Cold Snap Forces Temporary BPA Cost Adjustment


Despite announcing no rate increases over the summer, Bonneville Power Administration, Wells Rural Electric Co.’s wholesale power provider, is passing on a power cost adjustment for all of its customers starting on bills going out after January 15 and lasting for nine months. For WREC’s residential members, this adjustment will cost an average of 5 cents per month.

The adjustment is the product of BPA’s financial reserves policy, which requires it to maintain a certain cushion for financial stability. If unforeseen costs or circumstances force the company to draw from those financial reserves beyond a certain point, BPA can apply a surcharge to recover the necessary costs.

This financial reserves policy surcharge was triggered in part due to a cold snap during February and March of last year when cold temperatures and low water skyrocketed prices and put BPA in a bind. To meet demand, BPA had to buy expensive non-treaty water from Canada, putting it $179 million over rate case forecasts and forcing it to dig into its financial reserves. It could take as long as six years to recoup those losses via surcharges passed to BPA’s customers and, by extension, members.

The power cost adjustment will appear as a line item on each bill that describes a BPA financial reserves policy surcharge.