Uncertainty clouds coming energy rate hike

By KATHY DAY

Herald Writer

EVERETT — Although the first draft of the Snohomish County PUD’s 2001 budget calls for no change in electricity rates, district officials Monday acknowledged that a hike is in the future. It’s just that they don’t know when or how much.

Uncertainty is the order of the day because the Bonneville Power Administration, which supplies about half of the PUD’s electricity, last week decided to increase what it charges the PUD even though the two had a contract that lasts until October 2001. And Bonneville decided to come up with its own pricing mechanism rather than negotiate.

"A lot depends on what the board’s reaction is to the Bonneville mechanism," said John White, assistant general manager for power and services. "If it is significantly high, the board may look at a lower increase for a longer period vs. a higher hike that will go into effect later."

On Monday, the board introduced a resolution that gives General Manager Paul Elias flexibility to execute contracts for power rates and supplies that will go into effect in October 2001 even though they won’t know the actual price of power. Utilities must sign contracts with the agency by Oct. 31 even though they don’t know the price Bonneville is going to set.

The current contract will continue for the next year, although Bonneville’s move to increase power costs anyway could change that because the law permits the agency to adjust prices if the cost of power increases during the contract term.

White said he anticipates Bonneville officials will settle on a plan that adjusts prices almost immediately and will leave the door open for another adjustment later in the long-term contract.

During Monday’s preliminary introduction of the 2001 spending plan, PUD commissioners expressed concerns about the impact on customers.

"We need to preserve rates and rate stability," Commissioner Don Berkey said. "Rates will be different. We just need to know how much."

He asked White and other administrators to consider ways to conserve power as a way to reduce costs.

Board President Kathy Vaughn noted that because "everyone sharpened their pencils" in the past, the board had been able to defer earlier planned rate hikes. While noting that rate changes are on the horizon, she added that the board’s goal should be to keep them "out of double digits and below that."

The PUD board will consider options for the Bonneville contract at a special meeting on Oct. 10 and will get a detailed presentation on the overall budget on Nov. 7.