Reader talks PUD rates

Are you concerned about the 8 percent PUD rate increase? Well get used to it because Grant PUD has promised the bond rating agencies (Moody's, Fitch and S&P) an 8 percent rate increase per year up to and including 2015 in return for the Aa3 bond rating from Moody's and Fitch's AA bond rating. This will be 5 years of 8 percent rate increases in a row. Part the rate increases are to build PUD cash reserves to over 200 million dollars to humor the rating agencies. The rating agencies do have some legitimate concerns about Grant PUD. One of Moody's concerns is : "concentration of retail sales to industrial customers. A plant owned by Renewable Energy Corporation (REC, NR) is one of district's top industrial customers and this exposure remains a growing concern given severe stress in the solar panel manufacturing sector and REC's declining financial performance. " Aside from the risk REC poses, this concentration of industrial customers is in part causing upward pressure on rates. As of 2011, the industrial customers in Grant County were consuming 46 percent of the retail power but contributing only 40 percent of the revenue. The other rate classes consuming 54 percent of the power and contributing 60 percent of the revenue. It appears the other classes are subsidizing the industrial customers. When you look at the rate the average homeowner is paying, (about 4.8 cents per KWH basic rate included) as opposed to the industrial Class, ( about 3 cents per KWH plus demand) you can see the industrials are being subsidized. Compare this with Chelan's residential rate of 3.2 cents per KWH and Douglas's residential rate of 2.8 cents per KWH, basic rates included. Chelan and Douglas PUD's have protected their residential ratepayers by basing industrial rates on market price and limiting industrial power consumption respectively. The Commissioners should be protecting our ratepayers but they're not.

Greg Hansen

Moses Lake