By KATHY DAY
Herald Writer
EVERETT — On Jan. 1, the cost of electricity for Snohomish County PUD customers will increase dramatically. But just how much won’t be known until today.
The increase could range from 16 percent to 43 percent if the hike kicks in Jan. 1, or from 23 percent to 64 percent if the PUD waits until April 1, the three PUD commissioners were told Tuesday.
"It’s hard to believe we’re seriously sitting here and thinking about" these numbers, commissioner Cynthia First said.
Commissioners will take action at 8:30 a.m. today at a special meeting on the first floor of PUD headquarters at 2320 California Ave. in Everett.
The rate hike is necessary because soaring energy costs boosted by shortages in California have gobbled up district reserves.
Commissioner Kathy Vaughn said she wanted to deal with the immediate emergency of restoring the reserves. The board asked the staff to present options for a monthly surcharge.
Under that plan, the surcharge would be a set percentage applied to the amount of energy consumed by each customer. It could include a provision to re-evaluate or even drop the charge after a certain time — perhaps 12 to 18 months.
"When do we break even, and what percent do we need to start building reserves?" First asked.
The board agreed that the surcharge on actual use might encourage people to conserve energy and decrease the district’s power needs.
Under Tuesday’s plan, typical customers who now pay about $63 a month would see their bills increase by $10 if the increase was 16 percent. At 43 percent, it would go up about $27.
Commercial users paying $5,591 monthly would see an increase between $1,049 and $2,819, and industrial users with a $102,246 monthly charge would pay $20,611 to $55,391 more.
"I’m kind of depressed," commissioner Don Berkey said of the situation.
Glenn McPherson, the district’s assistant general manager for finance, said he was presenting "bookends" to give the board an estimate of what will be required to maintain cash reserves and restore the required debt service cushion that has been devoured by the run-up in electricity prices.
But he explained that the numbers also reflect anticipated increases in Bonneville Power Administration charges. The federal agency that provides much of the hydroelectric power to the Northwest has already requested a 15 percent surcharge, and PUD officials were sifting through documents Tuesday they expect will increase that figure for the current contract.
Commissioners seemed to agree that it was best to set aside the BPA impacts and deal with those in a separate rate discussion when they have more details about the new contract that takes effect next fall.
In a separate action, the board voted to transfer $32.8 million to its general fund to cover operating and debt service costs.
The transfer means that money won’t be available to help hold down rates next year.
Assistant General Manager John White told the board that a one-day snapshot of the cost of purchasing power on Monday showed the district paid 11 times more than a year ago. Cold temperatures that have hit the region and an increase in demand and decrease in resources in California have triggered record costs for electricity, he said.
"If it had stayed cold and prices stayed up, it could have been 25 times higher," he added. By the end of December, PUD officials estimate that they will have spent about $25 million more than expected.
The effects of power costs are hitting utilities throughout the state. Seattle City Light has already increased its base rate and added a surcharge.
In Tacoma Tuesday, commissioners considered a plan that would increase residential bills by a surcharge of 86 percent, beginning Dec. 20. The charge would be re-examined next fall when the new BPA contracts take effect.
Commercial and industrial customers in Tacoma may face increases ranging from 132 percent to 151 percent, a spokesman said.
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