McKenzie Valley electric service territory realignment study reaches key milestone
EWEB Commissioners approved a resolution authorizing the General Manager to negotiate and execute agreements with Lane Electric Cooperative regarding a potential realignment of electric service territory in the McKenzie Valley at the Board’s December meeting.
The area under consideration includes approximately 3,000 customers between Thurston Road and Vida.
This milestone reflects a significant step forward in a collaborative evaluation by both utilities to examine whether transferring the McKenzie Valley from EWEB’s service area to Lane Electric could improve efficiency, enhance reliability, and make better use of each utility’s resources.
Expressing support for the realignment, EWEB Commissioner Mindy Schlossberg noted that EWEB is structured to serve a dense, urban population, while Lane Electric is designed to meet the needs of rural, low-density areas like the McKenzie Valley.
“This realignment would allow EWEB to do what we do best and Lane Electric to serve upriver customers in a way that better serves customer needs,” Schlossberg said.
Because EWEB customers in the McKenzie Valley live outside Eugene city limits, they do not have the ability to vote for an elected representative on the utility Board. Schlossberg, who has served on the EWEB Board since 2019, represents all EWEB customers in the at-large position and is currently serving as vice-president of the board. “The concern I hear the most from upriver residents is a desire for direct, elected representation. A territory realignment would provide that,” she said.
The potential transfer includes only electric service and does not involve EWEB’s power generation assets or any agreements with customers related to drinking water source protection.
McKenzie Valley is more costly for EWEB to serve
One of the key reasons EWEB is evaluating a territory realignment is the higher cost of serving the McKenzie Valley, and the need to manage expenses in a way that protects affordability for all customers. These elevated costs stem from factors like remote infrastructure access, increased vegetation management needs, and the extended travel required for urban-based field crews.
A Cost-of-Service Analysis, conducted as part of EWEB’s budget and rate-setting process, found that the cost of providing electric service in the McKenzie Valley is about 21% higher than the revenue currently collected from that area. Normally, this would support the creation of a distinct “upriver rate class” to better reflect the cost of service. However, because EWEB and Lane Electric are evaluating a potential service territory transfer, all EWEB customers — including those in the McKenzie Valley — will see the same overall electric rate adjustment beginning in February 2026.
If the transfer does not move forward, EWEB management will then seek Board approval to implement the higher rate in the McKenzie Valley, to ensure rates are aligned with the cost of providing service to that area.
What’s next?
Draft agreements are currently under iterative development between EWEB and Lane Electric management, with both utilities emphasizing a joint commitment to a careful, collaborative process and creating long-term value for the communities served.
If the evaluation supports a transfer, EWEB and Lane Electric plan to work together to negotiate all necessary terms — including asset valuation, power-supply agreements, and the transfer of customer accounts — with the goal of reaching a target service-transfer date of May 1, 2026.
Even if electric service transfers, EWEB will continue to maintain its water and generation assets upriver.
“The McKenzie River is a legacy part of EWEB and has shaped our organization for more than 100 years,” said EWEB Commissioner John Barofsky. “The valley and watershed remain our number-one source of drinking water, and we will continue to invest in its protection for the well-being of valley residents and the community of Eugene.”
Read more about the potential service territory realignment.
