Dear Member,
We are changing our electric rates in May because the costs of providing service continue to rise. Our wholesale power and transmission bill from the Bonneville Power Administration is our largest expense, representing more than 60% of our electric operating expenses. It increased by approximately 15% starting last October, which adds about $800,000 in expenses for us this year.
The increase is driven largely by increasing wholesale power market prices, which are rising as electricity demand grows while coal plants are retired and removed. We don’t have enough generation in the region to meet peak demand. Wind and solar cannot be counted on during peak weather events, and importing power from other areas is expensive.
For example, during the January cold snap, the California Independent System Operator collected more than $100 million in “congestion rent” charges for energy deliveries from the desert southwest to BPA to meet the regional electricity demand. The added costs of importing energy make buying from other regions during peak events even more expensive.
To help offset this increase, beginning with May bills, the service availability charge for residential and small commercial accounts increases by $4. For large commercial accounts, the energy charge is increasing by 0.25 cents per kilowatt-hour, and the demand charge is increasing by 50 cents. These rate increases boost our revenue by about $285,000. We anticipate we will need additional adjustments next year.
Although we are raising rates in May, we will still be more affordable than most utilities. In Oregon, the average residential electricity price in 2022, with all charges included, was 11.42 cents per kWh; our average was 8.39 cents. That’s a 27% savings! Compared with Pacific Power, which serves the city of Hood River, our rates are about 40% lower. We are working hard to provide affordable, reliable, excellent service.
On behalf of all of us at HR Co-op, thank you for the opportunity to serve you.
General Manager
Libby Calnon