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 only last week withalmost 130 Northwest utilities and industries. The agreementspushed the agency’s total firm energy load to 11,000 MW. The amountwas higher than earlier BPA predictions and nearly 3,000 MW morethan the federal Columbia River Power System can generate on a firmbasis.

BPA said 135 public customers signed up for 6,600 MW, including2,000 MW of slice and about 1,200 MW of block sales. Of 135customers, 127 signed 10-year contracts and eight signed five-yearcontracts. Six investor-owned utilities signed contracts for 1,000MW, five for 10 years 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 to augment its supply in that same market,officials said. The proposed 15% charge is because of higher pricesfor purchased power; other utilities in the Northwest already haveannounced rate hikes.

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 kilowatt hour, nearly unchanged from rates in effect since 1996,BPA said. The proposed 15% wholesale increase would affect eachcustomer’s retail rates differently, depending on that entity’sother 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.

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