By Marcy Stamper
PUD ratepayers got a reprieve from a rate increase least year because of the COVID economic crisis, but their bills may go up this year.
The Okanogan County Public Utility District (PUD) commissioners are discussing several options for applying the 3.25% revenue increase approved in their 2021 budget.
At their Feb. 8 meeting, the commissioners looked at adjustments that would bring rate structures closer to the cost of providing service to different customer classes.
The PUD is using studies that show the cost of providing service to different rate classes to equitably distribute any rate increase, according to PUD Community Relations Coordinator Sheila Corson said. Proposed rates will be presented at a Feb. 22 rate workshop and board meeting.
The PUD is considering several approaches to the rate hike:
• The adjustment for the cost of providing power could be rolled into the current kilowatt-hour (kWh) charge, where it would be adjusted every April to reflect changes in power costs from the PUD’s sources of power, such as the Bonneville Power Administration and Wells Dam.
• The PUD might eliminate tiered residential kWh charges. That change would most likely be spread out over five years, because merging them into a single rate would result in steeper increases for the average user, Corson said. Residential customers are the only ones who pay more per kWh for higher use.
The PUD says that having a single tier will simplify the billing process and provide relief to low- or fixed-income customers with higher usage. Some people favor preserving the two tiers to encourage energy conservation.
• The commissioners are considering adjusting base charges, kWh charges and demand charges to achieve the revenue needed for each ratepayer class. That means some charges would go up while others would decrease.
• Utility bills may be revised to show itemized state taxes.
A 2019 cost-of-service analysis found that existing rates for most service classes — small and large general service (stores and businesses), industrial, irrigation, and area and street lighting — are within 5% of the PUD’s cost of providing power.
But residential customers were paying 17.5% less than it costs the PUD to provide their power, and frost-control customers came up short by 462% in the year studied. Based on that analysis, the commissioners looked at an average 3.25% increase in each of the next four years to cover costs and equipment maintenance, Corson said.
The PUD had a $1-million budget shortfall in 2020. Wholesale power sales were above budget, but retail sales were low, Corson said.
The PUD has borrowed about $40 million to make upgrades to the Tonasket substation, Okanogan-Brewster transmission line and substation power transformers in what Corson called a “more aggressive capital program.”
Last year, the commissioners postponed a planned 2% rate increase because of the economic crisis created by COVID-19.