Central Electric Cooperative, Inc. > President's Report > BPA Offsets Most Experimental Columbia River Spill Costs, Full Costs Likely to Hit Consumers Later

BPA Offsets Most Experimental Columbia River Spill Costs, Full Costs Likely to Hit Consumers Later

The final financial impact of increasing the amount of water spilled past Columbia Photo portrait of Dave Markham River hydroelectric dams this spring and summer will be $38.6 million, slightly less than the Bonneville Power Administration’s projected cost of $40 million. Because BPA reduced programs in other areas to buffer its Northwest utility customers from the full rate impact, the agency announced in June the spill-related surcharge was reduced by $28.4 million to $10.2 million. BPA’s actions combined with austerity steps taken by CEC will enable Central Electric to avoid adding the spill costs to members’ bills.

Based on BPA’s early $40 million projection, made before the court-ordered program began in April, we originally estimated the surcharge would cost Central Electric nearly $500,000. With the dramatic reduction in near-term spill costs, CEC’s actual costs will be $150,684.

This significantly lower total made it possible for CEC to cover these costs with existing revenues.

The spill increases costs by reducing the amount of water passing through the hydro plants’ turbines to leave more water in the river to help salmon migrate downstream. BPA must purchase electricity from the regional market to replace the lost power production.  While I am pleased with the work done by BPA to reduce the financial impacts of this program, which we fought in both the courts and the U.S. Congress to keep from taking place, the costs will eventually make their way into BPA’s rates.

The largest spending cuts came from BPA’s fish and wildlife protection programs. About a third of our wholesale power costs are dedicated to these programs, something all of us CEC members pay into through our rates. Now there will be a little less done in this area during the current BPA rate period. It could be argued we are paying for something we’re not getting, and BPA may need to play some catchup with its fish and wildlife program activities.

If this is the case, BPA may have robbed Peter to pay Paul. I believe all of us agree, that rarely works out without some pain in the end.

Sincerely,

Dave Markham
President and CEO