PUD rate increase moves forward

Sequim Gazette

Clallam County PUD customers can be assured of a 3-percent rate increase this year and in 2014, according to a presentation made by Joshua Bunch, the utility’s treasurer and controller, at the Sequim Library on June 25.


PUD officials also have public forums scheduled in Port Angeles, Forks and Sekiu before the PUD’s commissioners approve the rate increase on July 1.


Rates will increase on both sides of customers’ bills — the basic use charge will rise from 73 cents to 75 cents per day and the kilowatt-hour charge will increase from 6.5 cents to 6.7 cents. On average, a residential customer will pay $3.40 more per month.


Still, said Doug Nass, PUD general manager, “We’re quite fortunate to have good rates here.” An audience member noted the national average is 11 cents per kilowatt hour.


Bunch explained that there are several factors driving these increases for the PUD’s 27,200 residential and 3,330 commercial customers: the cost to purchase power, conservation/renewable energy compliance and capital expenditures and financing.


“Power supply costs are our largest cost — 45 percent of our budget — that’s the biggest driver,” Bunch said, noting that the Bonneville Power Administration, PUD’s sole supplier, intends to raise its rates 9.5 percent to the utility on Oct. 1.


“Every two years BPA looks at its rate structure and in October 2011 we received a 9-percent rate increase. It’s not a controlled cost for us — we have to pass that straight on to you.”


Between 2013-2014, those costs to the PUD will represent a $1.8-million increase.


Another contributing factor in cost is compliance with the 2006 state Energy Independence Act, which requires large utilities to purchase higher-cost renewable energy by increasingly greater percentages up to 2020. BPA’s energy comes from hydroelectric power, which doesn’t count as a renewable supply.

Asked why, Nass and Michael Howe, the PUD’s executive communications coordinator, chalked it up to “politics.”

Currently, the PUD is required by the EIA to buy 3 percent of its retail load from renewables. That mandate jumps to 9 percent in 2016 and 15 percent in 2020. A corollary of the EIA is increased energy conservation and the two combined represent a $500,000 increase to the PUD’s expenditures from 2013-2015.


In the name of system reliability, Bunch said, the PUD has a $45.6 million capital plan over the next five years.


“So 55 percent of our costs we don’t have any control over with BPA, the EIA and taxes,” Bunch said.

“We believe, and customers have told us, it’s preferable to have smaller and more frequent increases rather than large infrequent ones.”

For 2013, the PUD’s revenues are projected at $54,020,000 with $54,371,000 in total expenditures. The current proposed rate increase will appear on bills beginning July 1.


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