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August 20, 2002

Bonneville faces billion-dollar deficit

PORTLAND (AP) -- The Bonneville Power Administration says the unpredictable Western energy market could boost the agency's deficit to $1 billion over the next four years.

Last year, the BPA warned it might have to more than double its rates when electricity prices skyrocketed across the West, partly due to deregulation problems in California and drought that reduced hydroelectric capacity in the Northwest.

But this year, energy prices have declined sharply, reducing Bonneville's revenue.

"No one expected energy prices to go through the floor like this -- I mean, it really wasn't on anyone's screen; it certainly wasn't on our screen," said Kim Leathley, Bonneville's manager of business strategy and finance for power production.

Paul Norman, a Bonneville senior vice president, said the agency is trying to save money by making itself more efficient, but that won't be enough to make up the deficit.




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