Grant PUD developing 2024 rate increase

EPHRATA — Grant County PUD customers are considering a rate increase in 2024, but whether it will be 3% across the board to all customer classes, or an overall 3% increase, is still to be determined. Utility district commissioners talked about some of their thinking on rates during a rate workshop Tuesday.

Commissioners gave their thoughts on rates for 2024 at the request of Ty Ehrman, the chief customer officer. 

“We want to aim toward getting some decisions from you on 2024 (rates), with some understanding that we’re going to have some further discussion, after that decision is made, on 2025 and beyond,” Ehrman said. “Really aiming to get to choosing one (option) with modifications or some variant of that.”

In a presentation to commissioners Amanpreet Singh, the PUD’s principal economist, said the request for a rate increase was prompted by the impact of continuing inflation on PUD operations. In addition, the rate increase is required for the PUD to sustain itself in the long term, he said, and meet financial targets.

Singh presented commissioners with three options, the first being a 3% increase for all rate classes. The second option would impose a higher rate increase on some classes, a lower rate increase on others, to bring them more in line with the parameters established in the PUD’s rate-setting resolution 8768. The third option would follow the procedure used in 2023, an overall 3% increase, where the rate increase would be higher than 3% for some classes, lower than that in other classes, but would add up to 3% overall. 

The difference between the second and third options was that some rate classes would have different increases, depending on the option chosen. 

Ehrman said most utilities seem to be raising rates for 2024, and Commissioner Nelson Cox said whatever Grant PUD commissioners decide, it will be a smaller increase than almost any other utility.

“I kind of like Alternative 1, the 3% across the board. I think that’s more than fair,” Cox said. 

He said inflation was running higher than that.

“We’re not even keeping up,” Cox said.

    Grant County PUD Commissioner Nelson Cox considers the alternatives during a discussion on 2024 electrical rates Tuesday.
  

A key component of rate-setting policy is a periodic analysis of the cost of providing electrical service to each customer class. Commissioner Tom Flint said he didn’t think that method was the best one to use. In his opinion, it provides insufficient protection for what are considered the PUD core customers, which include residential, small commercial and irrigation rate classes. 

“I know this is a temporary one-year fix, but long-term, being able to protect the core power users is the most important thing that I have on my mind. So I’m more inclined to think just a 3% (increase) overall,” Flint said. “Now we can have a discussion, you can change my mind, but that’s about where I’m at today.”

Commissioner Larry Schaapman said he believes some cost analysis is necessary for the PUD to be able to set rates at all. 

“Everybody, from my perspective, seems to be fairly comfortable with where the rates are currently,” Schaapman said. 

Commissioners have said they want to discuss possible changes to rate-setting policy, which would govern rates in 2025 and beyond, over the winter.

“If I had to weigh in, I’d be more in favor of a 3%, alternative one,” Schaapman said.

Commissioner Terry Pyle said he expects considerable discussion about the way rates are set in the future, and for himself, believes it’s impossible to set rates without some way of estimating what it costs to provide service to each customer class.

“But since we haven’t come to any kind of resolution or conclusion about that, my personal opinion is I don’t think we should be changing horses in the middle of the stream, so to speak. So I’m aligned with Alternative Three, continuing what we did last year,” Pyle said. “Which is not great, but I think it better serves everybody in the process, staying the course, rather than changing knowing we’re going to change again in 2024,” he said. 

Commissioner Judy Wilson said she agreed with that. 

“That was sort of my idea, too, to have the same distribution that we had (in 2023),” she said.

Schaapman said Tuesday’s was a preliminary discussion. 

“These are staff recommendations. The commission still has a decision to make,” Schaapman said. 

Cheryl Schweizer may be reached via email at cschweizer@columbiabasinherald.com.

    Grant County PUD commissioners Terry Pyle, left, and Larry Schaapman, right, listen to a presentation on 2024 power rates.