Grant PUD commissioners to consider rate policy
The Royal Register News
EPHRATA - Grant County PUD commissioners will spend two and a half to three months reviewing the PUD rate policies, and the assumptions underlying the policy, before moving on to set rates for 2016.
The goal is to come to a conclusion on the rate policy by mid-April. The policy is the basis for setting rates; 2016 rates will be announced sometime in the fall.
The review was prompted by the findings from a study conducted in 2014 of what it costs to provide electrical service to each class of customers, and the effect that study had on rates for 2015.
Bonnie Overfield, of the PUD's financial department, reviewed a proposed timeline with commissioners at the regular meeting Tuesday. District employees will need some decisions and direction from the commissioners as part of the process, she said.
The policy currently sets the goal of adjusting rates so that each class of customers are paying a maximum of 15 percent more than it costs to provide electrical service, or paying at least 80 percent of the cost. The goal is to get all the customer classes within those targets by 2023.
The cost of service analysis (COSA) determined that some classes, residential and irrigation customers among them, were paying less than the targets, while others, large industrial customers most prominently, were paying more. The PUD staff proposed a 3 percent rate increase for irrigators in 2015, and 2.5 percent for residential customers. An 0.5 rate increase was proposed for large commercial customers. Commissioners eventually approved the rate proposal, but not until after considerable debate.
Commissioner Tom Flint said he wanted to know more about the cost of service study because he had a number of questions. Flint and commissioner Bob Bernd said they also wanted more information about two previous cost-of-service studies; each study came to different conclusions in some customer classes.
Overfield said the 2014 study was designed to be updated every year, and used different assessment tools and assumptions. The economic environment has changed as well, she said. Flint said he wanted to know more about what went into each study, and the assumptions underlying each one.
The goals and assumptions that went into the rate policy will be discussed at the Jan. 27 commission meeting, Overfield said. PUD staff will be asking for guidance from the commission on some issues, she said.
Demand for electricity is an important part of making revenue projections, she said, and currently demand is expected to increase by about 26 percent in the next 10 years. In answer to a question from Bernd, Overfield said it does matter where growth occurs, and in which customer classes.
The goal is to have a 2016 rate proposal ready for commission review by August, Overfield said, which would allow time for public comment.
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