PORT TOWNSEND — A new Jefferson County Public Utility District water and sewer rate study shows the current rates are unsustainable.
With costs likely to increase across both utilities in the new year, sewer customers may be most heavily impacted.
“People will not be happy,” Commissioner Jeff Randall said. “But we do have to balance the books.”
During a Dec. 2 PUD commissioners special meeting, Sergey Tarasov, a principal with FCS Group, presented the board with two options for bringing the sewer utility into self-sufficiency. One would raise rates to close the gap starting immediately in 2026 and the other would phase self-sufficiency in with 30 percent increases annually in 2026, 2027 and 2028.
In the second scenario, a 30 percent increase in total revenue in 2026 would have different effects on three groups of customers — standard, which has about 23 systems in Jefferson County, and customers on the Kala Point and Beckett Point systems.
All three groups would see an increase to $84.71 monthly, but if the commissioners chose to unify the rates for the different groups, the increases would differ greatly, with standard moving up from $82.78, Beckett Point from $64.62 and Kala Point from $47.98.
The commissioners ultimately requested that Tarasov provide a more heavily front-loaded phase-in approach, which would increase rates by 40 percent in 2026, 30 percent in 2027 and 30 percent in 2028. After 2028, rates would increase with inflation.
The suggested compromise between the immediate shift to self-sufficiency and the 30 percent annual increase suggestion was made after Commissioner Dan Toepper pointed out that the subsidization was costing water customers, who do not necessarily benefit.
FCS recommended converting the three sewer system rate structures into one.
Clallam PUD made a similar decision in unifying its payment structure between multiple systems in March 2025, Jefferson PUD General Manager Joseph Wilson said.
“They unified their systems into a common rate schedule,” he said. “Again, they faced similar decisions, came to the conclusion of charging the same rate across their multiple systems.”
The Jefferson commissioners will further deliberate on their solution during their Jan. 6 regular meeting.
In addition to providing the current water and sewer rate study, FCS was responsible for completing a recent electric rate study for the utility and the utility’s 2021 sewer rate study.
Wilson noted that the firm also has provided consultant work to Clallam, Kitsap and Mason utilities.
The PUD’s sewer utility, which exists within the same division and the same budget as water, has been notably subsidized by water, a trend the utility hopes to reverse in the coming years.
Operating costs for the PUD’s sewer systems are expected to rise from $480,000 in 2025 to $670,000 in 2030, with existing revenues only expected to generate $310,000 in 2026.
The water utility, while self-sustaining for its operations and maintenance, cannot cover the $20.8 million in capital projects planned through 2030. The projects would require $16.3 million in new debt between 2026 and 2029.
The increase under consideration would include a 5 percent base rate charge, bringing current residential base rates for a five-eighths connection from $42.61 to $44.74 in 2026, according to a PUD news release.
“We’re really trying to make sure we meet all costs, direct costs such as operating, capital, debt service, but also indirect costs related to policies, to make sure our utilities are sustainable, not just today but also into the future,” Tarasov said.
If water rates stayed the same, with planned capital projects moving forward, water reserves would fall below zero in 2026.
The next review of the rate study is planned for 4 p.m. Jan. 6 at 310 Four Corners Road, Port Townsend. Commission meetings also are available online via the calendar links on the right side of the PUD website’s front page.
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Reporter Elijah Sussman can be reached by email at elijah.sussman@peninsuladailynews.com.
