Council Raises Rates for HES Customers

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Beginning in May, electric rates for Hermiston Energy Services customers will increase by nearly 11 percent after the Hermiston City Council voted Monday to raise rates for the first time since 2003.

[quote style=”2″]Rate Increase Takes Effect in May[/quote]

For the past several years, Hermiston Energy Services (HES) has been dipping into its reserves rather than raise its customers’ rates in order to make up for the increased costs charged by the Bonneville Power Administration.

But, said HES Superintendent Nate Rivera, that’s not a successful business model. Two weeks ago, Rivera recommended that the Hermiston City Council raise rates for HES customers for the first time in 12 years. On Monday, the council did just that.

Beginning in May, HES customers will see their utility rates go up nearly 11-percent, followed by a 9.5-percent rate hike in May 2016.

Rivera said that even with the increase, HES customers will pay an average monthly bill of $112 compared to $113 for Umatilla Electric Cooperative (UEC) customers, and $121 for Oregon Trail Electric customers. The current average monthly utility bill in Oregon is $158, and the average national monthly utility bill is $208.

HES was formed in October 2001 when Hermiston purchased Pacific Power’s local distribution facilities. The average monthly bill for Pacific Power customers is currently $193. HES serves about 5,300 customers – or about 63 percent of Hermiston.

HES is also taking steps to improve customer service with a focus on reducing outages. Two weeks ago, Rivera told the council that HES customers have experienced an increase in outages during the past several years. In 2014, HES customers experienced an average of 2.512 outages compared to 0.191 for UEC customers.

“Reliability is trending downward,” Rivera said, citing equipment that is 30 years old in some cases.

To address reliability issues, Rivera said HES will convert to an Advanced Metering Infrastructure system that will increase response time during outages, and will partner with UEC to build a new substation on the east side of town – a move, said Rivera, that will also provide for additional capacity for HES.

Hermiston City Councilor John Kirwan said the rate increases are a necessary step.

“This is something that needs to be done so we can get the power grid up to snuff,” he said.

HES customers will see the increased rates on their June bills.