Students may see their electric bill go up for the second time in six months.
Eugene Water and Electric Board commissioners met Tuesday to discuss increasing residential rates by 2.6 percent to bridge EWEB’s $40 million budget deficit. The board is expected to reach a final decision at their March 5 meeting. They will also continue to examine pay cuts, pay freezes and short term bonds as other funding options.
EWEB implemented a 36 percent rate increase in November 2001. The proposed increase would average $2.25 on a monthly bill and be eliminated by the end of 2004.
“It’s not something that would be long-term,” board president Dorothy Anderson said.
Energy consultant and former EWEB board member Jeff Osanka said EWEB’s talk of another rate increase is troubling.
“I think rate increases hit those least able to pay, like students and seniors,” he said. EWEB, like many other Northwest utilities, is struggling to raise cash to pay off loans taken out during last year’s energy crisis.
Energy deregulation and a severe Northwest drought drained the local utility’s coffers and left EWEB struggling to overcome a $40 million debt.
EWEB buys nearly 10 percent of its power on the open market and was hurt last year by energy brokers such as Enron who sold power at prices as high as $1,000 per megawatthour. The situation worsened with last year’s drought because EWEB generates most of its own power through hydroelectricity.
Northwest Power Planning Council spokesman John Harrison said the water shortage was also severe in the Columbia River Basin, where the Bonneville Power Administration provides 70 percent of EWEB’s power.
“Utilities burned through cash; they might as well have been lighting the money on fire,” Harrison said.
To avoid being gouged at high rates, EWEB bought six-month electricity contracts at $300 per megawatthour and then was forced to commit to them even when
the Senate temporarily capped megawatthour rates at $20; they now average $22.
Osanka said EWEB wouldn’t be in a predicament right now if they hadn’t taken a risk with energy purchases.
“EWEB was buying power on the open market,” he said. “They should have stayed out of the game.”
Harrison said EWEB was just one of many utilities burned.
“Everyone took a risk here,” he said. Buying power on the open market “is all about risk.”
Anderson said the board is doing their best to make up $40 million without gouging EWEB’s 80,000 customers.
“We’re going to have to be prepared to make more cuts to avoid raising rates,” she said.