CEC Looks to 2019 and Beyond

CEO Dave MarkhamAt last month’s 78th annual meeting, I highlighted Central Electric’s chief accomplishments made possible by the board of directors’ leadership and dedicated staff. But, as I reminded the audience, the complexity of the issues we are confronted with is growing. Various external pressures challenge our efforts to keep rates low and reliability high.

Since 2009, the Bonneville Power Administration has enacted five rate increases with the sixth going into effect on October 1, an estimated average increase of 2.9 percent for electricity and an average 3.6 percent for transmission services.  While CEC successfully kept its rates at current levels despite a BPA rate increase two years ago, we will likely need to increase member rates in January 2020.

On another front, House Bill 2020—Oregon’s carbon cap-and-trade legislation—poses unintended fiscal consequences which would potentially expose Central Electric to millions of dollars in additional costs between the years 2021 and 2030. The bill calls for a reduction in carbon emissions in the electric, industrial, and transportation sectors. Businesses in these sectors annually emitting above 25,000 metric tons of carbon-dioxide will receive carbon credits, which decrease each year, to assist with their costs of transitioning to a cleaner energy portfolio.

The credits a business receives are determined on carbon emissions over a three-year span; 2017, 2018, and 2019. Due to load growth, CEC will exceed the threshold in 2020—a full year before the law goes into effect but after the distribution of the carbon credits. Ironically, CEC would not receive any carbon credits and would be subjected to financial penalties, despite having a 96 percent carbon emission-free energy resource portfolio.  But, the two large investor-owned utilities in the state get a reprieve—enough credits to cover ten years of carbon emissions and they are only required to be 50 percent carbon-free by 2040.

Recent efforts to educate our governor’s staff and legislators regarding these inequities and to find a solution to minimize the financial impacts has gained traction. But, your voice needs to be heard too. I would encourage you to visit our website www.cec.coop; click on the Community tab; and then ORECA-Action. There you can join your fellow CEC members and other Oregon electric co-ops members to share your concerns about this legislation with policymakers.

A long and challenging road lies ahead of us. But if the co-op’s history is any indication, I am optimistic we will successfully meet these challenges and protect the interests of CEC and its members.