Clark Public Utilities customers are about to get a shock to their wallets. An elected three-person board of commissioners has passed a 14.5 percent rate increase that will take effect March 1.
For years, the customer-owned public utility has stood as an example of stalwart management and exemplary service. Clark Public Utilities routinely wins awards for customer service; works to limit power outages and effectively responds to those that do occur; and has not raised electricity rates since 2011.
Because of several factors — including increasing rates for wholesale electricity, broad inflation, climate legislation and last week’s ice storm — those flat rates are about to surge. The situation will be difficult for residents and businesses, but it is necessary because of pressure on the market.
As board President Jim Malinowski said at a meeting this week: “It’s unfortunate that we have had this market situation that we didn’t anticipate. We’re as disappointed as you that we are having to go down this route. But I think it’s necessary for the financial security of the utility that we move forward with it.”
Financial security for the utility is the primary goal. But in order to ensure that security, commissioners must develop a better understanding of what is causing the price increase. While Malinowski says the board did not anticipate it, Commissioner Nancy Barnes offered an explanation for those who ask why the increase was not expected: “My reply to them is, ‘We did not miss this.’ ”
The responses appear incongruous. But regardless of the board’s preparation or lack thereof, a combination of events has led to a rare rate increase.
Barnes points to legislative action over the past 20 years — such as decarbonizing wholesale power, mandating that utilities use more non-hydro renewable power and limiting use of the utility’s River Road Generating Plant, which is powered by natural gas.
“The bottom line is that Olympia eliminated most baseload resources from the region without a plan to replace them,” she said. “They moved ahead with decarbonization plans without time for technology — such as storage — to catch up or for new power sources to be developed.”
Indeed, government action has placed a strain on local utilities. That is the cost of strong work designed to mitigate the threat of climate change — as detailed in the state’s Climate Commitment Act and similar legislation. As significant carbon emitters, utilities play a key role in reducing the state’s contribution to climate-warming carbon. The cost of reducing those emissions falls to ratepayers, but it is dwarfed by the cost of inaction.
That does not mean that customers should be thrilled with the rate increase. The typical household will see its electric service bill go from $109.92 per month to $124.48, and businesses also will face increases. In one example, a representative of Camas-based nLIGHT told commissioners that the company will see a $130,000 increase in electricity costs. For retail businesses, those increases inevitably will be passed along to consumers.
Meanwhile, the role of climate change and climate legislation in the increase was highlighted last week, when an ice storm caused a surge in electricity use throughout the area. As extreme weather events increase in frequency, utilities face growing pressure on their ability to provide affordable, reliable electricity.
While commissioners might or might not have been adequately prepared for the confluence of events that require the increase, they are wise to focus on the long-term stability of the public utility.
