PUD hears objections to rate hikes

Jim Bartleson of the Okanogan Irrigation District disapproved of the Okanogan County PUD’s decision to raise irrigation rates at a March 24 special meeting. Photo by Jennifer Marshall

Jim Bartleson of the Okanogan Irrigation District disapproved of the Okanogan County PUD’s decision to raise irrigation rates at a March 24 special meeting. Photo by Jennifer Marshall

OKANOGAN – It was a full house last week at the Okanogan County Public Utility District auditorium, where commissioners got an earful from farmers worried and angered over the higher irrigation rates they’ll pay starting April 1.

The special meeting March 24 was held so PUD staff could explain the numbers behind the increases.

The last irrigation rate increase was in 2001. The new rates, approved last year, took effect Jan. 1 but aren’t collected until irrigation season, which is April 1 through Oct. 31.

Up until now, the cost for irrigating depended on the user’s pump size. Pumps less than 75 horsepower were charged $1.55 per horsepower per month, while those with pumps larger than 75 hp paid $1 per horsepower per month.

Under the new rate structure, irrigators will pay $2 per horsepower per month, regardless of pump size. In 2012, the cost will jump to $3, and rise again to $4 in 2013. That’s a 31 percent increase over three years.

Meanwhile, energy rates are decreasing. Down by almost four cents, the new rate is $2.838 per kilowatt-hour. In 2012 it will decrease to $2.733, and in 2013 the rate will be $2.659.

General Manager John Grubich said the PUD’s costs are going up while wholesale power sales revenues are on the decline, so the utility was left with little choice but to share the burden with its customers.

According to the PUD’s figures, over the past nine years the cost of fuel has skyrocketed by 141 percent. Power pole costs jumped about 101 percent, transformers are up over 90 percent and purchased power saw an 82 percent increase.

“Looking 10 years in the future, we know that revenues have to be around $53 million for us to stay financially solvent,” Grubich said, citing a 2009 study by R.W. Beck analysts. “Really, what the equity management plan told us was we did need rate increases, and we couldn’t put them off.”

Grubich said residential power and irrigation cost more to provide than the PUD earns in revenue, by about 23 percent and 59 percent respectively.

When the meeting was opened to public comment, it became clear that the PUD’s financial plight didn’t mean much to some cash-strapped customers.

Several residents asked what cuts the PUD has made to its budget to prevent rate hikes.

“If you look at the costs that have increased without raising our rates, I think that’s evident that we have been pinching every penny we can. Otherwise we would’ve had rate increases from 2002 through today,” Grubich said.

“You didn’t have a rate increase for nine years,” said Commissioner Ernest Bolz. “What else did you have in your life that never cost you a dime more in nine years?”

The prime concern among the audience was keeping farmers in business.

“How many of these people are they going to put out of work?” one resident asked, suggesting that the PUD reduce its employees’ salaries or put a moratorium on developing Enloe Dam, a project that will cost upward of $40 million.

Grubich said the wage increase for the PUD’s employees from 2001 to 2010 was 35 percent, not taking into account the changes in the number of employees. He said Enloe Dam would have an effect on future rates of five-tenths of a cent per kilowatt-hour.

“Our budgets are due in December, and we found out about this two weeks ago,” said Jim Bartleson with the Okanogan Irrigation District. “So now we have a budget that does not include any increases for the pump stations that we do run…. We’re going to be paying an extra $100,000 in horsepower charges over three years in all of our pump stations. That’s unheard of.”

Grubich replied, “We went through these rate hearings last March and April as well, so any surprise shouldn’t be on us. We invited, we gave public notice; it was in the paper several times. We talked about a rate increase for over a year before we implemented it.”

“I think this rate increase is probably necessary. We’re going to have to pay the piper pretty soon anyway,” said Brian Kirchner of Okanogan. “And I don’t think any one of us in this room could probably do any better of a job than the three [commissioners] we’ve got. They all thought that they could open the oceans and let us cross, but it didn’t work because the regulations that they have to follow is what’s breaking our back.”

While the debate continued in the auditorium, six computer stations were set up in the lobby, where PUD employees used a rate calculator to help irrigators figure out how exactly the increases will affect their wallets.

Lorraine Ott of Riverside, who owns four irrigation pumps, used the calculator to determine her future costs.

“It’s not as bad as we think,” she said. “On a 20 horse pump, it’s going to go from $1,295 a year to $1,500. It’s a $300 increase. How we read this letter is wrong…. I thought it was going to [multiply] by four, and it’s not.”

She suggested that the PUD include samples of how prices will increase for different pump sizes in the irrigation bills.

Bolz said he thought the meeting went well.

“It’s very hard to make these decisions in a vacuum where people aren’t there,” he said. “I appreciate all the input. I know I was listening, and I think everyone was.”

Another meeting to explain rates to residential customers has been tentatively scheduled for 6:30 p.m. April 19, with the location to be determined.

A rate calculator is available on the PUD’s website, www.okanoganpud.org.

The PUD serves 750 irrigation customers and has 1,200 irrigation meters spread across Okanogan County, according to Executive Assistant Tina DeLap.

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