Residential base charge implementation
New base charge and rate increase will go into effect April 1, 2023
The PUD’s Board of Commissioners approved a revised implementation of the base charge for electric customers. The deployment schedule will take place over two years instead of four.
The PUD’s board approved the implementation of a base charge to its residential electric service rates (Schedule 7) on Nov. 19, 2019. After being delayed on March 23, 2021, due to the pandemic, it was officially implemented on April 1, 2022.
The rate structure change was required to:
- Address increasing fixed costs
- Fund critical infrastructure improvements that increase safety and reliability
- Support environmentally sustainable power
- Ensure stability for the utility as customer demand and use patterns change
The base charge applies per meter and is based on the type of building that is served and the amperage rating of the customer’s primary fuse box or breaker panel.
Instead of incrementally increasing over the next four years, the base charge is scheduled to increase on April 1, 2023 and again in 2024. The increase of the base charge will coincide with a reduction in the energy usage (kWh) charge. Because of that, impacts to customers’ bills will be minimal, with the typical PUD customer experiencing changes of just a few dollars of increase or decrease per month.
The base charge for medium-sized customers (most single-family homes) will be increased from 10 cents/day to 34 cents/day, or approximately $7.50 per month. To balance the increase to the base charge, the energy usage charge for medium-sized residential customers will decrease from 10.47 cents/kWh to 10.14 cents/kWh, a savings of approximately $3.65/month.
The amount of the base charge is based on home size and type. Customers are categorized as:
- Small (multi-family dwellings or small electrical services like garages or well pumps),
- Medium (single-family homes),
- Large (large homes with high energy demands) and
- Extra large (very large homes with multiple structures).
The large and extra-large categories apply only to new customers connected on or after April 1, 2022.
All customers pay either the daily base charge plus the usage charge or the minimum bill charge (53 cents/day), whichever is higher. By April 1, 2024, the minimum daily charge will be eliminated.
The base charge provides increased stability for the PUD as new homes connect to the electrical system. The base charge will pay for the fixed costs of connecting customers to the grid, including billing and meter maintenance.
As of April 1, 2023, PUD residential customers’ rate is 10.137 cents/kWh after the BPA Residential Exchange Credit is applied.
Sample PUD bill with base charge:
Frequently asked questions
Why did the PUD change its rate structure?
The PUD’s base charge is designed to better align rate recovery with the sources of fixed costs it incurs on behalf of customers, including meter maintenance and billing. The charge results in more predictable and stable bills for our customers and revenue for the PUD, which will allow the PUD to focus on keeping rates low, minimizing the need for rate increases and freeing up funds for energy-efficiency and income-qualified programs.
Is this considered a rate increase?
The changes to the base charge on April 1, 2023, will serve as the general rate increase approved by the PUD’s Board of Commissioners in 2022. The energy usage charge for residential customers will decrease from 10.47 cents/kWh to 10.14 cents/kWh, while the base charge will increase from 10 cents/day to 34 cents/day (for medium-sized customers). Next April, the base charge is scheduled to increase and will coincide with a decrease in the kilowatt-hour (kWh) charge. This will result in potential cost-savings for existing customers based on their usage.
How is this different than the minimum bill charge?
Customers are charged the minimum charge of 53 cents per day only if it is greater than the combination of the month’s base charge and kWh usage charge. The daily base charge is applied in addition to the month’s total kWh usage charge. The minimum daily charge will be discontinued as of April 1, 2024.
Is this just the beginning? Will the base charge go up in the future?
The base charge is currently at $0.08 per day ($2.24 to $2.56 per billing cycle) for small customers and $0.10 per day ($2.80 to $3.20 per billing cycle) for medium customers. The base charge is scheduled to increase on April 1 over the next two years while the energy usage charge is reduced. New customer base charges in the large ($21) and extra-large ($27) categories will only apply to customers connected on or after April 1, 2022, and also be phased in over the next two years. Currently the PUD has no plans to increase the base charge beyond 2024.
Why did the PUD institute a base charge?
As electricity usage patterns have changed, electric utilities have altered the way they recoup costs associated with building and maintaining the electric grid. In the past few years, the PUD has seen its customer count grow, while the total amount of electricity usage has remained flat. This has put the PUD in the unsustainable situation of serving thousands of additional customers each year without selling any additional electricity to pay for it. Utilities have instituted base charges to ensure all customers pay the appropriate amount for costs associated with metering, billing and connecting to the grid.
Why did the PUD decide to phase this charge in over two years instead of four?
Because of the Connect Up program going live in 2025, the PUD decided to minimize impacts and revise the implementation schedule from four years to two. The new schedule will still include a decrease to the energy usage charge, so impacts to customers’ bills will be minimal.