PUD commissioner argues against 3% electricity rate increase
By Jim Casey, Peninsula Daily News
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Hugh Haffner, running for re-election in District 2 against Bob Jensen, called the current economic climate "very similar to what happened in '29."
He referred to the economic collapse 79 years ago that began the Great Depression.
"It scares me about how it's going to affect our budget," he said.
"We've got to try to at least keep rates stable."
The 3 percent increase was an assumption made in preliminary budget figures presented by Joshua Bunch, PUD treasurer/controller, at a public hearing.
The budget, he said, still faces tinkering and possible tightening.
3-year to 4-year downturn?
"How can we get this budget into balance without any rate increases?" Haffner asked, predicting that the economic downturn could last three to four years.
Commissioner Will Purser agreed that an increase might not be in the cards.
Forces driving an increase, Bunch said, included interest on $8.5 million worth of bonds the district sold to build a new substation and buy a mobile substation.
Also pushing expenses is the PUD's purchase of the former Costco Wholesale building in Carlsborg.
Those factors notwithstanding, Bunch said the district's electric system outlay for 2009 was much like 2008's budget.
The money spent to buy power should drop if early spring weather doesn't repeat the cold spells of last March and April that also delayed the snowmelt that drives hydroelectric plants.
Reserve drops $1 million
Revenues should total about $71.4 million, compared with the $72 million projected through the end of 2008.
Expenses, Bunch said, should total almost $56 million. This year's spending is projected to come to $55.5 million.
That will leave the district with about $15.4 million cash on hand at the end of 2009, down about $1.1 million from this year's projected balance of about $16.5 million.
The 2009 water system revenues should come to about $4.7 million and its expenses to $4.1 million, leaving a cash balance of about $587,000, Bunch said.
That will be a drop of nearly $300,000 in cash on hand, according to his figures.
A promised Gales Addition reservoir will have to be financed, Bunch said.
The PUD's small wastewater systems should stay relatively flat financially, he said.
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Reporter Jim Casey can be reached at 360-417-3538 or at jim.casey@peninsuladailynews.com.
Last modified: October 06. 2008 9:00PM