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Economic and dam related articles

Ag Group Opposes Power Rate Increases

by Dan Wheat
Capital Press, November 21, 2014

Right now 15 large industrial customers pay 37 percent above
what it costs to serve them while irrigators pay 46 percent below...

EPHRATA, Wash. -- Grant Count Public Utility District has adopted rate increases that an agricultural group says shifts preference from farm irrigators and residents to large, single-load industrial users like Microsoft and Yahoo.

Ag Water Power Users of Eastern Washington asked PUD commissioners not to adopt the rate increases, saying they would adversely impact farmers and related agricultural industries.

Commissioners initially rejected the rates on a 3-2 vote. An amendment to moderate them failed and the rates then passed, 4-1, with Tom Flint, a farmer, the lone no vote.

Commissioners promised to review the rate structure in January and that is when farmers and residents better make their voices heard, said Dennis Conley, spokesman for Ag Water Power Users.

"This is a crack in the ditch. If farmers and residents don't stand up and say they don't like it, we will see more of it," he said.

The new rate structure is intended as a step toward equalizing charges with cost of service, said Thomas Stredwick, PUD spokesman.

Right now 15 large industrial customers pay 37 percent above what it costs to serve them while irrigators pay 46 percent below, Stredwick said.

The goal is for no one to pay greater than 15 percent above the cost to serve them nor more than 20 percent below, he said.

The 15 and 20 percent are arbitrary numbers that commissioners should review, Conley said.

"Irrigators know they've been subsidized, but it's been mostly from surplus power sales," Conley said. "It was shared among all ratepayers before there were large industrial customers but now most of it will go to them."

It costs the PUD less to deliver power to single, largeload customers than to residences and irrigators spread over the county, Conley said. But favoring such large customers at the expense of farmers and residents who have supported and benefited from the PUD since it constructed Wanapum and Priest Rapids hydroelectric dams in the 1950s is not right, he said.

Irrigator and residential rates most likely will continue to fall below costs of service, Stredwick said.

Shifting the rate structure to favor large, single-load customers is riskier, Conley said, because the PUD would be severely impacted if such customers had a decline in their businesses that caused them to leave the county.

"Power is a limited resource and if you spread it over a larger group it's a better business model," said Conley, a retired executive of Basic American Foods that operates a potato and bean dehydration plant near Moses Lake.

The rate increases as passed are 3.5 percent for irrigators, 2.4 percent for residences and .5 percent for large industrial users. There are other classes and rates.

Residential customers paid 4.3 cents per kilowatt-hour for power in 2014 and will pay 4.4 in 2015, Stredwick said.

Dan Wheat
Ag Group Opposes Power Rate Increases
Capital Press, November 21, 2014

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