Published December 2003

PUD rejects BPA’s offer, will continue with lawsuit

SCBJ Staff

In November, the Snohomish County PUD became the first public utility in the Pacific Northwest to reject a proposal that would lower the electricity rates that 72 public utilities pay the Bonneville Power Administration.

Because all 72 utilities must sign on by Jan. 21 if the rate reduction is to take effect, the vote would kill an arrangement supported by power brokers across the Northwest.

Supporters include Gov. Gary Locke, three other Northwest governors and most of the Northwest’s congressional delegation.

PUD commissioners Cynthia First, Dave Aldrich and Kathy Vaughn said they rejected the one-year, 9.7 percent rate reduction because it would give the utility too little money for forcing it to drop its right to challenge the way BPA compensates private utilities including Puget Sound Energy.

PUD General Manager Ed Hansen estimates that the PUD would save between $100 million and $300 million if the ongoing lawsuit against BPA successfully forces the federal energy wholesaler to rewrite the way it distributes its electricity in a way that’s more favorable to public utilities.

BPA has said the settlement would save the PUD $35 million over three years, a figure PUD officials say is misleading because part of the rate reduction would come from deferring costs that would have to be paid later.

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