Outage Map
By Brent ten Pas
On January 1, Central Electric Cooperative (CEC) entered Phase V, the final phase of its eight-year gradual rate redesign, which began in 2017 and is implemented every odd year.
Residential members will see a $4.40 increase in their facilities charge while the energy rate remains unchanged. Other rate classes are 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. 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 Phase V.
The transitional rate design addresses an imbalance in the rate structure dating back to the co-op’s early existence.
Historically, the utility industry, including CEC, blended all expenses into a customer’s energy use charge. Out of convenience, the practice entailed lumping fixed costs—operations, inventory, maintenance, repairs, and administrative overhead— with the kilowatt-hour charge.
The practice led to a two-fold problem.
First, the methodology painted an inaccurate perception among members that the co-op’s services were defined solely by their electricity use, unaware of the fixed costs of operating the utility. Second, while the co-op’s expense to buy energy for its members fluctuates based on weather and the energy markets, fixed costs are less volatile.
Over time, the co-op’s fixed costs outpaced revenues reliant on selling energy.
CEC began addressing the issue in 1978, adding a customer charge—later named the facilities charge—to stabilize revenues, starting with gradual increases, before launching the rate redesign in January 2017.
The facilities charges did not keep pace as CEC’s fixed costs significantly exceeded revenues, putting the co-op’s rates out of balance. Various factors contributed to this imbalance.
The weather is the chief driver of electricity demand. It has become more unpredictable and extreme, creating strong fluctuations in revenue and making business management more challenging.
Another factor is the rapid evolution of the electric industry. Emerging technologies provide customers with multiple ways to reduce their energy use, such as taking advantage of weatherization programs and installing energy-efficient lightbulbs, water heaters, and HVAC systems.
Growth in member-owned distributed generation—mainly rooftop solar systems—also decreases energy needs.
CEC encourages and supports members’ efforts to reduce their energy use. 1 of the unintended consequences, however, is fewer members contributing toward helping the co-op recover its fixed costs, which ensures the delivery of safe and reliable electricity.
In 2016, to create a balanced solution, 10 volunteer co-op members representing all customer classes served on a rate redesign advisory committee. After studying various options presented, the board of directors adopted measures to bring greater fairness and balance among the different rates— members paying for their energy use and equitable share in operating the utility.
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. 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’s and the nation’s average, while prices for residential electricity have jumped 25% nationwide from June 2021 through June 2024, according to the U.S. Bureau of Labor Statistics. All energy market indicators suggest the upward trend will continue.
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. As a result, CEC will likely need to make rate changes later next year and in the subsequent years to absorb BPA’s cost increases.
CEC will continue to navigate these oncoming 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.
To learn more, visit the Rate Schedules page.