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http://seattlepi.nwsource.com/business/167549_bpa03.html?searchpagefrom=1&searchdiff=3
Low water may add to BPA's woes
By BILL VIRGIN SEATTLE POST-INTELLIGENCER REPORTER
Too little precipitation east of the mountains is threatening to put an additional financial pinch on the Bonneville Power Administration even as the agency is already under pressure to avoid a rate increase in October.
BPA Administrator Steve Wright said yesterday the water forecast on the Columbia River hydroelectric generating system, which had been estimated at 100 percent of normal at Jan. 1, has deteriorated to about 80 percent of an average year.
That poses a twofold problem for BPA. Less water in the Columbia system means less water to help salmon in their migration. It also means less surplus power to sell outside the region, and thus less revenue to help plug a hole in BPA's budget.
"There's still hope" that water conditions could improve to close to average, Wright said, "but you'd almost have to have 40 days and 40 nights (of rain) to get back to average."
The BPA has been trying to avoid an Oct. 1 increase in the wholesale rates it charges to its customer utilities, but to accomplish that it needed to come up with $100 million in annual spending cuts or revenue increases. That was before the latest water forecasts suggesting revenue from power sales won't be as good as expected.
Wright said the BPA has been looking at three ways to reach that $100 million goal. One is to withhold some of the water that has in past summers been spilled over dams to help salmon migration, thus making more water available for power generation. The plan to reduce summer spill was announced earlier this week.
Another is settlement of litigation filed by public utilities over payments to investor-owned utilities (such as Puget Sound Energy) as part of a program to share the benefits of the low-cost hydropower system with residential customers. The BPA had come up with a settlement that required the endorsement of all parties to the lawsuit; public utilities such as Snohomish and Grays Harbor public utility districts objected to the terms, saying they were too generous to the investor-owned utilities.
Wright said the BPA has been talking to the investor-owned utilities about a smaller settlement.
The BPA also has a board of customers and constituents who have come up with $80 million in cost savings or revenue increases "we're comfortable with," Wright said.
The October rate increase that Bonneville hopes to avoid would be in a component that BPA is allowed to increase if it believes revenues may not be enough to ensure repayment of its federal Treasury debt. That surcharge, currently at 11 percent of base rates, its slated to go to 14 percent in October
