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BPA warns of rate jump

Dry winter could force prices higher

PORTLAND — Electricity rates for customers of the Bonneville Power Administration could jump by 30 percent by fall if the Pacific Northwest winter stays abnormally dry and wholesale prices remain high, says the BPA's acting chief.

Customers of Pacific Power, which supplies electricity throughout Jackson County, will not be affected by Bonneville's potential action, a company spokesperson said Tuesday.

Stephen Wright said just a month ago that effective Oct. 1, the beginning of a new contract period, rates likely would increase 15 percent.

But now the head of the federal agency that markets almost half of the electric power in the Northwest says the rate hike could easily double.

We're looking at a substantial increase, Wright said during a Monday meeting with energy experts and Sen. Ron Wyden, D-Ore., at the senator's office in Portland.

Wyden, a senior member of the Senate's Energy and Natural Resource Committee, reacted quickly to the threat of higher prices.

He said an increase of that size would be devastating to the people and businesses of the Northwest. He said he would use all of his political powers to bring electric power prices down, promote conservation and increase generation.

We're going to pull out all the stops to prevent these kinds of things from happening, Wyden said.

Bonneville markets wholesale power generated by the 29 hydroelectric dams along the Columbia and Snake rivers. It sells most of the electricity to public utilities, but also sells power to large industrial customers, such as aluminum smelters, and investor-owned utilities, such as Portland General Electric and PacifiCorp.

But demand has outpaced generating capacity and new plant construction, while deregulation in California has run into serious problems that have drained energy resources around the West.

Several aluminum smelters in Oregon and Washington already have shut down or significantly curtailed production, and a BPA rate increase could deepen their problems.

It would be a huge problem, said Brett Wilcox, president of Golden Northwest Aluminum, parent company for aluminum smelters in Goldendale, Wash., and The Dalles.

Wyden followed up Monday's discussion with a phone call to Spencer Abraham, President-elect Bush's choice to run the Energy Department.

Wyden said he urged Abraham to carefully evaluate the Western energy crisis and to steer clear of policies that might endanger the Northwest and its low-cost hydropower.

In the past, Abraham, a Republican and former senator from Michigan, supported a bill that called for the sale of the BPA to a private company that would market the agency's electricity to the highest bidder.

Wyden said he plans to use Abraham's confirmation hearing Thursday to press him further. Sen. Gordon Smith, R-Ore., also a member of the energy committee, has said he also will ask Abraham about maintaining Bonneville as a federal agency.