EAST WENATCHEE — The Douglas County PUD Commission on Monday approved a new rate structure that governs the cost of bringing power from external sources into the county for new large customers.
The approval comes after several meetings with local elected officials who expressed concern about the power delivery rate’s potential effects on economic growth in the county.
PUD commissioners heard a few additional submitted public comments in their meeting Monday afternoon. In a short discussion before the rate was approved, Commissioner Ron Skagen and General Manager Gary Ivory both said the rate will be fair and beneficial to customers.
“We’re excited to get this rate in place so we can begin serving customers,” Ivory said in the meeting. “We feel like it’s a very competitive rate when comparing it to other Washington state rates in this class.”
The power delivery rate policy stems from a change the PUD commission made last year that said any new large power users in the county would have to get their power from the wholesale market, rather than the PUD-owned Wells Dam.
The power will be purchased from external sources, brought in across the PUD’s transmission lines and delivered to the user’s facility in Douglas County.
The cost of that service, also called a wheeling rate, was set in the meeting Monday. It takes effect May 1, Ivory said.
The rate is a complex formula that includes several fixed and variable factors. The net cost would be around $0.046 per kilowatt hour, including power costs, the PUD said. It will also increase around 2.3% a year to keep up with the utility’s inflating labor and material costs.
The commission opted for an 11% rate of return, which the utility would apply toward future infrastructure improvements or other unexpected costs, officials said.
The policy will apply to a customer in any industry who uses more than around 1.5 megawatts. It wouldn’t affect an average residential customer’s rates.
The rate wasn’t developed for any specific customer, but much of the conversation around it has been focused on Microsoft’s planned data center. That’s partly because the company has already begun filing building permits.
It’s also due to the project’s scope: Building permits show the first of three proposed buildings to be valued at $409 million.
And while the facility’s power consumption hasn’t been finalized, Microsoft has asked the PUD whether a 180 MW load could be accommodated. The rest of Douglas County’s power usage totals around 130 MW.
Since Microsoft would have to buy power on the wholesale market, its load won’t cut into the Wells Dam capacity that powers the rest of the county.
The power delivery rate policy was introduced in January. Two rate hearings were held in February and March to collect public feedback. Two additional meetings were held last week after the Chelan Douglas Regional Port Authority and a group of other public officials requested further public discussions.
Commissioner Skagan said the newly approved rate policy will allow Microsoft and other future customers room for growth in the county.
“We believe it will be in your best interest to be here in Douglas County for years and years to come,” he said in the meeting. “We believe that this rate will be good for you, it will be good for Douglas County, and your development in Douglas County will be good for ratepayers and citizens.”