The Benton PUD is proposing raising rates an average of 6 percent starting Jan. 1.
However, rate increases in 2013 through 2015 should average less than expected a year ago at 1 percent to 3 percent a year, according to information presented at a lightly attended Benton PUD meeting in Kennewick on Tuesday evening.
The rate increase for residential customers in 2012 would be slightly lower than the average for all customers at 5.4 percent. That would increase the average bill of a residential customer from about $101 a month to about $106 a month.
Industrial rates could see one of the largest Benton PUD increases at a proposed 9 percent to 11.3 percent hike.
The decision on raising rates will be made by the PUD commissioners. They will discuss the staff recommendation of an average6 percent increase at a meeting Oct. 25 and are expected to make a decision Nov. 8.
Power costs are going up for several reasons, said Dan Bickford, PUD director of power management.
The Benton PUD traditionally has purchased more from the Bonneville Power Administration than it needed so it could resell some of the power at a higher cost and use the profit to reduce rates for its customers.
However, the BPA is limiting the amount of power the PUD can purchase and the PUD does not expect good prices on what it does have to sell.
In addition, the cost of BPA power it purchases is going up. BPA's rates are going up as it rehabilitates an aging federal system, the Energy Northwest nuclear power plant near Richland replaced its condenser and the costs of protecting fish increases, according to the Benton PUD. Transmission rates also are expected to increase.
The Energy Independence Act passed by a Washington voter initiative in 2006 also will add to the costs of Benton PUD power. The act requires utilitiesto buy 3 percent of their power from certain renewable sources, which include wind and solar, in 2012. That will increase to 15 percent in 2020.
The Benton PUD is supporting House and Senate bills to modify the act to say that if a utility already has excess energy under contract, then the utility has the option to choose not to buy unneeded and more expensive energy otherwise required by the act. The Benton PUD already has ample energy supplies under contract.
The PUD's rates now compare favorably to most other Northwest utilities, said Chad Bartram, assistant general manager. It looked at average costs of residential bills among Northwest utilities, to conclude its monthly bills are about $7 less than the average.