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Possible rate increase in PUD's future

A proposed Bonneville Power Administration rate increase could affect local power rates in coming years.

But Columbia River PUD hopes to keep the rate increase low, adding only approximately $3 to monthly residential power bills.

BPA officials say the current proposed increases are to compensate for reduced revenue expectations from surplus power sales as well as to maintain system reliability, to meet increased demands for transmission in the Pacific Northwest and to continue funding investments in the Federal Columbia River Power System.

Bonneville’s proposed 9.6 percent average wholesale power rate increase and a 13 percent transmission rate increase are not a surprise to managers at the Columbia River PUD.

“This is all not really news to us,” said Kevin Owens, Columbia River PUD manager.

The PUD completed a five-year cost of services study in 2011 and anticipated the upcoming proposed increase, predicting a 6.5 percent increase.

Although Owens expects only a $3 increase for residential customers, it is not an insignificant cost overall for the PUD to absorb. Power costs represent 60 percent of the PUD’s total operational costs, according to Libby Calnon, communications specialist with the PUD.

In an average annual budget of $28 to $29 million, the PUD can typically expect to pay $16 to $17 million on power.

While the 9.6 percent rate increase proposed by BPA is more than what PUD predicted in its cost of services study, Owens says nothing is set in stone yet. He is confident the final rate will be closer to the PUD’s prediction of 6.5 percent.

The 9.6 rate is an “overall rate for 100-some utilities,” he said. “There are so many variables.” It depends heavily on how individual utilities buy and use energy.

Bonneville will be in discussion with the utilities it serves throughout the coming months, whittling at the proposed figure and likely settling on a much reduced percentage by next summer, Owens said.

“Right now it looks like about 7 percent,” he said.

In 2009, the PUD absorbed an increase of 6.9 percent by dipping into its rate stabilization funds. Faced with a similar situation now, Owens expects the PUD will tap into its reserves again.

The PUD is one of the ten largest property tax payers in Columbia County and provides service to over 18,000 customers in Columbia and Multnomah counties. The utility paid $413,872 in property taxes to Columbia and Multnomah counties in 2012.