Facing a $17.7 million budget shortfall, the Clark Public Utilities Board of Commissioners will consider possible rate increases come January, a step the utility hasn’t taken in more than a decade.
The commissioners voted unanimously Tuesday to use the utility’s rate-stabilization fund to balance its $466 million electric budget as a stopgap measure.
In 2011, the last time the utility forecast a budget shortfall, commissioners voted to increase rates. Rates haven’t increased since then, a point of pride for the utility’s commissioners.
“As a customer-owned nonprofit utility, we’re committed to providing energy and water service at-cost, safely, reliably and responsibly in compliance with all regulatory requirements,” said Jane Van Dyke, president of the board of commissioners, in a statement Tuesday.
“This budget reflects our continued priorities of cost control, customer satisfaction and quality service as we meet the evolving needs of our community,” she added.
A rate change isn’t the only way commissioners could address the shortfall.
Money put aside in surplus-budget years make up the utility’s rate-stabilization fund, utility spokesperson Dameon Pesanti said. The fund gives the board time to take action to address a shortfall.
The utility uses zero-base budgeting, meaning expenses and income must bring its ledger to zero by the end of the fiscal year.
Pesanti said the utility builds a budget based on conservative principles, not on the best-case scenario.
“We do our best to forecast and analyze market forces out there, but sometimes things happen that are unexpected,” Pesanti said.
Pressures
The utility is confronting numerous pressures, from increased customer demand to rising energy prices to increased regulatory limitations. All are impacting the utility’s $466 million electric operating budget.
Extreme weather has become more common in the Pacific Northwest, driving demand for electricity to peak not just in the winter but also in the summer when people are increasingly relying on air conditioning.
With demand increasing across the region and this year’s poor water levels plaguing dam electricity generation, energy costs are at a premium.
Recent clean-energy requirements have also limited the utility’s ability to generate additional power at its River Road power plant.
The utility has invested more in information systems, cybersecurity and infrastructure driven by regulations, inflation and supply chain constraints.
Budget
The utility, which also delivers water to some customers, serves 235,000 customers in Clark County and is the only electric utility in the county.
Its River Road plant operating revenue budget is $99.6 million for 2024, a more than $9 million increase from this year.
The utility’s water operating revenue budget, meanwhile, is $23.2 million, up from $21.9 million in 2023.
The commissioners discussed the budget previously at a workshop and also a public hearing in November.
