PORT TOWNSEND — Jefferson County Public Utility District commissioners have approved rate increases for 2017.

Customers will see an increase in their bills starting Jan. 1 that includes a $7.01 hike in service charges, taking it from the current $7.49 to $14.50.

In June, customers will see a 1 percent increase in the utilization rate, which will affect customers differently, depending on their electricity consumption.

The rate increases approved Tuesday are the first in three years, according to District 1 commissioner Barney Burke.

Rates stayed stagnant for three years to allow the PUD to assess what kind of annual revenue the PUD will need for staffing, infrastructure upgrades and annual expenses, according to the meeting documents.

However, the main reason for this rate increase is the cost of power. The Bonneville Power Administration has increased the cost by 6 percent since the PUD took over as East Jefferson County’s electrical power provider in 2013 and is expected to increase another 4 percent in 2017, officials said.

Also, the PUD seeks to bring in more funding to pay off a loan from the federal Rural Utilities Service that was taken out to pay for electrical utility. The public utility is required to maintain a ratio of income to debt, officials said.

A rate increase proposal was presented at a public hearing in November.

Burke, who will be replaced by Jeff Randall in January, said these increases are a step in the right direction for the PUD.

According to PUD meeting documents, the financial state of the PUD will be re-evaluated in the third quarter of 2017 to determine any 2018 rate changes.

Jefferson County voters authorized the PUD to pursue acquisition of electrical power service from Puget Sound Energy in November 2008. It took over as the electrical power provider in April 2013.

The base price of the PSE infrastructure, $103 million, was adjusted by as much as $5 million to cover improvements PSE had done.

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Jefferson County Editor/Reporter Cydney McFarland can be reached at 360-385-2335, ext. 55052, or at cmcfarland@peninsuladailynews.com.