Snohomish PUD plans 6.5% rate hike to absorb City of Everett wholesale water cost spike

Snohomish PUD plans 6.5% rate hike to absorb City of Everett wholesale water cost spikeSnohomish County Public Utility District is preparing to pass through a 21% wholesale water cost increase from the City of Everett, driven by a newly imposed 12% utility tax and rising filtration expenses.

The City of Everett supplies approximately two-thirds of Snohomish PUD's water, representing 30% of the utility's operations and maintenance costs.

Everett's wholesale rates for 2027 are projected to be 21% higher than Snohomish's 2026 budget, adding approximately $1 million in costs for a total of $5.79 million.

The proposed 6.5% pass-through adjustment will be applied equally across all rate classes effective January 1, 2027, pending board approval on October 6.

Snohomish County Public Utility District (PUD) is advancing a 6.5% pass-through rate adjustment for its water customers to offset a significant wholesale cost increase from its primary supplier, the City of Everett. During a September 15 meeting, Chief Water Operating Officer Jeff Kallstrom outlined that Everett's wholesale rates for 2027 will be approximately 21% higher than the PUD's 2026 budget. The spike is largely attributed to Everett replacing a 6% payment in lieu of taxes with a 12% utility tax on August 1, 2026. Additionally, Everett implemented mid-year rate adjustments related to water filtration costs. Snohomish PUD purchases roughly two-thirds of its water supply from Everett, with the remaining third generated internally. This purchased water accounts for 30% of the PUD's total operations and maintenance costs. For 2027, the PUD forecasts its purchased water costs will reach $5.79 million, an increase of about $1 million over the 2026 budget. Kallstrom noted that Everett's cumulative rate increases since 2019 total approximately 35%. He attributed the cost pressures to industry-wide challenges, including new contaminant regulations, cybersecurity, climate resilience, and aging infrastructure requiring capital upgrades. The PUD's Water Utility Pass-Through Policy allows the Board of Commissioners to adjust retail rates to reflect wholesale cost changes from Everett, preserving transparency by isolating the incremental cost impacts. The proposed 6.5% pass-through will be applied equally across all customer rate classes. The Board of Commissioners is scheduled to vote on a resolution authorizing the pass-through adjustment on October 6, 2026. If approved, the new rates will take effect on January 1, 2027.