Another winter of low precipitation makes six in a row - the lowest cumulative runoff on record, meteorologists report. Barring unscheduled plant outages or other unforeseen circumstances, the region's utilities still expect to have enough electrical generating capability to meet demand. The primary effects will be financial. Low precipitation is reducing hydro system performance for utilities and suppliers in the region, which increases power purchases from other, more costly sources. Low water in rivers is also shrinking expected surplus sales revenues. All of this puts upward pressure on rates.

BPA Administrator Steve Wright said, "Last year we reduced rates 7.5 percent but notified the region that the biggest variable affecting rates going forward would be water and markets. The weather is not cooperating. We can't do anything about the weather, but we can do something about how much energy we use."

All Northwest utilities rely on hydropower for some portion of their electrical supply. When water conditions are average or better, BPA and the other utilities sell excess energy in surplus markets and use the revenue to help hold down rates for Pacific Northwest customers. To the extent that sales are down due to low water, revenues are falling short of projections.

"Conservation makes sense during all water conditions," said Melinda Eden, chair of the Northwest Power and Conservation Council. "During a drought it becomes even more important. Conservation is the most important way to meet future electricity demand in the Northwest and can help reduce the future cost of electricity for all consumers."

Publication date: 04/18/2005