PenLight keeps rate hike down for one year

February 26, 2014 

The Peninsula Light Company is in a unique situation. As the sixth oldest electric cooperative in the nation, it serves more than 31,000 meters, both residential and commercial. And since it mostly distributes electricity the Bonneville Power Administration generates, PenLight’s rates typically go up when BPA charges more for its service.

Not this year.

We reported last September that PenLight planned to hold off on a 9.6 percent BPA rate increase that went into effect on Oct. 1. PenLight CEO Jafar Taghavi confirmed it last week, and he added the utility will be able to absorb the rate hike for the full calendar year.

That’s not to say there won’t be any increases in the future. In fact, PenLight expects the next one to come in January 2015. But the utility has raised its rates only twice in the past decade, and it pushed the hikes from October, when BPA put them into effect, into April on both occasions in order to avoid members’ heaviest use during the winter months.

Those of us who live on the Gig Harbor and Key peninsulas are members of the co-op, but many don’t realize PenLight is a nonprofit organization. It doesn’t have investors who expect returns on their shares.

Instead, PenLight and its member-elected board of directors run the utility as a business with a focus on strategies to help it become more reliable, to make investments to help diversify the type of power it distributes, and to run different types of conservation programs to help members — and, therefore, PenLight itself — spend less money.

Taghavi and the board have kept operating expenses at less than 1 percent growth year over year for the past five years. That’s one of the reasons the utility can absorb such a hefty increase this time around. They’ve also worked with union representatives and other vendors to re-negotiate contracts.

Ultimately, the financial position in which they’ve put themselves has helped to delay a significant impact to peninsula-area residents, and they’re working other angles to help with communication, from a monthly newsletter to Twitter and Facebook messages that keep members up to date on outage information, as well as potential restoration times.

PenLight’s top priority continues to be its reliability program. It’s investing $6.5 million a year from 2008-17 to bury hundreds of lines of cable. It currently has about 70 percent of its system underground, and it’s aiming to bury another 100 miles this year.

Where that’s not feasible, PenLight is exploring other alternatives.

Last year, the utility installed 100,000 feet of tree wire — a durable, plastic-coated conductor — and it plans to double that in 2014. Those efforts have helped with vegetation-related outages in places like Rosedale, Artondale Drive, Point Fosdick Drive near the Uptown Gig Harbor Shopping Center and Jackson Lake on the Key Peninsula. It also invested in smart technology that allows linemen greater accuracy when it comes to predicting where an outage has occurred. The faster they can identify it, the sooner they can identify the problem, and, therefore, restore power.

PenLight once rated in the fourth quartile — the lowest nationwide for reliability based on outage frequency and duration — and after several years of being in the second quartile, it’s now in the lower ranges of the first quartile, something that’s remarkable, considering the weather and geography of the area.

One more project that’s expected to be complete in the first half of the year is a second point of connectivity with BPA. Instead of just the one connection with the Tacoma transmission tower across the Narrows, PenLight is about to complete a circuit near Allyn that would allow another access point for electricity in case the main line has a catastrophic failure.

We hope that never happens, but we’re glad PenLight leaders are looking forward — in many ways — and planning for the future.

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