Granting an increase in PUD rates in 2025

EPHRATA – Grant County PUD customers will pay more for electricity in 2025, although not all customers will see the same increase. Utility district commissioners approved the 2025 budget with an overall rate increase of 3% at their regular meeting on Dec. 10.

The 2025 budget proposal called for an average increase of 2%, but commissioners opted for 3% instead. The tariff increases come into effect on April 1st.

Residential customers with electricity will receive a 2.5% increase, which would increase their bill by about $2.58 on average, according to Christine Pratt, PUD public information officer.

Commissioners had a choice between a 2% or 2.5% total increase and ultimately chose a 3% total increase, roughly the same as the increase approved for 2024, according to a PUD memo outlining the changes for Each tariff class is described in detail.

Utility district commissioners have temporarily postponed rate increases in the past, one example being in 2020. Commissioner Larry Schaapman said in a previous interview that this would be less likely in the future.

The PUD didn’t always need the revenue, Schaapman said, and so didn’t raise rates.

“We don’t see that happening in the foreseeable future,” he said.

Times have changed, in part because the PUD is nearing the point where it will need to find new sources of electricity to meet demand, Ty Ehrman, PUD’s chief customer officer, said in an earlier interview.

Commissioners also opted to charge different rates for different fare classes rather than requiring a blanket increase. Julio Aguirre, manager of rates and pricing, told commissioners Nov. 12 that this was staff’s recommendation.

“We believe this represents another step toward mitigating some of the significant cost differences between what customers are currently paying and the 2023 cost of service,” Aguirre said.

Utility district officials analyze how much it costs to provide service to each class of customer as part of the rate-setting process. The most recent analysis was in 2023. It was consistent with previous studies that have shown some classes pay more than it costs for electricity and some pay less.

The commission’s guidelines establish a list of “core customers” that include residential and irrigation customers and businesses that use less than 500 kilowatts of electricity. These customers are the first to reap the benefits of electricity generated at the Priest Rapids and Wanapum dams, both owned by the PUD. The electricity from the two dams, the so-called Priest Rapids Project, is cheaper.

General service customers (Class 2) are those who use less than 500 kilowatts; Their rates will also increase by 2.5%. This also applies to irrigation customers, defined as operations with irrigation, temperature control or soil drainage equipment not exceeding 2,500 horsepower.

Large industrial customers (Class 15) will receive a 2.5% increase. They are not core customers and pay more than the cost of providing their electricity, according to the results of the 2023 cost analysis.

“We recognize that they are paying above the cost of service, and to close some of that gap, we are recommending that the increase they pay be equal to the level of the core classes,” Aguirre said.

Large general customers, companies with consumption between 200 and 5,000 kilowatts, will receive an increase of 4.9%. Aguirre said it was a special case.

“This is partly to align the relative economics of what these customers are paying with what they would pay (in the general service or industrial sector),” Aguirre said. “And facilitate the gradual shift toward cost-of-service levels.”

A surcharge of 6% is charged for industrial customers (class 14). Customers who consume more than five megawatts of power but less than 10 megawatts are considered such. They pay more than the cost of providing their electricity, but not as much as the large industrial class.

“They are above the cost of service, but we believe there is scope to increase their margin contributions. They are closer to the cost of service and we believe it is possible to increase their rates without significantly affecting them,” Aguirre said.

Street lights are in a class of their own and prices will increase by 6%. This also applies to agricultural processing (Class 16), vehicle fast charging (Class 19), agricultural boilers (Class 85) and developing industrial customers (Class 17). Currently, cryptocurrency companies are the only customers in the evolving industry class.

The customers who received a 6% increase mostly paid less than the cost of their service, Aguirre said.