Snohomish County PUD warns of higher bills

EVERETT — Snohomish County PUD customers next year could pay higher electric bills.

That’s because the utility will pay more for the wholesale power it purchases from the Bonneville Power Administration starting next October.

The BPA filed a request with the federal government for an 8.5 percent wholesale power rate hike on Thursday. The agency is a nonprofit federal electric utility located in Portland, Ore., that markets wholesale electrical power from 31 federal dams and one nuclear plant in the Pacific Northwest.

The PUD purchases about 80 percent of its power from Bonneville Power Administration, according to Steve Klein, PUD general manager. The utility district budgeted about $239 million this year for power and transmission services from Bonneville Power. Rates are set by the PUD’s Board of Commissioners.

“We were hoping for a lower number but this is BPA’s initial rate proposal,” Klein said Thursday. “BPA’s final record of decision on their ultimate rate increase will not be determined until July of next year. In the meantime, we intend to participate earnestly in BPA’s rate case process to convince them to lower their increase.”

Klein said the board will be given an analysis of how the increase affects the utility company and hold a public hearing before deciding on any new rates for customers.

A public rate review process is expected to last through next July, according to Michael Milstein, BPA spokesman. The final rate proposal will be decided at the end of the process and will go into effect on Oct. 1, 2011.

Low water levels for the past several years, falling surplus energy sales and aging hydroelectric systems all have contributed to the rate increase, Milstein said.

Wholesale power prices on the open market have fallen from almost $63 per megawatt hour in 2005 to less than $36 in 2009, he said. Bonneville Power charges its regular customers $30 per megawatt hour.

“We sell power first to those utilities in the region that have priority like Snohomish (PUD) and then more power is sold on the open market and helps keep rates we charge to those regional customers lower,” Milstein said.

Milstein said there’s also a possibility that next year could be another low water year. If that happens, rates could rise even higher in 2012. For now, the Bonneville Power Administration estimates that there’s a 60 percent chance another rate increase will not need to happen.

“We’ve been through difficult times before,” Milstein said. “We want to make sure we’re up front in explaining to people we’re trying to keep the rate increases as minimal as possible.”

The PUD serves 320,000 power customers. The last rate boost by the PUD was a systemwide rate increase of 3.5 percent in April 2009.

Amy Daybert: 425-339-3491; adaybert@heraldnet.com.

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