PUD rate hike: About $40.92 a year per household

EVERETT — A $40.92 increase in the average annual electrical service charge for Snohomish County homes was approved Tuesday by the Snohomish County PUD Board of Commissioners.

This is the first electric rate hike for the 300,000-customer public power utility since 2001. It takes effect April 1, at the end of the winter heating season.

“At no time does the board relish having to raise rates,” Commissioner Dave Aldrich said during the commission’s regular meeting Tuesday.

Utility officials argue the rate increase is necessary to help bridge this year’s projected $73 million budget shortfall.

The rate increase is expected to generate about $11 million in added revenue this year. The utility plans to draw about $43 million from various reserves and slash millions of dollars in spending. Among its cost-cutting moves: leaving open positions unfilled, deferring maintenance and cutting back on overtime.

On Tuesday, PUD General Manager Steve Klein announced the utility’s deficit would increase as much as $19 million above the $54 million budget gap originally projected when its budget was approved in December.

The new outlook has to do with tumbling wholesale rates the PUD receives for selling surplus electricity on the open market. It also arrives on the heels of a proposal by the Bonneville Power Administration to increase wholesale power rates by about 9.4 percent.

The bulk of the PUD’s budget woes can be traced to escalating labor, materials and maintenance costs, as well as to unfunded mandates, such as Initiative 937, which requires the state’s major utilities to produce 15 percent of their electricity from renewable sources by 2020.

With a systemwide average rate boost of 3.5 percent, the jump is significantly lower than the 33 percent and 18 percent rate increases the utility was forced to pass when wholesale electric rates skyrocketed during the 2001 West Coast energy crisis.

The PUD later lowered its rates by 5.1 percent in April 2002.

Reporter David Chircop: 425-339-3429, dchircop@heraldnet.com.