CEC will likely need to make additional rate changes in late 2025 and subsequent years to absorb BPA’s cost increases.
CEC will continue to navigate these approaching currents and keep members informed of ongoing developments while effectively managing costs within its control without compromising the safety and reliability of the electricity it delivers.
*Other rate classes will be affected differently.
In Phases I through IV, residential members saw a minimal decrease in their kilowatt-hour energy charge to offset the slight increase in their monthly facilities charge. However, the ongoing inflationary pressures on electrical equipment driving up the costs for CEC’s strategic investment initiative and the rising costs for power have made implementing a minimal rate decrease financially unfeasible.
For years, the co-op has successfully kept its residential rates low, well below Oregon and the nation’s average, while prices for residential electricity, according to the U.S. Bureau of Labor Statistics, have jumped 25% nationwide from June 2021 through June 2024. There is every indication the upward trend will continue.
The Bonneville Power Administration—the supplier of nearly all Central Electric’s wholesale electricity—has signaled an approximate 19% increase in power costs for the upcoming three-year rate period from October 1, 2025, through September 30, 2028.
The utility industry historically blended all costs into a customer’s energy charge, lumping a utility’s fixed expenses, such as operations, inventory, maintenance, repair and administration overhead, with the kilowatt-hour charge.
This approach created an inaccurate perception among members that the co-op’s services were defined solely by how much electricity they used. While a utility’s expense to buy energy for its members fluctuates based on weather and the energy markets, its fixed costs remain more stable.
Over time, the practice proved untenable, and it became necessary to separate or decouple fixed costs from electricity use because fixed costs began to exceed revenues. Various factors contributed to this imbalance.
The chief driver of electricity demand is the weather. It has become more unpredictable and extreme, creating strong revenue fluctuations and challenging business management. The electric industry has rapidly evolved, with emerging technologies affording customers multiple ways to reduce their energy use through efficiency and rooftop solar. CEC applauds and encourages members’ efforts to reduce their energy use. As a not-for-profit, however, CEC must recover its fixed costs equitably from all members.
CEC began to address the issue in 1978, adding a customer charge—later named the facilities charge—to stabilize revenues. While the facilities charge gradually increased, it did not keep pace as CEC’s fixed costs significantly exceeded revenues, putting the co-op’s rates out of balance.
In 2016, a rate design advisory committee, comprised of volunteer co-op members representing all customer classes, convened to devise a solution to balance revenue collection equitably.
The board of directors adopted their recommendation, bringing more fairness and balance among the different rates —members paying for their energy use and equitable share in operating the utility.
On their February bills, residential members will see a $4.40 increase in their facilities’ charges while the energy charge remains unchanged.*
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