EUGENE, Ore. (KMTR) -- As the colder weather creeps in, the Eugene Water & Electric Board (EWEB) is going back to its Board of Commissioners with a proposal to raise electric rates by 8% and water rates by 30% for all of its customers.
EWEB estimates that the proposed rate hikes will cost typical customers about $15 a month if the proposals are passed. If passed, the rate hikes would go into effect in 2013.
Rate hikes are certainly a familiar story for the utility. EWEB’s electricity rates have increased three times since May 2011. In total, customers have seen their rate go up more than 13% since then.
EWEB says there are varying reason for the rate hikes due to the circumstances facing both its electricity and water operations.
The proposed 8% electricity hike breaks down into three different factors. EWEB says about 4% of the rate hike will go toward the Bonneville Power Administration’s rate increases.
About 2% of the rate hike will cover re-licensing and repairs to the Carmen-Smith Hydro Dam. The remaining 2% will cover rising operations costs including the higher price of gasoline, some employee raises and unfunded employee retirement costs, as well as the locked-in costs of renewable power, like EWEB’s wind energy farm in Washington.
EWEB is also dealing with reduced revenue. The utility hasn’t been able to sell surplus electricity on the market, losing $30 to 50 million a year because of that.
“It's one of those financial situations that we simply can't cut our way out of this,” says Joe Harwood, Communication Coordinator for EWEB.
The other rate hike EWEB is proposing is a 30% increase in water rates. While operating costs for water service remain the same, EWEB says it’s losing considerable revenue from water sales because of a decrease in local water use with the recession. The utility says no matter how much water it pumps, the cost to operate are virtually the same.
"Without the electric and water rate increases, you start to cut back on infrastructure replacement. You cut back on reliability and you can really do some serious damage to the utility. One of the things our customers say - we survey them every year -what they want most is they want reliable electricity, clean water and they want affordable rates,” says Harwood.
EWEB has cut its budget by $6.5 million over the last three years. It’s also proposing another $7.5 million in cuts next year. EWEB also cut 51 jobs - or nine percent of its workforce - in 2011. The cuts included 31 layoffs and thirteen open positions being axed.
EWEB is proposing these rate hikes for the first time Tuesday night, October 16 and they’re encouraging public comment. The meeting starts at 7:30 PM; no vote will be taken until the last meeting.
There’s another chance for public comment on November 6 at 7:30 PM and December 4 at 7:30 PM. All meetings will be held in the EWEB board room at its headquarters on 500 East 4th Avenue in Eugene. The Eugene Water & Electric Board is Oregon's largest customer-owned utility.