PUD expects no change in power rates

EVERETT – Your electricity rates won’t go up in 2005. They won’t go down, either.

That’s according to a first look at Snohomish County PUD’s 2005 budget, released on Tuesday, which shows the PUD $13 million short of balancing next year’s budget.

The PUD will make up for $6 million to $9 million of that amount if the Bonneville Power Administration follows through on a promise to reduce its rates by as much as 7.5 percent this fall.

The rest will come from belt tightening – exactly what the PUD did in 2003 when it was $4.5 million short of balancing its budget.

“The (PUD) commission has sent a clear signal that there will be no rate increase,” said Ed Hansen, the PUD’s general manager.

Customers of the utility have struggled to pay some of the state’s highest electricity rates since the 2000-2001 West Coast energy crisis. Rates have not come down since they jumped 50 percent during the energy crisis to cover record spikes in the cost of electricity.

BPA has proposed lowering its rates by 5 percent to 7.5 percent Oct. 1, the beginning of its new fiscal year.

The PUD commission on Tuesday directed Hansen to write a letter to BPA urging for the 7.5 percent reduction.

The federal power marketer has suggested the 5 percent reduction might be the best approach because it would make a rate increase less likely next year. The PUD buys 80 percent of its power from BPA.

PUD commissioner Dave Aldrich said the utility needs to be careful with BPA’s proposed rate reduction, saying the agency could turn around and raise rates again in as little as six months. He pointed out that BPA raised its rates at this time last year.

“We’ve gotten burned before,” he said.

BPA is also considering raising the fees it charges utilities in 2006. The 14 percent to 20 percent increase would raise BPA’s overall rates by as much as 1.5 percent.

Hansen estimated that such an increase would cost the PUD $4.5 million to $10.6 million a year. He said the PUD now pays BPA about $30 million a year for transmission services.

The PUD releases its first look at the next year’s budget every August. This year’s budget is $586 million, $13 million more than the PUD’s $573 million in forecast revenues.

The budget is likely to go through several revisions before it is adopted by the end of the year.

Reporter Lukas Velush: 425-339-3449 or lvelush@ heraldnet.com.

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