Grant County PUD adopts new industrial rates

EPHRATA — The Grant County Public Utility District completed the final chapter of a rate design process for industrial customers Monday with a unanimous commission vote.

By adopting the revised and new industrial rate schedule resolution, the commissioners have provided industrial customers with enough notice to prepare for the new rates and potentially save some money.

The newly passed rates will go into effect on Nov. 1 when the current industrial rates sunset.

Commissioner Greg Hansen said he voted in favor of the new industrial rates after first considering a protest vote against them. He decided Monday that he would rather get this phase of the rate design process behind the commission and move on to other business.

However, if the agricultural food processors were not separated from the industrial rate class, he said he likely would have voted no on the new rates.

Last week, the PUD delayed taking action on industrial rates until agricultural food processors were removed from schedule 14 and placed into a separate rate class, now titled schedule 16.

Hansen wants the PUD to look at the other rate classes in the near future and believes they should receive the same treatment and consideration the industrial classes have received during the rate design process.

Hansen said the other classes' rates should be determined using an independent cost of service analysis and that if a rate reduction was appropriate, benefits should be passed along to those classes.

"I understand that we need industrial, but that doesn't mean that they should receive advantages the other rate classes have not," Hansen said after the meeting. "No one rate class should be receiving rate decreases while the others are not."

Existing industrial customers of the PUD will receive an average 2 percent decrease in power costs for 2006 in comparison to their estimated annual costs for 2005. That decrease will cost the PUD $1 million to provide for those existing industrial customers, Hansen said.

Larry Peterson, a board member of the Grant County Economic Development Council, said he sees the average 2 percent decrease as a cost savings of $1 million for existing industrial customers for 2006 compared to this year.

Commissioner Randy Allred said that it was most important that the district have stable long-term rates. He believes that short-term subsidized rates for any one particular group of ratepayers would end up costing the entire district.

"I thought they were the best we could agree upon," Allred said of the new rates.

Commissioner Vera Claussen said the new rates didn't follow closely enough with the cost of service rate design principals. She said she was never part of the commission majority's decision to achieve a revenue neutral financial position in the process.

"I don't feel the full commission discussed the revenue neutral position," Claussen said.

In a letter read to the commission Monday before they voted, Basic American Foods plant manager Brian Meiners encouraged the commissioners to consider cost of service principles in setting rates.

"The revenue-neutral direction that was used this fall is neither a sustainable position nor a historic approach to determine rates for industrial customers or any other customer class in Grant County," Meiners' letter stated. "Adjusting Rate Schedule 85 (Agricultural Food Processing Boiler Service) to move toward district costs rather than market costs will help existing and potentially future food processors in the county to maintain global competitiveness. It also provides a new revenue stream to the district as fuel switching to electricity occurs."

Marvin Price, the manufacturing services manager for Ochoa Foods in Warden, said that while waiting for the PUD to make a decision on rates, his company has been considering a conversion to electricity from natural gas for its boilers. He was hoping electricity rates would become favorable because natural gas prices have become too expensive. Now they can work towards a decision within Ochoa Foods on whether or not to convert, he said.

"Glad to see they got them passed," Price said.

Commission president Bill Bjork said that he was thankful to his fellow commissioners who did a very good job along with PUD staff in completing the rate design process.