Franklin PUD debates amount to raise rates

By Annette Cary, Tri-City HeraldJanuary 23, 2013 

The Franklin PUD Commission is considering raising electric rates by either 4.9 percent or 8 percent in May.

Commissioners discussed options at a meeting Tuesday but will wait to hear what the public has to say in a series of hearings to be scheduled in February and March before making a decision by late March.

It's a choice for ratepayers of pay now or pay later.

If the 4.9 percent option is picked, another rate increase of possibly about the same amount would be likely in 2014. If the 8 percent option is picked, there's a good chance no rate increase would be needed in 2014, said public utility district staff.

However, with the changing electric market, it's difficult for commissioners to predict exactly how much costs could be in 2014 and later. Uncertainties include what the Bonneville Power Administration might charge, water levels for hydropower electric generation and growth in the Franklin PUD customer base.

The proposed increase for 2013 is needed primarily to cover the rising costs of obtaining electricity from the BPA, which supplies 85 percent of the Franklin PUD's power as the Northwest's largest energy marketer.

This is the first time the Franklin PUD has raised rates since 2005, when it increased charges by 10.5 percent. It decreased rates by 5 percent in 2007 and 4 percent in 2008. In addition, it had a temporary price cut in 2008 and again in 2009 to pass along BPA credits to some customers.

As part of the proposed 4.9 percent or 8 percent increase, the commissioners plan to raise the basic service charge on monthly residential electric bills. A basic charge of $11.45 now is charged to each residential meter each month with an additional cost per kilowatt-hour used.

However, that basic charge does not cover the PUD's cost of having service available or providing service to residences that use no or little electricity.

"If someone has a meter and no electric charge, we subsidize them," said Roger Wright, president of the commission.

Commissioners agreed that the basic monthly charge should be raised $10 to $21.45, which still would not cover the entire cost of providing service.

With the higher basic charge, a household now using 250 kilowatt-hours per month and being charged $29.73 would pay $39.55 under the smaller rate increase proposed and $40.72 under the larger increase proposed.

The typical residence uses 1,400 kilowatt-hours per month, however. Now that household would pay $113.79 per month. If an overall 4.9 percent increase is adopted, that monthly bill would increase to $117.98. Under the overall 8 percent increase, the bill would rise to $121.45 per month.

The city of Richland already has raised electric rates this year, and Benton PUD is considering a rate hike.

The Richland City Council approved an 8.93 percent increase in the residential rate and increases of 7.4 to 20 percent for commercial and industrial rates starting Jan. 1.

Benton PUD customers could pay an average 1.5 percent more for their electricity starting in April under a proposal being considered. The rate for residential customers would increase 2 percent. For businesses and institutions that pay the small general service rate, rates would increase 1.4 percent.

The BPA's proposed increase in wholesale power costs for utilities throughout the region is causing many to raise their retail rates for customers.

BPA has proposed raising wholesale power costs by 9.6 percent and increasing transmission fees by 13 percent. That follows a BPA power rate increase of 7.8 percent in October 2011.

About 60 percent of the proposed BPA rate increase is the result of less money from selling excess power not needed by BPA customers, according to BPA. Energy prices are low in the Northwest because of the abundance of natural gas, according to BPA. Paying for improvements at hydropower dams also is driving up BPA power rates. BPA's proposed transmission increase is due to transmission lines that need to be built or replaced, and improved cyber and physical security.

Planned hearings for Franklin PUD customers include daytime and evening meetings in Pasco and late afternoon or evening meetings in Connell and Kahlotus. Dates for those meetings had not been picked Tuesday.

The Franklin PUD Rate Advisory Committee discussed the rate changes and the majority of members favored raising the monthly basic rate to $21.45 and an overall increase of 4.9 percent.

-- Annette Cary: 582-1533; acary@tricityherald.com

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