What would it take to avoid a Lewis County Public Utility District customer rate hike?
That’s the question the agency is now trying to answer.
The move comes after local mayors — at the behest of PUD Commissioner Michael Kelly — recently pleaded with the PUD to keep rates flat, citing economic hardships countywide.
In July, a consulting group warned that the PUD’s reserved capital funds could go negative by 2027 without a rate increase, though staff reports the PUD is otherwise in great financial shape.
With updated market assumptions, PUD Manager Chris Roden told commissioners that with no rate increase, the 2022 budget would suffer a $750,000 deficit. He walked through a list of potential reductions that could get that to zero.
That included reductions in fleet spending, training and travel, system maintenance, PUD parking lot repairs and substation cameras. By far the largest reduction, however, was a $350,000 cut to the tree trimming budget — a service that prevents limbs from falling on power lines.
It’s something commissioners, including Kelly, are uncomfortable with.
In a statement to The Chronicle, Kelly said the meeting was productive, and that he’s confident the board can agree on a zero rate increase in 2022. But cuts need to come from somewhere else.
“I want to see more creative things,” he said Tuesday, calling tree trimming reductions a “red flag” that would impact service reliability.
Commissioner Tim Cournyer, whose district spans the more rural eastern Lewis County, said the same thing. He painted a picture of East County residents whose power outages can last over a dozen hours.
“I would love to have rates at zero, but what’s the consequences of that?” he said Tuesday.
Last month, Cournyer said it was too early to rule out the possibility of a rate hike. He was joined by Commissioner Ed Rothlin in saying rates should be kept as low as possible without jeopardizing reliability and safety.
The risk of a $350,000 reduction to tree trimming services is difficult to quantify, according to Roden, although there is a direct correlation between the tree maintenance and reliability.
The reduction in the fleet budget, on the other hand, would allow “reasonable progress on the fleet” without “catastrophic impact,” Roden said.
Kelly made other recommendations, such as cutting workplace enhancements, which he said have “relatively zero impact on reliability and safety,” or using the PUD’s fiber budget — part of its plan to extend broadband to the whole county — to subsidize the electric system.
But the PUD has pledged to not subsidize one system with the other, and Roden said the PUD would need to understand the legal implications of doing so.
In future meetings, the PUD will continue to discuss options to avoid rate increases, although those will no longer be held in person, with the board voting to move to virtual meetings again, citing the surge in COVID-19 cases caused by the delta variant.
These conversations come as the PUD raises alarm about COVID-induced supply chain issues that staff say could eventually impact customers.
Engineering Manager Jeff Shupe cited extended lead times, delays in promised deliveries and significant cost increases. Those issues are further exacerbated by the disastrous Hurricane Ida that ripped through the eastern United States.
Shupe said the PUD is “aggressively” pursuing secondary and surplus markets to look for transformers, but much of that supply has been snached up for emergency storm repair.
“A lot of utilities are doing the best they can to rebuild old legacy units to put them back in service. They’re reaching out to the surplus scrap vendors trying to claw back anything somebody else has surplused and rebuilding it in-house if they have the capabilities,” Roden added.
As of this week, the struggle to find equipment hasn’t been passed onto customers, he said, but that could change if the market remains fraught, especially for people looking to build new homes.