Guest commentary: Lewis County Public Utility District rate increase necessary

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The Lewis County Public Utility District (PUD) is a public entity and its expenditures are ratepayer funded. Unlike other government entities, the PUD does not tax nor have government income to cover ongoing costs, so it is essential we recover utility costs through rates. It is our duty to be stewards of ratepayers’ money and set our two-year budget to cover anticipated costs to ensure stable and reliable operations.

We recently announced PUD’s budget for the 2025-26 period requires an anticipated 7.1% rate increase in 2025 and 1.25% in 2026 to meet increasing costs. Forecasted cost increases stem primarily from anticipated power cost increases from Bonneville Power Administration (BPA) and power markets, as well as inflationary cost increases experienced through wage and material cost growth.

The rate increase impact to an average 1,100 KWh electricity bill paying $110 per month is approximately $9.29 by 2026, increasing by $7.81 to $117.81 after Jan. 1, 2025, and $1.48 to $119.29 after Jan. 1, 2026. From the PUD’s perspective, the staggered increase helps defer the immediate impact given a 75 percent water probability each year. Lewis County ratepayers will pay slightly over 7 cents per KWh after rate increases, one of the lowest energy rates in Western Washington and well below the national average of 18 cents.

So why are rates going up? The PUD’s primary cost driver is electricity, and this cost is increasing; we project a 10% power cost increase from BPA in 2025. Power costs are 60% of the PUD’s operating expenditures and such an increase creates a $5 million shortfall at current PUD retail rates.

Energy cost increases are not just from BPA — January’s cold snap saw market energy prices reach over $1,000/MWh at a time where our residents were in need of energy to keep heaters running and people warm, requiring the PUD to use reserves to cover expenditures. As a utility, it is prudent to maintain reserves that are not too small nor too large, and sufficient to weather storms when they come. The 2025-26 budget replenishes reserves by $700,000 over two years to prepare for these excursions to the norm. Putting the increased electricity costs together with new wage contracts and overall inflation, we arrive at a need to increase rates.

Cost increases like those coming from BPA are outside of our control, so we also reduce internal PUD expenditures everywhere we can without sacrificing safety and reliability of the system. On top of cutting nearly $1 million from the budget through belt-tightening across the board, cutting travel and training and delaying certain expenditures, other areas of savings were found by enhancing use of technology.



For example, the PUD reduced vegetation management expenditures while at the same time reallocating resources to high-risk areas with data backed by both boots-on-the-ground and satellites-in-the-air, saving ratepayers $500,000 per year. Our recent AMI smart meter rollout lowers operating costs by over $1.1 million per year, every year. Efforts to improve operational efficiencies via technology is an unending task to lower PUD costs and save ratepayer money.

We listen to our ratepayers and we operate with the mantra to be frugal, open and transparent, minimizing and allocating costs where incurred. PUD commissioners and management have a duty to the community to not just listen and scrutinize but also make difficult, balanced decisions. High inflation and increasing costs impact families as well as PUD operations, so raising rates only when it is necessary to continue quality service to our ratepayers is critical.  As management of the PUD, we do not take our responsibility to ratepayers lightly and are committed to delivering you the highest quality service at the lowest rates possible.

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David Plotz is the general manager of the Lewis County Public Utility District.