In October, customers of the Columbia River People’s Utility District will see an increase in their electricity rates after the board of directors approved a 4.6 percent increase at the Aug. 20 meeting.
The increase is due to a larger-than-anticipated increase in wholesale power costs from the Bonneville Power Administration. While CRPUD had expected and forecasted an increase of 6.5 percent, the BPA increase that the district must deal with was set at 7.8 percent.
“Careful planning and the use of our rate stabilization fund allowed us to limit the impact on our customers and keep the rate increase as small as possible,” said PUD Board President Richard Simpson. “We expect these new rates to be in effect until September 2015.”
The utility district will use approximately $2.5 million from its rate stabilization fund over the next two years to minimize rate increases and to continue system improvement projects.
The $8 monthly charge to residential customers will not change. This particular charge covers fixed costs – meter reading, billing and postage, collections, record keeping and some of the distribution system’s maintenance and operations. These charges, called “readiness to serve” charges cover CRPUD’s costs to have the electricity available, whether it is used or not.
To prepare for this rate increase, CRPUD updated a 2011 rate study that examined cost of service and originally suggested two rate increases of four percent over the 2011-2013 time frame. The review revealed that a 4.6 percent overall increase was necessary.
Rate increases will vary among customers
Rate classes and electricity consumption will determine the actual percentage that a customer’s rate will increase. The PUD used the results of the updated rate study to apply the rate changes in a way that would ensure each class of customers, (residential, general service, or industrial) was paying what it costs to serve them. Residential customers will see an average increase of 4.8 percent; small general service customers will see an average increase of 3.8 percent, and large industrial customers will see an average increase of 5.3 percent.
In response to customer requests for a simple rate structure, the district rounded per-kilowatt-hour rates to the tenth of a cent, as opposed to the previous hundredth of a cent. “Our customers have asked us to keep our rate structure simple and easy to understand," said Simpson. "Rounding off our rates is one way we can accommodate their request."
After the increase, PUD residential rates will still be about 25 percent lower than the average rates across Oregon, and about 40 percent lower than average rates nationwide. In the past four years, the utility district’s power costs have risen by 24 percent.