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Cowlitz PUD recommend no residential power rate increase

By Alex Bruell, The Daily News
Published: August 24, 2019, 6:12pm

LONGVIEW — Cowlitz PUD staff are recommending no residential power rate increase for the second year in a row, a decision that will ultimately be up to agency’s commissioners when they adopt next year’s budget in September.

If the utility dodges a rate hike, it will be largely due to the Bonneville Power Administration’s announcement in July that it will not increase its wholesale power rates for fiscal years 2020-2021. The Cowlitz PUD buys 80 percent to 90 percent of its power from the BPA, so BPA rate hikes typically force the PUD to boost local retail rates. BPA is the region’s largest marketer of wholesale power, which it mainly gets from federal hydroelectric dams in the Columbia River Basin.

Staff delivered the no-rate-hike recommendation in a meeting with the three commissioners on Tuesday. The board will decide on the final budget Sept. 10.

The utility raised power costs a handful of times earlier in the decade to pay for capital improvements and to cushion rising BPA rates. But Bonneville rate increases have been slowing since 2013 and the PUD has made steady progress on paying off debt.

The PUD previously chose not to raise rates for 2019 and 2017. It hiked rates up 2.5 percent for 2018 when BPA raised its own rates by 5.4 percent. The PUD approved a 7.5 percent raise for 2016 after BPA raised their power rates by 7.1 percent.

Although BPA will not increase wholesale power rates, it likely will need to adopt a small surcharge — perhaps up to 1.5 percent — to make still sure it has enough cash on hand to operate for at least 60 days.

PUD General Manager Gary Huhta said the preliminary budget plans for a worst-case surcharge: “We modeled the maximum that they can take from us, and we feel like we’re comfortable we can absorb that in cash reserves.”

Whether the agency could absorb another surcharge next year would be “a conversation for next year,” Huhta said.

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