By Paul Gottlieb
Peninsula Daily News
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The hike was approved unanimously Monday by the three PUD commissioners and affects all electricity users outside the city limit of Port Angeles, including Sequim and Forks residents.
Spurred by a jump in power costs, the rate hike consists of a
3 percent overall increase in basic and kilowatt-hour charges — with another 3 percent increase planned for 2014, PUD Treasurer Josh Bunch said at the commissioners meeting.
The Bonneville Power Administration will hike wholesale power supply costs 9.5 percent Oct. 1.
Power-related costs of
$23.1 million in 2013 and a forecast of $24.9 million in costs in 2014 represent about 45 percent of the PUD’s total expenditures.
“The big thing is power supply costs,” Bunch said.
“When the BPA raises its rates, we are going to pass it on to our customers.”
“This is the largest single driver behind the rate increase.
“It’s a pretty significant increase in what our cost is for our customers,” Bunch said, adding that two smaller increases imposed when the weather is warmer will be easier for customers to stomach than a single large one.
Rate stability challenges, according to Bunch, also include fulfilling the requirements of Initiative 937, which Washington voters approved in 2006.
It requires utilities with more than 25,000 customers such as Clallam PUD to obtain 15 percent of their electricity from new renewable resources such as solar and wind, but excluding hydropower, by 2020 and to impose energy conservation measures.
With 27,200 customers, the vast majority of whom are residential, the Clallam Public Utility District is the smallest utility in Washington that must abide by the initiative.
Utilities must purchase 9 percent of their retail load from higher-cost renewable energy by 2016.
The utility has purchased geothermal energy credits to keep in line with the initiative’s requirements.
The PUD will purchase $210,000 in energy credits in 2013 and the same amount in 2014, and $131,000 in credits in 2015.
“More than half our costs are not controllable costs,” Bunch said.
The PUD expects to spend $964,000 on renewable energy and conservation in 2013, compared with $1.5 million in 2014 and $1.2 million in 2015.
The PUD also has a $45.6 million capital plan over five years for transmission and distribution facilities.
The utility expects to incur $15 million in debt to finance the plan.
With the rate increases, revenue will grow from $54 million in 2013 to $55.4 million in 2014 and $57.3 million in 2015.
The cost of purchased power will grow from $23.1 million in 2013 to $24.96 million in 2014 and 2015.
Maintenance and operating costs will increase from $17.4 million in 2013 to $18.1 million in 2015.
PUD officials have been making presentations on the rate increase from Sequim to the West End, Bunch said.
Utility spokesman Mike Howe said the PUD has taken “a very proactive approach with the customers, and they seem to understand.”
General Manager Doug Nass agreed.
“When they do listen to what we’re up against and the challenges we have, most of the customers we talked to reluctantly understood.”
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at firstname.lastname@example.org.