Clallam County PUD new-service increase is likely

Transformers scarce, expensive

SEQUIM — Scant availability and high costs of electric transformers continue to stymie the Clallam County Public Utility District.

The double whammy, in fact, may lead to a new service capacity charge for customers requesting new electric service, staff advised PUD commissioners during their June 13 virtual meeting.

The PUD is expected to levy a 2.3 percent new-service capacity charge that will go into effect July 1. Most new residential electric customers can expect to pay a service charge of $1,200; commercial capacity service charges will normally run from $2,000 to $4,200.

Commissioners tabled the proposed capacity charges for two weeks to allow for customer input.

Though not thrilled with the idea of a rate increase — especially after the PUD recently raised rates for utility customers by 2.25 percent in 2022 and 2023 — Commissioner Rick Paschall reluctantly accepted it.

“I never like rate increases,” he said, “but if we have to have them, I like the idea of charging those that are causing the extra cost rather than the whole customer base.”

Assistant General Manager John Purvis outlined the basic problems facing the PUD.

“Basically, we still have not received any of our transformer orders scheduled for delivery in calendar year 2022,” Purvis said. “It’s approaching halfway through the year, and we have received nada.”

The primary culprit? A scarcity of GOES, or high-grade, grain-oriented, electric steel used to manufacture transformer cores.

The GOES conundrum has caused major difficulties obtaining transformers commonly used for new residential services and developments. Pandemic restrictions, reduced global exports and realignment of global trade due to the war in eastern Europe are some primary causes for the paucity of GOES, he added.

Commission President Will Purser offered a simpler explanation: “This is a consequence of government and corporations moving our manufacturing base overseas,” he said.

Purvis noted that the most common transformers now cost about four times what they did two years ago. The additional transformer procurement cost for the PUD, he added, will exceed $1.5 million annually by the end of 2023 and remain elevated until supply chains normalize and the shortage of transformers steel is mitigated.

The additional cost of service equates to a 2.3 percent rate impact to PUD customers.

“We’re hoping these prices come down, but that’s what we’re looking at now,” he said.

Despite not receiving transformer orders for 2022, the PUD still has some stock of units, though not nearly what it would ideally like to have.

Currently on hand are 51 underground transformers in a variety of sizes and power. Atop that, 364 more have been ordered that have yet to arrive.

Overhead transformers seem to be in a bit better position: 255 of those are in stock.

In addition, the City of Port Angeles provided the PUD with six transformers to help fill the gap — those transformers to be paid back in kind when the PUD’s stock is restored.

Meanwhile, the PUD Board of Commissioners approved an emergency resolution authorizing procurement of 93 more “ranch runner” transformers now available due to Pacific Gas & Electric cancellations. The transformers will be paid for out of PUD reserves up to a maximum of $520,000.

Said Kaylie Hunter, PUD procurement and facilities supervisor: “The price is not great, but what I can say is the price is fair compared to the quotes I’ve been getting. We have no stock. We have emergency transformers for emergency use, but if we were hit with anything hard, we are in an emergency situation.”

Added Purvis: “This is a public health issue if you cannot provide transformers for people looking to move into new homes that don’t have transformers.”

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Paul Dunn can be reached at 360-452-2345, ext. 55650, or at [email protected]

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