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PUD Rates Go Up Feb. 1 by Jacob Jones The Daily World, January 12, 2010

Citing increased power costs and expensive new renewable energy mandates, Grays Harbor PUD commissioners voted unanimously Monday to raise utility rates 8 percent, starting next month.

Utility officials estimated the rate hike will add about $7 to the average customer's monthly bill, starting Feb. 1, in an effort to close a $9 million hole in the 2010 budget. That's based on a current bill of $87.71 increasing to $94.73.

More than 40 utility customers crammed into the commission meeting with many opposing the proposed increase, arguing Harbor families already struggle to pay ever-rising bills.

Commissioner Truman Seely, who took over as board president Monday, told the group the utility district didn't have much choice. It has bills to pay, too.

Seely pointed out that the Bonneville Power Administration, which supplies 78 percent of the district's wholesale power, announced a 4.6 percent increase last fall. And on top of that, he said, the PUD will have to invest in costly renewable energy production to meet new state requirements from Initiative 937, designed to foster advances in green energy.

"The only place we can be assured of that revenue is you," he told the crowd.

The district's revenue has decreased in recent years as the Harbor has seen a smaller power need due to lost industry, while the outside market for selling unused power has continued to suffer. Commissioners said 3 percent of the 8 percent increase will go to build savings for future capital expenses as opposed to going further into debt.

Seely predicted rates could also go up again 7 percent in 2011 and 7 percent in 2012 as costs continue to rise and the district chips away at its debt for earlier capital projects.

"It is time to start facing up to the fact of funding our capital out of our current revenue," Seely said, "and that means your rates going up.

"Sorry," he added, "that's just the way it happens."

Several members of the public stood against the increase, appealing to the commissioners to try other cost saving strategies. The comments ranged from complicated inquiries on the impacts of environmental activists to finger-wagging lectures on reckless spending.

Ken Estes, a former Republican Grays Harbor County commissioner candidate, said the rate increase would continue to heap taxes on Harbor families working to recover from the recession.

"Additional taxes, fees and rates burden the fixed income, the underemployed, the unemployed and stifle the economy," he said, adding, "We do want our toaster to work, but we also want to be able to afford to use it."

Dave Jennings, an outspoken PUD critic last year during public meetings on a proposed 4 percent rate increase that failed, challenged commissioners to review salaries, construction projects and future investments for any possible savings.

He criticized recent salary increases for General Manager Rick Lovely and other positions while also seeming to resent the commissioners raising rates to reduce the district's debt.

"It's like asking your boss for a raise to pay down your personal debt at home," he said.

Lovely argued the utility district has stripped almost every luxury from its budget in an attempt to cut costs and prevent a rate increase. He said seven recent retirees have not been replaced while he works to reduce staffing from 176 to 166 employees.

The district also recently closed down its North Beach service truck, he said, reducing its fleet from six to five trucks.

But services can only be trimmed so much, he said. "We have a system that must be maintained to maintain the reliability and safety and security. To not do that, we would not be fulfilling our responsibility to the ratepayers of this county."

Lovely said "illegal" overcharges from BPA led a long list of rising costs from more expensive tree trimming and pole replacement services to new infrastructure costs.

He said Initiative 937 mandates that require the district to receive a percentage of its power from renewable resources also presented a huge problem for districts that do not need to grow, forcing them to create power sources they don't need.

"We have to bear those costs," he said.

The general manager also defended recent spending on a new building, arguing that of $147 million spent in recent years on the district's infrastructure, just $6 million went toward making sure employees can work in decent buildings.

One man in the crowd, who declined to give his name, told Lovely he understood the costs of the system, but worried the district had grown too comfortable with spending the public's money.

"You have to understand, Rick," he said. "You deal with these big numbers, and we deal with our (smaller) numbers at home. Our numbers at home, when you effect them a little bit, that is an effect."

A few speakers questioned a recent 3 percent salary increase for union employees, such as line workers, despite the fact that non-union employees are on a wage freeze. They pointed to other local unions making concessions and taking furlough days to meet their budgets.

"The PUD has not saved money by cutting non-union staffing and salary levels by giving that savings to union employees," Estes said.

As the wind and rain howled outside the room, a man who identified himself as a PUD lineman rose and reminded the crowd he and others would be out repairing damaged lines in the dangerous weather.

"We're the guys that are going to be out there putting your power back on," he said before walking out, "So I'd appreciate if you keep that in mind when you're talking about cutting and slashing and cutting somebody's throat."

PUD officials said the general utility rate has not increased since 2002, though they acknowledged the minimum charge rose from $24 to $36 a month about a year and a half ago.

PUD Commissioner Tom Casey said Grays Harbor was faring better than many other districts. The new increase was the result of a number of factors adding up all at once.

"The bills have to be paid," he said. "There isn't any one thing to be sure."

Commissioner Russ Skolrood, who joined the board last year, said he never expected to take on the kinds of challenges the district has faced in recent months.

"Do I want to do a rate increase?" he asked. "No. It's my rate, too."

Skolrood said inflation and conservation cost money. He couldn't see any other options.

"Eight percent," he said, "I hate it."

The commissioners voted unanimously for the increase. With heavy sighs, they laughed nervously as much of the crowd filed out of the room.

In other PUD news from Monday night's meeting:

• As part of a number of improvement expenditures the commissioners approved $450,000 for installing and replacing meters for the year, more than $316,000 for a recent transmission improvement in downtown Aberdeen and about $600,000 in other transmission, computer and network maintenance costs.

• Commissioners approved a retainer contract with the KMB Design Group for up to $75,000 in case the district needs design work on any projects.

• They also approved a retainer contract with local forester Don Hurd of up to $50,000 for any forest survey work that may arise.

• The next meeting has been rescheduled to Tuesday, Jan. 18, to avoid the Martin Luther King Jr. holiday.