The Okanogan Public Utility District’s residential customers will pay $2.81 more for their base rate each month, starting in April, to fund transmission line and substation upgrades.
The PUD board of commissioners approved the 7.8-percent increase at their meeting on Monday (March 11). The rate hike affects all service classes.
The PUD needs extra revenue for major remodeling at the Tonasket substation and to replace the 66-year-old transmission line from Brewster to Okanogan so it can carry more power, according to Sheila Corson, community relations coordinator for the PUD. The additional funds will go toward interest on $10 million in bonds for these upgrades.
Other projects include replacing the 62-year-old transformer at the Ellisforde substation, adding a new circuit in Nespelem, and doing a study to find a location for an additional substation in Brewster.
When the commissioners adopted the 2019 budget, they anticipated raising rates to bring in 1.5 percent more in overall revenue.
PUD commissioners and staff opted to increase the base rate instead of the kilowatt-hour charge. Changing the base rate means the impact won’t fluctuate from month to month, said Corson.
Raising the base rate also helps recover the PUD’s fixed costs for powerlines and other infrastructure. Those costs are the same whether a customer uses one kilowatt-hour of electricity or 1,000 kilowatt-hours, said Corson. The last study the PUD did on its overall cost of services found that the base rate covered only half of the infrastructure expenses.
The PUD intends to do a new cost-of-service study that will look at the district’s needs over the next 10 years. The study will help the PUD evaluate its overall rate structure. The PUD expects proposals from four companies for a cost-of-service study later this month. The last cost-of-service study was done in 2013.
PUD rates were last increased in September 2017, when the base rate went up by $1 and the kilowatt-hour charge increased by 2 percent. After the 2017 rate increases, the average residential customer using 1,000 kilowatt-hours paid $1.79 more per month, according to the PUD.