PUD debates rate increase

A budget workshop was held at Tuesday’s Wahkiakum County PUD Board of Commissioner’s meeting, as commissioners and managers tried to decide whether to move forward with or without a five percent rate increase in customer rates.

General Manager Dave Tramblie continued to recommend a five percent increase across the board, for the electric system and both water systems. He itemized his reasons on paper. They were many and included, but were not limited to:

• The BPA has increased their wholesale rate by seven percent, which Tramblie claims would increase Wahkiakum PUD’s power costs by about $110,000 per year.

• The PUD’s expenses before any capital investments are about $3.5 million a year. With a 2.5 percent rate of inflation, he believes that the PUD would need an additional $87,500 just to keep up.

• Due to the investment the PUD made into the Wahkiakum substation, their capital investment has been higher than it has been historically. He is concerned that if they are unable to pay off the loan with the current repayment schedule the PUD would need to refinance in June 2017. He states that “there is no guarantee that we could refinance.”

• The proposed budget would reduce the PUD’s reserves by about $175,000.

• Once the Wahkiakum substation loan is paid off, he would like to move forward with the Grays River substation rebuild, a project which he estimates may cost around $800,000.

Tramblie acknowledged that the PUD’s mission statement requires him “to provide the most reliable service at the most reasonable cost.” He felt that he has done that successfully and that a 5 percent increase would allow the utility to continue to provide a reliable service at a reasonable cost.

Commissioner Dennis Reid responded.

“By my saying that I was not in favor of an increase on the electric at this time, I was not insinuating that we should run our reserves down to a dangerously low level. I don’t want to have no increase now and large increases later. I just felt that in the position we were in, we’ve been spending money while our reserves have been growing, that we could absorb the increase for this biennium. Our water customers have seen increases of 10 percent in the last two years and now we’re proposing to hit them with another increase along with an increase in the electric,” he said. “I just think it’s causing a lot of hardship on people.”

“Since 2011, reserves have dropped by a million dollars,” Tramblie said, acknowledging that it was due to the new substation, which will be a cash flow burden for two more years while they pay back the loan.

“I just hate to kick the can down the road,” Tramblie continued. “I think we need to continue to address infrastructure improvements.”

Other options were discussed.

“The business part of the PUD loves rate stability,” Commissioner Gene Healy said. “The customers like to save money. Seeing as how I represent the customer I’d be careful about raising the monthly fee.”

The discussion will continue. A preliminary budget needs to be approved during the first meeting in September while the final budget has to be completed by December.

Lia Sealund gave an update on conservation dollars.

“We are quickly reaching the end of the biennium funding on September 30,” she said. “Currently our budget was just under $114,000 for the current fiscal period. We are on target to spend 100 percent of those funds.”

Most of the funds were spent on light projects, first partnering with the school district to retrofit some of their lighting and secondly, to retrofit streetlights. So far the PUD has retrofitted 200 out of 500 lights and are in line to do 100 more.

“Over the last biennium, in pencil,” Sealund said, “it looks like there were approximately 300 megawatt hours saved per year over the life of the measures that your rebate dollars were spent on. We’ve got some great potential for energy savings in the next ten years or so.”

After a recent appeal for an adjustment, Healy suggested that the commissioners review their policy on adjustments for water leaks or losses.

“Maybe we can have it on the agenda to see if there are any adjustments we’d like to make,” Healy said. “We want to make sure we have a policy we are happy with. If there are customers who would like to come in and comment on this, I think it’s a good idea.”

Tramblie reported that the PUD had received a late bid to paint the electric warehouse.

“It was about 150 percent higher than what I anticipated or budgeted,” he said. “I think it’s in our best interest to wait until next spring to re-advertise.”