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Public utilities in the Pacific Northwest will be challenged to maintain rates they charge customers after the Bonneville Power Administration last week announced that its wholesale power rates would increase by 7.8 percent, effective Oct. 1.

The BPA said it is increasing rates to cover the costs of repairs at aging dams, fuel purchases and repairs at the Columbia Generating Station nuclear plant, and fish and wildlife conservation.

Nearly all of the 115 public utilities in the region buy power from the BPA. Each one will determine how much, if any, of the BPA increase to pass on to customers. One key factor likely will be how much power each utility acquires from the BPA.

For most regional public utilities, power purchases from the BPA represent a large portion of their total costs, according to Kevin O’Meara, deputy director of the Public Power Council, an advocacy group for publicly owned utilities.

The Umatilla Electric Cooperative, a nonprofit utility that serves approximately 10,000 customers in Eastern Oregon, buys all of its power from the BPA. If the UEC were to pursue rate increases, they would be determined by a board of commissioners after Oct. 1 and not impact customers until early 2012, according to Nate Rivera, a community relations representative for the utility.

Because the UEC is a rural electric cooperative, Rivera said its rate increases mostly impact the agricultural community.

鈥淭he difference between a farm making a profit and having a year that’s a loss is a very small margin,鈥� he said. 鈥淭heir cost to get water supplied to their land is a large part of their expenses, so if their rate increases, it shrinks their margins.鈥�

The Eugene Water and Electric Board purchases approximately 80 percent of its power from the BPA, and expects to hike its rates by about 2.1 percent in response to the BPA’s plan, according to Joe Hardwood, external communications director. EWEB’s largest customer class is residential, so it will foot most of the bill, he said.

EWEB’s financial team is examining its individual contracts to determine any possible rate changes for industrial clients. Hardwood expected any increases to be approximately 2 percent.

Clark Public Utilities, which serves 180,000 residential and commercial customers in Clark County, purchases approximately 60 percent of its power from the BPA. However, communications manager Erica Erland said the BPA’s rates do not necessarily correlate directly to Clark Public Utilities’ rates.

Utilities in Oregon also are facing rising rates because of the state’s renewable portfolio standard, which took effect this year. The RPS, passed in 2007, directs utilities to meet a portion of their electricity needs using qualified renewable sources; the amount is determined by the utility’s size.

The RPS for Oregon’s largest utilities starts at 5 percent in 2011, and increases every five years to reach 25 percent in 2025. The standard for other electric utilities in the state, depending on size, will reach 5 percent or 10 percent in 2025.

The Umatilla Electric Cooperative, in particular, could see a huge jump in costs over the next few years because of the way the state defines 鈥渟mall鈥� and 鈥渓arge鈥� utilities in regard to RPS. Development in Eastern Oregon has increased the region’s energy load, so the UEC could be placed in the same class as Portland General Electric and PacifiCorp, which each serve more than 500,000 customers.

鈥淭he state policy has us in a really difficult position,鈥� Rivera said. 鈥淎ny economic development in our region could be potentially damaging to us because it would force us to increase our rates. We want jobs to come to this area, and if state policy hamstrings us on that, we need to educate the Legislature and let (it) know how it’s impacting the region.鈥�

In the last legislative session, the UEC and Eastern Oregon lawmakers pushed for bills that would have granted the UEC an exception, but they weren’t passed. Rivera said the UEC will continue to fight for an exemption, although the region’s designation as a 鈥渓arge load鈥� is still uncertain.

If growth in the area were to slow or the rest of the state were to grow faster than expected, the UEC might not supply 3 percent of Oregon’s total electricity sales, which is a 鈥渓arge鈥� load according to the Oregon Department of Energy.

However, Amazon.com is building two data centers at the Port of Morrow and one at the Port of Umatilla that will significantly impact the grid.

If the UEC were designated as a large utility, it would be responsible for increasing its RPS from 10 to 25 percent and the additional $56 million in costs would have to be spread around a relatively small amount of customers.