Franklin PUD customers will pay 3 percent more for electricity starting May 1.
The Franklin Public Utility District Commission on Tuesday unanimously approved the increase, which is less than what had been planned.
Last year, the commission approved two years of 4.9 percent increases.
However, staff more recently concluded that a lower increase this year would be sufficient for the PUD to meet its financial obligations and would minimize the near-term impacts to customers. The PUD's rate advisory committee met Feb. 12 and agreed.
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The commission briefly discussed keeping the rate increase at the 4.9 percent that had been approved last year, which might eliminate or at least reduce a rate increase in 2015.
The PUD is a good steward of the ratepayers' money, said Elaine Banks, who represents seniors on the rate advisory committee. But the natural tendency is to spend more money if more money is available, she added. She favored holding the increase to 3 percent.
The committee has advised the commissioners in the past that it prefers smaller, regular increases over larger, sporadic increases.
The rate increase last year brought the monthly bill for a typical home using 1,400 kilowatt-hours to $118.05. The 3 percent increase May 1 will raise that to $121.59.
Rising power and transmission costs from the Bonneville Power Administration are the main drivers for the increase, according to the PUD.
The PUD purchases 85 percent of its power from the Bonneville Power Administration, and the PUD had a 6 percent increase in its power costs from BPA in October 2013. In addition, the PUD's BPA transmission costs increased 13 percent.
BPA is expected to raise the PUD's power and transmission costs again in fall 2015 and it had similar increases in 2009 and 2012.
"As they continue to raise rates, we have to as well," said PUD spokeswoman Debbie Bone-Harris.
Wholesale power purchases make up almost 70 percent of the PUD's annual expenses, but it is constantly looking for ways to cut costs in remaining areas in which it has more discretion, she said.
The rate increase last year was the first time the PUD had raised rates since 2005, when rates jumped 10.5 percent. Twice in those eight years, rates dropped.