The Grays Harbor PUD Board of Commissioners has voted to change the rates for PUD customers which will take effect on April 1, 2017. Choosing to complete the recommendations from a 2015 cost of service study while acknowledging serious financial facts, the Board voted on Monday to eliminate the two tier residential rate in favor of a flat $0.085 rate. The utility will not change the system charge which will remain at $39 per month.
The elimination of the tiered system will mean all customers who use the full 360 kWhs previously offered in the first tier will see their PUD bills increase by $11 per month. The increase of the residential rate from $0.082 to $0.085 will impact all customer bills by $0.30 per 100 kWh used. All other rate schedules will see a 4% rate increase.
The utility will continue to monitor other variables through 2017 which may impact budget numbers including load growth and weather factors.
"Raising rates is the last thing we want to do, but rising power costs, soft surplus sales and existing high cost renewable energy contracts make this a necessary step. Our mission is to provide high value utility services at the lowest practical cost. Given the financial realities we are facing, this is the lowest practical cost we can accept without seriously impacting the service, safety and reliability we owe to our customers," said General Manager Dave Ward.
"We share and understand the frustration our customers are feeling at the prospect of higher rates but to delay the needed changes would only increase the cost to the utility and its customers," said Commission President Arie Callaghan. "'This restructure and increase are driven by financial facts which we are happy to share with any customer who wishes to learn about the realities the Grays Harbor PUD is facing."
The restructure completes the steps recommended by a cost of service study performed for the PUD in 2015. The commissioners chose to partially implement the restructure in 2016 to lessen the immediate impact. However, increasing rates from the Bonneville Power Administration continued weakening of the surplus power market and the rising cost of voter mandated renewable energy purchases made it impossible for the PUD to put off the increase any longer.
"To maintain the current rate structure would mean a larger increase. To use credit to pay the bill would simply postpone and increase the final cost. If we act now, we set the utility on stable ground," said Ward.
"There is light at the end of the tunnel," said Callaghan. "Expensive contracts will expire in the next five years, meaning the utility will have more revenue to put into the system and to pay down debt. By taking action now, we are helping to make sure the utility is stable and ready to move forward."