Baker City, Oregon (OTEC) — Local electricity bills are set to increase by $4.00 for residential members effective with bills rendered in November.
In July, Bonneville Power Administration (where OTEC buys its clean hydroelectricity from) announced that on “average”, there would be no increase to the cost of wholesale power for 2019-2020. Unfortunately, OTEC was not an “average” utility as defined by BPA. Based on details given to OTEC at the end of July, OTEC’s cost of power will increase by 3.97 percent.
A Cost of Service study conducted by an independent consultant showed that a rate increase was necessary to ensure OTEC recovers enough revenue to sustain business operations for the long term, in order to continue providing safe and reliable service to its members at competitive rates.
During the August & September board meetings, OTEC’s Board of Directors approved an average rate increase of 2.71 percent. Rate increases vary by class
For OTEC’s 22,000 residential members, the increase will be shown in the monthly Delivery Charge, increasing the charge by $4.00 from $29.50 to $33.50 effective with bills rendered on or after November 1.
The energy rate per kilowatt hour (kWh) will remain unchanged for residential members.
By staying away from a rate increase that impacts actual usage, residential members are not negatively affected for using more energy when they need it, particularly for heating their homes during the colder months of the year.
OTEC knows that any amount of rate increase is difficult for our members. But, by avoiding a rate increase to the per kilowatt hour energy charge, the rate increase remains the same ($4.00) regardless the amount of energy used in their homes.
Because we know a rate increase could be more difficult for some of our residential members than others, OTEC distributes more than $1 million each year to help manage or reduce monthly electric bills. We offer online services to help our members manage their usage on a daily basis. Additionally, we have over 20 different rebate programs for energy efficiency projects and upgrades to their homes and business.
Wholesale power costs account for more than half of OTEC’s cost of doing business, which is why these cost increases are passed through to members. Over the last 15 years, OTEC has kept our needed cost increases at 0.95% on an annual basis, while overall inflation has increased in excess of 2% annually for the same period. OTEC is committed to keeping service reliable and rates competitive.
OTEC continues to deliver electricity at a good value, especially when compared to other cooperatives nationwide. According to OTEC’s lender, Cooperative Finance Corporation, compared to other borrowers, OTEC’s rates are in the lower 10% of cooperatives nationwide and fifth lowest in Oregon in 2019 of cooperatives who borrow exclusively from CFC.