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Clark Public Utilities commissioners approve 2011 budgets
December 14, 2010
Electric rates will not change under budgets approved for 2011 today by the Clark Public Utilities board of commissioners.
Commission President Nancy Barnes said while the budgets contain good news for the utility’s customer-owners, it is likely that rates will increase when the Bonneville Power Administration raises its rates in October 2011. "We don’t know the amount of the BPA increase now, so we can’t know the impact on our retail rates," Barnes said.
Given the current economic conditions, Barnes said it was essential to keep expenditures as low as possible without reducing the service provided to customers. She said the utility took major steps to reduce staffing and spending as the economy worsened earlier this year.
Budgets for the utility’s Electric and Water systems assume a continuation of the region’s sluggish economic conditions. Electric System customer growth is anticipated to be about 0.5 percent, with the number of new water customers to be up about 1 percent.
The budgets assume sales to commercial and industrial customers will remain about the same as in 2010.
Electric System expenses for 2011 are expected to be about $373 million. That’s down from $388 million planned for 2010, but the final total is expected to be about $362 million after the cuts made earlier this year. As has been the case historically, about 69 percent of the budget is the cost of power the utility generates or purchases for sale to its customers.
The cost of natural gas used to produce electricity at the River Road Generating Plant is expected to be lower in 2011, but those savings will be offset by higher costs of power purchased from the Bonneville Power Administration and the purchase of wind energy.
Investments in energy conservation of $3.8 million were expected to be funded by rates in 2010, but the utility was able to fund $7.4 million in conservation projects from outside funding. About $2.1 million is budgeted for 2011 conservation projects, after accounting for funds from outside sources.
The wind energy and conservation spending is required by Initiative 937, which was passed by voters in 2006.
Spending on construction projects will fall to about $22.3 million, a drop of about $4 million from 2010. The reduction reflects the slow growth in the number of new customers as well as reduced electricity sales.
Commissioners also approved operating and construction budgets for the utility’s Water System. Water System expenses are expected to be about $13.7 million, with construction spending of about $4.7 million.
The utility will fund all of the construction projects with borrowed funds, a departure from the normal policy of using 60 percent borrowed funds with the remainder coming from current rates. Barnes said the change is for one year only, and is being made due to the ongoing economic slowdown. Without the change, she said an increase in water rates would have been needed.
Approval of the budgets follows several lengthy sessions in recent weeks to review the proposals, Barnes said.
Clark Public Utilities is a customer-owned public utility district that provides electric service to more than 183,000 customers throughout Clark County. The utility also provides water service to about 30,000 homes and businesses in the Hazel Dell, Salmon Creek, Lakeshore, Hockinson, Brush Prairie, La Center, Meadow Glade, Amboy and Yacolt areas.
Clark Public Utilities was ranked highest in customer satisfaction among midsize utilities in the west by J.D. Power and Associates in 2008, 2009 and 2010.