Several public utilities in the Northwest have overhauled their rates in response to fundamental market changes and rising power costs.
Seattle City Light and Tacoma Power plan on steady rate increases in the next few years to shore up their revenues.
Despite the changes, several other utilities, including Snohomish County PUD and Clark Public Utilities, have kept rates steady in 2020. Meanwhile the Mid-C utilities are increasing rates for energy-hungry cryptocurrency operators and data centers.
Customers of Washington's largest publicly-owned utility, Seattle City Light, saw a 5.4 percent rate increase on average at the start of January. The increases ranged from a 4.7 percent bump for residential customers to 5.9 percent for high-demand customers. The increase is the first of several that are part of a five-year plan to stabilize the utilities' revenue (CU No. 1923 ).
SnoPUD is keeping rates flat in 2020, although it plans to add a residential base charge for the first time in more than 35 years. The new charge will be implemented over five years beginning in 2021. The increase will be accompanied with decreases in the usage rate, so the effect should be cost neutral for the average customer. Base charges for commercial and industrial customers will also increase during that period.
The change is meant to modernize the PUD's rate design, said Brian Booth, senior manage of rates, economics and energy risk management for Snohomish.
Tacoma Power expects annual 2 percent rate increases will be needed through the 2020s to make up for declining demand from retail customers and changes in the industrial sector, according to a staff presentation to the city's Public Utility Board in November.
Despite rising power costs, the Clark Public Utilities commission approved a 2020 budget that absorbed the costs without raising rates. Commissioner Nancy Barnes credited staff for controlling costs.
The Mid-C utilities are trying to forgo rate increases for traditional customers while increasing them for new customers with high-density loads, such as data centers and cryptocurrency operations (CU No. 1861 ).
Grant County PUD has set its sights on lowering debt and holding rates steady for traditional customers. In November, the PUD commissioners agreed to keep rates flat, except for 'evolving industries,' a rate class that includes data centers and cryptocurrency operations. It is the second year of no rate increases for traditional customers, who had seen annual 2 percent increases since 2009.
"We've been working a long time to get to financial stability and lower the district's debt to get to the position of zero rate increase," Commissioner Tom Flint said in a statement in November. "It's a very good day for our ratepayers and it's been a lot of work down the road to make this happen."
Bitcoin miners and other evolving industry customers will see the second step-up in rates, which will be fully phased in during 2021. At that time, smaller customers in the new class will have gone from 4.9 cents/kWh to 13.7 cents/kWh. Larger customers will have gone from 2.6 cents/kWh to 7.9 cents/kWh.
Chelan County PUD is still considering a five-year rate increase plan to pay for greater spending on hydro facilities (CU No. 1918 [8.1]). Staff is proposing a 3 percent average annual revenue increase for all classes. PUD commissioners could vote on the proposal at their Feb. 3 meeting.
Douglas County PUD is still considering a steep rate increase for cryptocurrency and other energy-hungry customers. Staff proposed a 10 percent jump for cryptocurrency customers and 5 percent for data centers, the go into effect in July. The proposal includes similar increases twice a year through 2025. The proposal, which the PUD commission will vote on Jan. 27, does not include a rate increase for traditional customers in 2020.
Benton County PUD increased all rate revenue by 2.9 percent in the fall, due to rising costs from BPA, which supplies most of Benton's energy. The increase applied to all rate components, including base charge, killowatt-hour consumption and demand charge. The PUD's residential rate is rising from 7.18 cents/kWh to 7.39 cents/kWh. Like many publicly owned utilities that depend on BPA, Benton has seen power costs creep up in recent years. Benton last raised residential rates in October 2017—from 6.84 cents/kWh to 7.18 cents/kWh.
The utility's power costs are expected to be up by $7.8 million in 2019, though final numbers are not in, Benton spokeswoman Jodi Henderson said. One of the main contributors, Benton officials say, is the federal court order to spill more water at Columbia and Snake river dams in an effort to boost salmon survival rates.
In 2020, the utility will have to increase the amount of renewable resources in its portfolio from 9 percent to 15 percent to comply with Washington's Energy Independence Act, which was enacted in 2006. Benton spent roughly $2.6 million in 2019 to meet the lower threshold. The utility expects that to rise to $3.2 million this year.
Price spikes in February and March last year pushed up Benton's power costs during that time by about $6 million more than expected, taking a big bite out of Benton's power market purchase budget.
Despite long term upward pressure on power prices, Benton expects to spend less on power supply this year compared to 2019, when prices spiked early in the year.
Several smaller PUDs have also implemented rate increases in 2020, such as Skagit County PUD (5 percent) and Pacific County PUD (4.4 percent).
In Oregon, Eugene Water and Electric Board is holding rates flat this year, despite slightly higher power costs in 2020. The utility has pursued cost savings elsewhere to keep rates flat. The utility has had only one residential rate increase in the last six years.
"Fostering customer confidence by maintaining sustainable spending levels will continue to be a primary focus for EWEB, as is assessing the trend of how much of customers' median income is spent on utility bills," Susan Fahey, EWEB's chief financial officer and assistant general manager, told the Eugene Register-Guard.