District to conduct rate study

Submitted by sheilac on Wed, 07/03/2019 - 10:51

The Okanogan County PUD is undergoing a rate study over the next several months to plan for the future financial needs of the district while keeping rates affordable and equitable.

FCS Group, a consulting company, will conduct the study, which will likely run through January 2020. Representative Sergey Tarasov presented to the PUD board on June 24. The study involves three main elements.

First, the equity management plan will determine the amount of annual revenue necessary to fund all financial obligations for the District, such as operating expenses, debt service and capital costs. It will look at different funding approaches for upcoming capital projects, making recommendations toward financial health. The plan also guides the District to meet financial targets and maintain reserve balances over a multi-year period.

Second, the cost of service analysis looks for an equitable distribution of cost share that considers the different classes of customers (such as residential, industrial, etc.). The study determines each class’s actual costs and whether their varying rates are equitable and sufficient to meet the District’s needs.

Third, the rate design portion will develop from the two earlier studies, taking the revenue requirements and equitable pricing structure and produce a rate schedule that will balance financial needs and minimize customer impacts.

The board has directed FCS Group to explore a variety of possible changes and how they might affect customer bills, such as eliminating the base charge, moving to a demand charge, changing the customer classes (there are currently nine) and other possibilities. The rate structuring seeks to avoid big increases while funding long-term infrastructure needs.

“If we can structure the rates so that it lessens the impact on the ratepayer, that would be a good use of this tool,” Commissioner Bill Colyar said.

The District will hear from FCS Group multiple times throughout the process, with presentations at public meetings. Information and updates will be provided on the 2019 Rate Study page.