PUD board approves new rate for high density load customers

by Kimberlee Craig | Jul 18, 2016

Chelan County PUD commissioners Monday approved a new electric rate for customers with energy intense loads such as server farms and similar technology operations including bitcoin mining. The action follows 18 months of analysis and gathering public comment.  The rate structure is expected to recover the fair and reasonable costs of serving these rapidly growing businesses.

Commissioners relied on the District’s strategic approach of providing the best for the most people for the longest period of time in making the decision.

The rate is effective Jan. 1, 2017, and includes a transition period of up to five years for existing high density load customers who can show they’ve made substantial investment and meet other criteria. Included is an upfront charge to offset the impacts from HDL customers on the District’s electric system capacity. 

Board members approved the rate as it was presented at a public hearing in June.

The current moratorium on accepting applications for service from energy intense loads will be reviewed by PUD commissioners on Oct. 3.

Commissioner Garry Arsenault related praise from a customer for the open process and customer and community involvement used by PUD staff as the rate was researched and developed.

“I congratulate staff for patience and time spent … to achieve what I think is a very successful HDL rate.”

Commissioner Dennis Bolz said collaboration and transparency were keys in reaching approval of the new rate. “There was a lot of individual and collective effort involved in bringing this proposal forward, and I think it’s a good product.”

The new rate applies to server farms and similar technology operations with intense energy use of 250 kilowatt hours per square foot per year or more. The rate recognizes that high density loads impose costs different in type and magnitude than other commercial and industrial customers. 

Board President Randy Smith has not taken part in discussions on the new rate and did not vote Monday to avoid the appearance of a conflict due to a business interest in facilities being used by a data company. 

Discussion of a new rate for energy intense customers was triggered in December 2014 when staff reported a dramatic increase in inquires for new service from high density and large load customers. Commissioners put the moratorium in place on Dec. 15, 2014, and revised the scope twice as more was learned about the impacts of energy intense load.

PUD staff’s report on the issue and rate development, as well as a record of the public comment, is on the PUD’s website at under “High Density Loads/HDL News and Comments.”

In other business Monday, commissioners: 

  • Heard an update from Customer Accounting Manager Kerri Wendell on the work done so far to replace the District’s billing system. In March, commissioners approved hiring a consultant to help staff navigate replacement of the system that plays a role in many critical District operations. The customer information system has worked well since it was installed in 2004, but the system is no longer supported by the vendor and it doesn’t offer advanced services that customers now request, Wendell said. A request for replacement proposals is being developed. Plans are to seek commission approval to issue the request for proposals in late summer or early fall.
  • Were updated on the electric grid research being done at Pacific Northwest National Laboratory (PNNL) in Richland. The lab’s Carl Imhoff outlined how scientists are working to improve today’s electric grid and find opportunities for improving future operations. PUD General Manager Steve Wright asked for the presentation as the District seeks to match its operating experience with PNNL’S technology innovation expertise.  
  • Heard from Ron Gibbs, Insurance and Claims manager, that PUD insurance premiums for the coming year will be 4.5 percent less than this year. Commissioners had authorized up to $2.245 million for coverage through July 2017. Gibbs reported negotiations brought coverage costs in for $2.239 million.  He credited the PUD’s strong finances and strategic objective to invest in its facilities, along with a favorable insurance market and other factors, for the lower premiums.  
  • Received a request for PUD’s fiber network access to be built out to White River Road from resident Sally Van Dusen. 

 Upcoming events:


 The next regular Chelan PUD commission meeting starts at 10 a.m. on Monday, Aug. 1, 2016, in the boardroom at 327 N. Wenatchee Ave.  

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