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PUD explores rate increases as power costs spike

Change in costs could mean higher fixed rates

COURTNEY VAUGHN - Jon Ellis, a rate advisory committee member representing the city of St. Helens, listens as Lorne Clark from Dyno Nobel talks about the impacts of rising energy rates Tuesday during a Columbia River People's Utility District rate advisory committee meeting.

A projected 6.9 to 8 percent climb in energy rates from Bonneville Power Administration in October will likely see Columbia River People’s Utility District follow suit.

CRPUD directors met with the district’s citizen advisory committee Tuesday, June 30, to review different rate and revenue scenarios following a cost of services analysis. To retain its roughly $8.2 million general fund reserve, the district is considering monthly flat rate increases ranging from $4 to $7 for residential customers, as well as $9 for small commercial customers and $10 for large commercial entities.

Under that rate structure, large and industrial businesses would see a 4 percent jump, while homes and small businesses would see an 8.5 to 9 percent increase. In that scenario, which assumes average residential use of about 1,100 kilowatt hours a month, consumption charges for households would stay the same.

The electric provider last raised rates by 4.6 percent in 2013.

According to the district, every 1 percent increase in BPA rates results in a $200,000 cost increase and a .7 percent retail rate increase.

The cost of buying power from BPA has been coupled with lower revenues due to a decline in consumption, district officials said. Energy conservation, a warm winter and the loss of commercial customers all pencil out to less revenue for CRPUD.

While the district is known for having lower rates than its neighboring metropolitan provider, Portland General Electric, CRPUD can’t keep its rates stagnant, an anaylsis conducted by Portland's EES Consulting at the district's request shows.

If no fluctuation is implemented and the district votes to absorb the cost of BPA’s increases, the analysis indicates CRPUD would face a deficit in the next four years if it doesn’t adjust its rates.

“Right now, BPA is pretty much raising rates every two years,” Sheila Duerhring, the district’s finance manager, said Tuesday. As BPA’s prices to the district have increased, the district’s costs have remained relatively flat, Duerhring said.

Tuesday’s session was for discussion only and no formal action has been taken by the CRPUD Board of Directors, but the district’s efforts to recoup its costs could leave some customers with sticker shock, committee members said.

An 8.9 percent increase for residential customers will mean their fixed rate monthly customer charge will nearly double. Currently, households pay a flat rate of $8 a month, in addition to their energy consumption charges. One of the rate increase models suggests a $15 monthly flat rate.

"I'm just thinking that whatever increases happen, you have to be very careful in how you explain it to the public,” Rita Bernhard, the rate advisory committee member representing the district’s low-income customers, said Tuesday. Bernhard said customers will likely perceive the change as rate doubling, even though the $7 jump would represent an overall increase of less than 9 percent to households.

“Sometimes, those of us who are in these positions have a tendency to not think about how to explain it to the general public,” Bernhard said. Bernhard previously served as a Columbia County commissioner and mayor of Scappoose.

The district's board of directors is expected to review more options in the coming months, before making a decision on rate adjustments in August.