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Economic and dam related articles

Lewis County PUD Staff
Describes Need for Rate Hikes

by Aaron Kunkler
The Chronicle, March 9, 2017

Meeting in Morton: The PUD Is Considering Implementing Higher Base
and Usage Rates in April to Offset a $3.3 Million Budget Deficit

MORTON -- About 25 residents filled the modest hearing room of the Lewis County Public Utility District on Tuesday to listen to staff presentations and voice their concerns over proposed rate increases scheduled for April.

Rates have remained steady for many years, said Brad Ford, the district’s auditor. In the past, the district has used both reserve funding and sold off excess power to help subsidize rates, keeping them from rising.

After running a cost of service analysis, PUD staff found a $3.3 million budgetary shortfall.

To counter this, the district is proposing an 8.4 percent increase, averaged across the various categories of customers.

Daily charges will be increased by 20 cents, for a total of 95 cents, for residential, commercial and small industrial customers. Kilowatt-hour charges would be increased by 5.5 percent to 5.763 cents.

Documents provided at the meeting showed the rate increases would raise the district’s rates to just higher than residents living inside of Centralia City Light’s coverage area but below rates in Mason County’s PUD 3.

Over the past three years, the district’s cash reserves have dropped from $16 million to $8 million, Ford told attendees of the meeting.

“Really, we kind of postponed rate increases,” he said.

The district is also a block-buyer from the Bonneville Power Administration, Ford said. This means they take a fixed slice of the overall power produced by Bonneville Power each year.

If the district does not use the entire amount of energy it purchases, it sells it on the market.

The energy market has been sluggish recently as natural gas has become more competitive, Ford said. In past years, when the market was stronger, the district was able to recover more money.

The benefit to the district and customers is that buying as a block maintains stability instead of buying on an as-needed basis. The district is bound by a contract with Bonneville Power through 2028.

Ford also said Bonneville Power will likely increase their rates by a 5 percent in October.

This is all coupled with requirements placed on the district by the state’s Energy Independence Act, a voter-approved initiative that mandates the district purchase a percentage of its overall power from qualified renewable resources. Hydroelectric energy, under the act, is not considered a qualified resource.

Overall, the district was required to purchase 9 percent of its energy from renewable resources in 2016. That will rise to 15 percent by 2020, with stiff financial penalties for noncompliance.

A proposed carbon tax working its way through the state Legislature could also increase operating costs for the district by millions of dollars annually.

The district came out in official opposition to the carbon tax, and Manager Dan Kay said they’re trying to leverage state representatives.

“We’re in Olympia, we’re tugging on the shirt sleeves of our representatives,” Kay said.

Ford followed up saying Lewis County was not the only public utility district in a similar position.

Kay said the district strives to be frugal, using its infrastructure and equipment until it must be upgraded or replaced out of necessity.

Many of the residents who attended were seniors, and voiced strong concerns about how the proposed increases would affect them.

In particular, the plight of residents on fixed incomes was brought up repeatedly, with many saying that the average $22-per-bill increase would be too great for many people to handle.

Another meeting is scheduled to be held at the Chehalis office, located at 245 NW Pacific Ave., at 10 a.m. March 14.


Aaron Kunkler
Lewis County PUD Staff Describes Need for Rate Hikes
The Chronicle, March 9, 2017

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