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BPA Residential Exchange Credit

I got a letter today, as probably did many of my local readers, from PGE explaining that the BPA residential exchange credit is being suspended and that "residential customers will see their [electricity] bills increase an average of 13 - 14 percent."

Firstly, I'm upset that they wasted a whole bunch of money by making a special mailing instead of including this information with my next bill.

Secondly, the mailing doesn't tell me anything useful about the reasons why the credit is being suspended. It tells me that it's due to a ruling by the 9th U.S. Circuit Court of Appeals and then tells me that "… electric utilities are uniting to fight for our customers' rights to their fair share of BPA benefits."

Hang on. Do I have such rights? Isn't that, just perhaps, exactly the matter the Court ruled on? I like to be an informed consumer and I would have appreciated hearing where I could find information on the merits of the case, not merely on its fallout. After searching for a while I found a news article with (a very few) more details:

The settlement underlying the current crisis began in 2000, when the agency agreed to give the investor-owned utilities a combination of power and financial payments valued at about $140 million annually between 2002 and 2006.

The benefit ended up far higher than $140 million, because the Western energy crisis forced the BPA to repurchase power it had agreed to provide utilities - but at much higher prices.

The public utilities sued in 2001, complaining that the settlements were illegal. [source]

I don't know exactly what this program is about. There's too much advocacy and too little explanation in the sources I've found. But it smells a lot like a subsidy designed to let private utilities buy BPA electricity at cost instead of at market rates:

Through the residential exchange, BPA distributes financial benefits of the Federal Columbia River Power System to ratepayers served by investor-owned utilities. The benefits BPA provides are passed on in the form of lower rates to the investor-owned utilities residential and small-farm customers. [source]

(If you have links that describe the residential exchange in more detail, please post them in the comments.)

The problem in my eyes is not that my electric bill is going up. The problem is that I've been getting subsidized electricity in the first place. When you subsidize something, you encourage its wasteful and uneconomic use. I don't want to encourage wasteful and uneconomic use of anything. There should be no subsidies.

The original news article states:

Ratepayer advocates and investor-owned utilities in Oregon already have called on the congressional delegation to get involved. They say Congress should consider reopening, and potentially fixing, the Northwest Power Act.

But any congressional action raises the possibility of forcing Bonneville to sell its federal power at market rates.

What, pray tell, would be so bad about BPA selling its power at market rates? In fact, why not wholly privatize BPA by selling its assets to investors?


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Tiny Island