PLU getting an electrical rate increase

“I just received a letter from Parkland Light and Water, dated Dec 17th, that effective Feb 1, 2010 that the electrical rate will increase by 7%.  That represents a $4,584 a month increase.  For the remainder of the fiscal year represent a $18,339 increase for all the electrical usage including residence halls.  For next year a $55,017 fiscal year increase next year for all electrical usage.”  Dave Kohler, Director of Facilities Management

What this means is that our current rate of $.0456 per kilowatt hour will be jumping to $ .o49 per kWh.  That might not seem like much, until it is multiplied by the thousands of kWh we use every month.  Last year PLU spent just under one million dollars on electric utilities; making a small 7% suddenly seem much larger.

Parkland Light and Water is a distribution co-op.  They do not generate their own power, but only distribute power that they purchase from Bonneville Power Administration.  BPA increased their rates in October, and now PLW is passing it along.  On July 21st, 2009 BPA released this press release:

The Bonneville Power Administration announced today numerous rate changes that are expected to take effect Oct. 1, 2009.

Rates for customers that buy power and transmission will increase on average by 6 percent.  Transmission rates will stay the same.  Power rates will increase by an average of 7 percent. This is the first power rate increase since 2002 and it’s driven by both rising costs and decreasing surplus revenues.

Power customers will also receive $163 million in returned overcharges due to a 2007 U.S. Ninth Circuit Court decision.   Financial benefits for residential and small farm consumers of investor-owned utilities, which are based on BPA’s power rates as well as other factors, will be $173 million.

BPA’s relatively new rate for wind integration services has been reduced substantially from the initial proposal due primarily to efforts from the wind power industry to improve their operational practices.

The new rates cover the agency’s fiscal years 2010-2011.  Under the rates, the average priority firm rate for wholesale power is $28.77 per megawatt hour.  That compares to the previous rate of $26.90 per megawatt hour.

“Nobody wants a rate increase, and we have worked very hard to keep the increase as low as possible,” BPA Administrator Steve Wright said.  “We tightened our belt and worked with stakeholders to keep the increase to a minimum, while honoring our commitments to fish, wildlife and maintaining system reliability.”

The primary causes of rising costs are actions to improve safety and reliability of the Columbia Generating Station nuclear plant and actions to protect threatened and endangered salmon.  BPA does not own or operate the nuclear plant, located in Hanford, Wash., but markets the power produced by the plant.

The power rate increase is down from the initial proposal of 9.4 percent in February, and it is considerably lower than the potential 15 to 20 percent increase that looked likely in early April. At that time, BPA’s financial picture had deteriorated significantly due to below average water and the poor economy.


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