Mason PUD 1 & PUD 3: Columbia River Treaty

Proposed Changes to International Treaty May have Impact on Local Electricity rates

The Columbia River Treaty has a long history of creating benefits for both the U.S. and Canada through its provisions for flood control and hydro power. Mason County PUD 1 and PUD 3 are concerned that proposed changes to the Treaty may have an impact on customers through increased electricity rates.

Most of the electricity (92 percent) used by customers of PUD 1 and PUD 3 comes from dams located throughout the Columbia River Basin. Much of each month’s bill goes to the Bonneville Power Administration (BPA) to pay for the hydroelectricity that comes from the dams.
Since 1964, the Columbia River Treaty between the U.S. and Canada has helped to manage the amount of water flowing in the river. The treaty is in effect through 2024. Next year, either country has to say whether or not they want to negotiate a new treaty, or let the current one expire.

To make this happen, dams on the upper reaches of the Columbia River in Canada store water so it can be held or released to make the hydroelectric system operate more efficiently, or regulate river flows to prevent or minimize flooding downstream.

Along with a lump sum for flood control, Canada gets a certain amount of electricity as payment for holding water in its reservoirs to help in the generation of power. The value of this electricity is between $250 and $350 million.

All customers of electricity marketed by BPA pay their share of this arrangement. For PUD 1 customers, the cost is estimated between $318,000 and $445,000 a year. For PUD 3 it is estimated at between $2 million and $2.8 million annually.

Talks are already underway, and the two PUD’s have a number of concerns: Canada wants more electricity as a part of the deal; goals and consequences are unclear in the draft plan for the new treaty; there is the possibility of cutting the role of hydroelectricity as a priority; spending more money on fish and wildlife, at a time when annual costs for these programs exceed $600 million; and additional costs will likely be placed on Pacific Northwest electricity customers.

PUD 1 and PUD 3, through their memberships in state, regional and national organizations, plan to make their opinions heard on the future of the Columbia River Treaty. This is especially important, since changes that are being suggested will likely have an impact on the price of electricity paid by local customers.

Sincerely,

Tom Farmer, commission president, Mason County PUD 3
Ron Gold, commission president, Mason County PUD 1