(Pasco, WA) -- The Franklin PUD Commission voted today to implement a rate action increasing overall average revenue by 3.0%. In addition, the residential and small general monthly basic charge will increase and the related energy charge will be reduced to properly align costs to ensure equitable cost-based rates for our customers. This rate change will be effective September 1, 2015.
In April 2015, our Rate Advisory Committee met and reviewed the Cost of Service Analysis completed by Franklin PUD staff and our rate consultant. They recommended to the Board in April a proposed rate revenue increase and rate design changes. Then, after three public hearings in June and July seeking customer input, and with the recommendation of our Rate Advisory Committee, the Board of Commissioners also approved another potential 5% increase in May 2016. The approval was made with the understanding that the amount of the 2016 increase would be assessed after the 2015 financial results were known.
While the basic charge is being increased (residential class to $34 a month and small general class to $38 a month) the kilowatt hour or “energy used” charge is actually being decreased so that Franklin PUD customers who use an average of 1400 kilowatt hours (kWh) per month will only be paying approximately $1.27 more per month. The basic charge is being raised to equitably charge customers for the use of the distribution, transmission, maintenance and administration of the electric system.
Rising power and transmission costs from the Bonneville Power Administration are the main drivers for the rate increase. The PUD buys about 85% of its power from BPA, the Pacific Northwest’s largest energy marketer. In October 2013, BPA’s wholesale power rates increased an average of 9%, with about 6% directly impacting Franklin PUD. BPA also increased its transmission rates by 13%. The 2013 BPA increases followed similar increases in 2009 and 2012 and will be increased another 7.1% in October 2015. While power costs represent nearly 70% of the annual budget for Franklin PUD, we continue to look for internal efficiencies and cost reductions to keep rates as low as possible.
