As we wrap up 2021 and head into winter storm season, I would like to remind you to prepare for possible outages affecting your electric service.
When storm-related outages hit, our crews work as quickly as safety allows to restore service.
During major storms, this effort could take a few days. During a widespread outage, we will post updates to our website and Facebook page. I appreciate your patience while our crews work hard to restore service.
Rate Information Meeting
I mentioned last month that our board of directors is reviewing our budget and considering a rate adjustment in 2022. We have scheduled a rate information meeting for December 9 at 6 p.m. at the West Oregon Electric Cooperative headquarters in Vernonia. Please watch for a letter in the mail that will contain the projected rate adjustment and meeting information.
I am often asked why our rates are so high. Several factors go into setting our rates, both from a historical perspective and looking ahead. WOEC was formed in 1944 to serve a small group of people that did not have access to power. There was not enough return on the investment it would take to run the lines out to all the sparsely scattered accounts to motivate investor-owned utilities to branch out.
The cost factors were and remain significant because the areas we serve spread across parts of five counties. The long distances we travel make service work, outages, and maintenance more costly and time consuming. Our territory is heavily forested with rough terrain, creating more work and maintenance than our urban area.
I am also asked about the base charge. The fixed costs of servicing an account— regardless of how much energy is used— contains all labor, trucks, other equipment, and other operational expenses. The base charge on your power bill (currently $46) covers only a small part of the cost of servicing and maintaining our system. If we were to charge the actual cost to maintain each account, the base charge would need to be about $100 a month instead of $46. This is determined through independent cost-of-service studies conducted every two years. Realistically, each account—such as telephone and gas companies require—would pay the full, actual amount of the fixed costs.
Because we do not charge the full amount of fixed costs, the kilowatt-hour charge is higher. Our neighboring utilities have a more condensed service area with a larger number of consumer accounts, have a better balance of commercial and industrial loads compared to residential and have more customers per mile. WOEC has more trees per mile that need to be maintained to protect our system. Our service territory sees minimal growth, and the development we do see is primarily residential. This causes our rising costs to exceed our revenues.
Despite these challenges, we are your member-owned and -operated cooperative. We provide good service, are responsive to our members, manage costs the best we can and work to keep the lights on under any conditions. As a cooperative, we are a not-for-profit utility focused on balancing our revenues and expenses. We are committed to serving our member-owners at the lowest cost possible while providing safe and reliable electric service.
Billi Kohler | General Manager
I hope you all are staying well. I am pleased to announce that I have been offered and accepted the position of General Manager for WOEC.
I have been serving as the Interim General Manager since Bob Perry retired in April. I understand the unique challenges our utility faces, and I am dedicated WOEC’s mission of providing safe and reliable electric service to our members.
During the past year, WOEC has seen a significant increase in cost of service. As many of you know, our service territory is faced with challenges that separate us from the others. We serve 3800 members spread out over 1,224 square miles of rugged terrain with millions of trees and gravel roads. We are limited to serving the residences and businesses within our territory: 93% of which are residential. A higher percentage of commercial accounts would lessen costs for residential members; however, with only 7% of WOEC’s membership falling into this category, rates for residential accounts are higher to cover the cost of service.
There are a variety of factors that come into play as cost of service rises. We are facing high inflation on a national level as well as inflation on materials and equipment. With minimal growth in our area, energy sales remain relatively flat year to year while costs increase each year. Rates must increase to cover rising costs. We are a Capital- and Labor-intensive business and it is necessary to invest in long-term assets and a specialized workforce to effectively serve our members.
We are carefully reviewing our budgeted costs and analyzing operations to ensure our rates are sufficient to cover the cost of providing reliable service. This review shows there is not much that can be trimmed and still maintain the system properly while fulfilling all other obligations.
We will hold a rate meeting in December for members to attend and discuss the anticipated rate adjustment for 2022. Watch for a notice in the mail this month with the meeting details. This information will also be posted to our website. As always, these adjustments will be considered with the goal to provide safe and reliable service to our membership.