Grant County PUD discussing 5 percent rate increase

Grant PUD/courtesy opening<br> A new six-bladed turbine unit is lowered into place in the Wanapum powerhouse as part of ongoing work. PUD projects will be covered at upcoming meetings this month in Moses Lake, Grand Coulee and Quincy,

by Lynne Lynch<br
| October 12, 2009 9:00 PM

EPHRATA — Grant County PUD commissioners directed staff to explore 5 percent electrical rate increases for 2010 and 2011 on Friday.

No action was taken, as the commission is currently reviewing the draft budget for adoption in December.

If adopted, the commission reviews the increase again in 2011, depending on how the year shapes up, said Sarah Morford, a utility spokesperson.

According to an overview of the draft budget, an increase in 2010 is needed because of increase power production costs from updating turbines and generators at Priest Rapids Dam and Wanapum Dam, and license implementation costs.

It’s expected the utility needs a $240 million bond for the work at the dams in 2010.

The most recent rate increase was a 4 percent jump in 2003.

The rates discussion came at the end of the second day of a budget workshop Friday, detailing a proposed $506.6 million budget.

When staff distributed the draft budget without a rate increase, Commissioner Randy Allred said he was “getting frustrated” and his patience was “running short” because staff couldn’t name a recommended number.

Instead, the draft budget included the working “X percent” rate increase.

Commissioners face the public at 6 p.m. Monday during a meeting about the district’s priorities at the Moses Lake Fire Station.

“I believe the commissioners deserve to know how much of an increase you’re recommending,” Allred commented.

Grant PUD Treasurer/Controller Jim Bunch said they would get to that detail, but part of determining the increase is analyzing the data.

Commission President Terry Brewer said the commission doesn’t give staff serious feedback with regards to changing the budget. He suggested staff work the numbers and returns to the commission with a recommended rate increase.

Allred said he and Brewer disagree totally. If the district needs to increase retail revenue to make the numbers work, the increase should be within the draft budget, Allred said.

Allred pointed out the PUD sees an increased $20 million in its cash position with no increase.

He added that he is a rate payer.

“Why are you increasing my rates?” Allred asked.

Bunch referred to the commission’s previous rate resolution, which lists steady, predictable increases.

At some point in time, the PUD could face a double-digit rate increase if they did not start with smaller increases soon, he explained.

There were also discussions of implementing a 4.5 percent increase for the next five years, or breaking up the increase in the following order, 6 percent, 6 percent, 4 percent, 4 percent and 2 percent.

Instead, commissioners directed staff to explore two 5 percent increases, with the first in 2010.

Brewer said the district’s reserve and contingency fund should be higher, because of water issues, power prices and capital projects.

“I would personally have no problem explaining my position,” Brewer said.

He added it’s important the district maintain a strong financial position.

Before directing staff to explore 5 percent increases for the next two years, Commissioner Greg Hansen and Commission Bob Bernd said they would be in favor of lower increases.

Hansen said he would pick the 4.5 percent option for five years, but not across the board for all rate classes.

Rate structure changes are currently being reviewed for irrigation and industrial customers.

Allred said he believed increases are in order, but that it might be better for the district to get their rate structures in line and have smaller, overall increases.

Commissioner Tom Flint was absent from Friday’s meeting.