Puget Sound Power & Light (PSPL) has protested Bonneville Power Administration's (BPA's) plan to negotiate industrial power contracts with its own direct services industries, giving them rate cuts without first taking part in full public hearings. Gary Swofford, PSPL senior vice president for customer operations, said in August that BPA planned to have signed contracts in place by September, when consumer hearings are scheduled. PSPL believed that BPA's plan could increase the price of electricity by almost 15 percent for 750,000 residential and small farm consumers in Washington State to subsidize reductions given to 11 aluminum plants and a paper mill.PSPL claims that its residential and small farm customers will be hurt by losing "exchange benefits" bestowed under the Northwest Power Act of 1980. [The residential exchange provides a billing credit to ensure that the benefits of inexpensive, federal hydropower go to all residential and small farm customers. BPA buys higher-cost electricity from investor-owned utilities, and sells back (exchanges) an equal amount of lower-cost federal hydropower.]
According to PSPL, the contracts would also guarantee that industrial customers escape liability for stranded investments made by BPA, particularly in nuclear power, allowing them to terminate contracts early. PSPL says BPA has chosen to address the stranded-cost problem by shifting costs to others.
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