Managers Message

The Cost of Conservation

Dear Members;

While Benton REA will not be increasing retail rates in 2011 we know that rate increases are on the horizon.  These rate increases are being driven by the cost of wholesale power, not the internal costs of running our cooperative.  Therefore keeping track of why wholesale power costs are increasing is very important!  Let’s take a look at the Cost of Energy Conservation Programs, one of the reasons that wholesale power costs will increase.
Energy conservation program costs are contributing to wholesale rate increases. Why? Because the conservation program rebates that are currently available through the Bonneville Power Administration (BPA) are funded from electrical rates that we pay.  This year alone, BPA will charge Benton REA over $750,000 to fund the BPA conservation rebate payments; regionally the amount is over $110 million.  
The U.S. government, including the BPA, routinely uses tax breaks and rebates as a means to encourage certain desired activity. To promote energy conservation, the BPA has raised the cost of its wholesale power sold to utilities such as Benton REA, to fund rebates to end use electrical consumers who qualify for BPA conservation programs.  Although well-intended, BPA conservation programs often focus on larger end users such as warehouses, processing or larger commercial/industrial ventures. BPA conservation rebate programs that offer meaningful savings for the residential consumer are not readily available. As such residential consumers end up paying higher rates to provide the rebates that are often enjoyed by only larger end use consumers.  
We hope effective conservation programs will save energy, which in turn will extend the ability of existing generation to meet growing electrical demands and delay expenditures needed to construct new generation. In theory, this will save all of us money in the long term.  
In the interim we will all be paying more for electricity to secure the future benefits associated with conservation savings. Hopefully these savings will delay the cost of building new generation while making the northwest more energy efficient.
We know that retail rate increases are on the horizon, let’s work together to keep ourselves and others informed of the reasons!!!  After all that is "The Cooperative Way.”

Sincerely,
Charles Dawsey
General Manager