Benton REA is committed to providing safe, reliable and affordable electricity to our members. Beginning this fall, the Bonneville Power Administration—which currently supplies all of Benton REA’s power—will increase its wholesale power and transmission rates, resulting in a combined rate increase of approximately 17.6% for Benton REA. This decision, made through BPA’s regular rate-setting process, will increase the cost of electricity for all public power utilities across the Northwest. Benton REA will continue to keep you informed and will work diligently to manage costs while maintaining the high-quality service you expect.
What the 2025 Bonneville Power Rate Increase Means for You
Some of the main drivers of electricity costs are the wholesale rates set by the Bonneville Power Administration. BPA recently finalized its rate case, setting the wholesale power and transmission rates it will charge electric cooperatives and other power utilities over the next three years. Beginning Oct. 1, these new rates will affect what all public power customers pay for electricity and transmission services.
BPA, a nonprofit federal power marketing administration under the U.S. Department of Energy, supplies nearly all the power used by not-for-profit electric cooperatives and public utilities across the Northwest. As the source of all the electricity delivered to members, BPA’s rate decisions have a direct impact on your electric bill.
Why Are BPA Rates Increasing?
The 2025 rate increase is driven by several key factors. First, rising operational costs are putting pressure on BPA. Maintaining and modernizing the region’s expansive hydroelectric dams and transmission infrastructure are becoming more expensive, and those costs are being reflected in new rate structures.
In addition, the new rate structure will enable the advancement of critical initiatives to meet customers’ needs and support national priorities for more abundant, reliable and secure energy. BPA is committing resources to advance major power and transmission projects, bolster cybersecurity measures and improve the overall resilience of the power grid. These proactive steps are essential for keeping power delivery safe and consistent.
Finally, market and environmental pressures are contributing to higher costs. Changing regulations, clean energy mandates and volatility in the energy market all increase the cost of doing business, which ultimately impacts the rates passed down to utilities and, in turn, customers.
Rate Impact on Benton REA
The combined cost of Benton REA’s Tier 1 and Tier 2 power is expected to rise by 16.4%, while the cost to deliver that power over transmission lines is projected to increase by 15.3%. Because power makes up a much larger share of Benton REA’s bill from BPA, the combined impact is an overall 17.6% increase in total power and transmission costs. These new rates will take effect on Oct. 1, and remain in place through Sept. 30, 2028.
Understanding Tier 1 and Tier 2 Power Rates
Tier 1 power is the most affordable and makes up the majority of Benton REA’s power supply. It comes primarily from BPA’s existing federal resources, like hydropower from the Columbia-Snake River System and nuclear energy from the Columbia Generating Station.
Tier 2 power is used when a utility needs more electricity than its allocated Tier 1 amount. Because Tier 2 power comes from additional, often more expensive sources, it is priced at a higher rate. Utilities that use Tier 2 power pay the higher cost to cover the extra resources needed to meet that demand.
Benton REA’s Advocacy Efforts
Benton REA actively engaged in BPA’s recent rate case through its membership in the Public Power Council and Northwest Requirements Utilities. These organizations—representing not-for-profit, consumer-owned utilities like Benton REA—played a critical role in pushing back on BPA’s initial proposal, which called for much steeper rate increases.
Thanks to coordinated advocacy and strong member participation, PPC helped secure roughly $45 million in annual reductions to BPA’s proposed power and transmission costs. Also, NRU achieved over $18 million in annual savings for its members by securing more favorable Tier 1 power and transmission rates. These efforts directly contributed to lowering the final rate impacts across the region, including a significantly reduced rate increase for Benton REA.
This outcome underscores the importance of Benton REA’s voice in regional policy discussions and our ongoing commitment to advocating for safe, affordable, reliable power on behalf of our members.
The Impact of Inflation on Electricity Costs
Broader economic conditions—particularly inflation—have significantly increased the cost of providing electricity. Rising prices for fuel, labor and other essential services continue to drive up Benton REA’s operational expenses, despite our ongoing efforts to manage costs. In addition, the prices of critical infrastructure components such as transformers, power poles and wire have surged in recent years due to supply chain disruptions, material shortages and increased nationwide demand. For example, the cost of line transformers has increased by 126% over the past five years.
What Does This Mean for Our Members?
While Benton REA works diligently to manage costs, BPA’s wholesale rate increase, combined with the continued rise in inflation, may drive higher retail electric rates for members beginning in fiscal year 2026 and likely continuing through the remainder of the three-year rate period and beyond.
The cooperative is currently working with an outside consultant on a cost-of-service analysis. A COSA is a study that determines how much it costs a utility to provide service to different customer groups or rate classes. The analysis helps in designing rates that are fair and cost-based, ensuring that each customer class is charged appropriately for the service they receive.
The COSA will guide Benton REA on the total amount of revenue it needs to collect from members to cover its expenses. It provides a basis for designing rates that are cost-reflective and encourages conservative budgeting as we look to the future.
Benton REA will continue to focus on system upgrades and wildfire mitigation. We must keep the health of our system in the best shape possible to avoid costly repairs, safety concerns and outages.
Our energy efficiency team will continue to help members save on energy costs through incentives for efficiency upgrades to homes and businesses—and it will guide members through the process from start to finish for the most energy savings.
Despite the upcoming increase, BPA’s electricity—sourced primarily from clean, renewable hydropower—remains one of the most affordable and reliable energy sources in the nation. According to the U.S. Energy Information Administration, the national average residential electricity rate in 2024 was 16.48 cents per kilowatt-hour. In comparison, Washington’s average was 12.2 cents, and Benton REA members pay just 7.9 cents. This places Benton REA among the most affordable electric utilities both statewide and nationwide.
To provide further transparency, here’s how each dollar Benton REA spends breaks down:
56 cents for power and transmission costs
Power = 49 cents
Transmission = 7 cents
32 cents for operational costs
12 cents for depreciation, taxes and interest
As a cooperative, we do not set rates to generate a profit. Benton REA remains committed to transparency, cost control and maintaining the infrastructure necessary to continue providing safe, reliable and affordable power to our members.
