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PUD commissioners hear from the public on proposed high density load rate

by Kimberlee Craig | Feb 02, 2016

Chelan County PUD commissioners Monday started formal consideration of a proposed rate for high density loads at a public hearing attended by more than 50 business and community members who are PUD customer-owners.

After more than a year of study, PUD commissioners are considering a new electric rate class for customers such as data servers, block-chain and bitcoin operations with intense energy use of 250 kilowatt hours (kWh) per square-foot or more per year.

At board direction, PUD staff presented two alternatives to the proposed rate of 5.03 cents/kWh. Rate structure was one of six issues identified in three community meetings held last month on the proposed rate.

The two alternatives were developed to be rate neutral for existing customers, said Lindsey Mohns, Customer Utilities business adviser. Both focus on recovering costs of serving high density loads over time and include components for power, delivery and customer costs. The alternatives are:

  • No sharing of market/benefit risk at 4.57 cents per kilowatt hour plus upfront costs (full cost recovery for power production, customer, and delivery costs)
  • Sharing of market benefit/risk at 3.99 cents per kilowatt hour plus upfront costs (The higher of production or market power cost plus the current blended rate of customer and delivery costs. Power cost to be adjusted, but not more than once a year.)

Seventeen people spoke Monday for and against the proposed HDL rate class including data operation representatives, members of the agricultural industry and PUD customer owners.

PUD staff also provided board-requested follow-up on the other themes that emerged at the earlier community meetings. Those issues are:

  • “Grandfather” existing HDL customers
  • Allocate energy limits for an HDL rate class
  • Consider schedule alternatives for putting the rate into place
  • Consider increased upfront cost recovery
  • Create a forum for further discussion of the proposed HDL rate

Analysis showed substantial barriers to “grandfathering” potential HDL customers at existing rates and to allocating energy limits for an HDL rate class, said Andrew Wendell, Customer Service director. There is the potential for phasing in the proposed rate and for options to mitigate system impacts through upfront charges, Mohns said.

A public forum to learn more about block-chain and bitcoin operations is scheduled for 5:30 to 7:30 p.m. this Wednesday, Feb. 3, at the Confluence Technology Center, 285 Technology Center Way. PUD commissioners continued Monday’s public hearing to Wednesday and designated it a special board meeting so all commissioners can attend. Board members said no action on the proposed HDL rate class will be taken on Wednesday.

PUD commissioners are still taking comments on the proposed HDL rate. More information about the proposed HDL is on the PUD website and comments can be sent to: contactus@chelanpud.org .

In other business Monday, commissioners:

  • Directed staff to accelerate repair of the main hoist drums in two powerhouse cranes at Rocky Reach Dam. Board members declared an emergency to waive bidding and start immediate negotiations with a contractor. Reports of cracks in similar cranes at other dams triggered inspection of the Rocky Reach bridge crane drums and discovery of cracks here, said Scott Tidd, project manager. Safe operation of the cranes is critical for hydro operations and for staying on schedule with ongoing turbine and winding repairs and winding replacements on the large units, he added. Commissioners weighed risks and opportunities of three options on repair in deciding to move ahead immediately. One crane is expected back in service in March and the second in early April. That ensures no change in schedule for the turbine and winding work and substantially reduces safety and revenue risks, said Mark Mullins, enterprise risk director. Overhauling the cranes, authorized last month by commissioners, will start as scheduled in December, Tidd said. 
  • Received a year-end report on the District power sales, conservation achievements and the forecast for river levels. The District finished the year about $400,000 above the budget estimates in net wholesale revenue; long-term electricity prices have dropped in price as has natural gas and crude oil; right now, the forecast is for 95 percent of normal river flow in the Columbia River – the actual levels will be better known in later March.
  • Received a year-end progress update on the District’s performance compared against start-of-the-year goals.

Upcoming events:

  • Feb. 3 – 5:30-7:30 p.m., Community Forum on high density loads, Confluence Technology Center
  • Feb. 15 – PUD offices closed for Presidents Day
  • Feb. 16 - 10 a.m., regular PUD board meeting (moved to Tuesday due to the holiday)
  • Feb 16 - 1 p.m., hearing to consider declaring surplus to District needs about .32 acres of PUD property near the Columbia River about four miles south of Wells Dam in Chelan County. And, whether to authorize the general manager to execute a land exchange agreement with Goodfellow Living Trust.  

The next regular PUD commission meeting starts at 10 a.m. on Tuesday Feb. 16, 2016, in the boardroom at 327 N. Wenatchee Ave.  

Chelan PUD records most commission meetings, and a link to the audio is available on the PUD’s home page at www.chelanpud.org. Find us on Facebook.com/ChelanPUD and follow us on Twitter @ChelanPUD.

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Visit our Safety and Outage Center for information, or to report an outage, 24 hours a day, 7 days a week, call 1-877-PUD-8123.

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