Reader disagrees with rate increase

It has taken 55 years for the PUD to raise rates to the Jan. 1, 2010 level. In five years the PUD intends to raise rates by 50 percent.

During the recent campaign, Commissioner-elect Walker expounded upon the great financial shape the PUD was in. Commissioner Bernd stated he had kept residential rate increases to 2.8 percent since 2004, apparently unaware of the April 2010 increase of 4 percent. Staff suggested a 7-20 percent temporary surcharge which Commissioner Brewer strongly opposed then, but now supports the even greater rate increase.

PUD General Manager Culbertson, the highest paid public employee in Grant County, wrote a guest editorial blaming low water flows that could not be anticipated. A review of USGS annual Columbia River water flows reveals at least a dozen lower flow rate years without any rate increases. The total current PUD debt is $800 million. In addition, the PUD borrowed $300 million more than in 2010, and will borrow another $342 million by 2013.

The PUD indebtness will then be $1.6 billion. Today, interest rates are at a 50 year low, but they are increasing. Debt bonds that roll over, will have to pay a higher interest rate. That means higher indebtedness and higher rate increases.

The flawed PUD budgeting policy using 85 percent average flow rates for estimating revenues is high risk and guaranteed revenue shortfalls. The PUD then spends down its reserves and uses that as a justification for higher rates.

The PUD policy of increased spending every year and is no strategy to pay off and reduce bonded indebtedness, guarantees annual rate increases, and rate class warfare between residential, agricultural, and industrial ratepayers.

The current $479 million annual budget may as well be $1 billion within a decade.

William Riley

Soap Lake