SNOHOMISH COUNTY — The PUD is proposing to re-adjust its electricity rates higher than initially announced.
The PUD is now proposing a 5.8% general residential rate increase effective April 1.
PUD figures estimate the average medium household could see its monthly power bill increase by $7. (It would traditionally be higher during winter if on electric heat.)
In December as part of approving this year’s budget, the board had approved a 3.8% general residential rate increase that will go into effect April 1. The request before the board is to change it from 3.8% to 5.8%.
A public hearing on the re-adjusted rates will be Tuesday, Feb. 20 during the afternoon session of the PUD Board of Commissioners meeting which would start at 1:30 p.m. A board vote is scheduled for March 5.
PUD leadership last week said the severe cold snap in mid-January caused a wallop to its wallet, and that’s why it’s re-adjusting rates.
Power usage spiked, and market prices did, too, when the utility had to buy “a significant amount of energy on the market over the weekend,” PUD spokesman Aaron Swaney said. Other pressures are supply chain issues, power market prices and inflation, the PUD’s senior manager of rates, economic and energy risk management Peter Dauenhauer told the commission last week.
These factors added up to $40 million in higher service costs than what the utility estimated earlier, and that’s coming from its power purchasing budget. (It spends about $700 million a year in service costs overall.)
Upping to a 5.8% rate increase would solve $10 million of the $40 million “problem” from January, the PUD’s finance chief Scott Jones said.
Budget-wise, the PUD needs to stay on a trajectory for managing costs and maintaining revenues.
PUD finance management is advising the board to hold onto the utility’s available contingency reserve versus tapping into it to offset the rate increase. There is $115 million available in its
contingency account.
“As of right now we are on solid footing to be more patient,” Jones told the Tribune about the reasons for upping from 3.8% to 5.8%. “We think this extra 2% (which will add $8-10 million this year and additional revenue through the 5-year forecast period) is a logical first step. Later this year, after we are able to see how the year shapes up, we’ll be able to make additional decisions on both use of reserves and how we want to shape the 2025 budget and rate structure. But it is still early and we need to get more clarity on the revenue and cost management for this year.”
If the board opted to cover the cost using contingency reserves, “if we don’t have a clear trajectory” to get back on track, “we would need to tack it on in the future” with later rate increases, a PUD leader said at the board meeting. A PUD rule requires it to put back money it pulls from the contingency within a set timeframe.
The utility needs to be able to budget better for weather situational events, PUD general manager John Haarlow said frankly at the board
meeting. Serious cold snaps also hit in the winters of 2019 and 2023.
Readjustment proposal details
The residential meter rate would be 0.10263 per kWh in the revised rates, or about 10 cents per kWh. Prior to the revisions, it had been planned to lower the rate to 0.09610, or a little under 10 cents.
The average residential customer uses about 11,600 kilowatt hours per year, the PUD says, which breaks down to an average of about 32 kilowatt hours a day.
The PUD introduced a fixed daily base charge into its residential rates in 2022.
The baseline is scheduled to go up in April 2024, and the revisions aren’t surging them higher.
In 2023, the daily base charge rate for a modest house was 35 cents per day, or $10.85 over a 31-day month. The 2024 rate for the same house, though, was set at 59 cents per day, or $18.29 over a 31-day month.
The PUD implemented a plan in 2022 to marginally decrease the meter rate for power use while increasing its base energy charge each year to 2026.
In other news
An update to the board about the PUD’s intended plan to buy First Air Field in Monroe to create a new East County campus was moved to the Feb. 20 meeting. A story about this campus plan was in the Jan. 31 Tribune.
