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No Rate Increase Included - Mason PUD 3 Commissioners Approve 2019 Budget

No Rate Increase Included - Mason PUD 3 Commissioners Approve 2019 Budget

by Mason PUD 3 on

November 20, 2018

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.

(SHELTON, WA) – Mason PUD 3 Commissioners today adopted a $75.5 million budget for 2019 that does not include an increase in local electricity prices. This is the third straight year that PUD 3 has adopted a budget without a rate increase.

The 2019 budget is 5.6 percent higher than 2018. The PUD is forecasting a nearly four percent increase in customer electricity consumption next year. The PUD is also expecting a 4.1 percent increase in the sale of energy. This is because of improving economic forecasts, and new customers coming online through 2019.

The Bonneville Power Administration is expected to increase the price of wholesale energy sold to PUD 3. Even so, PUD staff created a financial plan with no local price impact. BPA is expected to finalize its wholesale rates soon.

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 adopted 2019 budget include:

  • Mason PUD 3 expects to spend at least $2.8 million in 2019 to meet requirements of Washington State's renewable energy law, a slight increase from 2018. This includes power purchases and conservation programs. The amount of mandated, qualifying renewable energy as a part of power purchases increased from three percent, to nine percent in 2017. It will reach 15 percent in 2020.
  • PUD 3’s proposed capital budget includes nearly $1 million for its 40% share of a new substation. The PUD’s portion of the project cost will come from a dedicated reserve fund.
  • The customer-facing portion of the PUD’s grid modernization project was finished in 2018. Additional elements planned for 2019 include improvements to system monitoring software, conservation voltage reduction, and distribution management. The current fund balance for this work is $1.65 million. The overall project is funded by savings from a 2010 bond sale.
  • In 2019, six Fiberhood communities throughout Mason County are benefiting from a CERB grant. These communities will see the start of a two-year extension project of the PUD’s fiber optic network.
  • Tax revenue collected for Washington State and the City of Shelton is expected to increase nearly five percent. It is directly related to an expected growth in the sale of energy.
  • 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.

  • Because of a 2018 order from the Oregon U.S. District Court in Portland, the Bonneville Power Administration may be forced to institute the second year of what’s called a “spill surcharge” in 2019. It would cover the cost of spilling more water through dams for fish passage, and lost generation revenue.
  • BPA may impose a financial surcharge to help it meet reserves to make the agency’s annual debt payment to the U-S Treasury.

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.