Storm over rates

Businesses, PUD discuss 40% hike in power costs

By KATHY DAY

Herald Writers

EVERETT — Snohomish County PUD officials found themselves citing a popular movie Thursday to explain a dramatic increase in power rates to some angry business customers.

Just as a rare series of circumstances came together to create the catastrophe depicted in the movie "The Perfect Storm," so did the events prompting a 40 percent rate increase for the utility’s business customers, executive accounts manager Garth Williams said.

The meeting, attended by about 50 industry representatives, gave officials a chance to answer a lot of questions about the rate hike and how to deal with it. One of a series of bimonthly meetings, the session had been planned before the price of energy shot up earlier this month.

Commercial businesses will see their rates jump 38.4 percent on Jan. 1, and rates for industrial customers will rise 41.5 percent. The increase applies only to the actual amount of electricity they use.

Steve Corey, director of engineering at Canyon Creek Cabinet Co. of Monroe, said the meeting evolved into a "spirited discussion." While it wasn’t abusive in tone, he said, it was "probably close."

While he said his company will feel the impact of the increase, he said the firm is exploring ways to save energy for basic operations. Options "could include shifting around operations to avoid running equipment during peak hours," he said.

Corey and Warren McKay, who represented Northwest Composites and Aerocell at the meeting, both said they believed the district was in a tough position and shouldn’t be blamed for the problems.

McKay said the consensus at the meeting seemed to be to put the blame on California, adding, "you can’t blame them for the weather."

California normally sends power to the Northwest this time of year, but a combination of cold weather, power plant shutdowns, low rainfall for hydroelectric dams and general chaos from deregulation have meant the state needs to import power to prevent blackouts, officials said.

"In this rapidly volatile market, it’s hard to find a long-range model that can be used to predict this type of change," McKay said. His company, which employs about 700, is in the process of limiting its peak power loads and "buttoning up holes."

Like a lot of businesses, he added, "We’ve already closed the margin so closely on profits that there’s little room for change."

Some companies, like King Extrusions Ltd. in Woodinville, can only try to pass the increased costs on to customers.

President Doug Torrie said his plant, which makes vinyl parts for windows and doors 24 hours a day seven days a week, has little wiggle room because nothing can be shut down. He and his staff will look at operations and may consider passing on higher costs to customers.

That may not be possible though, he said. "It’s a competitive business."

Williams said the PUD is offering extra support to customers trying to deal with the sudden rate hike. Officials and company representatives will take a close look at past and current electricity consumption. In some cases, there may be financial incentives available to help companies reduce loads, while others that have not focused on conservation "might change direction," Williams said.

Everett School District officials estimate the electricity rate increase will cost roughly $200,000. That comes on top of a proposed 25 percent natural gas rate increase they project will cost another $200,000.

The district has been bracing for the increases for several months and sending memos to schools urging conservation, officials said.

While searching for answers Tuesday, Dennis Steeves of Everett-based Ameron Inc., which makes concrete utility and light poles, said the situation brings up Washington’s reliance on other states for power.

"At some point, we’ll have to bite the bullet and consider becoming self-reliant," he said.