September 2011

BPA Announces Power Rate Increase

Dear Member:

On July 26, the Bonneville Power Administration (BPA) announced a 7.8% average wholesale power rate increase to become effective on October 1, 2011. BPA provides 100% of our wholesale power. The cost of power from BPA is by far the largest single cost we incur and accounts for over half of the amount you pay on your monthly electric bill.

 

The reasons BPA cites to justify its wholesale power increase include:

  • Upgrades and major maintenance to the aging federal hydroelectric system (31 dams) in the Columbia and Snake River basins.
  • Fuel purchases and repairs at Columbia Generating Station, the Northwest’s only operating nuclear power plant. BPA funds the plant and markets its power output.
  • Dam improvements and habitat restoration to protect Northwest salmon and steelhead—as outlined in federal court mandates and agreements.

 

How the wholesale rate increase from BPA relates to the final retail rate to you, the members of Midstate Electric, is being evaluated. As part of the process, your Board of Directors has begun a rate study which looks at future cost of service, various rate designs and rates.

  • Cost of service refers to actual costs to serve the different rate classes: Residential, Commercial, Industrial, Irrigation and Street Lighting.
  • Rate design refers to how those costs are allocated across the rate classes and the various aspects such as kilowatt-hour usage, demand usage and system costs (facility charge).
  • Rates refer to the actual costs assessed to the members.

 

I assure you that through this process, your board of directors, management and employees are working together to lessen the impact of the BPA increase. As always, our goal is to provide you with safe, affordable, reliable power.

 

Bill A. Kopacz

General Manager

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