EWEB Eyes New 5 Percent Rate Boostby Christian Wihtol
Register Guard, September 6, 2011
The Eugene Water & Electric Board wants public comment on its plan to increase electricity rates this fall on the heels of a rate raise just four months ago and with another expected boost this winter or next spring.
The utility is holding a public hearing today on the proposed 5 percent fall rate increase, with a second hearing in October to be capped by a board decision.
The two big drivers behind the latest increase are actions by the Bonneville Power Administration, EWEB said.
BPA, with its hydropower network, is raising the price at which it sells electricity to EWEB. Plus, BPA is reducing the amount of power it sells to the utility, EWEB spokesman Lance Robertson said.
Historically, EWEB has often sold at a profit on the open market some power that it has bought from BPA at below-market rates, Robertson said. With less power from BPA, EWEB will have less to sell at a profit, he said.
"Most of that 5 percent (rate increase) is related to Bonneville and power that we receive from Bonneville," Robertson said.
Another factor in the latest proposed rate increase: Because of the recession, the demand from the utility's industrial and commercial customers is down, Robertson said. That means costs need to spread across fewer customers.
All told, the 5 percent increase will draw in $7.7 million more per year for EWEB.
The rate increase would add about $4.24 a month, or 4.7 percent, to the electricity bill of the average residential customer, starting with November's bill, Robertson said.
EWEB in May pushed through a 3.1 percent rate increase. The utility cited as one factor the price it has contractually obliged itself to pay for power from new sources, including the new Seneca wood-burning plant north of Eugene, which began producing electricity earlier this year.
Robertson said it is unusual for EWEB to put through two power-rate increases in a single year.
EWEB is expecting to propose another electricity rate increase, of perhaps 3 percent to 5 percent, in the winter or next spring, Robertson said.
That will be needed because the pending fall increase is not big enough to absorb the entire impact of BPA rates increases and power-sales cutbacks, he said.
BPA historically has provided local public utilities with all the electricity they wanted, and if the BPA's dams weren't generating enough, BPA would buy more power from other sources and sell it at a blended rate to local utilities, Robertson said.
Now, BPA is shifting its approach, selling to local utilities at a low price only the power that BPA's own dams generate and offering at market rates any additional power local utilities might need, Robertson said.
That pinches utilities that need a lot more power than is provided by their share of BPA's dam-generated electricity.
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