Public hearing Tuesday on EWEB water, electric rate increases

Press release

Eugene Water & Electric Board commissioners will hold the first of two public hearings on Tuesday, Nov. 16, to gather public comments about the proposed 2011 Electric and Water budgets. Tuesday's hearing will begin at 6:55 p.m. in the North Building at EWEB headquarters, 500 E. Fourth Ave.

The 2011 Electric budget assumes a 3 percent rate increase in spring 2011, which would cost the average residential customer about $2.60 per month.

The 2011 Water budget assumes a 7 percent spring rate increase, or about $1.70 per month for the average residential customer. The water rate increase is driven primarily by the need to build cash reserves for future infrastructure upgrades and additions to the water system.

If approved, the spring electric and water rate increases would become effective May 1, 2011.

The 2011 budget also assumes wholesale energy cost increases by the Bonneville Power Administration. Bonneville, which supplies EWEB with about 70 percent of its electricity needs, is planning to increase rates in the fall. EWEB anticipates the rate action will lead to an approximately 5 percent increase in electric rates effective Nov. 1, 2011. The higher cost of buying power from the Bonneville Power Administration is the sole reason for the fall 2011 electric rate increase.

Power-related costs and lower power-sales revenues, which are largely out of EWEB's control, account for about 90 percent of the utility's cost increases in 2011. These power-related costs and revenue losses are so large that they cannot be offset by spending cuts without significantly affecting electric and water service reliability and other customer services.

EWEB has already cut its 2011 budget by $2.5 million to lessen the impact of next spring's electric rate increase, to 3 percent instead of 4.5 percent. In addition, EWEB plans to draw about $6.3 million from its cash reserves to balance the 2011 budget. Throughout 2011, EWEB will continue to seek additional operational and labor-related savings to better position the utility for 2012 and beyond.

A second public hearing on the 2011 budget will be held at 7:30 p.m. on Dec. 7.

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