To pay off debt and keep the impact low to ratepayers, Okanogan County PUD commissioners are considering tapping into the rate stabilization fund and keeping proposed rate increases low in 2021.
Current debt to Key Bank will be paid off in two years, with just over $800,000 due each year; the district has proposed making those two payments through funds available in the rate stabilization fund.
After damage from the Cold Springs fire coupled with an already aging system, the district has planned an aggressive capital outlay budget of $35 million in multi-year projects. Major projects include upgrades to the partially destroyed Okanogan-Brewster transmission line, rebuilding the Tonasket substation and replacing old power transformers at a handful of substations.
To pay for those projects and others, the district sold about $40 million in bonds on Oct. 28 at an interest rate of 2.93 percent. Some of those proceeds also refinance past debt. Staff will present a more in-depth report on bond sales at the Nov. 23 board meeting.
To further meet revenue requirements, the district is proposing rate increases at an average of 3.25 percent beginning April 1, 2021. Based on a cost of service and equity management study last year, the district will apply that overall increase differently across the various customer types to move toward more equitable rates. Overall increases proposed per class (averages are not easily factored in all classes):
- Residential: 4.5 percent increase (average of $4.57 per month)
- Small general service: 3 percent increase (average of $5.04 per month)
- Large general service: 1 percent increase (average of $106.90 per month)
- Irrigation: 2.5 percent increase
- Industrial: 1 percent increase
- Frost control: 10 percent increase
- Area lighting: 3.2 percent increase
- Street lighting: 3.2 percent increase
The board will continue to discuss the budget and rates at their upcoming meeting at 3 p.m. Nov. 23. At 6 p.m., a workshop will feature a discussion on O&M trends, as well as presentations from human resources, information systems and broadband departments.
In other business, the board:
- Heard a report from Chief Engineer Dan Simpson regarding successful Western Energy Coordinating Council (WECC) compliance testing of relays and breakers at the district’s substations.
- Approved the surplus of about 84 transformers that are no longer useable.
- Heard the 2019 Fuel Mix report for the district’s power purchases, which included about 81 percent hydropower, nearly 7 percent nuclear, 3.5 percent wind and the remaining from the energy market’s unspecified sources.
- Heard evening presentations from the operations, engineering and construction design departments about their proposed 2021 budgets.