| October 9, 2001 For More Information, Contact: Lance Robertson Eugene Water & Electric Board 541-984-4716 E-Mail Lance Robertson
EWEB Raises Electric, Water RatesThe monthly bills Eugene Water & Electric Board customers begin receiving in November will reflect a major change in EWEB's rate structures for both electricity and water consumption. On Sept. 21, EWEB Commissioners increased electric rates by an average of 33 percent, including a 36 percent increase for residential customers, and raised water rates by an average of 11.4 percent. As part of the increases, the board adopted "tiered" rate structures for residential customers that are aimed at encouraging conservation. The water rate increase also includes separate "pumping" charges for customers who live at higher elevations. EWEB's cost of purchasing the bulk of its electricity from the federal Bonneville Power Administration is the predominant reason for the electric rate hike. On Oct. 1, EWEB's cost of acquiring electricity from BPA rose by 63 percent, due to the increase in Bonneville's wholesale power rates, higher transmission fees and other BPA-related factors. Bonneville supplies more than two-thirds of the electricity EWEB needs to serve its 80,000 customers. Although many other utilities have tiered rates (Salem and Seattle, among others), the new structure marks a departure in the way EWEB charges residential customers for the electricity and water they use. For electricity consumption, the tiers more closely mirror EWEB's cost of acquiring electricity from various sources, with the highest tier reflecting the power EWEB now buys on the volatile spot market. An analysis of consumption patterns by EWEB's staff also showed that tiered rates would soften the blow of skyrocketing rates for most customers. More than 70 percent of EWEB customers will see their bills rise less with a tiered rate structure than with a flat rate increase of 36 percent, according to the analysis. "With the dramatic increase in the cost of purchased power, flat rates are no longer a fair or equitable way to charge our residential customers," said EWEB Commissioner Susie Smith. Tiered rates will reward customers who already have invested in energy-conservation measures, while customers who are in the highest tier have "opportunities to lower their bills by improving the efficiency of their homes and appliances," she added. Beginning with November bills, residential electric rates will be divided into three tiers, or "blocks." All customers pay the same rate for the first 800 kilowatt-hours of electricity consumed, then a higher per-kWh rate for each successive block. The third block begins at 3,001 kWh in the winter and at 1,701 in the summer. Customers will pay 3.276 cents per kilowatt-hour for the first 800 kWh of consumption, 4.717 cents per kWh for consumption in the second block, then 6.33 cents for consumption in the third and highest block. Here's an example of how tiered rates will work for a customer who consumes 1,800 kilowatt-hours of electricity in September:
At 6.33 cents per kilowatt-hour, the pay-back period for investing in solar hot water heaters and other conservation measures will be much shorter, said Mat Northway, EWEB's Energy Management Services Manager. For example, a family of four with consumption in the highest tier could save enough electricity to pay off the cost of installing a new solar hot water heater in about seven years instead of the usual 10 years, Northway said. "Tiered rates help reward customers who conserve by letting them avoid the most expensive part of their power bill with their conservation," said Northway. "Conservation is just that much more cost-effective with tiered rates." Water rates also are subject to tiered and elevation-based "pumping" charges. The consumption rates range from 82 cents per 1,000 gallons in the first block to $1.89 in the third tier. The elevation charges range from 19 to 58 cents per 1,000 gallons. -30-
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