PUD Lowers Overall Rates 4.65%

September 22, 2006

Columbia River PUD’s Board of Directors approved new rates for all customer classes at the September 19th Board meeting. The new rates resulted in an overall rate reduction of 4.65% and will take effect October 1st. The rate decreases are as follows:

• Residential:  -4.4%
• General Service Small:  - 0.0%
• General Service Large:  -2.5%
• Primary Voltage:  -7.0%
• Transmission Voltage:  -7.0%

“I am extremely pleased that we are able to pass on this rate reduction to our customers,” said PUD General Manager Kevin Owens. “This action is very important to the economy of Columbia County. I appreciate the hard work of our employees and their ability to manage and reduce our operating costs over the past few years. BPA worked very effectively with us to reduce our power costs.”

The new rates are based on a Cost of Service study, conducted by the PUD this summer, which determined the cost to deliver services to each customer class.

The reduction is the result of lower wholesale power costs from Bonneville Power Administration (BPA), favorable debt refinancing and effective internal cost management at the PUD. PUD management and other regional utility customers worked with BPA over the past year to identify cost-saving strategies that resulted in lower power costs.

In April, the PUD refinanced part of its long-term debt, reducing its interest payments for the next five years. The PUD has also reduced operating expenses by nine percent in the last two years.

The new rates are expected to remain relatively stable through the next few years. Costs for future capital investments, anticipated increased operating costs and financial requirements were included in the rate design.

Rate consultant D. Hittle and Associates and a Rate Advisory Committee, made of 13 PUD customers representing all PUD rate classes, assisted the PUD Board and staff with developing the new rates. The committee, staff and Board reviewed the Cost of Service study and agreed to implement rates that reflected the cost to serve each customer group and to leave the basic rate structure unchanged so that customers within each rate class would be affected equally.

The PUD’s base rates last changed in 2001. Since that time, the only rate adjustments have been due to a Cost Recovery Adjustment Clause (CRAC) instituted by Bonneville Power Administration (BPA). This adjustment from BPA appeared as a separate line item on customer bills, changed every six months and was passed directly through to PUD customers.

The PUD anticipates there will be no adjustment from BPA for the next year. BPA has authority to implement additional adjustments in the future if there are significant changes to river operations or the Endangered Species Act that impact fish and wildlife recovery programs.