Mason County PUD No. 3 commissioners conducted a public hearing today about proposed electricity rate increases. The financial impacts of looming renewable energy purchases and an increase in price for wholesale electricity supplies purchased from the Bonneville Power Administration are among the main reasons PUD 3 is considering increases this year.

The adoption of the 2012 budget in December anticipated a retail electricity rate increase, which includes a 3 percent change in the cost for energy consumption and a 10-cent per day increase in the daily customer charge. The last increase in electrical rates was in 2009. Commissioners will consider adoption of new rates at their April 10 regular business meeting. The rate increase is driven by several issues:

• An average 10 percent increase in the cost of wholesale purchases of electricity from the Bonneville Power Administration and a possible further boost in rates in coming years.
 
• The loss of rate credits from the BPA due to past overcharges by the federal agency.
 
• The possible loss of a $1 million annual discount from the BPA for certain utilities with a large proportion of rural customers. This is due to an increase in PUD customers.
 
• A state requirement to buy a certain percentage of its electricity supply from qualifying renewable energy sources. The condition under state law will have a 3 percent impact on the cost of wholesale electricity purchased by the PUD for its customers.

• Overall increased operating costs for the PUD.

A residential customer using 1,000 kilowatt hours of electricity would expect a bill of about $81.24 per month, an increase of $4.84 per month (not including applicable state or City of Shelton utility taxes). The PUD is using $500,000 from reserves this year to reduce the impact on rates.