Industrial rates could rise by 3 percent

No decisions made, PUD continues talks

EPHRATA - Combining three industrial rate classes could raise rates by 3 percent for industrial, large industrial and ag food processing customers, or decrease rates by 5 percent in those categories, a Grant County PUD presentation shows.

The utility's Assistant General Manager Chuck Berrie said his presentation wasn't a staff proposal and staff wasn't recommending the scenario.

No decisions were made and another rate workshop for businesses is planned for Aug. 20, he said to commissioners and about 20 area business representatives on Wednesday.

Commissioners decided in July they wouldn't raise electrical rates, but would continue talks about changing the rate structure for larger users.

"We've been talking about this for a year," he said. "You're not late coming to the table."

Berrie's presentation didn't show the power use amount that would require customers to buy power on the open market if power was running low from the PUD's dams. He said that matter would likely be a policy decision made by commissioners.

"The district's overall financial health is good," Berrie said. "We're just trying to be proactive and don't want to overreact to a financial forecast with many variables."

Commissioner Randy Allred said it sounds like the utility is setting itself up to stand pat on new resources, calling it one of the biggest wrecks the county has ever seen. He also said there's nothing in the presentation that encourages conservation.

Rob Stokes with Basic American Foods said the large industrial rate class and Rate Schedule 85 (Agricultural Food Processing Boiler Service) appeared to be the same. He asked if Rate Schedule 85 would be added into the large industrial rate class.

Berrie said a decision hadn't been made about Rate Schedule 85.

Marvin Price of Warden-based Ochoa Foods said it appears there's a push to put all the customers in the same box. He said food processors would not jump to the large industrial class.

"So why combine them?" he asked.

Commissioner Greg Hansen said he thought the food processors should have their own category because they're a home industry and support an agricultural base of the community.

Berrie said customers can get "smacked" if the use of just one megawatt moves them into another more expensive rate class.

The utility's General Manager Tim Culbertson said the rate structure must be set in a nondiscriminatory manner and rates couldn't be tied to area jobs.

Steve Hennig with Simplot in Moses Lake said many of the processors converted from electricity to natural gas. He said rate increases are difficult for him to accept.

"I never hear what the PUD is doing to decrease input costs," he said.

He added that private industries examine cost-cutting measures daily.

Berrie mentioned the PUD saved about $16 million a year for the past several years by entering into an agreement with other agencies to spill less water over the dams.

"We're saving more fish with less expense," he said. "That's a lot of effort, but a huge return."

Gary Ash of National Frozen Foods said limited resources need to be assessed by looking at how much of a company's money stays in the area.

He said the PUD may have a big power customer using 50 megawatts or 100 megawatts and spending $100 million or $200 million a year. But he asked how much of the money remained in the area and benefited Grant County.

"Some of these limited resources need to be assessed this way," Ash said. "If half their budget leaves the state or the county, there's no benefit really to us here.

Commissioner Terry Brewer disagreed with Ash's idea and asked what would happen if the cities came along and said they needed to assess water.

"We have some big water users here causing negative impacts," Brewer said.

Hansen said it seems like the highest power users have the lowest jobs per megawatt.

Ash added they have the lowest value return to the community.

Lisa Karstetter of Yahoo! said the company's Quincy data center helps some people do their jobs better with the Internet. She said she knows the food processors use the Internet.

"Do you want us to go somewhere else?" she said.

She added the company is willing to pay to use the power.

"I also think we can't point fingers and we all add value," she said.