We're studying what it costs to provide PUD services

By Rich Riazzi, General Manager

4/8/2008

When we had our strategic planning meetings with the public in 2006-2007, we promised that as part of our work in 2008 we would study how much it costs the PUD to serve our various kinds of customers. 

The idea is that we will use that information to develop a proposal on how best to set our rates in the future for the different customers we serve -- including residential, commercial and industrial. It’s all part of setting rates that help us stabilize our finances over time, instead of relying as much on volatile wholesale surplus power sales that can vary considerably from year to year depending on the amount of snowpack in the mountains, timing of the spring runoff, operational factors and the market price for power.

It may require less effort (and cost) from the PUD to deliver power to one class of customers than another. That may justify charging different groups of customers different rates, based on the cost of service.

We have now begun that cost of service study, and we have shared the first pieces of information with our board of commissioners so they can follow closely, add their perspective and ask questions. Click on this presentation to see the first round of background commissioners were given on March 24, 2008.

Our plan is to present more information each month to PUD commissioners and the public, all leading to more meetings where we ask our customers for their thoughts and ideas on matching revenue requirements to actual costs to serve our various customer classes. Later this year, the board will take all the feedback and information and decide how they want to structure PUD rates for the coming years.

These discussions are not always simple arithmetic. Charts and graphs help compare and analyze the costs from service to service. We will be doing our best to present information in understandable terms so each of our customers can be fully informed and offer opinions.

As we did with the previous strategic planning process, we expect to have public meetings in the evening where we present information and invite comment. As part of public power, it’s our job to present relevant information, and we hope it helps you ask questions and tell us what you think.

The public is welcome at any of our regular board meetings (every Monday at 11 a.m.), but we especially hope you will participate when we get around to the details of our rate proposals later this summer. We’ll have plenty of announcements about upcoming  meetings.