‘We’re Overspending’: Lewis County PUD Commissioner Calls for Cutbacks After Rate Hike Suggested

PUD’s Reserved Cash Could Go Negative by 2027, Consultant Says

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Lewis County residents could face another price hike in their utility bills if the local Public Utilities District (PUD) heeds the warning of a new consulting report.

Washington-based FCS Group told commissioners this week that Lewis County PUD is eating into its reserves. By 2027, reserved capital funds could dip into the negatives.

In the big picture, FCS’s Sergey Tarasov said Tuesday the PUD is doing well, financially. But without a rate increase, capital needs won’t be properly funded.

One option to keep up with inflation, Tarasov introduced, would be an annual 2% rate increase.

For an average residential customer, it would amount to a monthly bill of $123.07 being boosted to $133.21 by 2025.

But another rate hike is out of the question for newly-elected Commissioner Michael Kelly, the TransAlta employee who last year ran on the promise to restrict spending and keep rates stagnant.

“I think we’re overspending. I think we need to cut back. I don’t think there should be a rate increase for anyone,” Kelly said during the FCS presentation. “The community at large elected me here recently. Over 15,000 people here said my idea to keep costs flat is the one they want.”

In 2020, Kelly beat out incumbent Ben Kostick, who sat on the PUD commission for 14 consecutive years and spoke about expanding broadband in Lewis County while campaigning to keep his seat.

This week, Kelly evoked voters to appeal to fellow commissioner Tim Cournyer, whose term began in 2017.

“You’re up for re-election soon here, Tim, so the voters are going to decide. And I can tell you this right now, that’s how they feel. So some cutbacks, I think, are necessary to keep the cost flat,” he said, adding later: “Our community is a low-income community.”

Lewis County PUD raised rates by 4.75% in 2020. A 1.9% increase also went into effect Jan. 1 of this year — that was bumped down from an original 2.6% proposed increase.

During the pandemic, thousands of customers fell behind on their payments. The PUD has waived a total of $471,000 in late fees since the onset of COVID-19, and as of July 15, 1,137 customers were at the “disconnect notice stage.” A statewide moratorium on disconnecting utilities currently extends until Sept. 30.

At the same time, the PUD’s 10-year strategic plan lays out several new and ongoing projects, including $27.4 million in substation rehabilitation. The goal is to rebuild or remodel at least two substations per year.

On Tuesday, PUD General Manager Chris Roden also described a need for investment in South Lewis County, where a southern transmission loop — estimated to run $830,000 — could improve grid reliability, reduce outage times and make maintenance safer.

An estimated $12 million is also sketched out for “new construction or significant rehabilitation” to the PUD’s main Chehalis facility, and $9.7 million is estimated for advanced metering technology.

Rate increases — if implemented at all — are still likely months away. FCS’ presentation suggested rate implementation would come after budget development this fall.

 

Comments

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Phil B.

I have questions:

“An estimated $12 million is also sketched out for “new construction or significant rehabilitation” to the PUD’s main Chehalis facility, and $9.7 million is estimated for advanced metering technology.”

Is the 12 million tied to grid improvements or office remodels?

I thought advanced metering was going to save us money…

Wednesday, July 21
Centralia LCPUD rate payer

Everyone needs to look within the PUD to see that the salaries being paid are way too high compare with others in Lewis County. This starts with the so called General Manager all the way down through staff. It is rediculous that the rate payers are being asked to find these lavish 6 figure salaries along with the general managers car stipend and retirement fund match. I mean..really? Why should the relate payers being taxed to find Chris Roden's lavish salary, car stipend AND his 457 retirement fund match. This is nuts and I believe the rate payers have bad enough.

Roden is ripping off Lewis County rate payers and his staff are all way overpaid. Time for PUD changes.!!

Thursday, July 22
Josh

LCPUD rates are so high to cover the lavish salaries the employees enjoy. Enough is enough and Commissioner Kelly is going to keep this crap in check. I think it is time for new PUD leadership and key dept staff. 6 figure plus pay is way to high for LC rate payers to subsidize..!

Thursday, July 22
Pete

It is well known that LCPUD may ask for advanced metering funds but they have no back end infrastructure to support it! Centralia has been way more advanced with City Lights AMI system for many years!!! I recently retired from CCL and can tell you what the PUD has in comparison is crap and not an "advanced" metering system.

Thursday, July 22
Ryan S.

When asked whether utility bills are too high or too low, 99/100 will say "too high." When asked if there are too many outages, those same 99/100 will say "yes."

They'll never compare the costs of outages relative to rate increases. They don't understand revenue requirements, let alone any of the inputs--salaries and pensions, trucks, materials, storage, prevailing wages, real estate--behind those requirements, much less how outages and energy infrastructure (lack thereof, in LC) affect business investments that would improve their stations in life.

If you want to be a public leader in a utility, then you've gotta be an explainer, not just a messenger. Perhaps start by explaining that you won't find three counties in the US where the juice is cheaper than here in Lewis County. That's as good a foundation as anyone in your business gets for making the case for rate increases that actually improve life quality.

But of course: You work for TransAlta! I've read this script 1,000x, and it's as stale today as it was in the 1980s. I'll make a not-so-bold prediction: Within the next few years, LCPUD will sell to a private utility, on the promise of improved service (a la PG&E), and for better rates, a la California at .30/kWh vs the .06/kWh that we pay here.

Equity fund shareholders--who don't live here--are always far more expensive and demanding than public employees, and they couldn't give a flip about service quality in Mossyrock.

Thursday, July 22
Bill Serrahn

We are currently entering a period of high inflation as anyone who has been to the gas pump or grocery store can see. The PUD is affected by raw material costs in the equipment and wiring they purchase. They are also affected by fuel costs and rising labor costs. They also pay more for the electricity which they deliver to you. I have heard that, when TransAlta generation goes offline in 4 years, wholesale electricity costs will jump drastically.

Of course more efficiencies must be continually sought and wasteful spending eliminated, but costs will continue to rise and rates will have to be adjusted upward. The question is, do you want a steady 2% or do you want to delay until they have gone through their reserves and need a major increase which will shock our budgets?

I just gassed up my F-150 with the 37 gallon tank. Ouch, wasn't gas just a $1.50 cheaper the last time? My Medicare Plan F is about 9% higher than it was 3 years ago. Even though high users have some large bills, our Lewis County electricity is still pretty cheap. We do need to figure out how to use less with better insulation, more efficient heating, and other updates.

Friday, July 23