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PUD Approves Rate Increase
PUD Commissioners voted to approve a staff recommended 3.5% increase in retail electric utility rates which amounts to an increase of approximately $3.35 per month for the average PUD residential customer, using 1200 kWh per month.
The 2014 PUD budget, approved in December of 2013, was predicated on a mid-year rate increase of 3.5%. “Commissioners spent much time during the public budget hearing process considering when to increase, and by how much to increase, rates,” said Doug Nass, PUD General Manager. “This rate increase is consistent with our strategic objective of maintaining stable rates and financial responsibility to our customers.”
In October 2013 the Bonneville Power Administration (BPA) increased rates by approximately 9.5%. This represents the largest cost center for the PUD at about 45% of the total budget. Staff and Commissioners decided to divide extension of this rate impact over the course of 2 years instead of just one, which keeps with the philosophy of providing stable rates.
In addition to the BPA wholesale rate increase there are continued rate pressures from rising costs associated with materials cost, operations, maintenance, and technology. Renewable energy mandates and conservation mandates, such as those from the Washington Energy Independence Act (formerly known as Initiative 937), will also play a larger role in the future.
Hugh Haffner, PUD Commissioner from the 2nd District and Board President, said “Rate increases are never popular, but with rising costs associated with regulatory mandates and BPA increases, there was little option. Customers can expect rate increases annually of about 3-4% because we anticipate future BPA increases are on the horizon.”
Will Purser, PUD Commissioner Form the 1st District, said, “Rate stability is important to us, meaning we try to avoid extreme measures and instead give some certainty to our customers for planning purposes.”
Ted Simpson, PUD Commissioner from the 3rd District, explained, “We do not take rate increases lightly and do our best to control costs, while maintaining and improving upon the level of service our customers expect.”
The approved retail rate increase will be effective on all bills rendered on or after July 1, 2014, which includes all usage since the customer’s prior bill.