Milton authorizes 16‑year BPA power‑sales agreement; council warned of unknown post‑2028 pricing and 'tier 2' risk
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Summary
Council authorized the mayor to sign a 16‑year Bonneville Power Administration contract (2028–2044). Staff said BPA is moving to dynamic pricing after 2028 and cautioned that 'tier 2' rates could be a major industry risk; legal reviewed the contract and staff recommended authorization to maintain BPA power service.
The Milton City Council on Nov. 3 authorized the mayor to execute a Bonneville Power Administration (BPA) power‑sales agreement that would run from Oct. 1, 2028 through 2044, a 16‑year term. Director Madden told council the city must return the signed contract by Dec. 5 if it wishes to continue purchasing BPA power.
Madden said the contract was reviewed by the city’s legal team and recommended for authorization. He cautioned council that BPA has not finalized post‑2028 pricing philosophy: the agency is moving toward more dynamic pricing that reflects seasonal and hourly demand, and the industry is focused on how to manage the potential for higher "tier 2" costs when demand exceeds baseline allocations. "The big problem that the industry is wrestling with... is the tier 2 cost rates," Madden said.
Council members asked how the contract would affect local rate tiers and whether alternatives exist. Madden said alternatives would be difficult for a city of Milton’s size and staff levels and that lacking the contract would require a multi‑year scramble for other federal or wholesale arrangements. On pricing, he said BPA projects average annual cost would remain close to current levels, but bills for customers could look different under an on‑demand pricing model.
Council moved, seconded and approved a motion authorizing the mayor to execute BPA contract number 26PS‑25057. The resolution passed unanimously.
