Chelan PUD is expanding its upper valley services after PUD commissioners approved negotiations to take over the Peshastin Water District.

PUD water and wastewater manager Ron Slabaugh says the acquisition will cost very little money.

“We aren’t going to pay anything for this system, except there are some existing loans and debt on those assets that cannot be transferred,” said Slabaugh at Monday's PUD commission meeting. “So, we will have to pay off that debt on those assets.”

Slabaugh also said there will be a transition period to move Peshastin customers into the PUD's system, and to prepare the PUD to fully own, operate and maintain the Peshastin water system. upon closing the deal.

In addition, Chelan PUD intends to retain full rights to set rates and fees to properly operate the Peshastin facilities in accordance with PUD strategic planning and future financial policies.

The PUD wants the takeover to come at no cost to its existing customers.

Chelan PUD rates are estimated to cover all the expenses surrounding the Peshastin Water Distgrict, including its debt service.

The Water District adopted a rate plan with a 4 percent annual increase to its customers through 2031.

Calculations from the PUD show Peshastin District customers would pay about $5 more per month in 2022 compared to PUD rates.

The PUD also plans to invest $3.1 million into improvements to the water system in Peshastin. They include $1.9 million for a new well.

The improvements could increase the water bills of residential customers in Peshastin by up to $38 a month until the improvements are paid off, possibly for the 20-year length of a loan.

PUD staff point out that Peshastin customers would be responsible for the cost of the improvements, whether or not the PUD acquired the system.

The actual rate customers in Peshastin would pay will not change.

Chelan PUD plans to apply for all feasible grant funding, such as system acquisition funding through the Washington Dept. of Health.

The PUD has decided to specifically not pursue a $1 million grant through the Washington Dept. of Commerce because of its compliance and administrative requirements.

The transition of the Peshastin Water System to ownership and operation under the Chelan PUD should take place in 2023

“The due diligence that’s been performed, I think, on both sides of understanding the ramifications of this has been tremendous,” said commissioner Randy Smith at the Monday meeting. “I just want to thank all parties involved for taking the time to make sure we get this right.”

Chelan PUD and the Peshastin Water District first started talking about a possible merger in 2016.

More From NewsRadio 560 KPQ