The Lewis County PUD 1 board of commissioners on Tuesday passed an $82 million budget for 2020, balanced in part by a 4.75 percent increase in electric rates.
The rate increase is pending public hearings scheduled for Oct. 15 in Morton and Nov. 15 in Chehalis, a first reading of a resolution creating the new rates on Nov. 19 and a scheduled vote on that resolution on Dec. 3. If approved, the rates would go into effect Jan. 1, 2020.
For more information on upcoming meetings, go to lcpud.org.
Three members of the public showed up Tuesday morning at 10 a.m. for the PUD’s second and final public hearing on the 2020 budget — two more than the previous budget hearing.
The first draft of the 2020 budget presented $88 million in projected expenses and a $3 million budget deficit.
PUD general manager Chris Roden on Tuesday presented an amended version pared down to $82 million, balanced partly by deferring capital projects, such as the purchase of new equipment, and with a 4.75 percent proposed increase in electric rates.
“If we don’t repair a damaged transformer this year, that cost does not go away,” Roden said, cautioning commissioners that the costs deferred to balance this budget will come up in a later year’s expenses. “What we have presented today is a balanced budget. We don’t anticipate our costs going down any time in the near future.”
The proposed rate increase is to customers’ energy charge, but demand and basic rates would not increase.
Roden also took a moment to clear up a misconception about the PUD’s largest power supplier — the Bonneville Power Administration, and how power costs lead to rate increases at the utility. Bonneville announced recently it would not raise rates to utilities.
However, Roden explained, Bonneville did increase a financial surcharge and will eliminate current credits to utilities, resulting in larger payments from the PUD to BPA.
Part of the budgeting process in the past year has been to draft a three-year operating plan, rather than work one year at a time.
The PUD is still projecting shortfalls of $1.6 million for 2021 and $3.7 million in 2022. In the future, the utility will need to find a way to pay for improvements to infrastructure and other capital costs, Roden said.
“This is the story of the next decade at the PUD,” he said. “We have an aging infrastructure portfolio.”