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PUD opts to stay Bonneville customer

Clallam County Public Utility District will remain a full-service customer of the Bonneville Power Administration from 2011-2030 rather than buying part of the federal hydroelectric system.

The district's three-person board of commissioners made the unanimous decision at its Nov. 24 meeting.

Clallam PUD Commissioner Hugh Haffner said the decision leaves the district less exposed to the often-volatile short-term energy market.

Clallam PUD serves about 28,500 electricity customers in Sequim, Forks and unincorporated Clallam County, plus the Port Townsend Paper Corp. mill.

The district buys 99 percent of its electrical power from the Bonneville Power Administration, the federal power marketing agency that supplies wholesale power to the Northwest.

Under the "load following," option the district will continue buying its current power allocation from Bonneville at tier one rates, which are being decided now in the current "rate case." That's an administrative process where Bonneville submits its proposed power rates to the Federal Energy Regulatory Commission for approval.

Then any additional power would be bought from Bonneville at more expensive tier two rates.

Under the second option, dubbed "slice," the district would have bought a portion (or slice) of the federal power system's output. Then additional power either would be bought on the open market or by joining with other utilities to build power projects or buy power on the open market.

"All 135 Bonneville customers signed the 20-year contract for cost-based rates ("load following")," Haffner said.

"What is our function? We're still a distribution utility so we are better off to be with Bonneville," he said.

The district suffered from high short-term market prices during the 2000-2001 West Coast energy shortage but only some of its power came from that source, Haffner said.

"Imagine if 30 percent of our power load was coming from the market at $1,000 a megawatt? Why should I gamble on slice when the customers I represent aren't gamblers?" he said.

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