PORT ANGELES — The Clallam County Public Utility District is considering a plan to budget for annual rate increases of no more than 3 percent and create a new system for calculating base rates.
Bonneville Power Authority, or BPA, which provides power to the PUD, has in the past threatened rate increases of up to 20 percent, though it has reduced those numbers to single-digits in the past, Joshua Bunch, treasurer controller for the PUD, told commissioners during a workshop Monday.
That has created budgetary uncertainty, he said.
“Rate stability requires a focus on longer-term planning, managing costs and prioritizing expenditures,” Bunch told the commissioners.
Bunch proposed an annual rate increase of 3 percent or less.
Instead of 6 percent or 7 percent increases every two years, he said, it is easier for customers to budget for smaller, regular increases each year.
He noted that the rates should be changed in the spring, when customers begin using less electricity, to reduce the shock of cost increases.
“Stable rates for the customer, stable rates for the PUD,” he said.
BPA increase
This year, the PUD expects the increase in the cost of electricity from BPA to be about 9.4 percent, which either has to be passed on to customers or be taken care of through cutbacks in other areas, he said.
Bunch said there can be no guarantee that there will be no increases greater than 3 percent, but with careful planning — unless there are unexpected, large emergency expenses or pressure from outside market forces — staying under the self-imposed annual limit is something that can be done.
A large portion of the PUD’s infrastructure, including a $2 million substation, has been replaced in the past few years, resulting in lower maintenance costs and an expected break in major new expenses for the next few years.
General Manager Doug Nass noted that the system needs to be evaluated every year and that there may be unexpected expenses.
“We don’t want the system to degrade,” Nass said.
The expense of remaining major projects can be spread out over several years through financing, Commissioner Ted Simpson said.
Bunch agreed and commented that using that kind of funding can be more fair.
“Customers benefiting from that asset pay for that asset over time, rather than the people who happen to be rate payers when the project is funded,” Bunch said.
Customer service rate
Another change being considered by the PUD is how the customer service rate, or base rate, is charged.
The proposed base rate would include a certain number of kilowatt hours of energy, and customers who use more would pay for the additional power by the kilowatt hour, under the proposal.
The current concept would create a base monthly customer service charge, possibly $18 to $20, but the actual amount is negotiable.
Bunch noted that in Grays Harbor, customers pay a base rate of $40.
Currently, residential customers pay a base rate of 73 cents per day and an energy use charge of 6.5 cents per kilowatt hour, according to the PUD rate schedule.
Such a policy could increase the cost for customers who use very little electricity, such as those who spend their winters in Arizona, but have less effect on year-round residents and businesses, Bunch said.
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Reporter Arwyn Rice can be reached at 360-452-2345, ext. 5070, or at arwyn.rice@peninsuladailynews.com.