Hermiston City Hall in Hermiston, Ore. on Nov. 20, 2024
Antonio Sierra / OPB
Hermiston residents are about to see a massive rate hike in their electric bill that will be spread over the next three years and will go into effect in March.
At a Monday meeting, the Hermiston City Council approved a 20% rate increase for Hermiston Energy Services, the city-owned electric utility. While several councilors referenced community complaints, they didn’t get any public pushback at the meeting.
Presiding over his last meeting before his term ends, Mayor Dave Drotzmann recalled how the City Council dealt with “spitting mad” public testimony when it raised water and sewer rates by 15% in 2017. But when he asked if any members of the public wanted to comment on the electricity rate hikes, he was met only with silence from the audience.
The rate increase will have a significant impact on Hermiston Energy customers. Started in 2001 after the city acquired Pacific Power’s facilities and infrastructure in Hermiston, the city electrical utility now covers about two-thirds of Hermiston, with most of the rest covered by the Umatilla Electric Cooperative.
Hermiston Energy general manager Nate Rivera said the rate hike was needed for two different factors. The first is that Hermiston Energy’s supplier, the Bonneville Power Administration, is raising its power and transmission prices. The second is that Hermiston Energy’s electrical infrastructure is starting to show its age and needs to be replaced, with some copper lines operating despite being more than 50 years old.
“Rate adjustments are the unfortunate part about the job,” he said. “The important thing to remember is the rate adjustments at a consumer-owned utility go to maintain a safe and reliable system.”
Energy prices are rising rapidly throughout the state. One report states that some customers are paying 50% more on their energy bill than in 2019. Portland General Electric and NW Natural have hiked their prices by more than 20% in recent years.
Even with the rate hikes, Rivera said Hermiston Energy’s costs will be on the lower end of the scale compared to other nearby utilities. A Hermiston Energy customer who uses 1,400 kilowatts of energy per month pays $124 per month, one of the lowest prices in the region. That’s far below other Eastern Oregon providers like the Columbia Basin Electric Cooperative ($158) and Pacific Power ($217).
The rate hike will eventually push that bill to $150, putting Hermiston Energy more squarely in the middle of the pack but still well below the $260 national average. Other local utilities are likely to raise their rates once they incorporate the increase in power prices from BPA, Rivera added.
Councilor Nancy Peterson said Hermiston Energy’s relative affordability offered little solace to customers, who don’t think about their power bills in those terms.
“In the community, what I hear overall is, no one cares what anyone else’s rate is,” they said. “They care about how much they’re having to pay.”
Councilor Roy Barrón argued that Hermiston Energy should start raising its rates by small, predictable amounts on a regular basis to avoid these large increases. But the majority opinion was led by Councilor Doug Primmer, who was sworn in to replace Drotzmann as mayor at the end of the meeting.
“Power is going to come from somewhere,” he said. “We’ve got to pay. It’s going to go up. There’s nothing that’s going to keep it from going up. It’s unfortunate, but it’s economics.”
City staff recommended spreading out the rate increase over two years, but the City Council opted to extend the period to three years, a move that will require Hermiston Energy to draw a significant amount of money from its reserves, according to Rivera.
The council ultimately voted 7-1 to approve the three-year rate hike. Barrón was the only councilor to vote against it.