Franklin PUD customers will pay 4.9 percent more on average for their electricity starting May 1.
The public utility district commission approved a 4.9 percent rate increase Tuesday rather than the 8 percent bump also under consideration.
It was a choice of pay now or pay later.
Because the lower rate increase was adopted, a rate increase also is expected to be needed next year. It’s projected also to be 4.9 percent, but likely could be lower, said PUD General Manager Ed Brost.
If the 8 percent increase had been adopted, no increase was expected in 2014. The PUD’s Rate Advisory Committee told the commissioners that it preferred smaller, regular increases to larger sporadic ones.
The rate increase adopted Tuesday will be the first for the PUD since 2005 when rates jumped 10.5 percent. Twice in those eight years, rates dropped.
The overall 4.9 percent increase also includes a $10 increase in the monthly basic residential service charge to $21.45. The cost of electricity used is added to the basic monthly charge.
At the current $11.45 monthly charge, homes that use no power or little power are not covering the cost of having service available, according to the PUD. That includes the cost of a meter, substations, transformers, wire, meter reading, billing, payment processing, collections and a portion of the debt related to the PUD’s distribution system.
The change will mean that the percentage increase for those who use very little electricity will be the highest. However, other ratepayers have been subsidizing their cost of basic service for years, said Tim Nies, director of administrative services.
The typical home uses 1,400 kilowatt-hours a month and now pays $113.79 per month. That monthly bill would increase to $118.05.
For a household using just 500 kilowatt-hours per month and being charged $48, the monthly bill would increase to $55.95. If commissioners are interested in an incentive program for low use of electricity, that could be considered in the future, Nies said.
The two rate increase proposals were considered at six public hearings, the last one Tuesday. No one spoke at the Tuesday hearing during the commission meeting.
However, at other public hearings feedback was divided between the two rate proposals, Nies said.
The rate increase is needed primarily because of the rising cost of buying power for Franklin PUD customers.
The Bonneville Power Administration has proposed raising power costs by 9.6 percent. It’s making less money from selling excess power not needed by BPA customers because an abundance of natural gas is decreasing energy prices in the Northwest.
BPA also is raising rates to pay for improvements at hydropower dams.
The Franklin PUD buys about 85 percent of its power from BPA, the Northwest’s largest energy marketer.
The city of Richland already has raised rates this year. The Richland City Council approved an 8.93 percent increase in residential rates and increases of 7.4 to 20 percent for commercial and industrial rates, which began Jan. 1.
The Benton PUD was considering an average rate increase of 1.5 percent starting in April. But its commission decided no increase was needed after financial reports for 2012 were completed and were stronger than expected.