Brewer says county can't become 'anti-growth'

GCEDC executive director fears artificially high industrial power rates

EPHRATA — The Grant County Public Utility District said last week that it was moving closer to a decision on industrial rate schedules, and the board of commissioners reconfirmed their commitment to make a decision for those ratepayers by Oct. 1.

"Last week, representatives from many of Grant PUD's different rate classes provided the commission with feedback on rate proposals presented to date," said PUD Commissioner Bill Bjork in a press release. "That is one of the benefits of a public power utility — our customers can provide input that helps with future decision making."

The PUD's new power sales contracts for the Priest Rapids Dam go into effect on Nov. 1, the same date the utility's current rate schedule for large industrial customers sunsets. The board of commissioners must make a decision on those rates before Oct. 31, but committed themselves to an earlier date to give industrial customers a 30-day window to prepare for the new rate.

The PUD has said it welcomes public comment on the rate design process during its regular Monday commission meetings. The district will also schedule new rate workshops toward the end of September, if necessary, to complete the process.

"The commission has instructed staff to provide detailed information based on recent rate workshops and to analyze suggestions made by individuals representing industrial rate classes," said PUD Treasurer Controller Nick Gerde. "We're working closely with them to find rate solutions that are non-discriminatory while at the same time, satisfy the overall goals of rate stability, minimize 'rate shock' to a customer or class and achieve a revenue neutral financial position."

Members of the Grant County Economic Development Council along with Schedule 9 rate class industrial customers have been meeting with district staff and commissioners regularly to discuss changes to the power rate structure for the largest users in the county following the relicensing of the Priest Rapids Hydroelectric Project.

Schedule 9 represents the rate class for industrial customers with the largest loads, or more than 10 megawatts. This rate was closed to new customers last year, leaving three companies in Grant County within that class, and was scheduled to sunset on Oct. 31. No replacement rate was put in place.

With the new power contracts taking effect, the PUD will no longer be purchasing power from the Bonneville Power Administration. BPA power has been more expensive than project power in the past.

"Therefore, after Nov. 1, the cost of the power used in Grant County will be at Priest Rapids Project cost," stated Terry Brewer, the executive director of the GCEDC, in a discussion paper issued Sept. 15. "This means a significant reduction in the cost of power now being born on the industrial customers."

He added: "If we were to compare the cost of PUD power which will be used to supply those three companies after Nov. 1, 2005 when the PUD no longer needs to purchase more expensive BPA power after relicensing, it would seem logical and reasonable to consider a rate reduction for that class of customer since the predictable costs of power have dropped measurably."

PUD staff and commissioners, however, are considering keeping the rates where they currently are and possibly even raising the rates industrial customers pay so that cash reserves at the PUD can be increased, Brewer stated. He feels the district plans to do this when the cost of delivering the power has been reduced dramatically, contrary to the long established PUD rate making policy and practice of using cost as a preliminary basis for all rates.

"The Grant County PUD staff and commissioners are also discussing plans to increase the price of power as load increases, instead of offering a lower cost for power for larger volume usage," he stated.

The PUD staff has proposed having the largest users pay more for power as the customer's demand or load increases. The commission has been looking at a tiered rate structure for industrial customers that will increase costs as power loads surpass the 10 megawatt level.

"Such a rate would clearly be regressive and limit any large user growth because of the pricing impacts," Brewer stated. "We (GCEDC) have recently had discussions with five potential customers who have stated that any major increase in the existing large user industrial power rate might very well limit or even eliminate their plans for doing business in Grant County."

Food processing companies within the district have said they would like to switch to electric boilers from their current gas-fired boilers to lower operating costs in their plants as high natural gas prices continue to rise. According to Brewer, these companies would then fall under the new proposed industrial rate class and be subject to the proposed higher rates.

"Grant County cannot afford artificially high industrial power rates for our present industrial customers, or the industries that are considering Grant County for their new project," he stated. "Likewise, we cannot afford to become anti-growth."