Rates FAQs

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What type of rate structure does the PUD use?

The PUD uses a seasonal rate charge to compensate for the seasonal change in the cost of power charged by the Bonneville Power Administration (BPA), which supplies about 80 percent of our power. The summer rate is in effect from April 1 to September 30, while the slightly higher winter rate covers October 1 to March 31.

What are “time-of-use” rates?

In May 2001, Puget Sound Energy (PSE) began to offer some electric residential customers the option of paying “time-of-use (TOU) rates.” TOU rates provide an incentive to customers to use energy during off-peak times — usually between 9:00 p.m. and 6:00 a.m. on weekdays and Saturday, and all day on Sunday. Those customers who cannot or do not want to move the bulk of their energy usage to these hours pay higher rates. In November 2002, PSE requested to end its time-of-use rates because it resulted in most customers having higher bills than at flat rates.

What other types of rate structures are there?

Some utilities bill their customers using “inverted block rates,” which allows different rates depending on how much energy you use. For example, the first 750 kilowatt-hours you use in a month might be at one rate, while any additional kilowatt-hours used over that amount would be billed at a higher rate. The incentive is to use less energy and stay within the first block, which has the lowest rates.

There are other types of rate structures that usually apply to businesses. For example, some utilities offer “load reduction rates,” which basically pays companies not to use power from a utility’s system. Net metering rate structures compensate customers who use alternative resources (solar, wind, hydroelectric, or fuel cells) to generate power for their own use (Our website has more information about our net metering program.)

Will the PUD ever offer time-of-use rates to residential customers?

The Board of Commissioners does periodically review all rates, including alternate structures. To offer time-of-use rates to residential customers requires installing new meters, which would be a sizable expense for the utility, in addition to other program costs such as retraining and reconfiguring internal corporate support systems.

What do rates cover?

Rates include the cost of purchasing or producing power (energy charge); the cost of getting that power to your home or business, including not only equipment but labor and facilities (distribution charge), and administrative overhead costs (customer charge).

Most rates in the region include both energy costs and distribution costs together. One of the major changes in deregulation is the separation of these costs (often referred to as “unbundling” of rates).

Some utilities charge a basic monthly customer charge on top of energy-usage/distribution charges. The PUD does not add this charge at this time and builds these costs into its basic rate structure.

Rates differ from residential to commercial to large industrial customers largely because of the costs it involves to get power to each customer classification. 

Each class has the same amount of energy charge built into its rate structure. But it’s cheaper to deliver power to one large industrial customer than to several small homes because often the large industrial customer has its own substation and takes power at a much higher voltage than residential customers who must have the voltage lowered for them to use in their households. 

Delivering power to our growing customer base requires many substations, poles, distribution wires, switching stations, transformers, etc. That’s basically why large industrial customers have lower rates than residential customers.

How do PUD residential rates compare to other regional rates?

Based on 1,000 kilowatt-hours (average rates, as of October 2013; includes customer charges where applicable)

Portland General Electric
$107.50
Puget Sound Energy
$99.02
Seattle City Light $94.13
Snohomish PUD $92.60
Clark PUD $90.60
Grays Harbor PUD
$88.13
Pacific Power
$82.60
Avista
$81.70
Tacoma Power
$78.05
Benton PUD
$76.69
With rates increasing all over because of tight energy supplies, why are permits being issued for new buildings with you supplying the power to them?

We have a legal obligation to serve. The PUD was established more than 50 years ago to provide electricity and water service to its customers in Snohomish County and on Camano Island. By law, we must provide electricity to all customers who request service. Although we work closely with city, county, and state agencies, we are not included in decisions regarding the Growth Management Act. In general, the cities and the county (and the state to some extent) decide where growth will occur, and then the PUD and other utilities providers work to ensure the necessary infrastructure is in place to facilitate the growth pattern.

What is a proration factor?

Some customers may see reference to a proration factor on their bills. This is a use of a multiplier - such as 0.566667, 0.750000 or 2.200000 - to calculate a portion of a bill. Proration factors are often used in cases when the number of days on a customer’s bill doesn’t fall into the range of days for the PUD’s billing period.

For example, consider a water customer who has a monthly “customer charge” on his bill. If the charge is $8.35 for a period of 30 days and the billing covered 69 days, the PUD would use a proration factor to calculate the total charge. The proration factor would be 2.300000 (69 divided by 30). The total charge would be $8.35 x 2.300000, or $19.21.

Another customer may have signed up for the PUD’s Planet Power program in the middle of a billing cycle. If the customer opted for one block (which costs $3 per month), but only nine days were left in the billing cycle, a proration factor would be needed to calculate the bill. If there were 30 days in the billing period, the proraction factor would be 0.300000 (9 divided by 30). The total charge would be $3 x .300000, or 90 cents.

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