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Commissioners start rate design discussion

Chelan County PUD
News Release
6/2/2008

A closer look at what it costs to deliver electric, water and sewer service to customers shows that wholesale power sales revenue only partly fills the gaps and rate changes may be needed to keep Chelan County PUD financially healthy through 2012.

At a workshop on Monday night, PUD commissioners, staff and customers heard the results of the cost-of-service analysis and started talking about how rates are set and how much it costs to serve different types of customers such as residential, commercial and industrial.

About a half-dozen customers also spoke, asking about help for low-income customers and wondering why rates for PUD water and sewer are higher than other systems. The need for cost control by the PUD was also mentioned.

No action was taken Monday, but PUD commissioners will be asked to decide rate design philosophies at next week’s board meeting. Questions that need to be answered include:

• Should there be small increases over time?
• Should the sharing of costs between customer classes be phased-in?
• What about a “postage stamp” (uniform) rate for the PUD’s water and sewer customers?
• Are changes needed in discounts for low-income seniors and disabled customers?
• How should rates promote conservation?
• When would any changes go into effect – Jan. 1 or April 1?

Chief Financial Officer Joe Jarvis said the PUD’s last cost-of-service study was done in the mid-1990s. The PUD raised rates this year for the first time since 2000, with a 5-percent increase for electric customers and 9-percent for water and sewer. Commissioners asked for a deeper look at rates as part of approving those increases.

Commissioners were also asked to consider changes such as:

• Eliminating the minimum charge for residential customers
• Dropping the demand “ratchet” for commercial and industrial customers
• Changing the irrigation season for rates on pumps
• Streamlining water and sewer rates and the rates the PUD charges itself
• Changing tiered rates to encourage more conservation

With guidance from PUD commissioners and customer feedback, staff will develop detailed options to be discussed at board meetings through June and July. A decision on new rates is planned for August as preparation for setting the 2009 budget.

Public comment is welcome at board meetings, by e-mail at board2@chelanpud.org and by phone at 661-4212. The results of the cost-of-service analysis will be posted on the PUD’s Web site.

***

PUD commissioners will hold a special meeting at 5 p.m. on Wednesday, June 4, in the Apple Room at the Wenatchee Roaster to have dinner with Douglas PUD commissioners and speaker Patrick Moore before his presentation on “Searching for a Sustainable Energy Future” at 7 p.m. at Wenatchee High School.

 The next regular meeting of the PUD commission will begin at 11 a.m. on Monday, June 9, in the boardroom at PUD Headquarters, 327 N. Wenatchee Ave.

Most PUD commission meetings are recorded, and a link to the audio is available on the PUD’s home page at www.chelanpud.org.

Kimberlee Craig
Public Information Officer
509-661-4320, direct line
509-679-6858, cell
kimberlee.craig@chelanpud.org