Power rates increased to pay for capital improvements

“The two-percent increase is for capital improvements. As a businessman, I hate rate increases but doing this now while interest rates are low is a sound business decision. Just like if you need a new tractor for the farm, you have to replace the equipment when you can most afford to.”

Scott Vejraska, Commissioner, Okanogan County PUD

Money raised to improve Tonasket substation, transmission lines

OKANOGAN – Okanogan County PUD Commissioners approved a two percent rate hike in a special public meeting on Monday, July 24.

Resolution No. 1639 authorizes the increase effective Sept. 1, according to John Grubich, the manager of the public utility.

“The purpose of the rate increase is to fund capital improvements to meet aging infrastructure concerns,” said Grubich, adding, approximately 16 people attended the special meeting and none of the attendees voiced opposition to the rate increase.”

The rate increase, includes a one dollar jump in the basic charge each customer has to pay, whether they are using power or not. The current fee of $35 will increase to $36, according to PUD Commissioner Scott Vejraska.

“The two-percent increase is for capital improvements. As a businessman, I hate rate increases but doing this now while interest rates are low is a sound business decision. Just like if you need a new tractor for the farm, you want to replace the equipment when you can most afford to,” Vejraska said.

The PUD Commissioner explained that the district has about $10 million in desperately needed capital improvements and will sell bonds or get a loan to pay for the improvements in the short term and the increase in rates will be used to service the debt.

“The first of these is the Tonasket Substation, the main transformer is 70-years-old and it is loaded to the max. If it fails the Tonasket area will be in the dark for at least a week,” said Vejraska, who says normally a substation has a back up transformer.

“Usually you can just switch them over and you’re back in business. We need to make about $5 million in improvements to the substation, not just in case of failure, but to insure that we can meet future energy needs as power usage grows,” said Vejraska.

The commissioner said that the second project involves the Ellisforde-Whitestone Substation, which is approaching 65-years-old.

“It’s a lot smaller, but we have to make sure it continues to be reliable. If I had a farm in the area and had crops, I’d want to make sure that I had reliable power so I could get them to harvest,” he said, adding that this project is just under $1 million.

Lastly, one of the most urgent projects as the utility has successfully negotiated a contract with Douglas County PUD for another 22 percent of the power output from Wells Dam, is to rebuild the transmission system between Brewster and Okanogan, according to Vejraska.

“We now have an additional 22 percent of Wells power. Added to the eight percent we already had, we will be getting 30 percent starting in 2018. We need to have a reliable transmission line from the dam to Okanogan that can handle the extra load and the old line was built in the 1950s,” Vejraska said.

“Even if we grew into the load slowly we might not be able to get it into the valley using the existing line. Of course we could work something out with Bonneville, but that comes with a cost,” said the commissioner. “We needed about $4 million to rebuild the transmission lines so we can utilize the really cheap power we will be getting from Wells Dam.”

Vejraska wanted to make sure that people understood that the contract with Wells Dam doesn’t mean Okanogan County PUD can turn around and sell that power on the open market for a profit. That, instead, it means the PUD will be able to use the inexpensive power first and buy less power at higher rates from the Bonneville Power Administration (BPA) or other sources.

“When they first were going to build Wells Dam Okanogan County PUD was offered to participate at 50 percent. At the time the then PUD Commissioners elected to opt out because BPA power was about a third of what it would it was going to cost from Wells. Now it is just the opposite, the Wells power is half or even a third of what it costs from BPA,” said Vejraska. “Actually, the contract is worth about $1.1 billion to our PUD over the next 50 years.”

The commissioner also wanted to point out the rate increase has nothing to do with the utility’s efforts to re-energize the PUD’s Enloe Dam on the Similkameen River near Oroville.

 

Power rates increased to pay for capital improvements

About Gary DeVon

Gary DeVon is the managing editor of the Okanogan Valley Gazette-Tribune and celebrated his 25th year at the newspaper in August 2012. He graduated from Gonzaga University with a degree in Communications - Print Journalism, with an emphasis in photojournalism. He is a proud alumnus of Oroville High School. His family first settled in Okanogan County in the late 1800s. His parents are Judy DeVon and the late Larry DeVon and he has two younger brothers - Dante and Michael. Many family members still call Oroville home. He has a grown daughter, Segornae Douglas and a young granddaughter, Erin.