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News / Business / Clark County Business

Clark Public Utilities board will likely vote on overall rate increase of 9.9 to 13 percent

Utility hasn't raised electric rates in more than a decade

By Sarah Wolf, Columbian staff writer
Published: January 17, 2024, 6:05am

After not having raised electric rates for more than a decade, Clark Public Utilities commissioners next week will consider a 9.9 percent to 13 percent overall rate increase.

The board will hold a public hearing at 9 a.m. Tuesday, then is likely to vote on the rate increase the same day.

“We have avoided raising rates since 2011 with careful planning and conservative fiscal practices, but increases in power supply costs have resulted in a projected shortfall for 2024,” said Dameon Pesanti, spokesman for Clark Public Utilities.

“Extreme weather events, like the one we’re currently experiencing, create further instability in energy prices with significant budget impacts,” he added.

Public Meeting

Who: Clark Public Utilities.

What: Public hearing and possible vote on electricity rate increase.

When: 9 a.m. Tuesday.

Where: Clark Public Utilities Building, 1200 Fort Vancouver Way, or online at clarkpublicutilities.com/about-cpu/public-documents/commission-meeting/.

Comment: Email Margaret Anderson at manderson@clarkpud.com to make public comments.

In December, the commissioners opted to use the utility’s rate stabilization fund to balance Clark Public Utilities’ budget, which was facing a $17.7 million shortfall.

The decision gave the commissioners time to decide if and how much to raise rates.

A consultant presented a cost-of-service analysis during a commission meeting earlier this month. The analysis showed the utility’s current reserves have less than 60 days cash and are less than recommended based upon his experience with other utilities.

He presented numerous options for the commissioners to consider, all of which included residential, general service, industrial and lighting rate increases.

This week’s winter storm was so expensive for the utility that an additional increase was recommended during a commission meeting Tuesday morning.

Pesanti said the analysis takes into consideration all the expenses required to deliver “reliable and affordable energy service to all our customers.”

A rate increase would add to Clark Public Utilities’ reserve funds, providing a budgetary cushion for times when the utility is strained by weather, high prices or high demand.

The proposed rates would still result in power rates less than many other Washington utilities, according to the consultant’s presentation.

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Power bills have two parts — a basic monthly charge and an energy charge that is billed per kilowatt-hour. The proposal would raise both.

Zero-based budgeting

The utility’s board of commissioners last voted to increase rates in 2011, a point of pride for the commissioners.

The utility uses zero-based budgeting, meaning expenses and income must bring its ledger to zero by the end of the fiscal year.

Pesanti previously said the utility builds its budget conservatively, not on the best-case scenario.

“We do our best to forecast and analyze market forces out there, but sometimes things happen that are unexpected,” he said in December.

Several pressures are impacting the electric operating budget.

Extreme weather has become more common in the Pacific Northwest, elevating demand for electricity in both the winter and summer as residents increasingly rely on heating and air conditioning.

In 2023, the region suffered poor water levels, hindering hydroelectricity generation and making wholesale electricity more expensive. Low snowpack levels are also a concern going forward. This winter started with a record-low snowpack.

The state’s recent clean-energy requirements have also limited use of the utility’s River Road power plant, which is fired by natural gas.

Clark Public Utilities has also spent more money on information systems, cybersecurity and infrastructure based on regulations. Plus, inflation and supply chain issues have played a part in driving up costs.

Clark Public Utilities provides electricity to more than 220,000 customers in Clark County.