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Return to Previous PageNatural gas prices to decline, but electricity’s going up

By Susan Palmer
Register Guard

Natural gas customers will get a double-digit break on their utility bills this fall, while many electricity customers can expect increases.

In both cases, blame goes partly to the weather and partly to the recession.

Northwest Natural Gas Co. announced Monday that residential customers can expect a 14.5 percent rate reduction while commercial customers will see their bills decline by 17.5 percent. For the average residence, that’s about a $12 decrease. For the average business, it’s about $54.

“The economic slowdown combined with greater gas production and generally mild weather across the country equaled a dramatic decline in prices,” said Randy Friedman, director of gas supply at NW Natural. “That allowed us to buy low and share those savings with our customers.”

But a low water year and decreased demand, coupled with safety and environmental enhancements, sent the Bonneville Power Administration’s electricity rates in the other direction. Wholesale power will go up on Oct. 1, but whether local utility customers will see a corresponding spike in their electric bill depends on where they live.

The rate increase from BPA, which operates 31 federal dams in the Pacific Northwest, already has been passed along to Emerald People’s Utility District customers, EPUD finance manager Jim Theabolt said.

EPUD raised rates 6.4 percent in June, partly in anticipation of the BPA increase, and partly because of other increased costs in providing power, Theabolt said.

A rate increase also is likely for Eugene residents. Today the Eugene Water & Electric Board will hold the first of two public hearings on its proposal to increase rates. The utility has a policy of passing on BPA increases to customers, but it has been four years since EWEB raised electricity rates. Cumulatively since 2005, EWEB has decreased rates by 6 percent.

Springfield Utility Board customers, meanwhile, won’t feel the financial pain. That’s because SUB doesn’t plan to raise rates in the foreseeable future, General Manager Bob Linahan said.

“We knew it (the BPA increase) was coming and we planned for that,” Linahan said. “With the recession we are cognizant of the fact that people are having a hard time paying their bills.”

SUB does not expect to change the rate it charges for electricity until December 2011, he said.

The other two area utilities, Lane Electric Cooperative and Blachly Lane County Cooperative, haven’t decided what they’ll do.

Blachly Lane General Manager Bud Tracy said it’s still not clear how BPA will structure the rate increase, and whether it will apply to actual energy consumed or to capacity. The utility expects to make a decision in November, he said.

Lane Electric also is waiting to see what the impacts will be, with a decision likely at a November or December board meeting, spokesman Dave D’Avanzo said.

In Eugene, EWEB is proposing a 4.5 percent increase or about $3.78 for the average residential user. Larger business and industrial users could see greater increases, ranging from 7.26 percent to 8.62 percent, depending on the user. The utility will hold a second public hearing on Oct. 6 before making a decision. Any rate increase would show up on November bills.

BPA’s wholesale rate increase has been expected all year, utility managers say, but it isn’t as bad as BPA had warned initially. Last spring, Bonneville predicted that prices could spike as much as 15 to 20 percent, thanks to a poor water year, the recession and increased costs associated with project safety and environmental protections for salmon.

The increase wasn’t that high in part because BPA identified $100 million in cost-cutting measures, agency spokeswoman Katie Pruder said.

“Nobody wants to have a rate increase,” Pruder said. “We’ve tried to avoid them with lots of programmatic cuts at BPA.”

PROPOSED EWEB RATE INCREASE

Commissioners invite public response

When: 7:30 p.m. today at North Building at EWEB, 500 E. Fourth Ave.

Register Guard
Eugene, OR
September 01, 2009

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