At the beginning of this month, Hermiston Energy Services (HES) implemented Phase II of the Hermiston City Council-approved adjustments to electric rates for all customers.
As a consumer-owned, not-for-profit electric utility, HES adjusted rates based on an independent Cost of Service Analysis and feedback from the council in October 2020 to reduce the impact on customers. HES split these adjustments into two parts – a 6.98 percent increase effective Jan. 1, 2021 and a 6.9 percent increase on Oct. 1, 2021. Customer rates are based on actual usage.
According to the city, the primary factor driving the need to adjust the cost-based rates was an increases in wholesale electricity prices. Over the past four years, HES’s wholesale power provider, Bonneville Power Administration, has increased the cost by about 18 percent. HES’s wholesale power costs comprise over 54 percent of its total operating expenses.
“Rate increases are an unavoidable part of providing utilities. HES has made significant adjustments to its budget over the past two years by deferring some maintenance and using financial reserves to delay a rate increase as long as possible,” said Nate Rivera, HES general manager. “Unfortunately, this was not a sustainable long-term solution, and required a rate adjustment to maintain a reliable and safe system for its customers.”
The average residential customer will pay $124 in October. The U.S. Energy Information Administration estimates the Oregon average electric bill for residential customers is $176.
HES serves more than 5,300 accounts in Hermiston.