PUD continues to qualify for Tier 1 Bonneville power rate
March 17, 2022
On Tuesday, the Wahkiakum County PUD Board of Commissioners learned about Bonneville tier rates, heard reports and were asked to consider making some changes to their agenda.
General Manager Dan Kay went over the PUD’s contract with Bonneville Power Administration, with an explanation of BPA’s tier rate methodology.
He said that the PUD’s current rate period high water mark is 4.775 average megawatts. That number is determined by readings taken every hour for an entire year. There is a buffer for that number, and Wahkiakum PUD can remain in Tier 1 so long as its net requirement remains below 5.775 average megawatts, one megawatt above the high water mark.
The net requirement for Wahkiakum is currently 4.921 average megawatts, a number which is also determined by readings taken every hour for an entire year, and so Wahkiakum’s rates remain in Tier 1.
The Tier 1 rate is currently $35 per megawatt/hour.
“In simple terms, if you go over the amount they’ve got allotted to you, theoretically, you’re supposed to pay a penalty,” Commissioner Gene Healy said.
That penalty is the Tier 2 rate.
“To get up to the Tier 2 rate, we’d have to go roughly 20 percent load growth,” Kay said. “We do roughly about one percent per year…We do feel safe right now, where we are at. It would take several thousand customers, because it’s an average number. When we have those cold spells in December and February, those 13 megawatt peaks are for short durations . . . it doesn’t adjust our net requirements.”
“We’ve never purchased Tier 2 power,” Auditor Erin Wilson said.
Reid was relieved.
“With the growth we’ve been having, I thought we were right at our limit, and I was wondering how we were going to start planning on how to handle the increase in our rates, but that is really good to know,” he said.
Tier 2 rates are based on the market, and strangely enough, the current rates for 2022 and 2023 are actually lower than Tier 1, but Reid pointed out that some years they have been much higher.
During the manager’s report, Kay started with an update on legislative issues.
He expected the biggest item to affect Wahkiakum would be the $100 million approved for arrearages, which will be distributed by the Department of Commerce.
“There are some less flexibilities in it,” he said, “the monies have to go to low income customers who have previously received money from [Low Income Home Energy Assistance Program], [Low Income Household Water Assistance Program,] or if utility has a rate payer assisted program like our [Residential Energy Assistance Program.]
“There is a lot of people that will be left out,” Reid said, As of right now, they way it stands, 80 percent of our arrearages will not qualify under this bill. That’s sad.”
Kay also said during his report that there was an outage on Sunday when a tree came down and knocked out power to four homes, but the crew was able to take care of the issue quickly.
He also said that the PUD has seen more customer growth, and that when it's raining, the crew focused on maintenance projects. They will assist with the hardware installation for a public wifi project in downtown Cathlamet, and over the last couple weeks they’ve been working with the county to address flood mitigation, landslide and culvert repairs.
“Mother Nature is not playing nice this year,” Kay said.
The agenda became part of the conversation on Tuesday, with a suggestion that commissioners remove the open discussion period.
“I have a little trepidation about it, but if that’s the will, I’m fine about it, it just seems like it’s kind of like a muzzle,” Commissioner Dennis Reid said, “but it just forces us to plan ahead and get things on the agenda.”
“It’s absolutely your agenda to have whatever you want on it, so if you want to keep it, you can keep it, but just as you said, it helps us plan a little bit better for the meeting,” Counsel Tim Hanigan said.
“I think the operating word is ‘discussion’ period,” Commissioner Bob Jungers said, before echoing Reid. “…removal of it could be viewed as a way to muzzle us, and I don’t like that. I think spontaneity is valuable in a group and an individual, so I would prefer to leave it.”
After a little more conversation, the commissioners decided to keep the open discussion period on their agenda, where it has been for years.