As a customer-owned utility, EWEB does not operate to earn a profit or to serve the investment needs of stockholders. Prices are based on the costs to serve our community with safe, reliable water and electricity.
EWEB has a solid track record of avoiding rate increases for customers. Electric and water prices have not increased since 2016. During this time, we have been able to maintain funding for limited income programs, conservation, and infrastructure investments.
In recent years we have avoided price increases by managing the costs that we can control, such as delaying or reducing certain capital projects, and restructuring debt. Some costs, such as the price of purchased power, are out of EWEB's control, but smart financial management has allowed EWEB to absorb multiple years of price increases from Bonneville Power Administration (BPA) into the budget without passing along a change to customers.
Our proposed 2022 budget reflects investments to ensure we can continue to provide safe and reliable water and electricity even as critical infrastructure ages and new challenges arise.
After five years of stable prices, EWEB will likely need rate increases to support utility operations and continued investments. However maintaining affordability will always be an important principle.
This year we will use a three-year forecast to develop and propose customer rates for the years 2022-2024, with yearly rates and customer class assessments planned each fall as part of the annual budgeting process.
The following are projections for 2022 based on the Board's strategic and operational guidance, economic assumptions, and proposed capital investments. The EWEB Board of Commissioners will approve a final 2022 budget and prices in December.
Electric 2022 projections
Average increase: 3.25% (includes 2.75% general price increase and 0.5% BPA increase)
Water 2022 projections
Average increase: 4%
As a not-for-profit, publicly owned utility, we want to ensure you get high levels of value and service. Our prices cover the cost to provide you with safe, reliable services, maintain utility infrastructure, invest in system improvements, offer energy efficiency incentives and bill assistance programs, and protect the McKenzie watershed, our community's source of drinking water.
The price adjustments in our budget projections will help cover:
A primary focus for 2022 and beyond continues to be updating infrastructure. Some of the major capital projects that we are planning and budgeting for include:
The cost for EWEB to purchase power and bring it to Eugene represents a significant portion of the electric utility's budget. We generate around 20% of the community's power using EWEB-owned or co-owned resources, and the remaining 80% comes from Bonneville Power Administration, other power purchase agreements and wholesale market purchases. These power costs are increasing and becoming more volatile. In the draft 2022 budget, purchased power costs are $21 million higher than 2021.
We begin the price/rate-setting process annually in the summer. Through a series of public meetings, your elected Board of Commissioners provides feedback and direction on spending for major capital projects and potential price changes for customers.
Summer through fall, EWEB staff use direction from the Board to develop a proposed spending budget for the following year.
The final budget is adopted in December following public hearings during which our customer-owners are invited to provide testimony on any proposed adjustments.
July 6: Board reviews strategic and operational priorities, economic forecast assumptions, capital investment plans and Long-Term Financial Plans (LTFPs) used to develop the upcoming year's proposed budgets and 3-year customer pricing schedules.
Oct. 5: First of three public hearings on the 2022 proposed Electric and Water Utility budgets and price proposals. Board provides direction on the assumptions included in the draft budget and on investment levels for future capital plans. Based on Board direction, staff will develop budgets and price proposals for consideration at the November Board meeting and approval at the December meeting.
Nov. 2: Second of three public hearings on the 2022 proposed Electric and Water Utility budgets and price proposals. Based on Board direction, final proposed budgets and prices will be prepared for the December meeting.
Dec. 7: Final of three public hearings on the 2022 proposed Electric and Water Utility budgets and price proposals. Staff will recommend approval of the proposed 2022 budgets and pricing updates.
City of Eugene residents elect five commissioners to four-year terms to form the EWEB Board of Commissioners. The elected Board is responsible for overall governance of the utility.