Salem Electric’s power supplier, the Bonneville Power Administration (BPA), has begun a process which will probably result in their raising wholesale power rates this October. BPA says the increase could be as high as 15%, which would translate to a 9%–10% retail increase to our customers.
     The process would trigger BPA’s Safety Net CRAC or Cost Recovery Adjustment Clause. This is the third of BPA’s three CRACs. The other two have already added over 40% to the wholesale cost of BPA’s power.
     BPA projections indicate a January-to-July runoff forecast at 70% of normal. This, coupled with the 2001 drought, volatile energy prices and the West Coast energy crisis, puts BPA in a terrible cash position.
     The next annual treasury payment from BPA is due September 30, 2003. So, they say, a new rate structure must in place by then.
     Your Salem Electric staff and board are involved in the process by participating in many groups and organizations to keep abreast of these issues.
     Efforts are underway to urge BPA to reduce the size of this increase in ways that would not jeopardize BPA’s future.
     Although BPA has adjusted its rates several times in the past two years, Salem Electric’s rates have remained unchanged since October 2001.
     We’ll keep you updated as we receive additional information.

March 2003