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Energy, other costs drive increases

Monday - March 21, 2022 12:00pm

Okanogan County PUD commissioners and staff discussed the proposed electric rate changes planned for April 1. The rates reflect the 3.75% overall revenue increase approved in last year’s budget process.

With construction and equipment costs rising and utility infrastructure already aging out of service, the PUD has raised rates in recent years to fund regular maintenance without having to always borrow money. Large projects underway include the steel Okanogan-Brewster transmission line, Tonasket substation rebuild and the continuation of replacing aging power transformers in substations, mostly funded by a $40 million bond issue in 2020.

Each customer class will be adjusted individually, following the guidance of the cost of service study. The study showed that some classes need a higher increase than others in order to pay their full share of the costs incurred by providing electric service. Changes are proposed for both the basic monthly charge and the kilowatt-hour energy charge.

The average rate increase is listed, but the percentages change based on energy usage:

  • Residential, 5%
  • Small general service, 3.25%
  • Large general service, 1.87%
  • Industrial, 1.87%
  • Irrigation, 2.5%
  • Frost control, 10%

The PUD purchases its power from certain contracts (with Bonneville Power Administration, Douglas County PUD and Energy Northwest) and the energy market. With two peak records set in 2021 (one in summer, one in winter), the cost of power was much higher in 2021 than in 2020. The PUD’s cost of power adjustment (COPA) adjusts April 1 to reflect the actual cost of the power. The PUD was $1.7 million short of its budget for power in 2021, so the COPA will likely be increased to an expected $0.00345 per kilowatt-hour from $0.0006.

For 181 meters, the new rates also propose removing the $14.95 monthly basic charge for domestic wells and moving those accounts to the regular residential basic charge of $39.95. Those accounts are not paying the full share of costs to provide power, and the PUD has no way of confirming that the meter truly only serves one residence’s domestic well.

The board will revisit the proposed rates at their next meeting March 28.

In other business, the board:

  • Approved change orders for work on the Okanogan-Brewster transmission line project.
  • Heard that the PUD paid its annual privilege taxes of just over $1 million to the state in February.
  • Authorized the General Manager to execute a contract with McMillen Jacobs Associates for the Enloe Dam inspection, in an amount not to exceed $296,392.
  • Set future board meetings for April 11 and 25; May 16; June 13 and 27; July 11 and 25; Aug. 8 and 22; and Sept. 12 and 26. They also set May 2 as a strategic planning workshop.