By Warren Nakkela, Board of Directors;
Uncertainty is the word describing the future of how
electricity will be sold in the United States. Deregulation,
driven mainly by industrial and large commercial power users as a
means to use their bargaining clout, to reduce their power costs.
For Public Power in the Northwest, deregulation is further
complicated by existing contracts with the Bonneville Power
Administration and the bonded indebtedness of the Washington
Public Power Supply System's (WPPSS) failed nuclear power plants.
In addition, solutions for the diminishing salmon runs on the
Columbia River are being sought, funded largely by your power
bills.
Under the most talked about model for the future of
electricity, your power bill would reflect the
"unbundled" charges that make up your power bill.
These separate charges would show the cost of power before it
reaches your local utility -- the PUD. These charges would
include: Generation, Transmission, Fish Recovery Costs, WPPSS Bond
Payments, Taxes for Public Benefits and God knows what else.
The other items on your bill would reflect the cost of operating
the PUD, often called wire charges, plus any taxes.
Presumably, (because the laws are now being considered in
Salem) you would eventually have the choice as to your power
supplier. This would be the first part of your power bill.
The other part would be the wire charges, or delivery. But
that's not all. Unless your power supplier is Bonneville,
WPPSS charges could probably be tacked onto your bill regardless
of your power supplier as they are now hidden in Bonneville's
Power Rates.
Competition is be touted as a panacea for the power
market and indeed, competition in its rightful place can do
wonders through efficiency. But competition can also result
in a reduction of service and reliability. It can result in stranding of customers with small power needs.
In short, the competitive market favors large and attractive power
loads -- and sometimes at the expense of everyone else. The
PUD, in addition to delivery, will still be in a position to
serve everyone else with energy at market rates or below.
A remaining question: What will power
industry restructuring do to the
market rates in the Northwest? As we are all aware, we enjoy
some of the lowest power rates in the United States. Will
power industry restructuring change that? Many players are posturing to
enter the deregulated market. Among these are power
marketers who own no generation. These people will seek to
profit by moving power from areas of low cost to higher priced
markets. Does this bode well for the Northwest? Many
think not.
As legislation is being considered, the three things the
PUD needs to retain are: (1) the ability to self regulate (set
rates and policies), (2) Preservation of the PUD's Service
Territory and, (3) keeping the power from Federal Dams with the
region in order to maintain a strong competitive buffer against
escalating power costs.
Your PUD has been active in keeping abreast of bills in the
legislature and is working to help steer legislation away from any
pitfalls to Public Power.
