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PUD grappling with rate increase models

Columbia River PUD expected to finalize new rates in August


SPOTLIGHT PHOTO: COURTNEY VAUGHN - Columbia River PUD directors Harry Price, Jake Carter and Dave Baker review data during a meeting Tuesday, July 21. The board of directors is expected to vote on an energy rate increase in August.The Columbia River People’s Utility District’s board of directors continues to mull rate increases, but no decision is expected until next month.

Directors met Tuesday, July 21, and looked at new charts for how the PUD could adjust its rates for each customer class in light of increasing costs being passed along to the district from the Bonneville Power Administration.

The district purchases all of its energy wholesale from the BPA.

On June 30, directors attended a cost of services analysis meeting with the district’s Citizen Rate Advisory Committee. District officials were presented with scenarios showing the financial impact to the PUD’s reserves if the monthly fixed customer fee is raised for all customers.

A breakdown shows that if the district does not change its rate structure, it will face a deficit in its reserves.

A cost of service study recommends increasing the fixed, monthly customer charges as follows:

  • From $8 to $15 for residential customers, an 87.5 percent increase;
  • From $15 to $24 for small business accounts, a 60 percent increase;
  • From $40 to $50 for large commercial accounts, a 25 percent increase;
  • From $50 to $80 for industrial primary accounts, a 60 percent increase;
  • From $100 to $150, a 50 percent increase, for the district’s largest industrial customers.
  • Customers currently pay the monthly fee in addition to charges per kilowatt for energy usage.

    Under that fee schedule, the district would be able to maintain its desired $8.2 million to $8.5 million in cash reserves.

    Directors signaled a preference to see additional financial charts with lower rate proposals.

    Despite giving direction to PUD staff earlier this year to maintain cash reserves at those amounts, directors weren’t comfortable nearly doubling the monthly fee for households to achieve that goal.

    Jake Carter, the PUD board’s vice president, indicated he would rather see the residential monthly rate only increase to $12, and for the district to have less in reserves, while cutting costs elsewhere.

    Directors Craig Melton and Harry Price echoed Carter’s suggestion.

    “[We’d be] drawing it down a little farther than what we want to, but come 2020, we’ll start [bringing] it back up,” Carter said, alluding to the district’s anticipated debt payoff in 2020.

    “The longer you delay an increase, the more the increase becomes later on,” PUD Finance Director Sheila Duehring said in response to the suggestion.

    The board is expected to adopt new rates at its Aug.18 meeting. The new rates would go into effect Oct. 1.