Grant PUD rate increases expected to slow down after 2019

WANAPUM DAM — The 2019 Grant County PUD budget includes a two percent overall rate increase, but the increase is projected to drop to one percent overall in 2020. Utility district commissioners reviewed the preliminary 2019 budget proposal at the regular meeting Tuesday.

The rate increase may be higher or lower than two percent for individual rate classes, but the rate increase will be two percent overall.

Utility district patrons can review the 2019 budget at three public hearings in October. They're scheduled for Oct. 9 in Ephrata and Moses Lake and Oct. 11 in Quincy.

The 2019 budget projects $279.6 million in total expenses. About $81.3 million will be spent at the Priest Rapids Project, which includes both Priest Rapids and Wanapum dams and any capital projects along the shoreline inside the project boundary, to work on upgrading generators and turbines, improvements to the riverbank and spillway, and repairs. Spending for the electrical system is projected at $50.7 million, including substations as well as connections to, and expansion of, the district's fiber system.

“As we look at our 2019 plan, we are in a very healthy position to where we've been historically,” said chief financial officer Jeffrey Bishop. It's the culmination of a decade-long effort to improve the district's finances, he said, and it's producing results earlier than anticipated.

With the PUD's current financial picture, rate increases in 2021 and possibly after that are projected to be below two percent. The PUD has carried a large cash balance the last few years, the result of a need to borrow money for a two-decade project to refurbish the turbines and generators at Priest Rapids and Wanapum dams. The improved finances may allow the PUD to reduce the amount of cash it's holding by up to $50 million, Bishop said. That money is not included in the budget, he said; whether or not the PUD actually uses that money will depend on the reaction from the agencies that establish ratings for entities that issue bonds. Those ratings determine how much interest the PUD has to pay when it issues bonds.

However, “the world isn't static,” Bishop said, and there are potential expenses that could impact the financial picture.

Currently studies are underway on the riverbanks that anchor Wanapum Dam, and they may need some stabilization work – possibly very expensive work. The 2019 budget includes $50 million for those studies, and commissioner Tom Flint asked if PUD officials thought that was a reasonable estimate. General manager Kevin Nordt said that's an estimate for work on the east riverbank only. The west riverbank has the potential to be the more expensive project, he said.

Other possibilities included a period with no electrical load growth, and low-water years.

Note: An earlier edition of this story incorrectly stated that the $81.3 million was to be spent on Priest Rapids Dam, rather than the  Priest Rapids Project. The Herald regrets the error.