Electricity rates to surge: PUD board approves 2 2017 hikes

Allison Arthur aarthur@ptleader.com
Posted 1/10/17

Welcome to 2017 and higher electricity rates in East Jefferson County.

And yes, it likely will be higher than what you would be paying if Jefferson County Public Utility District (PUD) had not …

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Electricity rates to surge: PUD board approves 2 2017 hikes

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Welcome to 2017 and higher electricity rates in East Jefferson County.

And yes, it likely will be higher than what you would be paying if Jefferson County Public Utility District (PUD) had not purchased the system from Puget Sound Energy (PSE) in 2013.

For an average power customer using 1,000 kilowatts of electricity, the Jefferson PUD bill is expected to be $106.96, while PSE’s bill for the same amount of electricity is expected to be $104.39, a difference of $2.57, according to Jim Parker, PUD manager.

Because of the recent below-freezing weather, however, it’s likely the “average customer” bill will be higher than that this month.

“PSE rates exceeded JPUD from May through November [of 2016], and JPUD will have slightly higher rates as of January,” said Ken Collins, president of the PUD board of commissioners. “The critical question, as I see it, is what people are getting for what they are paying.”

Collins answered by noting that unlike PSE, the PUD has crews and trucks based at Four Corners Road, and those employees can be on the scene of a downed power line or other outage in five minutes, rather than the 45 minutes that PSE crews were taking to come over the bridge from Poulsbo. PSE had closed its facility in Jefferson County some years ago.

Collins also said that by the end of 2017, the PUD expects to have a local staff of 50, which is “an increase of 1,000 percent” over what PSE employed locally. Toward the end of its time in Jefferson County, Collins said, PSE employed five people.

“Although there is only a small difference in the rates charged by JPUD and PSE, there is a huge difference in where approximately $6 million per year winds up going,” Collins said. “With PSE, it goes to an investment group in Australia, as opposed to going to pay the mortgage on the utility that will ultimately be wholly owned by the community,” he said.

Collins also noted that starting in 2017, the PUD is providing low-income residents roughly the same amount of money in assistance that the private PSE had been providing before it sold the company.

He also noted that while the PUD is not regulated by the state Utilities and Transportation Commission, which regulates PSE’s rates, PUD commissioners are bound by the state Open Public Meetings Act and Open Public Records Act, and “decisions can only be made in a forum open to the public.”

“All meetings are audio-recorded and available on the PUD website. JPUD commissioners live in Jefferson County and must get public approval to serve every six years,” he said.

And finally, as for the benefits of local ownership, Collins said that the PUD is doing well to limit greenhouse gases because it buys all of its power from the Bonneville Power Administration (BPA), which relies on hydroelectric power for the bulk of its power. In 2014, hydroelectric power accounted for more than one-third of PSE’s “power portfolio,” the company reports on its website. PSE also owns a large coal-fired generating facility in Montana and several natural-gas-fired power plants.

HIKES APPROVED

PUD commissioners unanimously approved rate hikes Dec. 13 for the first time since purchasing the power system from PSE in April 2013 for $115 million.

The monthly base rate is set to rise from $7.49 to $14.50 effective Jan. 1. In June, a 1 percent consumption rate is implemented, which impacts customers differently, based on how much electricity is used.

A rate hike ensures that the PUD continues to have adequate reserves, operating margins and the ability to fund system improvements, PUD’s Parker said.

The rate increase also is necessary, PUD officials said, because the cost of wholesale power that the PUD buys from the BPA has gone up twice since the PUD took over from PSE, and it is expected to go up again in October 2017.

Operating costs also have increased because the PUD has added more customer service, finance and engineering staff; PUD is expected to hire more employees in 2017.

Before approving the hikes, the PUD hired EES Consulting to take a look at the cost of providing service to different classes of customers – residential customers, industrial customers and public entities such as schools – to help it determine whether existing rates are fair.

EES had found that some public school districts with “interruptible” power should be paying 35 percent more for electricity. Chimacum School District Superintendent Rick Thompson urged commissioners to be gentle with the schools, and the board opted for a 5.5 percent hike next year, instead of the 35 percent hike the schools had faced.

The rate hike also includes $2 built into the base rate. That’s expected to generate $500,000 a year to help low-income customers with their bills, more than what PSE contributed before it sold the system to the PUD. PSE said it provided $464,000 to low-income customers in its last year of operation.

PUD commissioners also decided to re-evaluate the PUD’s financial position in the third quarter of 2017 to consider if any revisions may be necessary in 2018 and 2019.

The PUD expects to hire a weatherization specialist in 2017 to help customers identify ways to make homes more energy efficient, according to a press release. The PUD also plans on exploring the possibility of a community solar project, working with the National Park Service and other entities interested in offering electric vehicle charging stations, and researching how to promote electric heating. It also plans to continue to promote rebates on LED bulbs, energy-efficient appliances, ductless heat pumps and heat-pump water heaters.

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