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COST OF POWER MAY INCREASE

PORT ORFORD Following the announcement of a 46 percent wholesale electric rate increase by the Bonneville Power Administration, Jim Arntz, general manager of Coos-Curry Electric Cooperative, said Monday it might translate to a 5 percent rate increase for customers Oct. 1.

Based on what Arntz knows now, he may recommend a 5 percent retail rate increase to the board this year, and another 5 percent for Oct. 1, 2002.

Arntz said it all depends on how Bonneville reduced its projected 100-250 percent increase to 46 percent.

He said Bonneville had projected the higher rate increase when it oversold its power supply by 3,000 megawatt hours. It would have had to purchase that power somewhere at $150 to $300 per megawatt hour.

Instead, said Arntz, Bonneville went to its customers and paid aluminum companies, customer-owned utilities and others to not use electricity.

Arntz said Bonnevilles power production is in balance now with its demand, or load, but it is committed to pay for that load reduction.

He said he hasnt seen the figures yet, and doesnt know what Bonneville paid to reduce its load.

Bonneville has committed to the 46 percent wholesale rate increase for six months, beginning Oct. 1.

If Bonneville did not pay too steep a price to reduce its load, said Arntz, he would expect that 46 percent increase to decline after the first six months.

In that case, he said, a retail rate increase of 5 percent this year and 5 percent next year should be sufficient for Coos-Curry.

If Bonneville paid too much for load reduction, said Arntz, it may have to stick with the 46 percent increase after six months, or even increase it.

That would force Coos-Currys rates up, said Arntz. It might have to raise rates a total of 15 percent over two years, instead of 10 percent.

Either way, said Arntz, Coos-Curry is committed to taking the rate shock away from its customers, and has no intention of passing on the full 46 percent wholesale increase.

Its pretty sad when a 46 percent increase sounds good, said Arntz.

Theres something backward about that.

He said after hearing Bonneville beat the drum about huge increases during the past six months, 46 percent sounded good.

In real dollars, however, said Arntz, the increase is bigger than the one that followed the decommissioning of several partially completed nuclear power plants by the Washington Public Power Supply System in the early 1980s.

He said what is happening now is not as big an increase percentage-wise, but it far outstrips it dollar-wise.

Oregon had been set to deregulate its electric market on Oct. 1, the same day the 46 percent rate increase takes effect.

Arntz said the Oregon legislature voted last week, however, to delay deregulation for another five months.

He said whether the rate increase was caused by deregulation or not, if the two had taken place on the same day, the public would have assumed they were linked.

Arntz said new federal soft price caps on wholesale electric rates linked to natural gas prices will reduce the volatility of the market and help California.

He said that state also has significant power generation coming online.

It should bring stability to prices, said Arntz, and could reduce rolling blackouts.

As for power outages in the Northwest this winter, Arntz said it all depends on water: how much it rains and how much water is spilled over dams for fish.

He said this year is predicted to be one of the worst water years in the history of the Columbia River.

He didnt believe Bonneville would spill any more water for salmon this summer.

If that is true, said Arntz, the probability of a major outage this winter should remain at about 17 percent.

It comes down to competing politics of fish-spill versus power generation, he said, and they havent really proved it helps fish.

Arntz said a cold-spell this winter, with increased electrical demand, could increase the chance of rolling blackouts.

One of the best things would be a warm, wet winter, he said. The second best would be a cold winter with a lot of snow.

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