New PUD rate structures proposed

Residential tiered rates could be consolidated
OKANOGAN - In continuing efforts toward more equitable rates, Okanogan County PUD commissioners discussed possible new rate structures Dec. 7.

The 2021 draft budget calls for a proposed 3.25 percent overall revenue increase, but how that will be applied to different customer classes is yet to be determined. Based on past cost of service studies, different classes will be adjusted individually.

Overall proposed changes to rate structures include:

  1. Base charges would increase slightly to get closer to the actual cost of infrastructure in place (poles, wires, transformers, etc.) to serve a customer, even if that customer never used power.

  2. State taxes could be designated on customer bills to reflect the state taxes the PUD already pays. Those would become additional line items on bill statements, similar to how city-based taxes are designated. This leads to additional transparency for the PUD, so that customers understand more specifically where their dollars go; the PUD pays a state privilege tax of 2.14 percent and state public utility tax of 3.8734 percent currently on all power sales, for about $2.8 million per year.

  3. The COPA (Cost of Power Adjustment) would be rolled into the current kilowatt-hour charge in 2021. From there out, the COPA would be revisited every April 1 to reflect changes in power costs from the PUD’s sources of power (such as Bonneville Power Administration, Wells Dam, etc.).

  4. Both the kilowatt-hour charge and demand charge (demand is only applied to non-residential classes) would change to achieve the amount of revenue needed per class. Many would decrease to reflect the new designation of state taxes.

  5. Tiered residential kilowatt-hour charges are currently at about 4.5 cents for under 2,000 kWh monthly usage and 6.6 cents per kWh for usage above 2,000 kWh, originally used to encourage energy efficiency. However, in order to simplify the rates and give relief to low-income or fixed-income customers in the higher usage category, the tiers could be consolidated instead to one rate in-between the current tiered rates.

The PUD is working with FCS Group, the consulting agency that originally prepared the cost of service, equity management plan and rate study for the PUD in 2019 to create new rate structures. Overall, the proposed increases are:

  • Residential: 4.5 percent increase (average of $4.57 per month)

  • Small general service: 3 percent increase (average of $5.04 per month)

  • Large general service: 1 percent increase (average of $106.90 per month)

  • Irrigation: 2.5 percent increase

  • Industrial: 1 percent increase

  • Frost control: 10 percent increase

  • Area lighting: 3.2 percent increase

  • Street lighting: 3.2 percent increase

Commissioners will continue to discuss the 2021 budget at the Dec. 21 meeting. Rate schedules will be approved at a later date, with the intention of new rates to go into effect April 1.

In other business, the board:

  • Approved Resolution 1734, authorizing use of the rate stabilization fund to make the final repayments on current debt to Key Bank for just over $800,000 per year in 2021 and 2022. The PUD would then begin to replenish the fund in 2023.

  • Approved Resolution 1735, adopting rules and regulations for the joint use of its poles.

  • Approved Resolution 1736, authorizing the surplus of old broadband and information systems equipment.

  • Authorized staff to continue the four-day work week schedule through 2021. General Manager Steve Taylor said overtime hours were still comparable to those of five-day schedules, and customers have expressed appreciated for the longer hours of 7:30 a.m. to 5:30 p.m. As always, the district offices have drop boxes and online or phone payment options any time the offices are closed.

  • Set regular board meeting dates in early 2021: Jan. 11 and 25; Feb. 8 and 22; March 8 and 22; April 12 and 26.

 

 

 

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