Low rainfall year could mean higher power prices
By Charles E. Beggs, Associated Press Writer
Wednesday, April 06, 2005 |
SALEM - There will be enough electricity to meet the region's summer needs, but at increased costs that could translate into higher consumer rates by next year, Northwest power managers told state regulators Tuesday.
With 2005 shaping up to be the third-driest year since 1977, hydroelectric output from the region's dams is expected to be less than normal. Utility officials, in a briefing to the Oregon Public Utility Commission, said they will have to rely more heavily on higher-priced power from sources such as natural gas-fired plants.
"The lights aren't going to go out," said John Fazio of the Northwest Power and Conservation Council. But, he added, "electricity prices are likely to rise because of the shortage of water supply."
Officials didn't estimate what the impact on ratepayers might be. Utilities sometimes ask regulators to allow them to boost rates to recover the cost of having had to buy more expensive power.
Fazio said water runoff into the Columbia River at The Dalles is at 70 percent of normal and forecast to stay at about that level. Snowpack currently is between 50-75 percent of normal in much of Western Oregon and Washington, but as low as 25 percent in areas east of the Cascades.
Jim Lobdell, a vice president of Portland General Electric, said power planners are starting to question what's normal because this is the sixth consecutive year with below average water supplies.
He estimated PGE, Oregon's largest electric utility, will have $30 million to $40 million in additional power supply costs this year because of the water situation.
Stan Watters of PacificCorp, which serves customers in six states, said the cost of power generated by gas-fired plants has risen sharply because natural gas prices are 30 percent higher than a year ago.
Bob Jenks of the Citizens Utility Board, an independent advocate for residential ratepayers, said the meeting dealt too much with how utilities will need to recover their extra costs instead of how to reduce consumption.
"It's not focused enough on reducing the costs that have to be recovered," he said. "Calling on customers to reduce use needs to be central to this effort."
PUC Chairman Lee Beyer agreed in remarks after the meeting.
"If you don't save on power this year, you're going to pay next year," he said.
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