The Pacific Northwest electricity rates

The Pacific Northwest has the cheapest electricity in the continental United States, and the reason is water. The Columbia and Snake river hydroelectric systems were built largely with federal money decades ago, their capital cost has long since been recovered, and their fuel is free.

The Bonneville Power Administration markets the federal output at cost rather than at market price. Public utility districts, municipal utilities and co-operatives holding BPA allocations pass that advantage straight to their customers, which is why the gap between a public utility and an investor-owned utility here is one of the widest in the country for identical service.

Idaho at the low end of the national table and Washington and Oregon both below the national average is the visible result.

Rates are rising because of what is being added rather than what is already there. Washington's Clean Energy Transformation Act and Oregon's clean energy law both require carbon-free supply on fixed schedules, driving procurement of new resources and the transmission to reach them.

Wildfire liability has become a major cost in Oregon after catastrophic fire seasons produced litigation against utilities, raising insurance costs and mitigation spending including preemptive shutoffs and extensive vegetation management. Washington faces a milder version of the same pressure.

Drought is the recurring risk. In low-water years hydro output falls, utilities buy replacement power at market prices, and the cost flows through to rates with roughly a year's lag.

The boundary between a consumer-owned utility and an investor-owned one matters more here than anywhere else in the country. Seattle City Light and Snohomish PUD customers pay materially less than Puget Sound Energy customers a few miles away, for the same service.

Low rates make electrification unusually favourable. Heat pumps and electric vehicles pay back faster here than almost anywhere, because the operating cost comparison against gas and petrol starts from a low base. Both states have layered their own incentives on top of federal ones, which matters in a region where summer air conditioning is becoming necessary.