Klamath Basin Drought may boost power bills 040605

This year's drought threatens to give ratepayers a jolt when they open their electric bills in 2006.

Energy officials told the Oregon Public Utility Commission on Tuesday that less water to generate cheap hydropower will spread ripples through the energy market. The Bonneville Power Administration, Oregon's three investor-owned utilities and others briefed the PUC about the repercussions of the dry year.

For electricity users, conserving energy might be the best defense against higher energy costs next year.

"Customers ought to be told that the power they're using today is going to add a surcharge to the bill at a later time," said Bob Jenks, the executive director of the Citizens' Utility Board of Oregon, a consumer watchdog group.

Wholesale electricity prices, as well as the cost of natural gas used to generate electricity, will continue to rise, BPA and utility officials said. Despite the market conditions, the region's supply of electricity should be adequate this year, they said.

But high energy prices and increasing demand eventually could catch up to consumers.

Lee Beyer, the chairman of the PUC, said that utilities might seek to recover their increased costs from ratepayers next year. He also urged consumers to trim their electricity use.

"You save on your bill this year, and you save the utility from having to go out and into an expensive marketplace to buy replacement power," Beyer said.

The BPA sells wholesale power to utilities for about $31 per megawatt. That compares with the going rate of $75 to $85 per megawatt from other sources, Beyer said.

The region is in much better shape than in 2001, when California's botched deregulation plan and a shortage of electricity created an energy crisis on the West Coast, Beyer said. More electric-power-generation plants have been built since the 2001 crisis, he said, and many producers jumped into the market to capitalize on higher prices.

"They're probably rubbing their hands together," Beyer said of the spike in wholesale electricity prices.

Melinda Davison, who represents Industrial Customers of Northwest Utilities, said it's too early to reach conclusions about next year's electricity bills. The water situation has improved in recent weeks, she said, and Oregon's unseasonably warm weather this year has reduced demand for electricity used for heating.

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