After months of hammering the Bonneville Power Administration for raising its rates, Snohomish County PUD officials say they won’t have to pass the federal energy wholesaler’s Oct. 1 rate hike on to the PUD’s 275,000 customers.
If approved by the three-member PUD commission, residential rates will stay at an average of 7.85 cents per kilowatt-hour, which pencils out to an typical monthly bill of $85 for a homeowner.
PUD officials said keeping rates level is key for customers who are already paying among the highest rates in the state, especially considering winter is around the corner.
"The commissioners have certainly sent a strong signal that they don’t want to raise rates," said Ed Hansen, the PUD’s general manager.
Hansen said the PUD could probably cut costs again if power prices go up at some point in 2004. Although possible, "raising rates would probably be a last alternative," he said.
Released on Monday, Hansen’s preliminary budget would have the utility balance its budget by tapping into a rate stabilization reserve and by utility-wide belt tightening highlighted by not filling 14 vacant positions. No layoffs are proposed.
Hansen would get $7.2 million from the PUD’s rate stabilization fund to cover the cost of BPA’s rate hike for 2004. That fund is designed to be used when there are steep swings in the prices the PUD pays for electricity, Hansen said, adding that BPA’s rate hike qualifies. There is currently $60 million in that fund.
Still, just covering the BPA rate hike would leave the PUD $4.5 million short of balancing its budget, money Hansen proposes to make up by cost cutting.
None of his proposed cuts are large.
"There were lots of little things," said Glenn McPherson, the PUD’s treasurer and assistant general manager. "There was no one big thing."
Examples that will save tens of thousands of dollars include deferring noncritical maintenance at the PUD’s Jackson hydroelectric facility on the Sultan River, and delaying the purchase of software that would improve the way the utility collects information from its customers.
Hansen’s proposed budget for 2004 is $573 million, $9 million more than the $564 million the PUD will spend this year.
He said he will continue to push BPA to reduce its rates by cutting its own costs.
BPA officials have said the 2.2 percent rate hike could turn into a 7 percent rate reduction if a group of public utilities, including the PUD, agrees to drop a $200 million lawsuit against the federal energy wholesaler. The lawsuit claims that BPA gives too much of a break to private utilities at the expense of public ones.
If the lawsuit is dropped, BPA spokesman Ed Mosey said utilities such as the PUD would then be refunded all extra money collected since Oct. 1.
Reporter Lukas Velush: 425-339-3449 or lvelush@heraldnet.com.
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