After six years without an electrical rate increase, Grant Public Utility District’s preliminary 2010 budget includes a pair of five-percent rate increases, one in 2010 and one in 2011, the utility said Tuesday.The increase is intended to meet rising revenue costs and to keep the utility financially sound.
The jump is primarily driven by the cost of power produced at Wanapum and Priest Rapids dams, the PUD said in a press release.
Grant PUD received a new long-term license to operate the hydro facilities in 2008. The terms of the license issued by the Federal Energy Regulatory Commission direct the utility to make investments in excess of $1 billion in rebuilding aging infrastructure at the utility’s two dams and providing protection to natural and cultural resources. Those include constructing and operating fish hatcheries and adopting and implementing shoreline and recreation management plans.
The expenses associated with the projects increase the cost of power produced at the PUD’s hydroelectric facilities for Grant County residents and are needed to keep the projects maintained over the 44-year term of the license, maintains General Manager Tim Culbertson.
The utility expects to borrow $800 million in .coming years. to finance the required projects. Keeping its current AA- bond rating should allow it to finance debt at optimal interest rates.
“Although rate increases are not easy, they are a necessity,” Culbertson writes in the utility’s current newsletter. “Every utility has unique financial situations and Grant PUD commissioners and staff will continue to make decisions in the best interests of the people we serve.”
Final details of a rate increase have not been decided. Over the next few months, the elected commissioners will determine how the increase should be implemented across customer rate classes. Public hearings will be held before the board takes a final vote.