5-year Rate Plan

Chelan PUD is proposing rate increases to help cover the rising cost of maintaining the utility services our customer-owners depend on every day. Since 2019, the cost of key equipment and materials has increased more than general inflation. Industry-wide, the cost of wire and cable has risen 152%, and transformer costs have increased 89%. As these costs continue to grow, rate adjustments are needed to maintain safe, reliable service and prepare the system for the future.

Another driver for the 5% electric rate increase is to avoid over-reliance on favorable markets for surplus energy sales. For years, Chelan PUD has relied on surplus hydropower sales to help keep customer rates low. As the gap grows between the rising cost of service and the rates customers pay, relying on power sales to make up the difference will become harder to sustain long term.

No. Microsoft is paying the costs associated with serving the new data center, including the system studies, the substation, transmission lines, and its power supply, which will be imported from the wholesale energy market. Chelan PUD's policies are designed to protect existing customers from the impact of serving data centers in Chelan County.

Here’s how the proposed rate plan would impact residential customer bills, based on average usage:

• Electricity: 5% annual increase, or about $3.50 more on the average monthly bill

• Water: 2.5% annual increase, or about $2 more on the average monthly bill
• Wastewater: 4% annual increase, or about $4 more on the average monthly bill
• Wholesale fiber, 2.5% annual increase deferred for 2027.

The goal of the 5-year rate plan is to provide predictable, gradual increases that keep pace with the cost of providing service. If the proposal is adopted, rates will increase every year on June 1, 2027 through 2031, pending annual review by the board of commissioners.

Your bill pays for the electricity you use and the power system that delivers it to your home or business. Like roads and bridges, that system needs ongoing maintenance and upgrades to stay safe and reliable, with room to accommodate growth and extreme weather.

We’re always looking for ways to cut costs, and we know that affordable rates are important to our customer owners. If the rate increase is adopted, Chelan PUD’s rates will remain among the lowest in the nation.

One of Chelan PUD’s core values is stewardship. Our job is to responsibly manage the resources entrusted to us for the benefit of future generations. We’re trying to balance affordability with our duty to maintain reliable utility systems.

Revenue from surplus hydropower sales helps keep customer rates lower than they would otherwise be. Today, customer rates cover about 62% of the cost to generate and deliver electricity; hydropower revenues cover the rest.

As part of our 50-year visioning process, Chelan PUD considered scenarios where the wholesale market might not be a dependable source of revenue. By making relatively modest changes now, Chelan PUD can be more self-sufficient and better prepared for an increasingly unpredictable future.

Revenue from surplus hydropower helps keep customer rates among the lowest in the country. That strategy has served our communities well. However, as the gap between our operating costs and rate revenues grows, relying on power sales alone becomes increasingly difficult to sustain over the long term recognizing that the power markets are evolving and uncertain. The five-year rate plan is designed to help Chelan PUD become more self-sufficient over time.

If the proposal is adopted, rates will increase every year on June 1, 2027 through 2031, pending annual review by the board of commissioners. One of the goals of the five-year rate plan is to take a measured, predictable approach rather than defer costs and potentially face larger increases later. Rates are evaluated annually based on the utility’s financial needs, costs, investments, and long-term plans.

Chelan PUD has several tools to help customers with their bill, including a recently-expanded billing assistance program that offers 25% monthly discount on water, wastewater and electricity bills for income-qualified households. Customers can apply on-line at chelanpud.org/discounts.

Later this fall, the PUD will launch increased rebates to make home energy efficiency improvements more affordable for income-qualified households. Learn more at chelanpud.org/reach.

Customer-owners can ask questions and submit comments by emailing [email protected].