Commissioners to explore alternate rate setting

Grant PUD commissioners Thursday asked staff for alternatives to the 2-percent electric rate increase slated to begin April 1, but they first want to see the financial implications to the utility of each potential alternative.

Alternatives requested during the rate workshop are:

  • Three consecutive annual rate increase of 1 percent each through 2021. This would replace the current plan of 2 percent in 2019, 1 percent in 2020, and one-tenth percent in 2021.
  • No rate increases for the next three years, but tapping $4 million to $6 million in unrestricted reserve funds, if necessary, to cover any needed costs.
  • Calculate the difference in rate revenue collected if each rate increase applied evenly to all Grant PUD rate classes. According to a rate policy approved by commissioners in 2015, annual rate increases vary by customer class, based on the cost to provide their electricity. The varying rate increases per class, taken altogether, contribute to an increase in overall rate revenue for the year.

General Manager Kevin Nordt told the commission that staff would study the proposed alternatives and calculate each of their effects on utility finances over a 10-year period.

Nordt emphasized that the method for setting rates is a commission decision, regardless of policies currently in place, provided the method chosen violates no state or other laws.

The results of the staff analysis of the requested alternatives, as well as the results of a new cost-of-service analysis just getting started, will be made public at a future commission meetings.

Part of Thursday's discussion focused on the current rate policy, which mandates small rate adjustments over time toward a targeted "band" in which no rate class pays less than 20 percent below its cost of service nor more than 15 percent above its cost.

"The ag community has birthright preference, because they created the District, and that has deteriorated over time because of that band of differences," Commissioner Tom Flint said of the current rate-setting policy.

Farmers' irrigation rates are currently 36 percent below cost of service. Their annual rate increases since the rate policy was set in 2015 have been higher than other rate classes, as Grant PUD works to move them into the policy-directed 20-percent-below-cost band.

Commissioners Nelson Cox and Judy Wilson agreed that customers who have been here the longest and contributed to creation of Grant PUD have "equity" in the system that justifies lower rates for them.

"We're not taking care of the people who've been there for the whole party," Commissioner Nelson Cox said, also referring to the county's longest-established residents.

"The way it's been presented in the media is saying the large industrials are subsidizing the irrigators and the residentials, which in my mind is not correct," added Commissioner Judy Wilson.

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