PUD Hosts Rates Forum Monday Night
by Steven Friederich
The Daily World, March 28, 2009
A potential 4 percent rate hike by the Grays Harbor PUD may be the first salvo of rate hikes over the next four years, depending on how much money the Bonneville Power Administration charges the public utility.
On Monday, PUD officials are hoping to channel any anger residents may have over increases to their utility bills directly at the BPA, in a public forum slated for 6:30 p.m. in Sam Benn gymnasium at Aberdeen High School.
For years, the PUD has been locked in a David and Goliath legal battle with the BPA, a federal agency which provides Grays Harbor with most of its power, primarily from hydroelectric dams. PUD General Manager Rick Lovely says Bonneville has been unfairly billing Grays Harbor for millions extra dollars each year and giving that money to out-of-area private utility companies.
"The rate increase wouldn't happen if Bonneville wasn't giving away your money," Lovely said.
Earlier this week, the public utility sent a letter to every ratepayer, informing them of the potential rate hike and the forum. On Friday, the forum was being advertised on local radio.
Each ad, each letter points the finger at the BPA for the rate increase. Very little attention is being paid to a discussion of major cutbacks at the PUD.
And that's the point, according to PUD Commissioner Tom Casey who says he, for one, will refuse to look at any major cutback to services.
"To hell with that," Casey said. "We provide service every day. We don't have people here who do useless things. Everyone here does something every day so the lights stay on. ... I don't think we should have the rate increase and we can eliminate that if that's what we focus our attention on as a community (against the BPA)."
"I don't think our cutbacks will affect the rate increase very much," added Commissioner Russ Skolrood.
That hasn't gone unnoticed by Aberdeen City Councilman Paul Fritts, who this week called on the PUD to provide some answers.
"You're looking at several cities, the county cutting to the bones," Fritts said on the floor of the council chambers on Wednesday night, just minutes after accepting $469,000 in wage and benefit reductions from city employees.
"Our union members and administrative staff are taking pay cuts," Fritts added, raising his voice. "I'd like the PUD to state publicly what the heck are they doing to cut costs prior to raising our rates. ... I don't know if they've read the paper and discovered that there's been 300 to 400 layoffs in this county. I don't know if they've noticed there are people taking pay cuts. What are they doing to solve the problem before passing those costs on to the city? They may have done everything they can do. But I believe we deserve some answers and we deserve them publicly."
"Well, we look forward to talking to the public on March 30 at our public forum where we will talk not only about the siuttaion we're in now, but what the PUD is doing to minimize the impact on our customers," said PUD spokeswoman Liz Anderson after hearing Fritts' comments.
Lovely said the PUD pays Bonneville about $40 million a year. He says a 10 percent raise from Bonneville means the PUD must find an extra $4 million in its budget.
A 4 percent rate increase on Grays Harbor homes will only bring in $2.5 million. That leaves about $1.5 million in cuts Lovely said he's committed to making or paying for out of reserves - a "rate stabilization fund." Without dipping into reserves and finding cuts, the rate increase to customers this year would be 7.3 percent, Lovely said.
But Lovely says he's hearing Bonneville may charge even more money - a surcharge as high as 25 percent.
That may result in the PUD's "worst case scenario," which would raise rates by 4 percent this year, 4 percent next year, 4 percent again in 2011 and 7 percent in 2012.
Lovely says the PUD is attempting to do everything it can to avoid future rate hikes, including its legal battles with Bonneville. He says the BPA owes public power millions of dollars in compensation that has not been paid, even though a federal court has ordered the federal agency to pay up.
The PUD might have been better off if, in December, it hadn't given $5 million of its legal settlement with the BPA directly back to the Harbor's ratepayers. A rate increase wouldn't have been needed this year if that hadn't been done, PUD officials said.
But Lovely said the PUD made a promise that the money would be given back to the ratepayers.
"I got letters thanking us for doing that, saying we made a huge difference in their ability to have Christmas," Lovely said.
Lovely aknowledges, though, that there are likely to be few "thank yous" during Monday's public forum.
"The reason it's in Sam Benn Gym is we're expecting a large turnout," he said.
"The utility understands the impact to the community," Lovely added. "This is a bad economic time. And to the extent that we can manage the situation and control costs, we will. But we have a company to run at a minimum level and, I'm sorry, I don't consider this the same as the city and the county. We're about safety and service. We operate an entity that has a product which kills people if it's not properly handled and managed."
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