A news report in the Hungry Horse News (Columbia Falls, MT) captures the some of peculiar flavor of federal power marketing in the Northwest:
“The price of electricity mirrors the price of natural gas to a certain degree. With natural gas prices up, electricity prices are also up overall. That puts more money in BPA coffers, which, in sort of an odd twist, allows the administration to lower its costs and sell power at a cheaper rate.”
Something fishy is always going on at the Bonneville Power Administration. That’s a given for the federal entity that manages several hydroelectric dams along the Columbia and Snake rivers in the Pacific northwest. Normally, that “something fishy” is fish – the BPA is constantly trying to balance the many demands on its system: power supply, irrigation, recreational amenities, among other things, while at the same time allowing safe passage for many of the salmon and other fish that travel the rivers.
But something’s clearly a little off in the power marketing end of the agency. I think the story is, in part, this: While the BPA is obligated to provide power (at “cost”) to certain preference customers in the region, it also sells power it has available beyond those obligations in the wholesale market, but sometimes it doesn’t have enough power to meet all of these obligations, so it has to buy additional electricity on the wholesale market to supply the preference customers.
The full story is more complicated; see the details covered an a GAO report issued in July (Better Management of BPA’s Obligation to Provide Power Is Needed to Control Future Costs).
Hungry Horse News story found via Google News search. Many more related stories on the HHN website.
Will someone please remind me why we haven’t privatized this agency?