Grant PUD discusses criteria for new rate class

EPHRATA — Emerging industries and electrical rates, what qualifies for the “emerging industries” class and what doesn’t, was discussed during a recent Grant County PUD commission meeting.

The discussion came during a presentation on the new rate Class 17. Utility district staff have recommended putting the new rate class into effect Oct. 1.

For customers in residential areas that qualify for Class 17, the basic electricity charge would be $1.04 per day, plus 13.7 cents per kilowatt hour. In answer to a question from commissioner Dale Walker, Nolan said that charge would apply to all electricity used by the customer. So a customer that was running an operation at a residence that qualified for Class 17 would pay Class 17 prices for all electricity used, at least right now.

For Class 17 customers that use more than 200KW, the basic charge would be $1,000 per month and 7.09 cents per kilowatt hour. Those customers also would pay a demand charge, $6 per kilowatt during the billing period.

Jeremy Nolan of the PUD accounting department detailed the criteria that qualifies a business to allocated to Class 17, and what qualifies a business to be shifted to a different class. Utility district employees look at three benchmarks, he said.

“What we’re looking at is concentration risk, primarily, to begin with,” Nolan said. If a class of business has the potential to use more than 5 percent of the PUD’s total load, that business would be considered for Class 17, Nolan said. “That would be the first one. And then we’re looking at one of the other two.” The second is regulatory risk, whether or not a class of business would be subject to state or federal regulation that would make the business less attractive. The third is business risk, where most or all of the activity is in “an evolving or unproven industry,” Nolan said.

Nolan used two examples, marijuana growers and cryptocurrency. Requests from cryptocurrency customers add up to more than 5 percent of the PUD’s total load, which puts that industry in consideration for Class 17.

Marijuana grows are at risk for regulation, Nolan said. “I think absolutely. But when you look at their overall aggregate load, there’s not a whole lot in our current load, and when we look at our service request queue, it’s not inundated with marijuana growers.”

Commissioner Bob Bernd asked about data centers. Nolan said they do add up to more than percent of the PUD’s total load. “Now the question is, are they hitting these other (criteria).”

“It’s also the risk in that business, (of) the whole business going away,” said chief executive officer Kevin Nordt.

Data centers “are beyond the evolving and unproven,” Nolan said. In their case “we looked at that 15 to 20 years ago.”

Customers in Class 17 will be reviewed each year to determine if they still fit in that class. If the industry still has the potential to take up more than 5 percent of the PUD’s total load, the evaluation moves on to the other criteria. “When we’re talking about what constitutes evolving or unproven industry, we think it’s going to be a number of years, when it becomes widespread.”

He used Bitcoin, the best-known cryptocurrency, as an example. Bitcoin was developed in 2009, became widely traded in 2013, with the business accelerating in 2017. “So when does that become past evolving or unproven? Some industries might become proven very quickly, some might take longer.” Whether or not the industry has moved beyond the unproven category, at least in the PUD’s estimation, “that’s going to be at the discretion of the PUD.”

Cheryl Schweizer can be reached via email at education@columbiabasinherald.com.