Grant PUD commission closes in on setting new rates

EPHRATA — The Grant Count Public Utility District commissioners reviewed an industrial rate proposal during their Tuesday morning rates workshop as part of the district's ongoing effort to adopt a new rate schedule for industrial customers by a self-imposed deadline of Oct. 1.

The PUD's strategic-planning staff created the proposal within policy guidelines provided by the board of commissioners. The proposal calls for a blending of existing rate schedules 9, 10 and 80 to combine future and existing customers into three industrial classes according to projected energy use, or capacity.

The new industrial power rates schedule appears to look similar to the PUD's current rates for that class.

The proposed rate structure would include tiers with separate rates depending on actual energy use, or load. By tiering the rates, the PUD would be encouraging industrial power use conservation.

"Staff worked closely with the commission to find a rate alternative that is non-discriminatory, while at the same time, satisfies the overall goals of rate stability, minimizing rate shock to a customer or class and achieving a revenue neutral financial position," said PUD Treasurer Controller Nick Gerde. "We believe this to be the best solution that protects the utility and its broad customer base in this uncertain time where we do not know what the terms and conditions of a new license will be, cannot predict water levels in the Columbia river or know future market prices.

"The commission has stated a desire to be prudent stewards of our resource, and this rate schedule is one way to accomplish that goal," Gerde said.

Industrial customers and the Grant County Economic Development Council, however, have been critical of a tiered rate, which is not designed based on cost of service. Costs increase as load increases in a tiered rate structure, which members of the GCEDC have said would negatively impact future industrial growth.

The GCEDC opposes the PUD plan of increasing the price of power as load increases, instead of offering a lower cost for power for larger volume usage.

Tuesday's industrial rate proposal from PUD staff was created using a revenue neutral approach at the request of a majority of commissioners. This approach has been continually criticized by the GCEDC as not being based on cost of service and would make rates far higher than necessary to cover the PUD's expense of providing the power to industrial ratepayers.

"I don't think we debated the concept of revenue neutral," PUD Commissioner Vera Claussen said.

Not only was Claussen critical of the majority of the commission's guidelines to PUD staff members to follow the revenue neutral rate design guides, but she was also unsatisfied with the result.

"I think it meets the expectations of a majority of the commission, but it doesn't meet my expectations," she said. "I'm just philosophically opposed to inverted rates."

Commissioner Greg Hansen had a different opinion of where the PUD should go with the design of industrial rates.

Hansen said he was concerned that a growing industrial class may gobble up Priest Rapid Hydroelectric Power, which he believes would eventually cause an increase in costs to the other rate classes.

"I just want to look out for the majority of ratepayers," he said.

Hansen said that 15 large industrial customers use 39 percent of the power while residential ratepayers within the district use about 40 percent of the power.

He also pointed out that Grant County PUD has the lowest industrial rate of the 13 PUDs shown on a graph that he was provided by GCEDC Executive Director Terry Brewer.

Final action on the proposed new industrial rate schedule appears to be set for Monday, Oct. 3, at the regular PUD commission meeting.