PUD seeks county loan for substation

Wahkiakum PUD has requested a $1.2 million loan from Wahkiakum County to help finance construction of a new substation at Cathlamet.

Commissioners and PUD officials discussed aspects of the loan at the Tuesday meeting of the county commission. A resolution and supporting documents hadn't reached the commissioners, so they said they would consider the matter again on March 13.

Treasurer Paula Holloway, who is retiring at the end of the month, said such a loan wouldn't adversely impact her investment portfolio. The portfolio includes reserves from governmental entities throughout the county and totals $11-12 million.

"They (the PUD) have over $2 million of their own investment," she said.

PUD Manager David Tramblie said the new substation will cost an estimated $3 million. The PUD has $1.8 million in reserves, so it needs another $1.2 million to finance the project.

The existing Cathlamet substation is 40 years old and near the end of its expected life span. The winter power peaks that it handles are near the maximum capacity that the transformer can handle, he said.

The way that it is connected to transmission lines requires a complete shut down of power to the county to conduct maintenance he said.

The PUD has already purchased adjacent land for the new substation, and Bonneville Power Administration has pledged to install a new tap at no cost, a $350,000 savings.

Tramblie and Holloway suggested the loan carry a low interest rate, one half of 1 percent over the state investment pool rate.

The low interest rate will make the project more acceptable to PUD customers--who are county residents, Tramblie said, and the county investment pool will earn a higher rate than it would at the state pool rate.

County commissioners Lisa Marsyla and Blair Brady seemed open to the request, but they had comments (Commissioner Dan Cothren missed the discussion to attend a meeting in Aberdeen).

Brady said he wanted to make sure the county had access to sufficient funds in case an opportunity to purchase private timberland arises. A bill awaiting Governor Chris Gregoire's signature would set up and help fund a process in which nearby counties could pool funds with Wahkiakum to buy timberland whose harvest revenue could be shared to provide revenue to the counties.

"I'm trying to find a $10 million line of credit for the county so we can purchase property," he said.

Marsyla commented on the PUD's ability to raise rates to increase its revenue.

"What's frustrating to me is that we don't have a lot of control over our revenues; we can't raise rates, and we look over across the street and see you raising rates," she said.

"That was our first rate increase in six years," said PUD Commissioner Dennis Reid.

The discussion ended with the commissioners wanting to see a resolution and other paperwork to establish the loan; Holloway said she would make sure they got that for next week.