BPA considers production step-up

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

SEATTLE POST-INTELLIGENCER http://seattlep-i.nwsource.com/local/bpa13.shtml

BPA considers production step-up

Tuesday, February 13, 2001

SEATTLE POST-INTELLIGENCER STAFF AND NEWS SERVICES

The Bonneville Power Administration said yesterday that it is meeting with other managers of the Columbia River hydroelectric system to assess whether they'll have to increase water flows later this week to generate more electricity.

With predictions of colder temperatures coming, BPA may be faced with a choice of buying expensive open market power, and endangering its financial condition, or running more water through electricity-generating turbines.

The latter option carries the risk of depleting reservoirs on the system and reducing the water available for power generation and fish migration. The latest forecasts for the Columbia River put spring flows at just 63 percent of average levels, because of a near-drought this winter.

BPA increased water flows beyond what's known as the biological plan for four days in January when market prices skyrocketed.

-- Martin Thompson (mthom1927@aol.com), February 13, 2001

Answers

THE ENERGY CRUNCH: BPA MAY CHANGE ITS RATES EVERY SIX MONTHS Tuesday, February 13, 2001 By THOMAS RYLL, Columbian staff writer The Bonneville Power Administration is nearing an agreement with its wholesale customers that would call for a rate change every six months for five years.

"We're really close," said Stephen Wright, the federal power- marketing agency's acting administrator. "There's enough going forward that we think it's going to happen."

The variable-rate structure, which might be invisible to residents here, is a reflection of power-industry developments, and resulting sky-high prices, that have confounded even experts like Wright.

In recent years the BPA has offered fixed-rate, five-year power deals; if the new proposal goes forward, contracts starting Oct. 1 will have shifting rates. The rates won't be known until later this year.

Residents of Clark County will feel the pinch Oct. 1 when Clark Public Utilities begins buying about half its electricity from the BPA. Last month, BPA officials said rates for the first year of the contract could be 100 percent higher than those proposed just a few months ago. Succeeding six-month periods would see lower rates, assuming the region's power problems calm down.

Clark's rates to customers increased 20 percent in January due to the high cost of natural gas for the utility's River Road Generating Plant, which produces about half the county's electricity.

Last week, Clark secured a $63 million deal for two months' electricity August and September needed to fill a gap between expiring contracts and the Oct. 1 start of a BPA contract. That power price is roughly 15 times what the utility has been paying for electricity.

Just what effect that purchase and the BPA prices will have on local rates is unknown at this point. A 100 percent wholesale hike would have a much smaller impact here because BPA power would only be half the local supply. Utility officials have said they will attempt to smooth out the BPA rates to minimize the impact on residential and business customers here.

Even so, that the cost to customers will go up is all but certain.

Monday afternoon, Wright briefed Southwest Washington reporters at the Vancouver offices of U.S. Rep. Brian Baird, D-Vancouver.

Baird said he continues to support wholesale electricity price caps, which the Bush administration opposes.

He has been in discussions with the region's congressional delegation, "literally looking at all the options" for limiting prices for perhaps three to six months.

Baird said he does not know what means a bill, for example would be necessary to institute price protection. "Some mechanism must be found," he said. "What I don't think is acceptable is a complete laissez faire. … We've got a crisis and people are suffering."

Baird and Wright reiterated pleas that residents voluntarily reduce electricity consumption, thereby cutting the amount of power that the BPA will have to buy at wildly inflated prices.

"Behavioral changes are the simplest way to save electricity," said Baird. "We don't have to go to the store and buy insulation to cut consumption."

Wright said the winter's unusually dry weather will reduce the output of the region's electrical generation system (90 percent dam/10 percent nuclear) this year by 3,500 megawatts, the equivalent of 3.5 nuclear plants. Growing demand and California's deregulation problems have combined with drought conditions to send electricity prices to unheard-of levels.

Even so, said Wright, "It does not make sense. I cannot describe to you the economic fundamentals here." What BPA and the region need more than anything, he said, is rain. "We could get a great water year next year, and we would be awash in money."

To that end, Baird quipped, "My office is introducing legislation to make it rain more."

http://www.columbian.com/02132001/clark_co/178573.html



-- Martin Thompson (mthom1927@aol.com), February 13, 2001.


Moderation questions? read the FAQ