Cowlitz PUD considers 5% rate hike
Electric utility has not raised electric rates since 2017
Increasing power costs and new safety projects have prompted the Cowlitz PUD to plan for its first rate increase in seven years, the utility announced Tuesday
If the PUD commissioners agree to boost rates on Sept. 24, the average customer’s monthly bill would increase $6.40 a month, to $134.45, according to utility spokeswoman Alice Dietz.
Commissioners will hold rate hearings at 2 p.m. and 7 p.m. Sept. 17 at the PUD Building, 961 12th Ave. in Longview.
Even with the boost, PUD rates still would be in the lowest one-third compared to other Washington PUDs, Dietz reported.
The new rate would take effect Oct. 1. The PUD serves 50,000 customers in Cowlitz County and is the second largest public utility district in Washington.
The PUD needs the increase to avoid a budget deficit created by an increase in wholesale power rates by the Bonneville Power Administration, the federal power marketer that sells the PUD most of its power.
Dietz said the PUD must also plan for inflation and uncertainty in the power market. In addition, it is undertaking projects to get its transmission lines and substations ready for growth and make them more reliable and protected from wildfires and vandalism.
Putting the 5% hike in perspective, Dietz noted that the Consumer Price Index — the common measure of inflation — has increased 28% to 30% since the time the PUD last raised rates.
Even with the increase, the PUD will need to draw down its cash reserves to balance its budget. It still would have about $114 million in reserves. That puts the PUD’s “Days Cash on Hand” — the number of days it can operate on reserves alone — in the average range for Washington PUDs, Dietz said.
The PUD will use use reserves and delay further action until it has more certainty abou BPA rates and wholesale power market prices. A BPA rate decision is expected in July.
The current public utility framework and utility regulation assures us of inadequate infrastructure and chronic underinvestment. We are not politically capable of solving this problem without a total reexamination of the goals of public investment . We will always be faced with the problem of too little too late. We have a lot of history to overcome. Building for the future involves real sacrifice.
One last comment for now. The formula for price setting under PUC guidance guarantees inadequate investment to meet the growth in demand because it isn't based on the estimated costs of adding future capacity. More later.