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PUD Approves Budget / Rate Increase
Clallam County PUD #1 (PUD) Commissioners voted to approve the 2017 Budget, 2017 Strategic Plan, and board reorganization during the December 12, 2016, Commission Meeting. The budget process for Commissioners included work sessions and regular business meetings, which were all open to the public.
The PUD’s approved Strategic Plan continues the emphasis of Providing Stable Rates to customers and being Financially Responsible. The 2017 budget reflects that with the Commissioners approving a staff recommended 3.8% average increase in retail electric utility rates and a 7% average retail rate increase for water and sewer customers.
Electric Rate Increase
“Rate increases are never popular, but our strategy of having low and predictable increases creates stability for customers as they budget,” says Doug Nass, PUD General Manager. “We take great pride in our utility’s reliability, great customer service, all while maintaining some of the lowest electric utility rates in the state and country.”
The retail electric rate increase is equal to about $4.48 per month for the average PUD residential customer, using 1200 kWh per month. The actual retail electric rate increase will be applied as an increase of 10% per month on the customer’s base charge and approximately 2% on kilowatt hours used, which all totaled is approximately 3.8% overall for the average residential electric bill. Rate increases are effective on all bills rendered on or after April 1, 2017.
Example of an average electric bill: Current $114.29; with the rate increase it would be $118.77
Electric Rate Pressures
For Clallam PUD, weather is responsible for almost all usage and revenue variations. Since 2014 the area has seen warmer than usual weather, resulting in decreased revenues for the PUD. Other rate pressures include Bonneville Power Administration’s wholesale rate increases of 3.5% effective October 2017, the added costs of meeting the mandates of Washington’s Energy Independence Act (formerly known as I-937), and personnel costs that include escalating health care costs as a result of federal legislation.
In October 2015 the Bonneville Power Administration (BPA) increased rates by approximately 6%. This represents the largest cost center for the PUD at about 43% of the total budget. For this increase, 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 part, the 2017 PUD rate increase is attributable to both the 2015 and 2017 BPA wholesale increases.
Water Rate Increases / Rate Pressures
The PUD’s Water System faces challenges related to aging infrastructure, limitations on capital financing, and regulatory mandates.
“The Water Utility is separate from the electric utility and it is must be managed as such. With a smaller customer base and aging infrastructure, these rate increases are necessary to not only maintain the system but also to make certain we are able to deliver the quality water expected,” says Doug Nass.
The water system rate increase was approved at 7% for each of the next three years (this average includes an 8% base charge increase and a 6% increase on usage). Rate increases are effective February 1, 2017.
Example of an average water bill for the first year: Current $61.83; with the rate increase it would be $66.17
Wastewater System Rate Increase
The PUD’s Sewer systems are similar in challenges to that of the Water System. The sewer system rate increase was approved at 7% for each of the next three years. Rate increases are effective February 1, 2017.
Example of an average wastewater bill for the first year: Current $45.60; with the rate increase it would be $48.79.
Approximate Total Customers in each utility: Electric, 30,000; Water, 5000; Sewer, 60
Other Commission News:
The Board held elections to reorganize officers for the next two years, 2017-2018. Effective January 1, 2017, Ted Simpson is President, Hugh Haffner is Secretary, and Will Purser is Vice President.