For More Information Contact:
Joe Harwood, 541-685-7471
Eugene Water & Electric Board

March 1, 2011

EWEB to consider electric rate increase

Eugene Water & Electric Board commissioners will hold the first of two public hearings on Tuesday, March 1, to gather public comments about a proposed electric rate increase that would take effect on May 1.

Tuesday’s regular Board meeting will start at 7:30 p.m. in the North Building at EWEB headquarters, 500 E. Fourth Ave.

The primary and overriding driver of the electric rate increase is higher power-related costs. EWEB’s cost of renewable power investments has increased debt payments and has resulted in higher overall power costs at a time of diminishing power sales revenue. The utility also is facing lower revenues due to a significant drop in the price it can charge for the surplus power sold to other utilities.

The proposed overall 3.1 percent electric rate increase would help EWEB balance the higher costs of renewable power investments with the recession-related drop in wholesale power prices, which decreases the surplus power sales revenues the utility counts on to keep rates low.

The effect of the proposed rate action would result in an increase of about $2.85 per month, or 3.3 percent, for the average residential customer.

EWEB anticipates an additional 5 percent electric rate increase in the fall of 2011, exclusively to pass through an increase in wholesale power purchases from the Bonneville Power Administration.

Power-related costs and lower power-sales revenues, which are largely out of EWEB’s control, will account for about 90 percent of the utility’s cost increases in 2011. These power-related costs and revenue losses are so large that they cannot be offset by spending cuts without significantly affecting electric and water service reliability and other customer services.

EWEB has already cut its 2011 budget by $2.5 million to lessen the impact of the proposed May 1 rate increase. In addition, EWEB plans to draw about $6.3 million from its cash reserves to balance the 2011 budget. Throughout 2011, EWEB will continue to seek additional operational and labor-related savings to better position the utility for 2012 and beyond.

A second public hearing on the proposed electric rate action will be held on April 5.