The Load Based CRAC (LBCRAC) allows BPA to adjust rates every six months to recover the costs of purchasing augmentation power- that is the firm power BPA needs to serve loads beyond what the federal system can provide. The Financial Based CRAC (FBCRAC) allows BPA to make annual adjustments to base rates if their accumulated net revenues fall below a preset threshold. The single largest influence in BPA revenues is the market for BPA's seasonal surplus power sales. The Safety Net CRAC (SNCRAC) is a last resort adjustment that goes into effect only if there is less than a 50% probability of BPA making it's treasury payment.

The city's rates already include the current LB and FB CRAC's costs and these CRAC'S are projected by BPA to decrease over the remainder of the rate period. BPA's forecasts of these are as follows:

As you can see the highest forecast is for the current rate year (Oct. 2002 -Sept. 2003) at 45.5%. Ifthe SNCRAC were to trigger in Oct. 2003 it would be added into a lower LB-FB corrected rate than currently have and therefore could be as high as 6.5% and still not result in an actual increase above our current rates.

However, we are going to see a 1.5% rate increase in transmission in October, 2003. This will need to be figured in with the latest power rate information during the budget process in order to set rates for the city's next fiscal year.