Raise rates, Jefferson County Public Utility District told by consultants

Moving forward, consultants will work with the board to develop new rates.

PORT TOWNSEND — The Jefferson Public Utility District hasn’t increased rates since acquiring the electrical utility from Puget Sound Energy in 2013, but that could change after recommendations from consultants presented Wednesday.

Consultants from EES Consulting of Kirkland recommended during a standing-room-only meeting Wednesday that the PUD raise electrical rates anywhere from 5.8 percent to as high as 16.1 percent in 2017.

Raise base rate

They also recommended raising the base rate, a flat fee customers are charged each month, from $7.49 to at least $12 or more.

To reach the recommendations, the consultants used the 2016 budget as a starting point — adjusted for inflationary increases — accounted for Bonneville Power Administration rate increases and planned for more well-paid staff at the PUD.

Wayne King, PUD board member, said he thought the consultant’s presentation was well-thought-out and thorough.

He doesn’t want to see stark increases in rates and would rather see the base rate increase.

“The base is to keep trucks running and employees paid,” he said. “I believe that’s the simplest way to do it.”

The Jefferson PUD has among the lowest base charges in the state. Clallam PUD charges $27.68 and Grays Harbor PUD charges $39, consultants said.

King said it wouldn’t be fair to increase rates by 10 percent or more because it would disproportionately affect businesses and low-income households.

The consultants recommended the PUD take on 25 percent to 40 percent of debt for capital improvement projects and raise the rates 8 percent to 11 percent for 2017 with inflationary increases thereafter.

This would be to help fund $8.1 million for capital improvement projects in 2017, they said.

At current rates, the consultants estimated there would be $1.4 million available for capital improvement projects. If rates stayed the same, they estimated the PUD would be negative $1.1 million for capital improvement projects.

“They presented it like we have to borrow money to operate and we don’t,” King said. “You don’t just borrow money to borrow money.”

Board members Kenneth Collins and Barney Burke were unable to be reached for comment Wednesday afternoon.

During the meeting, Collins said there is a necessity for raising rates after a hiatus of three years.

“I think there’s a lot to be said for implementing rate increases over the next two to five years,” he said. “This is an area where we need to put a lot of emphasis.”

The consultants also recommended that the PUD consolidate its rates, since there are some classes with only a handful of customers.

They recommended combining rates 25 and 26, both large commercial rates. Rate 26 has three customers.

Irrigation rates would be eliminated if commissioners followed the recommendations; they would be combined with small commercial rates.

The consultants also recommended eliminating the school rate and adding the four schools on the rate to Rate 31.

Several people in the audience told the board it should increase rates now to avoid a suddenly high increase a couple years down the road.

Rick Thompson, Chimacum School District superintendent, told the board it should be careful when adjusting the rates for the schools.

“We would appreciate if rates are raised, it would be gradual,” he said. “Some of the initial figures we saw would equate to laying off a teacher.”

The consultants told the board that just because they make recommendations does not mean the board has to follow them.

Moving forward, the consultants will work with the board to develop new rates.

________

Reporter Jesse Major can be reached at 360-385-2335, ext. 5550, or at jmajor@peninsuladailynews.com.

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