Outage Map
New Rates Help Meet Rising Costs and Inflation
by Brent ten Pas
Central Electric Cooperative, a member-owned, not-for-profit utility, serves its members clean, safe, and renewable electricity at affordable rates. However, maintaining the highest quality of service at a reasonable cost is challenging in the current economic environment.
CEC has held off raising rates since 2020 but now must implement a rate revenue increase of 5.9% to meet operating costs and cover capital improvements. The rate change affects all customers. Depending on monthly use, CEC’s residential members will see a 5% to 7% rate change on their February bills.
The decision involved analysis and thoughtful deliberation. CEC conducted a cost-of-service analysis to evaluate and design rates to recover costs. A member rate design advisory committee, representing all customer classes, reviewed the COSA results and recommended the rate changes to the board of directors, who adopted them in September.
CEC’s situation is not unique. Various regional utilities have recently implemented double-digit rate increases, including the local investor-owned utility, which implemented an approximate 15.2% residential rate hike. Even with CEC’s rate changes effective next year, the co-op’s rates will remain some of the lowest in the state and country. See chart.
The three primary cost drivers are Bonneville Power Administration’s rising power costs, ongoing economic inflationary pressures, and CEC’s continued investment in its electric infrastructure.
Increase in BPA’s Power Costs
BPA—a self-funding, nonprofit federal agency—markets clean, renewable electricity from 31 federal dams in the Northwest. It delivers power to 127 public utility customers, including CEC, through 15,000 miles of high-voltage transmission lines.
BPA adjusts its rates every two years to ensure it meets operating costs and capital spending. For the 2024-2025 rate period, the overall power, transmission, and other services are more expensive. The all-in rate change for CEC is an 11.5% increase in power costs.
Inflationary and Supply Chain Cost Pressures
Central Oregon continues to experience lingering adverse financial impacts of the COVID-19 pandemic. As consumers have seen a dramatic increase in costs for goods since 2019, CEC and the electric industry have also been hit hard with rising costs in electrical equipment due to manufacturing and supply chain delays.
The cost of a power pole has increased by 35%, overhead power lines by 45%, underground power lines by 79%, and a single-phase (residential) transformer by almost 100%. See illustration.
Ongoing Investment in Electric System
The inflationary price increases and supply chain delays adversely affect CEC’s decade-long $147 million strategic investment initiative to update its electric infrastructure to ensure safety and long-term reliability while helping meet the demand for power driven by Central Oregon’s population growth.
In its fifth year, CEC has replaced more than 1,680 poles on its distribution lines within its 5,300 square miles of service territory. Most of these poles, erected before 1950, are nearing the end of their service life. The co-op has targeted approximately 400 poles annually for replacement. See illustration.
Ongoing efforts also include replacing underground distribution cables. When the cooperative started installing underground cables in the late 1960s, industry standards allowed power lines to be placed directly in the ground. Moisture, extreme temperatures and other disturbances over time cause underground cables to fault, causing power outages.
CEC now installs underground cables inside conduit. This is a more expensive endeavor, but the long-term result reduces costs and enhances reliability. Since 2017, CEC has replaced nearly 26 miles of underground cable.
The co-op has also expanded capacity at substations—the critical interface between the high-voltage transmission and distribution systems—which allows for the delivery of more electricity to meet growing demand. CEC has upgraded substations in Bend, Powell Butte, Tumalo, Sisters, and Lone Pine in the past five years.
Preliminary plans are underway for a substation in the Stevens Road development area in southeast Bend.
Rate changes are inevitable and necessary to offset BPA’s rising costs, keep pace with inflation, and maintain and upgrade CEC’s electric infrastructure to ensure a safe, resilient, and reliable system for our members and communities today and well into the future.
For more information on the rate changes and to estimate your future monthly bills, visit our Rate Changes FAQ.
Download article – Ruralite December 2023 Rate Changes (PDF)