For More Information Contact:
Lance Robertson, 984-4716 or 954-7509 (cell)
Eugene Water & Electric Board

Commissioners to hold hearings on proposed rate increase

Eugene Water & Electric Board commissioners will conduct public hearings on Sept. 7 and Oct. 5 on a proposed 5.4 percent electric rate increase.

The increase would pay for higher Bonneville Power Administration electricity costs and will provide EWEB with financial stability during future low-water years.

If adopted by the elected board following the Oct. 5 hearing, the increase would be effective with November bills. The increase would add $4.27 to the monthly bill of the average residential customer who uses 1,050 kilowatt-hours of electricity. Most commercial customers would see rates increase between 3.4 percent and 5.2 percent.

Both hearings will be held during the board's regular meetings on Sept. 7 and Oct. 5, which begin at 7:30 p.m. in the North Building at EWEB, 500 E. Fourth Ave.

About one-third of the increase will cover higher BPA power costs. The federal agency, which supplies EWEB with about 75 percent of its power, is increasing the cost of the electricity it sells to EWEB by about $2.6 million.

The remaining two-thirds of the 5.4 percent increase would provide greater financial stability during low-water years. Like many Northwest utilities, EWEB needs water to generate hydroelectric power. When river levels fall due to a lack of rain and snow, power generation and revenues decline. The region is in the middle of the fifth consecutive year of below-average precipitation - the third driest five-year period since 1929. Due to lost hydropower generation, EWEB expects its power-sale revenues to fall short by almost $8 million in 2004.

As a result, EWEB is taking a more conservative approach to budgeting. Beginning in 2005, the utility will assume that only 85 percent of the normal amount of water will be available for hydroelectric generation, reducing the amount of revenues for the general operating budget by $13.5 million per year.

The rate increase, combined with about $1 million in spending cuts and revenues generated by the existing surcharge, will provide EWEB with the financial stability needed during future low-water years. In normal water years, the additional revenues will be used to build cash reserves - a planned "rainy day fund" for dry weather.

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