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West Oregon board OKs 14% rate jump

Ratepayers in Chapman area will feel increase


The board of directors of West Oregon Electric Cooperative Inc. approved a 14 percent increase in member rates at a meeting Tuesday, Sept. 17, in Vernonia.

The rate hike, which takes effect Oct. 1, will allow the cooperative to pay down debt and absorb large rate increases instituted by the Bonneville Power Administration, West Oregon’s general manager said.

Marc Farmer said West Oregon was hit with nearly $11 million in costs due to disaster events, despite assistance from the Federal Emergency Management Agency, over the past several years. West Oregon is still trying to pay off that debt, he added, and a rate increase will help it reduce its debt faster.

“The number one reason is to cover the debt service payments of those FEMA events,” Farmer said.

West Oregon is trying to replenish its budget reserve and reduce its debt, Farmer said.

“We gave the board some different scenarios on how to accomplish that, and depending on how quickly they wanted to build those up ... depended on how much they raised the rates,” Farmer said.

The board considered options to increase rates by 12 percent, 14 percent or 16 percent. It ended up settling on the intermediate option, which also implements a two-tiered rate structure.

“If we went with a 12 percent rate increase, it would take four years to accomplish the goals,” as opposed to three years with a 14 percent hike, Farmer explained. “What we’re doing is you’re rolling the dice that some time in the next four years, the next three years, we’re not going to have another big event.”

Chapman resident Jeff Campbell, who purchases electricity through West Oregon, expressed relief over the $2 increase to the cooperative’s $35 base rate, a jump he suggested is fairly modest. But he said the overall 14 percent increase will still be high for many consumers.

“It’s definitely a blow,” Campbell said. Although the base rate increase is less than it could have been, he added, “I think even so, there’s going to be quite a few people in their area that are going to have a very difficult time paying their electric bill.”

Farmer said the board is hoping to build up its budget reserve enough to absorb another BPA rate increase in 2015.

“While it may be a little painful up front, in the long run, it will save us,” Farmer said.