Northern Wasco County PUD will bring a budget slightly unusual for a public body to its board of commissioners for approval next week — unusual in that its operating budget is slightly less than it was the year before.
The $9.4 million proposed budget for 2014 is $253,758 — or 2.62 percent — lower than last year’s version. That figure doesn’t include the anticipated $19.4 million in purchased power costs, which is about $929,000 more than last year. Power costs rise annually as a result of factors outside the PUD’s control, including increased power use (load growth) and rising power rates from Bonneville Power Administration, explained Dwight Langer, PUD general manager.
The operating budget is lower largely as a result of a number of actions the PUD took this year designed to keep its first rate increase in a decade as low as possible. Among those were entering a contract to sell power from the PUD’s fishway hydropower plant at The Dalles Dam to PGE and buying back some of the bonds that were used to pay for the McNary small hydro project the utility owns jointly with Klickitat County PUD.
In addition to reducing overall operating costs, the measures offset most of what could have been a possible 24 percent rate increase to single-phase residential customers, Langer said at the time. Instead, the average rate increase was 4.2 percent.
Energy conservation programs drew the largest discussion at a budget workshop Dec. 10. Director Clay Smith expressed concern at the large amount spent on programs such as incentive payments for heat pumps, duct sealing, more efficient commercial lighting and the like.
“I think we need to somehow reduce this amount,” Smith said of the roughly $915,000 budget item. He expressed concern that the outlay might be detracting from the district’s primary goal of providing affordable power. He also said ratepayers fund that amount, but only about half take advantage of the program.
Steve Holmes, who coordinates the programs for the PUD, explained that $605,000 of that figure comes from a fund at Bonneville Power Administration and is based on goals set by BPA.
“That’s $605,000 BPA puts on the table for conservation,” Holmes said. “It’s based on our wholesale load.”
The money actually comes from BPA’s utility customers and is earmarked for specific BPA conservation goals.
“If we don’t accomplish those goals, someone else gets that money,” Holmes said. In fact, Northern Wasco County PUD received $78,000 in funding from utilities that did not accomplish those goals.
Later in the meeting, Director Milt Skov also noted that conservation measures are the most affordable means of maintaining capacity for new load growth. If households and businesses are able to operate using less electricity, that means more power is available for new uses without having to develop new power generation resources.
Development of new power generation resources is also a big item on the budget table next year, said Langer, as the PUD continues to progress with its Freedom Project hydropower generation plan. The plan is to build a second 5 megawatt generator on the fishway at The Dalles Dam.
Langer estimates the PUD will spend about $1.2 million on the project next year, one of the largest items on the budget.
The PUD will be commissioning a variety of studies, design and engineering work to fulfill the requirements of a draft license amendment from the Federal Energy Regulatory Commission. The utility will communicate the outcome of these studies with stakeholders including cities, counties, BPA, tribal nations, the National Marine Fisheries Service, Oregon and Washington fish and wildlife departments and others, and ask them to vet the draft license.
“Once the stakeholders reach consensus, we’ll prepare a final license amendment,” said Kurt Conger, director of power supply and transmission for the PUD.
Conger said the PUD is on track toward their goal of completion in June 2017.
The PUD also plans to lay out about $1.2 million next year to maintain and improve its transmission and distribution systems.
“We are continuing to focus on reliability and customer service,” Langer said.
The PUD, unlike some other utilities, had no significant power outages during its service area’s dip into single digits over the past few days, although one outage was caused by a car hitting a power pole.
Power use hovered around the district’s historic peak as a direct effect of the four-day cold weather snap, consuming more than 109 megawatts to match the 2009 peak. While the area often saw colder winters earlier in its history, growth in load over time — about ½ to 1 percent a year on average — also contributes to peak loads.
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