Manager’s Message – January 2023
As we have been discussing for the last few months, due to the ongoing drought and high market power prices, Plumas-Sierra Rural Electric Cooperative (PSREC) will be adding a wholesale power cost adjustment starting for January usage on power bills mailed out at the end of January. The WPCA will be 2 cents per kilowatt-hour for the first quarter.
The WPCA will be adjusted quarterly depending on conditions as the year progresses. The biggest drivers of the WPCA charge are the lack of our federal hydropower due to extremely low reservoir levels at the Bureau of Reclamation dams in California and extremely high wholesale prices for power and natural gas throughout the Western United States. The wholesale prices are comparable to the worst of the 2000 power crisis.
At a rate meeting, a comment was made that PSREC raises rates when prices go through the roof, but we don’t give it back when things are wet. I’d like to address this.
There are 2 types of rate increases. The first is a base rate increase, which is driven by specific cost increases that aren’t going away. There is continuous pressure on our costs due to inflation—whether it’s high or low—and there are increased costs due to our being in the California Independent System Operator. The CA ISO controls transmission rates, and PG&E has been successful in getting approval for the highest transmission rates in the country. There is no prospect in a reduction of costs until we get at least partially out of the CA ISO.
In addition, there are regulatory requirements, including the rules requiring all utilities to eventually provide 100% of their energy through clean power resources. This requirement puts sustained upward pressure on rates on a continuous basis for years to come.
The second type of rate increase relates to short-term problems—such as the current drought—and high energy prices for the replacement power we need. We will not meet our required financial ratios in 2022; we must raise rates in 2023 to the level required to meet our ratios.
We do pass the savings of wet years to our members. In the past four years, when we had lower power costs than budgeted, we carried those power cost savings into the next year, reducing or eliminating the size of rate increases for the following year. Power costs in 2022 impacted our overall financial situation. It is likely the next wet or “good” year for power costs will be used to rebuild our cash position and we may have to extend the WPCA into 2024 due to the cost of power cost spikes in both the late summer and then in December of 2022.
If we beat our budget in non-power parts of our utility, we use those margins (savings) to reduce our borrowing for capital projects, giving the members multi-year savings.
We are a cooperative. Our members are the stockholders. When things go well, the board decides the best balance of short-term and long-term use of funds to benefit members. It all goes back to you, but not always as visibly or as memorably as the pain of a rate increase.
We were off to a great start with snowfall in mid-December, but what matters to power costs is how strong the snowpack is in April and how full reservoirs will be in the summer.
In 2022, Plumas-Sierra Telecommunications received project grants from the California Advanced Services Fund. These projects include portions of Elysian Valley, Doyle, Herlong, Honey Lake Valley and part of the Susan River Valley, and parts of the Sierra Valley, Old Truckee Road and Loyalton. Installations have begun in some parts of Loyalton; reach out to our office to see if service is available at your home.
Additionally, the Ponderosa Boulevard and surrounding area in Janesville is open for fiber installations. PST expects to start work on the Galeppi Ranch and Carol Lane East area in early winter, as conditions allow. We await final approval for the project that runs from the Mohawk substation (by Little Bear campground) to Spring Garden and through Greenhorn Ranch. We hope to begin construction once the snow melts.
PST will apply for additional CASF Grant funding in 2023 to allow PST to continue bringing service to areas in our region that are harder to reach. For our members, we apply for all the grants we can to keep filling in new service areas.
Check availability for your location at www.pst.coop or by calling (530) 832-4261. PST’s internet services are unlimited; you don’t have to worry about data caps. PST offers speeds up to 1 gigabyte per second on fiber optic service. To learn more about services or get on the interest list, visit the Plumas-Sierra Telecommunications website or call (530) 832-4261.
Continue To Be Prepared for Outages
Winter is here, and though PSREC has invested in system improvements, removed hazardous trees and maintained the system, outages can and will happen. Being prepared can help make the best of a bad situation. Visit www.psrec.coop for information on outage preparedness and electrical safety.
PSREC’s outage notification system provides localized outage information to members via text and email. To view the most up-to-date outage information or to report an outage, log into the PSREC SmartHub app on your Apple or Android device or log in on our website. All outages should be reported to PSREC—day or night—at (530) 832-4261 or through the app.
PSREC and PST will offer scholarships to students who receive either electric or internet services from PSREC or PST at their primary residence in Plumas, Sierra, Lassen and Washoe counties. Applications and more information can be found on our website. The deadline is April 28.
Plumas-Sierra participates in the Washington Youth Tour program. This program provides an enriching experience to local youth that helps them discover themselves and their roles as citizens. It also introduces them to the cooperative way and teaches the value of involvement and commitment to their communities.
The Washington Youth Tour application deadline is January 13. More information is available at www.psrec.coop or by calling the member services department at (530) 832-4261.