Clallam County Public Utility District #1 could raise electric utility rates in 2012.
Staff is proposing a 3-percent electric rate increase added to the daily user charge of 62 cents per day, which will equal about $3.30 per month for a residential customer, PUD treasurer/controller Joshua Bunch said.
The proposed electric utility rate increase comes on the heels of the Bonneville Power Administration’s wholesale power rate increase of about 8 percent, which represents a cost increase of about $1.8 million.
The PUD also faces an additional $860,000 in Energy Independence Act renewables and conservation costs, Bunch said.
Cuts in the amount of $900,000 were made to the 2012 PUD budget, but the net impact of $1.76 million is too much to absorb without compromising service, Bunch said.
The EIA was passed by Washington voters in 2006 and the first big mandate comes in 2012, with the requirement that 3 percent of utilities’ power come from renewable resources. The percentage must increase to 9 percent by 2016 and 15 percent by 2020, according to the law.
Renewable energy resources, such as wind and solar power, are significantly more expensive than the hydropower from BPA, PUD General Manager Doug Nass said.
The BPA power rate is about 3 cents per kilowatt hour, whereas wind power is 9 cents and solar power 12 cents per kilowatt hour, Bunch said.
The EIA also requires utility companies do more conservation.
Last year, the PUD spent $1.4 million on conservation and sent out compact fluorescent lights to customers. They plan to do it again in 2012, Nass said.
The BPA fully reimburs-ed the conservation costs but in 2012 it will only partially fund conservation, contributing an estimated $750,000, Bunch said.
Additionally, the EIA mandates energy savings for 2012 be almost double what was achieved in 2011, he said.
PUD Executive Communications Coordinator Michael Howe said the BPA rate increase and conservation reimbursement decrease happen to coincide with the more demanding EIA requirements, which come with harsh penalties for noncompliance.
“The mandates are really hard on us and are hard on our customers,” Nass said, later adding the world isn’t the same as it was in 2006.
If the PUD had to make cuts to close the entire $2.66 million increases projected for 2012, services would take a hit and costs would be pushed down the road, he said.
Cutting a program like vegetation management would result in more outages, which would end up increasing overtime costs for responding workers, he said.
Nass said small rate increases over time are better than implementing a large increase to catch up.
The PUD has steadily increased rates for water and electricity over the past several years.
In June, the PUD raised water rates by 6 percent and will increase at the same percentage annually for two more years. For the three years before that, water rates increased 6.5 percent annually.
Electric rates went up 8 percent in December 2010. At the time, commissioners said they could not absorb another rate increase from the BPA, having absorbed a 5-percent increase in 2009.
PUD staff will hold an informational meeting this week in Sequim regarding the proposed 2012 electric utility rate increase.
The meeting, set for 3 p.m. Thursday, Dec. 8, at the Sequim Library, 630 N. Sequim Ave., includes a short presentation by PUD staff and concludes with time for questions and/or comments from the public.
Each of these issues, as well as PUD cost controls, will be presented. The public is encouraged to attend.
PUD commissioners also will consider the proposal at their Dec. 12 and Dec. 19 regular meeting dates.
For additional information on the PUD, visit www.clallampud.net or call 452-9771.