Northwest Power Supply

It is important to understand the rich history and unique relationship between the nation's rivers, the Bonneville Power Administration (BPA), and non-profit, consumer-owned utilities. This relationship gives non-profit utility consumers, like you, the first right, or "preference," to purchase cost-based power generated from rivers in the Columbia Basin.

Many people take for granted that affordable power will be there when they need it. Changing markets and increasing electric rates are a good reminder of the importance of affordable power. As energy markets continue to change, the affordability of preference power is at risk. Non-profit utility consumers are facing higher electric rates as a result.

The Preference Clause

Teddy Roosevelt was the first president to recognize the nation's rivers as a public resource. President Roosevelt and Congress said that the public should have the first right, or "preference," to purchase electricity from federal projects built on these waterways. This preference clause was first spelled out in the Reclamation Act of 1906.

Thirty years later, President Franklin D. Roosevelt made Teddy Roosevelt's vision of affordable federal hydropower a reality. The federal government built a system of multi-purpose dams on American rivers to generate power for the public benefit. The intent behind the Federal Power Program was that the electricity generated by the nation's rivers should benefit the public - not private individuals or for-profit corporations.

Columbia River Power System

The Federal Columbia River Power System (FCRPS) refers to 31 federal projects built on different rivers located throughout the Columbia Basin. In addition to generating electricity, these hydro projects help with flood control, irrigation, recreation, and river navigation.

These hydroelectric dams generate clean, cost-based power for Northwest utilities and their consumers. Public Power utilities pass these savings on to their customers in the form of non-profit rates.

Over 50 years, non-profit utility consumers have been paying for the dams through their electric rates. Unlike many federal projects, payment for these dams has been made on time and in full, including interest charges.

Meet the Bonneville Power Administration

BPA is the federal Power Marketing Administration (PMA) for the Northwest. There are four PMAs in the United States that sell the power generated by federal projects. BPA sells power generated by the FCRPS to consumer-owned utilities at "cost-based" rates.

A cost-based rate means that BPA charges its utility customers just what it costs to produce that power. Cost-based rates can be lower and more stable than market rates for electricity, which are affected by the principles of supply and demand.

As preference customers, most consumer-owned utilities purchase all or some of their power from BPA. To pass on the benefits of the federal system, these same utilities must resell the power to their customers at non-profit rates, or just what it costs to provide electricity to homes and offices. Non-profit rates are one of the most significant benefits consumers receive from the FCRPS through BPA and public power utilities.