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City will pay more for power

Weiser Signal American of Weiser, Idaho

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The Bonneville Power Administration is raising the rates it charges Weiser for wholesale electricity purchases by 7.1 percent with an effective date of Oct 1.

BPA officials announced the increase in wholesale power prices on July 23. BPA is a major power supplier in the Northwest and sells electricity to 142 public utilities, including Weiser.

Weiser operates its own electric utility, and within the city limits it offers some of the lowest electrical rates for residential and business customers in the region. The city doesn't generate any of the power it sells to customers. The electricity is purchased from the BPA and delivered to an Idaho Power substation located southwest of town. Outside of the city limits, Idaho Power provides electricity to Washington County residents.

Mayor Diana Thomas said on Friday that city officials will have to review the impact on the FY 2015-16 budget from BPA's pending price hike, but she doesn't think the city will need to increase electricity rates again this year.

"At this point we don't have any intention to raise them again this year," Thomas said, but she didn't rule out that a rate hike could happen in the spring of 2016.

The city raised electrical rates by 5 percent effective March 1 following a vote by the city council in February. The rate increase added about $3 to the monthly bill for the average residential customer.

The city had previously absorbed previous rate increases from Bonneville Power, but city officials said they could no longer afford to do that and the increased cost of power would have to be passed along to customers of the city utility.

The BPA adjusts its wholesale price for electricity every two years. The 7.1 percent hike will be in effect for 2016 and 2017. The rate increase supports investments in the federal hydropower system and expansion of BPA's high-voltage transmission system to meet regional needs, a news release from the BPA said.

Additional reasons.for the rate increase, according to BPA, include expected cost increases for fish and wildlife programs; an increase in BPA's cost of acquiring energy and transmission services to meet obligations to deliver power to off-system customers; and a reduction in BPA's long-term power sales to one of its largest customers, the aluminum giant Alcoa.

In the city's proposed fiscal year 2015-16 budget, the city's electric utility, which is a self-supporting enterprise fund, is projected to spend $2.4 million on electricity purchases from Bonneville Power, which is the same amount budgeted for the current fiscal year. With BPA's power price hike of 7.1 percent, the city would pay an additional $170,000 for electricity.

Thomas said the budget can be adjusted until the city's budget hearing Aug. 24. City officials were expecting a hike in the cost of wholesale power from BPA sometime this year. She previously told the Signal American that she doesn't think any budget adjustments will be needed if other revenues come in as projected.

In the FY 2015-2016 city budget, the electric department is projected to earn $3.15 million in revenue from operating the utility and selling electricity to city customers. The difference between what the city pays wholesale for the power from BPA and what it retails it for to city customers reflects the cost of running the city's electrical department.

City officials have said previously that the average residential consumer in Weiser saves about $200 a year on power bills compared to those living outside the city who get their electricity from Idaho Power.

The mayor said even with recent increases in the cost of buying power from BPA, the city will maintain its position as one of the lowest cost municipal electricity providers around. She said Idaho Power also would likely raise its rates after the BPA's actions.

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Original Publication Date: July 29, 2015

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