Mason PUD 3 Commissioners Considering 2020 Budget

Mason PUD 3 Commissioners Considering 2020 Budget

by Mason PUD 3 on

September 10, 2019

Budget includes first rate increase since 2016

(SHELTON, WA) – Mason PUD 3 Commissioners are considering a $77.6 million budget for 2020, which includes the first local electricity price increase since 2016.

The proposal calls for an increase in the daily system charge of ten cents per day, or approximately $3 per month for an average residential customer.

The proposed 2020 budget is 2.7% higher than in 2019.

Commissioners conducted public hearings on rates and the budget today (Sept. 10). They may consider adoption at their regular business meeting on September 24. If adopted, the rate increase will go into effect on October 1.

Commissioners and staff developed next year’s proposed budget with a zero-based approach, meaning every function in the utility was analyzed for its needs and costs.

Highlights of the 2020 proposed budget include:

  • Mason PUD 3 is expected to spend at least $3.7 million in 2020 to meet requirements of Washington State's renewable energy law. It is a nearly $1 million increase from 2019. This includes power purchases and conservation programs. The amount of mandated, qualifying renewable energy as a part of power purchases increases from nine percent this year, to 15% in 2020.
  • The Bonneville Power Administration will increase the price of wholesale energy sold to PUD 3. BPA is also increasing the transmission cost to the PUD for delivery of high-voltage power to local substations.
  • A nearly $1 million per year settlement expires this year with the Bonneville Power Administration over the way the agency calculated its Small Farm and Residential Exchange program during the 2002-2007 fiscal years. The program was designed to share benefits of the publicly owned federal power system with customers of private utilities in the region. A federal court ruled that PUD 3 was overcharged. BPA was ordered to pay back the money over eleven years, with the final payment occurring this month (Sept. 2019).
  • The PUD’s capital budget includes the cost to complete the new Totten Substation. The substation is expected to reach significant completion by the end of 2019. There will be some costs in 2020.
  • The customer-facing portion of the PUD’s grid modernization project was finished in 2018. Additional elements planned for 2020 include improvements to system monitoring software and electricity distribution management. The fund balance for the work is $1.4 million. The overall project is funded by savings from a 2010 bond sale.
  • Twelve Fiberhood communities throughout Mason County are benefiting from two CERB grants. These communities are part of a four-year extension project of the PUD’s fiber-optic network to unserved homes and businesses.
  • Other items throughout the budget are natural fluctuations in the cost of goods and services.

Mason PUD 3 is closely monitoring several issues outside its control that could have an impact on local operations next year.

  • It’s expected that BPA will impose a financial surcharge to help it meet reserves to make the agency’s annual debt payment to the U-S Treasury.
  • A possible increase in metal and material costs related to tariff increases on foreign trading partners.

Qualifying senior citizens and low income/disabled customers may want to ask about available discounts that result in a waiver of the daily system charge from their bills.

PUD 3 also has a wide range of rebates and incentives to help reduce electricity consumption. Services include a free energy audit to identify ways to save energy.

Mason PUD 3 includes about 600 square miles of service territory, with nearly 34,000 electricity customers. PUD 3 also operates a wholesale fiber optic telecommunications network, which supports the operation of its electric distribution services.