By Todd C. Frankel and Jennifer Langston
Herald Writers
EVERETT — The Snohomish PUD decided Wednesday night to cut residential electricity rates by 5.1 percent beginning with the April 1 billing period, which will result in customers saving an average of $45 a year.
The decision by the PUD commissioners reflects a cautious, middle-of-the-road approach to rate cuts. The group also was considering two other options: holding off doing anything until fall, or slashing rates by 10.1 percent.
The commissioners "wanted to balance providing some rate relief to customers this spring but at the same time balance the need to make a financially prudent decision," said PUD spokesman Neil Neroutsos.
The decision follows two nights of public testimony, where, not surprisingly, many comments bordered on outrage. Many PUD customers have spent the winter suffering sticker shock after power rates were raised by more than 50 percent last year.
But even the PUD’s decision to modestly cut rates left some customers less than impressed.
"That isn’t good enough," said Sally Foster, who lives in a home near Stanwood where the thermostats are stuck at 40 degrees and she has resorted to relying on two wood-burning stoves for warmth.
Despite intensive pressure from customers, the utility argues that if it cuts rates based on overly optimistic projections now, it might have to turn around and raise them again in six months.
Even though the drought is over and energy prices on the spot market have returned to normal, the PUD and other energy suppliers including the Bonneville Power Administration are still saddled with expensive contracts for energy signed during last year’s crisis, when markets were inflated.
Some PUD customers got two-month bills this winter that rivaled their mortgage payments, even though they had kept houses cool, turned off lights and conserved hot water.
But the majority of people who weighed in on the PUD’s three proposals at public meetings and focus groups voted either to keep rates the same for now or cut them by 5 percent, said communications director Julee Cunningham.
There also was a contingent of people who wanted a different option but didn’t specify what should be done, she said.
"There’s not one of us in the room that doesn’t appreciate the frustration of the situation. It does get to you," she said. "It’s just that these are the options we have to look at, so we have to stay focused on those."
Although some customers supported a 10 percent rate cut, most said a big decrease now, with summer months approaching, wouldn’t make that much of a difference.
They felt it was more important to be conservative now rather than risk another rate increase next fall, when the Bonneville Power Administration — the PUD’s major supplier — might raise its rates, Cunningham said.
"People have a real concern about an increase in October," she said.
What happens to the electricity rates over the long term depends on BPA, weather, the Enron bankruptcy proceedings and whether the utility is willing to dip into reserve funds.
You can call Herald Writer Jennifer Langston at 425-339-3452
or send e-mail to langston@heraldnet.com.
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