PUD Board Votes to Forego Rate Increase
Supported by active and responsible management, better than expected weather, and improving financial conditions, the Grays Harbor PUD Board of Commissioners has voted to forego a budgeted rate increase, which was scheduled to take effect on April 1st.
“I am so pleased that the PUD is able to take this step and avoid a rate adjustment this year,” said Board President Jon Martin. “While the utility had to plan for a possible increase as part of a responsible budget process, it was always my hope that the conditions would allow the utility to make adjustments without asking for more from our customers. Thanks to some strong work by our staff and favorable conditions, we are able to do that.”
The 2% increase, budgeted to account for rising power costs and natural conditions such as temperature and snowpack that impact power generation and consumption, would have increased PUD revenue by $1.1-million in 2022. However, a report presented to the board this month, indicates that cold, wet conditions and a strong close to 2021 will allow the utility to absorb any additional costs without passing higher rates onto customers.
"This is why we wait to actually implement an increase until after the winter," said Board Vice President Arie Callaghan. "We plan for the worst and hope for the best and that allows our staff to look at our finances and the weather and make the best-informed decision possible."
As the Grays Harbor community enters its third year of impacts from COVID-19, board members were well aware of the impact any increase could have on customer budgets.
"We all know that many customers are just getting back on their feet or still dealing with the impacts of COVID," sad Board Secretary Dave Timmons. "Whether you're a home or business owner, the slightest change to your monthly expenses can have a big impact. I hope this can provide a little stability and relief for our customers."
How You PUD Worked to Cancel a 2022 Rate Increase
Last month, the Grays Harbor PUD Board of Commissioners made the decision to cancel a budgeted rate increase. This was a move that I, my fellow commissioners, and PUD staff had been working on since the board approved the 2022 budget last November.
One might wonder why the utility would even budget a rate increase if it was planning not to implement one. Legally it’s something we have to do. We can pass a budget with a rate increase and then cancel it, but it’s more difficult to create a budget without an increase and then decide we need one.
To get to this point, the PUD relied on sound planning, detailed analysis of cost impacts and potential savings opportunities, and a little bit of luck. I’m not talking about a roll of the dice and hope for the best. I’m talking about a number of factors lining up just the way we needed them to. Year-end finances, winter temperatures, mountain snowpack, and the price of power charged by the Bonneville Power Administration are all taken into account. Since the PUD waits to increase rates until after the winter months, it allows for an assessment of most of the year’s first quarter to be taken into consideration.
Early on I could see that the staff did a great job of planning this out. The PUD ended 2021 in a strong financial position which meant 2022 began on solid ground. In addition, power prices from Bonneville were expected to remain stable. That opened the door for more flexibility in 2022 spending. Much of the rest depended on one thing that carries a large degree of uncertainty: the weather. We all hoped Mother Nature would cooperate, but there was no way of being sure. Thankfully, things went the way we needed them to.
Grays Harbor is a “winter peaking” utility, which means that the financial future for the PUD can be heavily impacted by the weather in the early months of the year. Cold weather in Grays Harbor was accompanied by lots of snow in the mountains. That means a heavy snowpack for the year, more runoff of melting snow into the rivers and more water flowing through the dams on the Columbia River during the summer than did in 2021. That means more power is available which keeps prices down. As power purchases are the largest part of our budget, if we pay less for power, it has a huge impact on the bottom line.
All those factors meant that the 2022 budget could continue without additional revenue from higher rates. It was a great feeling to hear that from General Manager Schuyler Burkhart. With all the stresses our customers have been going through, passing on higher energy costs was something everyone at the PUD wanted to avoid.
Responsible financial management means that we have to plan for the worst case, but when the best case wins out and added costs can be avoided, it’s a great thing for our community and our customers.
Commissioner Jon Martin,
District Three
Commission Meeting Dates
Meetings are held in the Nicolas Building, 220 Myrtle Street, Hoquiam
April 2022
- Monday – April 4
- Monday – April 18
May 2022
- Monday – May 2
- Tuesday – May 17 (rescheduled from May 16)
Utility workshops are held at 3:30 p.m. Regular business meetings are scheduled to begin at the conclusion of the utility workshop. Public comment periods are included at the open and close of every meeting.
Commission meetings may be canceled and special meetings may be scheduled. Beginning in April of 2022, commission meetings will again be open to the public. Those who wish to attend virtually may do so. For more information please visit our website.