The Hermiston City Council on Monday approved adjustments on electric rates for all classes of service that will become effective on bills calculated after Sept. 1.
Hermiston Energy Services (HES) will adjust electric rates, ranging from 0.4 percent for large commercial accounts to an average increase of 6.43 percent for irrigation accounts. The overall effect for all classes combined is a 2.59 percent increase.
In its new residential rate, HES has raised the monthly electricity delivery charge to $14 (up from $10.50) and will continue to charge 6.8 cents per kilowatt-hour. Customers who uses 1,500 kilowatt hours per-month would pay $115.85 in energy charges, up from the current amount of $112.35 (about 11 cents per day).
The primary factor in the adjusted rates has been increases in wholesale electricity prices. Over the last seven years, HES’s wholesale power provider, Bonneville Power Administration (BPA) has increased the cost by about thirty percent to Hermiston Energy Services and other public utilities throughout the Northwest. HES’s wholesale power costs comprise over 50% of its total operating expenses.
“We continue to expend great effort to keep BPA from raising their wholesale power rates,” said HES Superintendent Nate Rivera. “However, we expect an increase to HES’s wholesale electric rates again in October 2017.
With this in mind, HES has started the process of restructuring its existing bond that would provide additional cost savings to HES. Also, HES will incorporate $4.5M of construction work plan costs in to the restructured bond that would be finalized in August of 2016.
HES commissioned a Cost Service Analysis to help apply rate changes in a way that would better mirror how the HES is charged for wholesale power and to reflect the cost of providing service to various rate classes.
The U.S. Energy Information Administration estimates the Oregon average electric bill for residential customers is $155.79.
Hermiston Energy Services last approved a rate adjustment in March, 2015. Hermiston Energy serves more than 5,200 accounts in Hermiston.
