HERMISTON, Ore.-The Hermiston City Council approved a reduction in electricity rates at its regular meeting on December 8.
Ordinance 2377 will reduce Hermiston’s electric franchise fee from seven percent to four percent and will eliminate the economic development incentive program tied to electric utility franchise fees.
The three percent rate reduction should save the typical Hermiston household between $40 and $60 per year starting in 2026, depending on usage, according to the City.
“The rapid expansion of data center operations within Hermiston has dramatically increased franchise fee collections, which allows a reduced universal rate to now benefit all customers while still growing city revenue,” the City of Hermiston said in a statement regarding the rate reduction.
With the elimination of the economic development incentive program, started in 2022 to support data center development and bring in revenue for the City through franchise fees, data centers will no longer be eligible for refunds and will pay the same four percent fee for power usage as all customers.
According to the City of Hermiston, revenue from franchise fees is expected to continue to grow by one to two million per year between 2026 and 2030, even with the rate reduction for households and businesses.
Dropping rates to four percent would also put Hermiston’s rates on par with other Oregon cities, whose rates are between three and nine percent, according to Hermiston’s Assistant City Manager, Mark Morgan, in a presentation to the Council.
