PUD commission agrees to disagree on adjustment on financial forecast

Six percent rate increase at center of discussion

EPHRATA — Financial forecasting completed earlier this year by the Grant County Public Utility District projected a 6 percent rate increase for 2011, which divided the board of commissioners over what to do about it.

The Grant County Economic Development Council is concerned the rate increase remains in the forecast.

"The projected rate increase sends confusing signals to ratepayers and industrial customers," said Larry Peterson, GCEDC member and Port of Moses Lake commissioner.

"If there was a projected need for it that would be one thing," said Peterson. "There is no apparent need for that rate increase."

The projected rate increase is a result of the PUD's financial parameters being applied to future water year forecasts. Commissioners Vera Claussen and Tom Flint want to modify the forecast and eliminate the 6 percent rate increase.

Commissioners Bill Bjork, Greg Hansen and Randy Allred believe the rate increase is the result of an honest financial forecast and should not be tweaked.

"We owe it to the public to maintain the integrity of that forecast," said Hansen.

Bjork said the PUD needs to fully disclose potential future rate increases and be prepared to make adjustments two or three years in advance to reduce the impact on ratepayers.

"We're on top of it," Bjork said. "We don't take this thing lightly."

He said the senior PUD staff would not receive commission approval for rate increases unless it was completely warranted.

"We'll be taking a hard look at any future rate increase," he said. "I don't want one."

The PUD recently decided to begin raising the amount held in the reserve and contingency fund from about $17 million to $70 million, to provide security in back-to-back critical water years.

PUD General Manager Tim Culbertson said the PUD has experienced 12 bad water years in the last 16. Commissioner Claussen said she agreed to raise the fund from $17 million, but not up to $70 million.

"It's an obscene amount of money," for the PUD to maintain in the fund, she said.

Peterson said the PUD is actually projected to have around $100 million dollars in the reserve and contingency fund in 2011, and could use some of that money to offset the projected rate increase.

Commissioner Flint said he is determined to maintain rate stability for companies making long-range plans in Grant County who rely on data from the PUD's financial forecast.

"Why not change it right now?" Flint said. "It sends a good message to all the ratepayers."