.png)
Don Gronning
NEWPORT – The Pend Oreille Public Utility District (PUD) forecast more than $113 million in capital improvement projects over the next 10 years, along with possible rate increases of 3-7% per year starting in 2025. That was some of the information PUD commissioners received during a special board meeting Monday, Sept. 23, according to a news release from the PUD.
The 2024 Revenue Requirement Forecast, prepared by consulting firm FCS Group, serves as a key financial planning tool for the PUD, outlining the utility’s anticipated expenses, including operational costs, power supply and necessary infrastructure investments over the next decade. This forecast helps determine whether the current revenue streams are sufficient to cover these costs and guides discussions about potential rate adjustments to ensure the PUD remains financially stable while continuing to provide reliable service.
The PUD’s General Manager, John Janney, told The Miner in an interview last month that he liked to give commissioners a longer-range view of operations.
“I’m used to presenting to a board a multi-year plan so that they can kind of get a peek over the horizon,” Janney said. “For whatever reason we were just kind of showing them a little snip at a time, maybe the next budget year or a year or two after that. That’s one of the reasons we’re doing this 10-year forecast and rate study is to look out beyond just next year or even the year after.”
The PUD is facing several important things happening over the next 10 years, Janney said in the interview. The current deal with Shell Energy to buy and sell PUD electricity expires at the end of 2025. The Clark PUD sale to buy Box Canyon Dam power starts in January 2026 and the Boundary Dam settlement agreement with Seattle City Light expires at the end of 2029.
“Then we’ve got some regulatory things that are kicking in over the next 10 years as well, for the Clean Energy Transformation Act and the Climate Commitment Act,” Janney said. Add to that the Wildfire Mitigation Plan, as well as safety plans the PUD has been working on.
“I think it’s super important to present our board that multi-year look,” Janney said. It also helps customers understand that the PUD is facing some headwinds, as well.
“Almost all the utilities around us have been raising rates like crazy,” Janney said last month. “So we’re doing our best to be prudent, be smart and mitigate the costs that are coming at us from those. But you can’t bleed the utility dry, either.”
He said too often he’s seen utilities wait too long to raise rates.
“When you wait too long, it ends up costing a lot more and often has some other bad outcomes with reliability issues or loss of key employees or a bond rating reduction and additional costs that come with that,” he said. “The board has a fiduciary responsibility to maintain the financial health of the utility and I think I have to provide them the proper information so they can make decisions through that lens.”
Janney said that the PUD must be aware of its customers and their ability to pay. “But at the end of the day it’s going to cost what it costs.”
Monday’s presentation of the forecast marks the beginning of a community-wide discussion about the future of the PUD.
According to the news release, key issues raised in Monday’s meeting include: Rising Costs and Infrastructure Needs: Pend Oreille PUD is grappling with rising costs due to inflation, supply chain disruptions and new regulations. The utility faces more than $113.9 million in capital improvement projects between 2024 and 2034, including critical infrastructure projects, wildfire mitigation measures, and upgrades to an aging electric system. These projects are needed to maintain reliable service.
Future Rate Discussions: Although no decisions have been made regarding rate increases, one scenario presented includes annual rate increases between 3% and 7%, starting in 2025. These increases would help cover rising operational and regulatory compliance costs, which are projected to grow steadily over the next decade, alongside significant capital expenditures.
Staffing and System Resiliency: The PUD highlighted the need to attract skilled employees to address upcoming retirements and sustain the utility’s operations. Ensuring a stable, knowledgeable workforce will be crucial for maintaining and upgrading its electric system in the coming years.
“Our goal is to remain financially sustainable while maintaining our commitment to delivering safe, affordable, and reliable services to the community,” said April Owen, Director of Finance for the PUD. “The challenges we face are significant and we are in the process of developing a comprehensive plan that represents the best interests of our customers.”
The PUD will continue to gather feedback from the community in the coming months, encouraging customers to participate in future discussions and share their thoughts on the utility’s direction.
Next steps include continued evaluation of financial data and ongoing community dialogue, development of a new Strategic Plan, with a goal to present it to the PUD Commissioners by mid-2025 and regular updates and opportunities for customer input as part of the planning process.
“Today’s presentation is just the beginning of a larger discussion,” Janney said in the news release. “We are committed to a thorough and transparent process as we evaluate all options. No rate decisions have been made, and community feedback will play a key role in shaping the outcome over the next several months. Rate adjustments, if any, will be decided by our commissioners with a projected implementation date around April of next year.”
For more information on the 2024 Revenue Requirement Forecast, visit the Pend Oreille PUD website at www.popud. org/news-and-alerts/news-andpress- releases.
