Grant County PUD considers fee

EPHRATA — Grant County PUD commissioners and staff are looking at raising electrical rates through a customer surcharge.

EPHRATA - Grant County PUD commissioners and staff are looking at raising electrical rates through a customer surcharge.

If enacted, the surcharge would be in addition to the current 4 percent rate increase for customers that started this year, said Sarah Morford, a utility spokesperson, on Tuesday.

It's not clear if the surcharge would be applied to all customers or to individual rate categories.

The surcharge amount also wasn't known, but figures of between 7 and 20 percent were discussed at this week's commission meeting.

There's a possibility of a 20 percent rate increase to bring reserves back to the targeted level, said PUD analyst Rich Flanigan.

"Is it more prudent to take a few 7, 7, 7 (percent) and then maybe get a good water year that pushes the (reserve) fund back up to the targeted level?" he asked. "In year two, you take the surcharge completely off."

Commissioners took no action on the matter Monday and will continue to discuss the surcharge in the next few months.

Another possibility discussed was starting a three-year surcharge once the district's reserve and contingency fund dips below $100 million because of another below average water year.

"If you're looking at three years, to me, that's taking on the image of being permanent," Commissioner Greg Hansen said. "I really don't think it should be more than a year."

It's one of the tools they'll be looking at to solve the financial needs of the district, Morford explained.

The district is experiencing the second of two below average water years. It means less power is produced and sold at the PUD's Columbia River dams, which impacts revenues.

Other tools the district is using include the current rate increase, cost cutting throughout the PUD and prioritization of capital work that needs to be done.

During the commission meeting, PUD analyst Flanigan discussed what he called a "40,000 foot bubble" and how the surcharge is implemented.

An acceptable reserve and contingency fund balance is between $100 million and $120 million.

Once the balance reaches below $100 million, the surcharge would start.

General Manager Tim Culbertson said he thought commissioners may establish the threshold limit. Commissioners would later have the ability to relieve the surcharge once the reserve fund returns to an acceptable figure.

Culbertson also spoke about revenue financing some of the district's capital projects.

"I just don't like the idea of a surcharge and then well, we have extra money in our (reserve and contingency) fund," Commissioner Bob Bernd said. "It seems to me a surcharge is meant to be a temporary thing until the situation corrects itself."

"It seems there should be a sunset on the surcharge, that once the rates got there, the adjustment clause would kick off," Bernd said.

Culbertson said a surcharge is meant to be temporary. They are trying to put something together that's uncomplicated to trigger and untrigger the surcharge.

The board must decide how it's allocated.

Commissioner Randy Allred asked if the PUD was purchasing power its not producing and spoke about the possibility of tilting the surcharge toward the largest loads coming on in the county

"I'm not suggesting that anybody get hit with everything," he said.

Chelan County PUD extended a 9 percent surcharge to its customers in April because of below average river flows projected for next year.

There are also forecasts for more low market power prices, according to the utility.

Six Chelan PUD executive team members are returning their wage increases awarded in February and also agreed to have their salaries frozen until next February.

Nonunion salaried employees had their wages frozen until August and must take five days off without pay.