Forum: Better planning by PUD could have avoided rate increase

The utility’s 5.8 percent increase appears to use PSE’s 17 percent increase as cover for its rate hike.

By Ignacio Castro Jr. / Herald Forum

The Snohomish Country Public Utility District is going to increase the electric rates for residential and small businesses by 5.8 percent, effective April 1 (“Energy bills to rise 5.8% next month in Snohomish County,” The Herald, March 17).

A rate increase for large businesses is not mentioned. A no-rate-increase for large business, if true, is not equitable to the majority of PUD customers.

In 2021, the PUD projected a 1.5 percent rate increase effective in 2024. Now, the PUD blames a bigger increase this year on inflation (actually continuing downward since 2020), supply chain issues (easy target to blame), and extreme winter events (at least two mild winters in the last three years including 2024).

The PUD also cites higher equipment costs, higher energy costs and higher compensation for workers. Strategic planning could have anticipated equipment needs earlier, potentially leading to pricing breaks. The same applies to “unexpected” energy costs. Improved projections of energy use and long-range plans could have identified some of the problems earlier also. Better negotiated energy pricing for the time frames of the energy needs could have reduced costs.

Higher costs for workers are the result of over-staffing higher paying positions and perhaps ineffective use of staff. The PUD’s claim that under-staffing has forced the overtime costs shows the result of this. According to the PUD, overtime costs increased from $9 million in 2017 to $24.5 million in 2022. The PUD does not offer the overtime costs for 2023 or 2024 to-date. Given the PUD’s increasing trends, the overtime paid in 2023 and potentially for 2024, are probably higher. Better management could have and should have kept these costs down. It is not too late for 2024.

One of the PUD’s justifications for the rate increase is for “crucial investments in infrastructure and technology.” Many government grants have been given to the PUD for these kinds of projects. No explanation is offered about the use of the millions of dollars provided by these government grants. The most recent publicized government grant was for $30 million dollars. There have been others over many years.

Interestingly, the PUD rate increase comes after Puget Sound Energy, itself, announced rate increases. The PSE rate increases, if approved, will be 17 percent for electric customers (residential and/or commercial?) and a 20 percent increase for natural gas customers. PSE has over 150,000 customers in Snohomish County.

The PUD does not need to leverage its actions to increase rates using PSE’s actions as leverage.

The PUD solar array project in South Everett is probably being planned with government grants. One of the selling points for this project is to use some of the project revenue to donate to another new program to provide grants for households who need help with energy bills. This may be a worthwhile cause, but it should not be used as justification for use of government funds meant for other uses.

A better plan might be to scrap the project, reduce rates for households in need, and do away with the need to give away PUD revenue. Unused solar array projected costs savings including maintenance and service costs could also be used to help households in need. Strategic planning could have identified this.

Ignacio Castro Jr. lives in Edmonds.

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