilities, public and private, to participate in efforts to reduce purchases from BPA, adding that “the only way for it to succeed is if all utilities pledge a comparable reduction.” The executives said they “strongly support” the recent agreement with Alcoa that relieves BPA of the obligation to purchase power for the company’s plants while energy prices are too high to allow economical operations. The governors said that the agreement, which compensates idled workers, should be “the template for your agreements with other aluminum companies.”
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