The Wahkiakum County Eagle - Established as The Skamokawa Eagle in 1891

Wahkiakum PUD commissioners met Tuesday to discuss proposed rate increases for electrical and water customers, to review the 2012 preliminary budget and to award bids for portions of the electric substation project.

At recent meetings, Manager Dave Trambie had outlined his request for a 9 percent rate increase for electric customers. The rate increase was needed due to increases in power costs from Bonneville Power Administration, the cost of constructing a new substation, and the loss of a $70,000 annual credit from BPA, Tramblie said. After recent discussions with BPA staff, Tramblie revised his request to seven percent after learning a new smaller credit of $60,000 would partially offset the lost $70,000 credit.

Tramblie explained his rate increase proposal translated into a $4 increase to the basic electric charge for all customers coupled with a $0.003 addition to the consumption charge per kilowatt hour. Thus, residential customers would have a basic charge of $16 per month and the kilowatt hour charge would increase from $0.0665 to $0.0695.

Tramblie noted the district offers up to 20 percent discounted rates for senior citizens and disabled people through a program administered by Wahkiakum County Health and Human Services.

Audience member Lee Tischer urged the commissioners to consider the county’s high unemployment rate when considering rate increases. He suggested the commissioners freeze all non-union salaries and negotiate with the union to keep wage increases as low as possible.

Audience member and retired Wahkiakum PUD Manager Mike Prever volunteered his electrical engineering services to the district if the commissioners wanted a cost of service analysis done for consideration on adjusting the basic electric charge.

Commissioner Bob Jungers responded “Mr. Prever makes a good point that rate increases should consider the cost of service analysis. We have had a cost of service analysis done, although it’s out of date now. We have considered having another one done but didn’t feel that it would be cost effective as it is an expensive survey and the gains netted from it would be negligible.”

Commissioner Dennis Reid said he wanted to address why the PUD doesn’t take money from accumulated reserve funds to alleviate the need for rate increases. The PUD has to be run like a business with a budget that we can meet and pay our way as we go, he said. He added the district is using reserves to build the new substation in order to prevent the need for loans to cover the entire cost.

Reid added, “The last thing we commissioners like to do is have a rate increase. Two of us are retired and on fixed incomes as well. It affects us the same as any other ratepayers. But we have to do what’s best for the utility and what will make us effective in providing reliable service for a long time to come.”

Tramblie proposed a 3 percent increase to the basic service charges for the Puget Island Water System ratepayers and a 5 percent increase for Western Wahkiakum Water System customers. For the WWWS, that would translate to an increase of about $2.50, said Tramblie, and $1.50 for Puget Island water users.

Tramblie noted the costs of maintaining aging systems and meeting regulatory requirements drove the request for water rate increases. He explained that earlier this year the WWWS spent $22,000 completing a required study for the state Department of Health and that the PIWS would have to submit an identical report in two years. Due to the significant cost of preparing the document, commissioners lowered the minimum reserve fund requirement for the WWWS earlier this year in order to use reserve funds to pay for the study.

Auditor Erin Wilson said the district is still engaged in negotiation with Town of Cathlamet staff to finalize the water purchase contract for next year. The Puget Island water system is supplied by Town of Cathlamet sources. Wilson explained the PUD currently pays $1.75 per unit and the proposed new rate is $1.86 per unit plus a three percent utility tax.

Commissioner Gene Healy said he would like to see the contract finalized before deciding on the final rate increase. Wilson clarified that the ongoing negotiations would probably not change the rate significantly.

Audience member Nancy Trott urged the commissioners to look for potential sources of savings within the PUD, for example, cutting salaries, rather than passing on the entire burden of increased costs to ratepayers.

The commissioners responded that electrical rates had not been raised for five years. Additionally, the manager will not receive a raise in 2012, nor did he ask for one, said Reid.

Rate and budget hearings are scheduled to occur during the commissioners’ next regular morning meeting at 9 a.m. on October 4, later that day also at the PUD’s office, and October 5 at the Rosburg Hall.

Additionally, the commissioners awarded bids on three portions of the substation construction project. CG Power Systems USA Inc. of Missouri was selected as the winning bidder for the new transformer at a cost of $563,000, below initial estimates. Siemens was chosen as the winning bidder for the circuit switcher at a cost of around $50,000. Schweitzer Engineering of Pullman submitted the winning bid for a control house and equipment at a cost of around $142,000.

Reid broke the $3 million price tag for the project down into $1.8 million from cash reserves, $1 million from financing, and around $200,000 from cash flow. Tramblie said the current 40 year old transformer has seen close to overload conditions at peak capacity. “This is the single biggest project our PUD has done since its formation,” said Healy. The new transformer should be in operation for the next 50 years.

Audience member Carol Cole said to the commissioners “I applaud you. I think it’s very difficult in a time of budget constraints to consider to move ahead with substation construction but I think it’s good foresight.”

The project is slated to begin construction in June 2012 and to be fully operational by December 2012.