PUD rejects rate hikes for 2004
Published 9:00 pm Tuesday, December 2, 2003
EVERETT — Rates for Snohomish County PUD customers will not go up in 2004 despite a rate hike by the PUD’s largest electricity supplier.
The PUD commission adopted a no-rate-hike 2004 budget on Tuesday that, at $573 million, toes the line on expenses by not filling open positions and by hiring less outside help.
The spike in energy costs was offset in part by a high new-connection rate, with 6,300 new homes or businesses wired into the PUD’s system this year. Estimates are for at least that many more in 2004.
A 2.2 percent rate increase that the Bonneville Power Administration passed on to the PUD Oct. 1 will cost about $7 million in 2004, the main reason the 2004 budget is $9 million larger than this year, said Glenn McPherson, the PUD’s assistant general manager of finance.
Despite BPA’s rate hike, the commission refused to raise rates for its 275,000 customers, who have paid among the highest electricity rates in the state since the 2000-01 energy crisis. For several months, PUD residential customers actually paid the state’s highest rates.
"This board has said we will not raise rates," said Kathy Vaughn, PUD commission president. "This community has suffered enough from high rates."
Residential rates will stay at an average of 7.85 cents per kilowatt-hour, which pencils out to a monthly bill of $85 for a typical homeowner. PUD officials said keeping rates level is key for customers.
Cuts to the budget for hiring consultants and outside contractors will save the utility $4.5 million, McPherson said.
The board also voted to not fill 14 open positions, a $1 million savings that will have the district’s employee count drop to 891, down from 905 this year and an all-time high of 960 in 1998. The district will get another $700,000 in savings from other areas, including improvements in technology.
Vaughn said the PUD has been able to cut positions because existing employees have been able to take on extra work, something that will continue in 2004.
"We’re extremely pleased with the hard work by the general manager and all of his staff," Vaughn said. "Everyone will be working harder to keep costs down. Everyone is going to have to give more effort."
Vaughn said the PUD will continue to find ways to trim from within, but said the commission’s long-range plan is to rework the utility’s relationship with BPA, which has raised its rates 50 percent since 2001. The PUD gets 80 percent of its electricity from BPA.
"We would like to see our rates go down to something close to where they were before the energy crisis," she said.
The commission will hold a series of workshop meetings in January to map out a way to rebuild the utility’s relationship with the federal energy wholesaler.
The two have been at odds, especially since the PUD has resisted BPA’s attempts to get 72 public utilities to drop a lawsuit that challenges the way the agency compensates private utilities. Last month, the PUD became the first utility to reject BPA’s settlement proposal.
Reporter Lukas Velush:
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