In July, the Bonneville Power Administration (BPA) announced an increase in the cost of power it provides to not-for-profit public utilities like Oregon Trail Electric Cooperative (OTEC) of approximately 9 percent. The board of directors at its August board meeting approved an average rate increase for all rate classes of 4.38 percent. For OTEC’s more than 25,000 residential members, the increase will be reflected in the monthly delivery charge, increasing it from $18 to $21.56, with no increase in the actual cost of electricity. This will limit the monthly increase in the delivery charge for every residential customer to $3.56.
“BPA’s rate increase means that, unfortunately, our co-op is facing a major increase in the cost of the electricity that we purchase for our members,” said Werner Buehler, OTEC’s chief executive officer. “In fact, the electricity we buy from BPA accounts for over half of our cost of doing business.”
Because wholesale power costs account for more than half of OTEC’s cost of operation, OTEC will need to pass this increase through to members. Buehler noted that in the last 12 years, OTEC has only had to raise rates by 4.8 percent, less than 0.4 percent a year, to cover increased OTEC operating expenses. All other rate increases have been a direct pass through of increased BPA power costs.
OTEC Board President Greg Howard said, “The focus for the board is ensuring that our rates remain among the lowest rates in the nation. We know that any increase in expense for our members is a hardship, and we will continue to do everything we can to mitigate the increased costs of doing business for our members.”
The cost of doing business continues to rise for electric utilities, and OTEC is no exception. However, the overall rate increase of 4.38 percent on average for all OTEC rate classes does not include any funds for OTEC to offset the steady increases in the cost of fuel, labor, equipment and materials.
Oregon Trail Electric will raise electric rates beginning October 1. Members will notice the increase in electric bills mailed after October 1.