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Klickitat PUD 2024 Electric Rate Increase

by Jan 03, 2024

Klickitat PUD electric rate increase of 4.5% effective January 1, 2024. The increase will vary by rate class. Please review the full article and your rate class posted on the website for more details.

Klickitat PUD held the 2024 budget and electric rate hearing Tuesday, December 12th at 3:00 PM at which time the 2024 budget was adopted and 2024 electric rate increases approved. Rate revenues will increase by 4.5% effective January 1, 2024. The percentage increase will vary by rate class and rate component. On average, a residential customer will see an increase of $5.37 per month. 

Throughout the year Klickitat PUD published a series of communications to broaden customer understanding of external drivers which are impacting the utility industry. This was in preparation for continued cost and rate increases throughout the region. 

Regional wholesale power markets continue to see reduced supply and increased demand. This creates serious concerns about power availability at peak times and during extreme weather conditions. At the same time, there are policies restricting new fossil fuel base load generation and forcing retirement of coal and gas-fired generation, while increasing current electric demand with electrification of buildings and vehicles. Renewable generation like wind and solar are variable energy sources and provide minimal help with load balancing or demand response, which does not solve the power supply problem.

During the 2023 rate review, the rate impact due to increases in cost related to wholesale power markets was 9%. Staff recommended that rate increases to recover power costs be spread over three years to reduce impact on customers. This resulted in a 3% increase in 2023 and projected minimum increases of 3% for 2024 and 2025, with rate changes assessed and approved annually through public process. The 2024 portion was approved during the December 12th, 2023 rate hearing.

Energy markets aside, the cost of doing business continues to increase. This includes transportation, materials and construction costs. Traditionally, Klickitat PUD had an electric system built with excess capacity. Due to load growth, as expected with the regulatory policy push towards electrification, the excess capacity is depleted and KPUD needs to build additional system capacity. System improvements are essential to ensure reliability. Related costs contribute to 1.5% of the approved 4.5% rate revenue increase.

With rate development, one primary objective is to ensure each rate class is paying their fair share, and one rate class is not subsidizing other rate classes. Medium and large commercial services and irrigation services received higher net rate increases, ranging between 5.2% and 5.5%. One notable change was to medium general services tiered demand structure; peak demand between 0 and 25 KW will bill at $2/kW instead of zero. Lower rate increases were approved for residential, farm and small general services. Residential rates will increase by roughly 4%, on average a residential customer bill will increase $5.37 per month. 

In summary, rate revenues will increase by 4.5% effective January 1, 2024. Wholesale power increases attribute 3%, while the cost of doing business and expanding our system infrastructure drives the additional 1.5%. The actual impact varies by rate class and rate component; so depending on customer usage trends, monthly bill impact will differ. Rate design will continue to be a focus for 2024 as KPUD evaluates available options including residential demand and time-of-use billing.

Customer service is available to estimate customer specific impacts.