Different Factors That Can Impact Your Bill

It seems nowadays that when the topic of politics comes up in any group, the collective blood pressure rises and the group attention level drops, and yet, here I go again. Please hang in there with me, because the impact of state and federal government policy on Northwest electric utilities has never been greater, or less certain. Much of the uncertainty is swirling around why, when and how much your rates could be affected.

Right now, we are facing a three-headed monster of factors that could result in a rate increase. First, BPA’s Financial Reserves Policy mandates that it maintains enough money in reserve to cover unexpected expenses and/or revenue shortfalls. Lower-than-average water levels and increased power costs have led BPA to access its reserves to cover reduced revenues. We will know in the next month or so whether, or more likely when, a BPA surcharge will be passed on to BPA customers.

A second challenge involves a federal court order requiring increased water spill at dams on the Columbia and Snake rivers. Increased spill allows more water to pass over dam spillways rather than through turbines, with the goal of helping salmon migrate downstream. Columbia REA absolutely supports taking steps to promote healthy fish populations. At the same time, water that bypasses turbines does not generate electricity. With less hydropower available, BPA may need to dip into its financial reserves further or purchase additional electricity on the open market, the cost of which also could be passed along to all BPA customers.

The third factor hits a bit more close to home. Columbia REA, as we have mentioned before, is experiencing the same inflationary pressures that, I dare say, all of us are feeling in our daily lives. We all have to buy things to keep the wheels turning and the business operating and the kids well-equipped for school and other activities. It seems the cost of nearly everything continues to creep upward.

Together, these challenges make it more difficult for the Cooperative to absorb rising expenses. They do not automatically mean a specific future rate increase, but when these cost factors impact our ability to provide safe, reliable service, we need to adjust. The unfortunate reality is that it is nearly certain that Columbia REA will need to implement a rate increase of some sort in the next few months. Whether that comes in the form of a surcharge, which could go away after nine months to a year, or a permanent rate hike to cover increased costs, or some combination of both, remains to be seen. Right now, much of this is being determined at the state and federal level. Which means … well, you know what that means. It could be a while.

As soon as I know something for sure, so will you.

Best,
Scott Peters
CEO