EWEB considers utility rate hikes.

Byline: Matt Cooper The Register-Guard

Higher debt payments and lower water usage are driving substantial proposed electric and water rate increases that the Eugene Water & Electric Board may approve Tuesday, officials said Thursday.

The EWEB board will consider a 5.8 percent increase in monthly electric rates and a 9.3 percent increase in monthly water rates, starting in May. The average residential user's electric bill would jump nearly $6 monthly, to $83.50, and the water bill would rise by about $1 monthly, to $15.25.

If the increases are approved, the utility's electric rate would rise to slightly higher than the average among 15 comparable utilities in the Northwest; its water rate would remain second-lowest among comparable utilities in the state, officials said.

Analysts say a heavy winter snowpack should mean a surplus of electricity in the Northwest this year. That could mean a drop in EWEB electric rates later, but officials said they won't know until later this year or the next how other factors will affect the picture.

In the meantime, the utility must deal with rising debt payments on loans for its facilities and on retirement benefits. The hike in the electric rate would generate $8.1 million annually, and half of that would go to the higher debt payments, said Dick Varner, fiscal services supervisor.

The utility has higher debt payments now because it took out debt around 2001 that had lower initial payments that are now climbing, Varner said.

The higher electric rate also will provide more money to buy renewable electricity, which is generated from sources that can continually make - or renew - the supply. The utility may pay more for this type of electricity than it can charge in selling it, but EWEB is philosophically dedicated to encouraging the use of renewable energy.

Almost half of the money generated annually by the water-rate increase - $600,000 - would cover operating costs after the utility for the past five years has overestimated how much water customers would use, Varner said.

He speculated that wetter-than-average summers in 2004 and 2005 allowed customers to use less water for their lawns, so the water rate that EWEB charged in those years didn't capture the money EWEB needs in order to cover its costs to provide water.

The utility also credits its conservation efforts for reduced usage. Spokesman Lance Robertson acknowledged the irony of charging customers more for using less water, but said those who conserve can still save far more than they lose in higher rates.

The rate increases also would help cover the rising cost of salaries, Varner said. The utility's 500 employees received an average salary increase of 3 percent to 3.5 percent this year - roughly equivalent to the average wage increase for jobs in any industry nationwide this year, he added.

General Manager Randy Berggren recently received a 7 percent salary increase, but officials said his compensation is comparable to that of other industry executives.