PUD considers a rate reduction

EVERETT – Many of Snohomish County PUD’s 300,000 customers have struggled for five years to pay some of the highest electricity bills in the state.

Now some at the utility are proposing to lower rates by 3 percent, one of a number of options under study, according to documents obtained by The Herald.

The rate cut would save the average PUD customer $28 per year – barely enough money to fill their gas tank.

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PUD leaders are calling the proposed rate reduction a gesture of goodwill with hope that more reductions are on the way.

Some customers are saying every penny counts, and to keep the reductions coming.

Noting how few dollars they would save, others would rather see the utility pay down debt, help its low-income customers or invest in conservation.

“Three percent is nothing,” said Cori Smith of Snohomish. “Three percent is not enough to waste anyone’s time.”

The potential rate reduction could, for the average customer, lower power bills by $4.68 each two-month billing cycle.

“It may not be a big amount, but it’s a start on the way down,” said PUD Commissioner Kathy Vaughn. “Even if it’s a minor rate reduction, I wanted to send a signal that we are working very hard to reduce costs.”

Commissioner Dave Aldrich supports lowering rates, but he said PUD customers would save more over the long haul by investing in conservation, which saves $2 for every $1 invested.

“Who wouldn’t support lowering rates?” asked Aldrich, who wants to do both. He has proposed that the PUD increase the amount it spends on conservation from $13 million per year to $19 million per year.

Investing back in the utility is exactly what Matt Wright of Monroe would like the PUD to do – just not how Aldrich proposes.

“I think the PUD should use the money to pay down its debt,” he said. “Sure I would like to see my rates lower, but I would like to see the PUD in a good financial position for the long run. I plan on living in the county for a very long time and a stable PUD is good for everyone in the county.”

Debbie Richey of Camano Island wants to keep more of her money in her pocket.

“I would love to see a reduction, no matter how small,” she said. “My electric bills are out of sight.”

The utility had to raise its rates 53 percent in 2001 to cover the record setting electricity price run-up of the 2000-01 West Coast energy crisis.

That’s when it joined other utilities in signing expensive power contracts that the PUD maintains were the product of illegal market manipulation by energy marketers such as Enron Corp.

The PUD was able to lower rates 5 percent in 2002, but the utility’s rates remain among the highest in the state. Since 2001, the PUD has been shutting off power at record levels to customers who have been unable to pay their bills.

The PUD is just now getting out from under some of the contracts signed during the energy crisis.

The utility will save $18 million per year when its contract with American Electric and Power concludes at the end of this year. That change is largely responsible for the PUD now considering a rate reduction, said Glenn McPherson, the PUD’s assistant general manager of finance.

Reporter Lukas Velush: 425-339-3449 or lvelush@heraldnet.com.

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