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PUD phases in electricity rate increases

For the first time in a decade, Northern Wasco County People’s Utility District approved a schedule of rate increases in response to wholesale power increases from Bonneville Power Administration.

The hikes are designed to generate 4.2 percent more revenue and cover an anticipated $4.5 million revenue shortfall between 2013 and 2016, but will actually vary based on customer categories from

1 percent for industrial primary metered customers to 40 percent for irrigation. An 8.5 percent increase, phased in over four years, is planned for residential service, which includes the largest number of customers. That’s about $5 per month on an average bill. Commercial rates will rise 4.5 percent. Street and security lighting charges will rise 15 percent.

The new rates take effect April 1.

The changes are based on a comprehensive cost of service study performed by EES Consulting. Their goal is to base rates upon the cost of providing service for each customer class. In other words, the goal is for customers to pay their fair share.

Even with the increases, rate comparisons in the EES report show PUD customers would still pay less than customers in other nearby utilities. An average monthly residential bill for the PUD would be between $91 in 2013-14 and $95 in 2015-16.

Existing rates for the same purchase through Hood River Electric Co-op are $104, Pacificorp $163, PGE $169, Wasco Electric Co-op $133 and Klickitat County PUD $134. Rural programs like Wasco

Electric have a much higher cost of services because of the vast distances between customers, directors pointed out.

Residential rates will increase in two phases. Fixed cost of service will increase to 11.25 per month this April 1 and energy charges to 5.3 cents per kilowatt hour. On April 1, 2015, the facilities charge will increase to $15 per month, but the energy charge will remain 5.3 cents per kilowatt hour.

Low income senior and disabled customers will continue to be eligible for a 10 percent discount, and extremely low-income seniors and disabled customers can receive a 35 percent discount.

Given the potential complexity of commercial rates, the PUD opted not to phase in their increase. Starting April 1, the facilities charge will increase to $29 per month and the energy charge to 5 cents per kilowatt hour.

Commercial three-phase and single-phase customers with total demand of over 50 kilowatt hours in any one of the past 11 months are subject to a demand charge of $4.25 per kilowatt based on the 30-minute period of greatest energy use during the month. Their base facilities charge will be $75 per month, and energy charge 3.72 cents per kilowatt hour. Demand charges account for the PUD’s need to keep power available for high-demand customers.

Primary service customers will have a $3.84 per kilowatt demand charge, a $470 base facilities charge per metering point and a 3.41 cents per kilowatt hour charge.

Irrigation customers saw the largest cost increase — 40 percent — though the hike was significantly lower than the 67 percent the cost of service study indicated. These customers had a chance to meet with PUD staff and some board members after earlier in March to discuss the reasoning behind the cost increases.

Customers will see a base facilities charge of $32 per month, a demand charge of $4.25 per kilowatt, and an energy charge of 4.07 cents per kilowatt hour.

Board members had little to say about the increases this month, after discussing them in detail at their February meeting.

The PUD took several measures at their February meeting to lessen the blow of the increases, which could have been as high as 33 percent without them.

Among those measures include the decision to defease more than $6 million in revenue bonds. The move takes the bonds out of the PUD’s day-to-day cash flow needs and debt calculations, is expected to save 6 percent in revenue requirements. Other measures, like changing the reserve levels will save an additional 4.8 percent.

The PUD also negotiated a contract to begin selling power from its 5 megawatt The Dalles small hydropower plant to PGE.

“Add those three factors up and you are looking at a 24 percent reduction in rates that could have gone back to single-phase residential customers,” Langer said at the February meeting.

The increase is expected to cover Bonneville Power Administration’s anticipated 9.6 percent wholesale power increase for priority firm power, which is what PUD uses, and a 13 percent increase in transmission rates. The rates are proposed for the 2014-2015 fiscal years.


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