Chelan PUD considers Public Power Benefit Funding for Peshastin water projects

PESHASTIN – The Chelan County PUD Board of Commissioners explored Public Power Benefit (PPB) funding as another option for the Peshastin Water District’s (PWD) capital improvement projects during their meeting on Feb. 20. 

With PWD’s impending merge into PUD’s system this spring, PUD and the Peshastin community have held a number of meetings to discuss how to fund the PWD’s necessary capital improvement projects, originally estimated at $3.1 million in 2022, and refined to $2.67 million in Jan. 2024. However, some funding projections still consider the original estimated cost. 

In initial discussions, the PUD took PWD’s valuation of $1 million in water rights and $500,000 in system capital into account and proposed the implementation of a rate adder, which would burden PWD customers with the remainder of the costs.

However, at the Board’s request from previous meetings, PUD Treasurer Heather Irelan and Customer Service Program Analyst Cathy Melton presented options for utilizing PPB funding as another option. 

The Public Power Benefit program allocates funding to community-minded projects within the PUD’s domain, using earnings from surplus power sold on the wholesale power market. The options could either eliminate or minimize the rate adder, which has been widely unpopular amongst residents, businesses, and even PUD commissioners.

The PPB has about $10 million in funding to allocate for 2024, $8.35 million of which is spoken for in other projects. The first option Irelan and Melton presented was to use the entirety of the remaining $1.65 million for PWD.

“The upside to that is that it would provide certainty and transfer the funds immediately,” said Irelan. 

However, the allocation would not allow time to apply for grants and would not allow for other community projects to receive funding. Similar considerations were presented in option two, which would plan for lump sum funding in the 2025 allocations, which is estimated to be only $6 million.

Commissioners were unanimously in support of utilizing PBB funding and largely in support of option three, which would align the funding allocation with the capital project schedule and allow time to seek out grant funding. 

“My recommendation is to use Public Power Benefit to begin that process with a clean slate, not ask for any adder of any kind, and to give our staff as well as the community just a clean foundation. You know, welcome to the PUD utility group; you're going to pay what everybody else pays…And we're going to run a great program for that community as we do in other communities,” said PUD Commissioner Steve Mckenna.

Both Ray Schmitten and Shawn Cox of Blue Bird Inc. and Hi-Up Growers expressed gratitude and favorability to the new proposals. Both had attended a majority of the recent meetings to voice their concerns about the rate adder.

“We feel listened to. We feel like the community of Peshastin had some concerns. They voiced their concerns. We were allowed to express the way we felt it should be, and it feels good to see the process work,” said Schmitten.

Commissioners decided to defer funding decisions to a later date in order to better study the options at hand.

“Hopefully one of the takeaways is that this commission really does care about Peshastin as a community, and we want to do what's right and fair for not only Peshastin, but for all of our customer owners,” said PUD Commissioner Kelly Allen.

Taylor Caldwell: 509-433-7276 or taylor@ward.media