Subject
A resolution adopting the Hermiston Energy Services Customer Service Policies, Rates, & Associated Fees Manual.
Summary and Background
During Council work session, Hermiston Energy Services presented information and asked for direction to make adjustments to our retail rates for all classes of service effective on bills calculated after December 31, 2018.
The primary factor in the adjusted rates has been increases in wholesale electricity prices. Over the last nine years, HES’s wholesale power provider, Bonneville Power Administration (BPA) has increased the cost over 38% to Hermiston Energy Services and other public utilities throughout the Northwest. HES’s wholesale power costs comprise over 52% of its total operating expenses.
Rate increases are an unfortunate and unavoidable part of the utility business, but I would like to spend a minute explaining what goes into the process of changing rates.
HES commissioned an independent Cost of Service Analysis (COSA) 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.
Hermiston Energy Services last approved a rate adjustment in June, 2016. Hermiston Energy serves more than 5,200 accounts in Hermiston, Oregon.
Also, as part of the update to the manual, HES will establish a Pre-Pay Program that will provide an additional option for Customers to pay for electric service. The Pre-Pay Program offers a way for Customers to pay in advance for electric use in exchange for considerations intended to be beneficial to the Customer, including no deposit requirement, no past due balance fees and no reconnections fees. Customer participation in the Program shall be on a voluntary basis and at the sole discretion of the Customer.
In closing, increasing costs makes energy efficiency and conservation more important than ever. From individual consultations, to online self-help resources, HES works with residential, irrigation and commercial customer-owners who want to better manage their energy costs. The best way for our customers to reduce the amount of their electric bill is to use less energy, while still having the comforts they desire and deserve. Energy efficiency can help accomplish these goals.
Tie-In to Council Goals:
Goal 4:CAPITAL IMPROVEMENT PLAN (CIP)
Fiscal Information
Under the recommended rate adjustments, a residential electric bill will increase by $2.00 per month (about 6.5 cents per day). Each customer class is adjusted based on recommendations in the COSA.
Alternatives and Recommendation
Alternatives
1. Approve Resolution 2117 as drafted.
2. Approve Resolution 2117 as drafted without changes to HES Rates.
3. Approve Resolution 2117 as drafted without addition of Pre-Pay Program.
4. Do not approve Resolution 2117.
Recommendation
Staff recommends approval of resolution adopting the updated Hermiston Energy Services Customer Service Policies, Rates, & Associated Fees Manual.
Requested Action/Motion
Motion to approve Resolution 2117 as drafted.
Submitted By: Nate Rivera