After months of deliberation, the Eugene Water and Electric Board voted unanimously last night to enact a 5.4 percent increase in Eugene residents’ electric rates.
This is significantly lower than the previously proposed 15 percent rate that EWEB’s board had been considering before. The board was faced with deciding on an increase after this year’s drought and the deregulated energy market in California drove market prices up.
The Bonneville Power Administration, which provides almost half of EWEB’s generated power, is also planning on raising rates as much as an estimated 250 percent next October.
A fifteen percent increase was still one of three increase options EWEB’s Fiscal Services Supervisor Dick Varner proposed to the board at last night’s meeting. Another option Varner proposed was no increase, but it was the supervisor’s recommendation that a 5.4 percent increase would be the most beneficial to the community.
“The staff feels that a 5.4 percent increase is moderate enough that it would be supportive of our financial needs and still send the appropriate price signals to encourage consumer conservation,” Varner said.
Board President Dorothy Anderson agreed, saying that no one wants to see a 15 percent increase, but no increase would be short-sighted.
“We don’t want to be forced to endanger our reserves,” Anderson said.
Varner and the EWEB staff decided not to propose the previously discussed inverted rate model, which would charge residents more for the power that exceeded a certain level of use.
Varner said a flat rate would be more effective to enact now than an inverted rate model.
Public opinion has been split between an inverted rate and a flat rate, and on Tuesday night, one community member said he supported the inverted rate because it would best promote power conservation.
“The purpose of the board should not be to protect some people or some businesses, but to promote conservation, ” Bob Cassidy said. “Save the salmon, keep the air clean and promote conservation.”
Hugh Perrine, another Eugene resident who came to speak about rate increases, said the 5.4 percent increase was good, but a 15 percent increase was better.
“We need an increase that reflects the economic reality of what’s happening right now,” Perrine said. “If anything, it’s important to make the increase as soon as possible so people can prepare for them.”
Varner said some EWEB staff members thought a 15 percent increase would send the best conservation signal, but 5.4 percent is the minimum threshold for rate increases to start at.
“This rate sends a good foundation,” EWEB general manager Randy Berggren said.
Despite Varner’s confidence in 5.4 percent as an appropriate increase, EWEB Commissioner Sandra Bishop was still hesitant to make a decision.
“It’s difficult to make a decision when the information we are getting keeps changing,” Bishop said. “But I know we need to take action in this sitting.”
EWEB Vice President Peter Bartel agreed that a decision needed to be made, and said the board should vote on the 5.4 percent if that was the most beneficial to the public.
“If 5.4 percent gets us to a safe place, then let’s do it,” Bartel said.
The board also looked at what EWEB can do within its own business to cut back on electricity use, and how businesses on special contracts could help in the conservation efforts. Both of these issues will be decided at a later date.
The board will also still be looking at the possibility of an inverted rate later in the year.