Columbia River PUD Approves 4% Rate Increase
August 17, 2011 – For the first time in a decade, Columbia River People’s Utility District (PUD) is increasing rates for electric service. The PUD’s Board of Directors approved a 4% overall increase at its August 16 public meeting. The increase will appear on all bills rendered after October 1.
The rate increase is primarily a result of wholesale power cost increases. Wholesale power costs, which make up about 60% of the PUD’s operating budget, have increased by 16.6% in the past two years, necessitating the rate increase.
“We have worked hard to keep rates affordable and stable for customers, and to keep this rate increase as small as possible,” said PUD Board President Dave Baker. “We expect rates to remain the same for the next two years.”
The PUD will review rates next in 2013, when the current wholesale rates from the PUD’s wholesale power provider, Bonneville Power Administration (BPA), could change again.
Beginning October 1, 2011, the average residential bill will rise by $2.87 per month, from $71.90 to $74.77. After the increase, PUD residential rates will be 25% lower than the average rates for all Oregon electric utilities.
As part of the overall rate increase, the PUD is increasing monthly customer charges for most customer classes. A customer charge is used to collect a portion of the fixed costs incurred in serving each customer such as metering, billing, and accounting.
For residential customers, the customer charge will increase by $1 to $8 a month. Residential customers whose annual income is less than 150% of federal poverty guidelines will continue to be eligible for the Special Waiver, which waives the monthly customer charge.
Prior to implementing the rate changes, the PUD hired EES Consulting of Kirkland, Washington, to conduct an independent cost of service analysis. In late spring, EES Consulting reviewed the PUD expected revenues and expenditures to ensure that each of the PUD’s various customer classes, such as residential customers, commercial customers, and industrial customers, pays their share of what it costs the PUD to serve them. The analysis showed that the PUD’s existing rates were generally equitable, but that they were not sufficient to meet the PUD’s revenue requirements. As a result, EES Consulting worked with the PUD board and staff to determine the amount of the increase that would be required to maintain financial stability and to ensure the continued safety and reliability of the electric system.
Once the cost of service analysis was complete, the PUD convened a Rate Advisory Committee. The committee included 28 citizens representing all of the PUD’s customer classes, and senior and low-income customers. It met twice in June to review the consultant’s findings and the recommended rate changes. Following those meetings, the Board held a public rate hearing on July 19th, and adopted the new rates on August 16th.