By Paul Gottlieb
Peninsula Daily News
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The electricity expense budget totals $57.41 million, down from $57.92 million this year.
The Water Department expense budget is $4.66 million, up from $3.74 million for 2012.
The Sewer Department’s expense budget is $50,648, up from $49,724, with no rate increase for its wastewater customers.
There was no breakdown immediately available on what the rate hikes would mean to the average PUD customer’s bill.
Waiting on BPA
“The [electricity] budget assumes an electric rate increase of up to 3 percent, but that increase has not been finalized as of yet,” Clallam PUD said in a statement put out by Michael Howe, its executive communications coordinator.
The PUD statement said, “If a rate increase is enacted, it likely would not go into effect until May of 2013.”
The statement gave this explanation:
“No official rate increase has been approved at this time because there is uncertainty about what the Bonneville Power Administration will do with its [wholesale] rates.
“BPA wholesales electricity to the PUD.
“BPA has indicated it will raise wholesale rates, effective October 2013, by approximately 8 percent.
“In addition, BPA has reduced the amount of funding it provides utilities for conservation efforts, yet mandated conservation efforts by the PUD must be increased as a result of the [state] Energy Independence Act [also known as Initiative 937, passed in 2006].”
The statement added this warning:
“The PUD has given many public presentations where it has committed to stable rates, though this may mean electric rate increases of up to 3 percent each year.”
The 6 percent rate hike for Clallam PUD water users would be effective next month.
“This rate increase is the third of a three-year increase at 6 percent each year,” the PUD said in its statement.
“The rate increases were approved in 2010.
“Water rate increases are generally implemented in three-year cycles.”
On Tuesday, a day after the budgets were approved, Howe spoke to an audience of about 60 at the Sequim-Dungeness Valley Chamber of Commerce luncheon at SunLand Golf & Country Club.
He said support in the state Legislature remains tepid for amending I-937 to the benefit of Clallam PUD and its 30,000 customers.
“To be honest, the feedback from the Legislature is sort of iffy,” Howe said.
Howe gave a 25-minute presentation to the chamber’s audience on efforts to get state lawmakers to reverse the initiative’s exclusion of hydroelectric power as a source of renewable energy.
He also discussed the requirement’s impacts on the PUD, whose primary function is distribution of electricity to county residents except those living in Port Angeles, which has a city-owned utility.
The 2006 initiative, which had a voter majority in Clallam County, required utilities with 25,000 customers or more to purchase 3 percent of their energy from renewable sources such as wind and solar by 2012.
It also requires that 9 percent be drawn from renewable sources by 2016 and 15 percent by 2020 — and there’s the rub.
Clallam County PUD is the smallest utility in the state among more than a dozen that must comply with the initiative.
Clallam PUD has endorsed an effort led by the Tri-Cities Regional Chamber of Commerce to amend the act.
The PUD wants to be allowed to suspend the requirement for meeting the renewable-energy edict until its utility load growth requires it.
Load growth was 2.1 percent in 2006.
It is 0.8 percent in the recession reality of 2012.
The hydroelectric power that Clallam PUD buys from BPA costs 3 cents per kilowatt.
Howe said this compares with 14 cents a kilowatt for solar power, 12 cents for wind and 9 cents to 10 cents for biomass.
The PUD also is required to meet conservation targets.
“We’re having to buy more power and told to stop using so much power,” he said.
“With the higher cost of renewable [energy], it creates a strong disincentive for conservation, but at the same time, we are required to do conservation.
“These things are not meshing,” he added.
“All we are saying is, don’t make us buy it before we need it.
“Don’t make us replace the low cost of hydropower before we need it, which will force us to raise rates in economic times where it’s already tight.”
He added that environmentalists have opposed wind farms because of the windmills’ impact on birds. A wind project Clallam PUD was involved with on the Washington coast had to be abandoned.
In Cowlitz County, the addition of wind farms increased electricity rates 18 percent, Howe said.
“People have been making long-term decisions based on this already,” he added.
“We are in the process of making long-term decisions.”
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at email@example.com.