Growth Means More Substations

Chelan County is growing, and we’re seeing an increase in residential, commercial, and industrial electric loads. Adding new customers to the system means we need more substations to support that load growth.

Distribution substations are an important part of the electrical system. Substations reduce high-voltage electricity (transmission) to lower voltage electricity (distribution) for residential and commercial use. The PUD has 34 distribution substations located strategically throughout our service territory. A substation typically serves about 1,500 residential homes.

When an existing substation approaches 80% capacity, we start planning to build a new one. Once the need for a new substation is identified, it can take from three to five years to site, design and construct the facility so it can serve the growing power demands.

Chelan PUD constructs the McKenzie Substation in 1967
Chelan PUD constructs the McKenzie Substation in 1967

Building New Substations

With current growth forecasts, we anticipate the need to construct about seven substations in the next five years – compared to one substation every few years in the past. This is anticipated to cost the District more than $15 million per year. That’s why it’s important to begin planning and collecting capital construction funds so we can maintain safe and reliable electrical service into the future.

Chelan PUD Existing & Projected Future Substations

Map of existing and projected future substations for Chelan County PUD

Funding Growth

By funding the construction of new substations, the PUD will be able to serve new and growing customers, which supports local economic development, new jobs and needed housing in the County.

The PUD has identified three options to fund these capital investments in the electrical system.

Aerial of Chelan PUD Substation

A Chelan PUD Substation

Funding Growth Options

  • Retail Rate Increases

    While these investments could be funded by customer owners through rate increases, we heard from you during the strategic planning process that this is not the preferred approach.  Customers indicated that they preferred only modest (35.8%) or no rate increases (38.7%) to support this type of growth and economic development. Therefore, Chelan PUD is not exploring rate increases as a funding mechanism at this time.

  • Developers Fully Fund Substations

    This option could unfairly burden developers, business owners and home builders who want to connect to a substation that is currently at capacity, by charging them the full cost of a new substation or not allowing connection. This could have a negative impact on economic development by placing significant cost burden for the substation on the developer, when the new substation could benefit future new customers, as well as improve overall system reliability.

  • Hybrid approach where costs are shared between new customers and the PUD (system impact fees)

    PUD staff have proposed a hybrid approach, where some infrastructure cost continues to be collected through rates (at the current level) and marginal costs (cost of new construction compared to historic) are shared through a system impact fee assessed to new customers.  Additionally, a portion of the cost that improves reliability continues to be PUD funded.