Bonneville Power Administration, electricity

The Bonneville Power Administration, a division of the U.S. Department of Energy, sells the output of 31 federal hydroelectric dams and one non-federal nuclear power plant, all located in the Columbia River Basin. Bonneville, based in Portland, also owns and operates about 15,000 miles of high-voltage transmission lines in the Pacific Northwest, accounting for about 80 percent of the regional total. The dams are operated by the U.S. Army Corps of Engineers or the U.S. Bureau of Reclamation. The nuclear plant, the Columbia Generating Station at Hanford, Washington, is owned and operated by Energy Northwest, a joint operating agency comprising 18 public utilities in Washington.

Bonneville is the largest supplier of electricity in the Pacific Northwest. The federal dams and nuclear plant, plus power Bonneville buys on a regular basis from other suppliers, comprise the Federal Columbia River Power System. Bonneville buys electricity from other suppliers because it is required by law to provide all of the power its public utility customers ask for, and that load is more than the federal system can generate.  However, beginning in 2011 Bonneville plans to limit its sales to the output of the federal power system except for those customer utilities that specifically ask Bonneville to buy additional power on their behalf.

Historically, Bonneville’s electricity was among the lowest-cost power in the nation. Bonneville’s customers —there are more than 120 — primarily are electric utilities in the Northwest, which in turn sell the power to their customers. Bonneville also sells electricity to utilities in the Southwest, but most of that power is surplus to Northwest needs. By law, Bonneville sells its power first to public utilities, then to others. Also by law, Bonneville sells power for the cost of its generation, not for profit. Periodically, Bonneville sold power directly to a few large industrial customers in the Northwest, which included 10 aluminum smelters, an aluminum fabrication plant, three chemical companies and a paper mill. Over time, though, these sales diminished as the result of rate increases at Bonneville and declining aluminum prices worldwide that made those plants increasingly uncompetitive.

There have been no additions to the federal power system since the completion of the Columbia Generating Station in December 1984, although Bonneville later signed contracts to buy portions of the output of several nonfederal power plants including a small dam and several wind power plants. The federal system has a total capacity — capacity is the maximum generating potential — of 17,462 megawatts, and an-energy output —energy is the normal power production — of 9,871 average megawatts. Hydropower accounts for 80 percent of the capacity and 67 percent of the energy provided by Bonneville. That is a lot of electricity. The average annual, continuous power demand for the city of Seattle is 1,150 megawatts, and so purely for comparison purposes Bonneville delivers enough energy for nearly nine Seattles. Bonneville’s power accounts for about 65 percent of the generating capacity and half of the firm energy produced in the Northwest.

Of the five federal power marketing agencies in the United States, Bonneville steadily grew to become the largest. It is unique as a federal agency in that it does not rely on annual appropriations from Congress for its financing. The Federal Columbia River Transmission System Act of 1974 gave Bonneville self-financing authority. Thus Bonneville is funded through the revenues it collects from the sale of power, as are the Treasury bonds Bonneville sells to finance its activities. This includes reimbursing other federal agencies, including the Corps of Engineers, for their hydropower-related expenditures at the federal dams. In 1977, Bonneville was transferred from the Department of the Interior to the newly created Department of Energy, but regardless of where Bonneville resides within the federal bureaucracy, it is very much a Northwest creature and it is jealously protected by the region’s congressional delegation, its de facto board of directors.  Formally, Bonneville has no administrative authority or board of directors or overseers beyond its administrator and whatever oversight is provided by the Department of Energy, the Federal Energy Regulatory Commission, and Congress, which reviews Bonneville’s budget and power rates only to ensure they are adequate to cover the agency’s expenditures.

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