WENATCHEE — Chelan County PUD is anticipating record growth over the next few years — but expanding its operations will come with a high price tag, meaning the district may add a new fee.
The PUD anticipates spending more than $15 million per year over the next five years, or $75 million total, to keep up with economic development and growth in the county.
The district expects to build about seven distribution substations in that time period, a 21% increase from its existing 34. The substations, which transform high-voltage electricity for residential and commercial use, each serves about 1,500 homes.
Andy Wendell, PUD customer service director, said the PUD is monitoring growth in Olds Station, the north and south shores of Lake Chelan, Leavenworth, Wenatchee, Malaga, Cashmere and Entiat as it considers locations for future substations.
“Substations are a network of substations. They don’t necessarily work independently; they work in unison,” Wendell said. “When you build a new substation — say, for instance, in Wenatchee — it offsets some of the stress that an adjacent substation may be having. So it’s kind of a balancing act.”
In the past, the PUD has built about one substation every few years. It takes three to five years to design and build a substation, and the process is kicked off when an existing substation approaches 80% capacity (usually 20% capacity is saved to reroute to other substations during an outage or maintenance).
The PUD has identified three options to come up with the funding:
- Requiring developers to fully fund substations
- Increasing rates
- Implementing system impact fees for new customers
PUD staff is recommending the third option, which is expected generate about $1 million annually.
Under the PUD’s current proposal, the PUD would be responsible for 20% of the cost of new substations, and the other 80% would be recovered via existing retail rates and the proposed system impact fee for new customers. There are no rate increases included in the proposal.
The fee works out to about a $27 per kilowatt increase for new connections, which would be added to existing service connection fees.
For the average new home, which typically requires 400 amps of electrical service, that would increase connection fees from $2,800 to $4,095.
Charging the full cost of a new substation to developers, business owners and home builders who want to connect to an at-capacity substation could be an unfair cost burden, according to the PUD website.
“Substations actually serve power to existing customers as well as new customers,” Wendell said. “Asking an individual developer to pay the entire cost of that substation would be overburdening or saddling that particular developer with more costs than they should.”
Instead, PUD staff believes a system impact fee would best align with customer feedback. In a recent customer survey, the PUD found a majority of customers wanted to see emphasis on local growth as long as rates were only modestly impacted.
If the PUD’s board does approve the fee, it will likely go into effect between April and June 2022, said Cathy Melton, PUD customer service program analyst.