Pasco weighs PWRF rate paths as processors warn hikes could damage local businesses

Pasco officials presented four financial pathways on Monday to address a continuing operating deficit at the Process Water Reuse Facility (PWRF), and local industrial customers warned that abrupt rate jumps could threaten their businesses.

Director Sarah told the council the utility ended 2025 operating at a deficit and projected another shortfall for 2026. Staff outlined four options: (A) adjust rates to cover all shortfalls immediately (steep hikes), (B) freeze rates and use the $66 million federal investment tax-credit balance as a subsidy (risking a large cliff when funds are exhausted), (C) use only interest generated by the federal balance to modestly reduce increases, and (D) a gradual 5–7% annual increase combined with limited tax-credit principal withdrawals to smooth costs over nine years.

Local processors urged caution. Brandon Moss of Oregon Potato Company and operations representatives said the post-upgrade rate increases already imposed were significant and that additional sharp increases could make operations unsustainable or drive processors away. "We can't lose a processor," a processor representative said, noting that the facility’s capital and operating costs had risen materially after the upgrade.

Council members expressed sympathy for processor concerns and favored a more gradual path while staff pursues operational improvements, renegotiation of contracts and potential new revenue streams such as controlled receipt of trucked organic waste. Several council members said they favored option D as a balanced approach to preserve the long-term viability of both the utility and its industrial customers.

Next steps: staff will continue to work with the stakeholder workgroup, pursue operational efficiencies with the treatment partner and return to council with a refined recommendation and timing for any rate adjustments to take effect in 2027 if approved.