Benton PUD, Richland may raise utility rates

By Drew Foster, Herald staff writer

Although Benton PUD is proposing a rate increase for residential and commercial customers, Franklin PUD and Benton Rural Electric Association don't plan on following suit, but Richland might.

"We are not planning any type of a rate increase for 2010," said Ed Brost, Franklin PUD general manager.

Benton REA spokesman Troy Berglund said, "We will definitely not be raising rates for the rest of 2009 or 2010."

Berglund added that Benton REA is working to avoid a rate increase through 2011 as well.

Ray Sieler, Richland Energy Services director, said city officials are reviewing a cost-of-service study to determine if a rate increase is needed or how large it might be.

"There's a likelihood we'll have some sort of a rate increase," Sieler said, adding that a proposal likely will be brought to the city council in February.

Benton PUD officials announced earlier this week that they're proposing a 4.6 percent rate increase for residential customers and a rate increase of 7 percent to 8 percent for commercial customers, depending on the business.

The proposed increase will be voted on Nov. 24. If approved, it will go into effect Jan. 1.

"The primary driver is related to our wholesale power costs," said Jim Sanders, Benton PUD general manager. "The wholesale power costs are increasing."

Sanders said wholesale power, which Benton PUD buys from the Bonneville Power Administration, makes up about 65 percent of Benton PUD's operating costs.

Wholesale power cost increases, combined with what Sanders called a "depressed" aftermarket where Benton PUD resells a portion of its purchased energy, have led to a $15 million increase in the public utility's operating costs this year.

Brost said Franklin PUD's operating costs also are escalating, but the public utility plans to use about $1.2 million in reserve cash to offset operating increases and capital project costs next year. Brost said customer rates are likely to increase in 2011.

-- Drew Foster: 585-7207; dfoster@tricityherald.com

tool name

Sunday, Nov. 15, 2009

Benton PUD, Richland may raise utility rates

By Drew Foster, Herald staff writer