There’s little doubt rates charged by Bonneville Power Administration will be going up in the future.

The federal agency reported in February that it expects part of its operations to end the year with less than two months’ cash on hand which could trigger an automatic power rate increase in fall 2025.

BPA officials also have said for years they need to conduct critical maintenance and upgrades to their infrastructure, from the hydroelectric dams to the transmission lines that send power across the Pacific Northwest.

Any increased costs will be passed on to the utilities that rely on BPA’s power, which in turn likely will lead to higher power rates for consumers.

But one thing that won’t contribute to those higher rates and may even help mitigate them? BPA moving to a new energy market organized by an Arkansas-based cooperative rather than its current California energy market.

The federal agency’s recent proposal to shift to a new “day ahead” market sparked concern across the region from public utility commissioners, lawmakers in Oregon and Washington, and large investor-owned utilities. Critics say the move will drive up power rates for millions and potentially contribute to grid reliability issues.

But the public power utilities that serve the Tri-Cities see the move as a positive one that is more likely to lead to lower costs and provide for more certainty and planning of energy distribution.

“(It’s) a move that stands to benefit Northwest power customers, including those served by Franklin PUD,” the Pasco-based utility told the Tri-Cities Area Journal of Business in a release. “Participation in the (Southwest Power Pool’s Markets+ system) will enhance reliability and enable BPA to optimize the value of its clean and renewable hydropower system, delivering advantages to the region and Franklin PUD’s customers.”

BPA currently sells its power via a “real time” market, which requires more intensive management and coordination among the agency and the utilities it serves. BPA has also asserted for years its current market gives too much power over the region-wide energy system to California because the California Independent System Operator is governed in part by the California Legislature.

“The California market governance structure is created to deliver benefits to California ratepayers,” Jon Meyer, Benton PUD’s senior executive director of finance and executive administration, told the Journal.

Three linemen work on a power pole in Franklin County. (Courtesy Franklin PUD)

Under the proposal, the agency would join Southwest Power Pool’s Markets+ system, which is managed out of Little Rock, Arkansas. It is governed by a board that includes power producers and utilities and serves all or some of Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming, according to the Washington State Standard.  

A final decision on whether to shift markets is expected in May.

There is no concern that the move will pull power from the Tri-Cities; BPA is legally required to provide power to the 140 consumer-owned utilities in the region, which includes Benton REA, Benton PUD and Franklin PUD.

But critics say BPA joining the Southwest market will still drive up costs overall.

They have said the move will increase rates for their millions of customers, citing BPA’s own studies saying the upfront costs of joining the Southwest market are higher.

Letha Tawney, one of three commissioners on the Oregon Public Utility Commission, told the Washington State Standard that if BPA leaves the Western market, it will create needless problems. If a transmission line trips off because of a wildfire, or a coal plant goes down, the supercomputer in Folsom can quickly reroute energy across the region. Without BPA on its radar, a system operator in California would have to call operators in Little Rock to ask what each was seeing on their own maps of the Western energy load.

That’s not what public power proponents think will happen.

The Public Power Council, an advocacy organization for public power providers that includes the Tri-Cities utilities, supports BPA’s preliminary proposal. The Southwest market’s design and governance structure is better suited to BPA’s hydroelectric power generation and will lead to more efficiency.

“BPA’s decision to move forward with Markets+ underscores the strength of the SPP Markets+ option which was designed by diverse stakeholders across the West,” Scott Simms, the council’s CEO and executive director, said in a statement. “With many utilities across the Northwest and Southwest already supporting Markets+, this decision signals even greater momentum toward a broad and well-structured market that delivers reliability and cost benefits.

“We encourage additional utilities to consider joining this effort to further enhance regional coordination and market efficiencies,” he added.

Leaders with public power providers also see a greater likelihood of cost benefits, especially since BPA would no longer have to adjust its operations in a way that would more likely benefit California ratepayers over the others it serves.

“It’s that element of governance, this will move to a collective conglomerate,” Ryan Redmond, CEO of Benton Rural Electric Association (REA) told the Tri-Cities Area Journal of Business. “It’s a solid and more equitable model for us to work from.”