Indeed, because the Northwest s power resources and transmission services have been operated for many years as if the region were served by one utility, many question whether an RTO will create any economic benefits at all for consumers. The market has had a tremendous impact on industry politics in the Northwest. In 1995, for the first time, the market price for wholesale energy fell below BPA s rates. Even though BPA reduced its rates by 13 percent through cost-cutting in 1996, customers left or tried to leave BPA in droves in search of cheaper rates. And many publics turned to other suppliers for up to 30 percent of their load.
Nothing is forever, however.
And, for the near term, BPA has little incentive to reduce or contain its costs. Here is the math of the situation. BPA has approximately 6,400 average megawatts of energy to sell to regional customers. 9 Publics now take about 4,300 average megawatts but may increase this load when new contracts are signed this year. Since 1981, investor-owned utilities have received payments from BPA to make up the difference between their higher retail residential rates and the retail residential rates charged by publics.