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Posted on Nov 14, 2014

Power users will see rate increases in 2015

Grant PUD commissioners on Wednesday approved rate increases for the coming year, with residential rates set to increase by 2.4 percent.

For average residential customers, this equates to a $2 per month increase on their electric bill (assuming 1,800 kWh).

Commissioners passed a variety of rate increases that will begin Jan. 1. Those increases also include: 3 percent for commercial customers, 3.5 percent for irrigators, 0.5 percent for large industrial customers (includes Quincy data centers), 3.5 percent for smaller industrial customers, 2 percent for large general customers and 2.5 percent for agricultural food processors.

The rate increases combined are expected to generate about 2 percent more revenue next year, or about $3.3 million, according to numbers from Grant PUD.

Commissioners on Wednesday also adopted a $254.6 million budget. The 2014 adopted budget was set at $247.4 million; however, it is currently projected at $269.1 million due to costs associated with the Wanapum Dam Spillway Response this year.

The rate increases come as commissioners attempt to bring the district more in line with a cost-of-service model that ties rates more closely to the actual cost of providing services to its various customers, which range from residential and commercial customers to data centers and food processors.

Commissioners passed a policy last year that sets a target date of 2023 to achieve more equality between the rate classes. The policy stipulates customer classes must pay at least 80 percent of the cost of providing their electricity and can’t pay more than 15 percent over the cost of service. The policy also calls for “small and predictable” rate increases to avoid “rate shock.”

The two user groups currently most out of line with their cost of service are irrigators and large industrial users. Irrigators, at this time, pay 46.4 percent below the cost of providing their electricity while large industrial users pay 37.3 percent above their actual cost, according to numbers from Grant PUD.

Earlier this week, Ag. Water and Power Users of Eastern Washington issued a press release, urging PUD commissioners not to approve the proposed rate schedule. Based in Moses Lake, the group was formed in 2008 to address power rate and water supply issues impacting area irrigators. The group called the 3.5 percent increase to irrigators “unfair.”
“Ag. Water and Power Users believes that such a relatively large and abrupt increase of 3.5 percent for irrigators in 2015 will adversely impact farmers and other related agricultural industries in Grant County,” the press release states.
Commissioner Larry Schaapman said he met with the group last week to explain the policy set by the board last year.

Irrigators pay “significantly under” their cost of service, said Schaapman, a local farmer who pays his power bill under three different rate classes. Both residential and irrigation users will see an increase of more than 2 percent next year to bring them closer to those boundaries set by the board, he said.

Schaapman argues Grant PUD, which traditionally has relied on annual power sales on the open market to bring in a source of revenue, now has a steady source of sales with its large industrial customers, or data centers. This change over the most recent years gives Grant PUD a more stable revenue base, putting less exposure on residents and irrigators, who continue to be in the group that has first rights to power produced by the PUD, Schaapman said.

“I’ve tried to explain to them that you’re all protected,” he said.

However, at the Oct. 28 commissioners meeting, even commissioners debated whether a 0.5 percent increase for the large industrials is fair. Some also argued that a target date of 2023 was too aggressive.

“We’re letting the large industrials pretty much have their way with us,” Commissioner Tom Flint said at the meeting.

If he was an irrigator and saw his rates were increasing six times faster than industrial users, he would be concerned, Commissioner Dale Walker said.

However, some board members seem too concerned with the irrigators and large industrial users, Commissioner Terry

Brewer said. “But I didn’t hear you giving residential a break,” Brewer said.

At the Oct. 28 meeting, Schaapman urged commissioners to stick to policy rather than buckle under pressure.

“We’re going to continue to fumble the ball if we don’t stay focused,” he said.

 

— By Jill FitzSimmons, editor@qvpr.com

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