As a not-for-profit cooperative in a time of rising costs, West Oregon Electric Cooperative's (WOEC) challenge is to provide safe and reliable service at the lowest cost.
By Scott Laird
At the end of each calendar year, the West Oregon Electric Cooperative Board of Directors meets to approve a budget for the upcoming year. Co-op staff prepare the budget by doing a thorough examination of expected revenues to make sure they cover anticipated expenses.
If you’ve kept a budget over the last several years—either for your household or for work—you’ve likely seen the costs for just about everything rising. It’s no different at WOEC. The cost for labor, materials, and supplies has continued to increase, along with insurance and the cost to buy the power WOEC distributes to its members. Add in flat kilowatt-hour sales, and it becomes a challenge to provide reliable power without a modest rate increase to help meet those rising costs.
That’s what the WOEC board was faced with in November when they approved the 2026 budget. The only way to cover rising costs is to cut expenses or raise rates, and the board did both—though the rate increase will not affect most residential and small business accounts.
To prevent a larger increase in 2026, WOEC General Manager Billi Kohler says the board and staff worked hard to offset rising costs by cutting expenses and managing costs where possible.
After implementing minor increases for the past two years, the 2026 rate adjustment, which took effect Jan. 1, keeps the base rate and Block 1 rate the same for all rate classes. The main change is eliminating the declining Block 2 rate for all classes except large commercial.
The decision to increase rates is never taken lightly, Billi says.
“Keeping rate increases modestly is part of our culture,” she says. “As a not-for-profit cooperative, we operate at cost. We know the members we serve are sensitive to changes in their bills, and we take that responsibility seriously.”
The chart above shows WOEC’s anticipated costs in the nearly $16 million budget.
Billi believes helping members understand WOEC rates is an important part of her job.
“These rate increases are much smaller than they should be,” she says. “Our message to our members is that they need to expect incremental increases for probably the next three to five years. We’re trying to keep it as small as possible this year.”
To set the rates needed to cover costs, WOEC requests a Cost of Service study every few years, conducted by an independent third party. Over the years, the rate study has shown WOEC needs to increase the monthly base charge—the charge every member pays to receive service. WOEC has slowly been increasing that fee, but is not making any change this year.
Prior to this most recent rate adjustment, WOEC used a declining block rate system. The rate for members who used more than 1,500 kWhs of electricity, Block 2, decreased once they exceeded that threshold. The cost-of-service studies indicate that, rather than a declining block rate, WOEC should move toward an inclining block rate, where higher levels of energy use are charged at a higher rate.
WOEC’s first step in this direction is to adjust rates by charging the same for Blocks 1 and 2. This better aligns rates with the cost of providing service and brings WOEC closer to current industry standards.
“It’s time for us to catch up with the rest of the industry,” Billi says.
WOEC’s kWh rates are currently above state and national averages, but Billi notes other utilities in the Pacific Northwest are quickly catching up. Since 2019, WOEC’s rates have increased approximately 15%. In comparison, Portland General Electric’s rates increased 38% to 67% in the same period, and many other cooperatives have announced up to 12% increases for 2026.
The Cost of Power
The increased costs of power start at the top. Bonneville Power Administration’s wholesale power and transmission costs, labor, and materials have all increased significantly over the past several years. BPA then passes these costs down to its distribution utilities, including WOEC.
In addition, BPA’s demand for power is outgrowing its limited power generation capabilities, while its infrastructure system is aging and needs to be upgraded.
“The example I like is I-5 through Portland,” Billi says. “50 years ago, it wasn’t as congested as it is today. But now we have more cars on the road, and there’s a lot of congestion. It’s the same thing with the transmission system. It was built many decades ago, when there were a lot fewer people in the Northwest using power. As we consume more electricity, the more congested that transmission gets. It’s time for it to be upgraded, which is going to be extremely expensive, and it’s going to fall on all of us in public power in the Northwest.”
WOEC Chief Financial Officer Dan Huggett says BPA’s generation capability can be limited because it comes from hydropower and is affected by the amount of rainfall in any given year.
“In order to continue meeting the growing needs of their customers, BPA needs to either acquire more resources or go to the open market for power, which is really expensive,” he says.
Because of limited generation, WOEC is allocated a certain amount of power from BPA to distribute each month. If the co-op exceeds that amount—which has become a common occurrence in the past few winters—WOEC pays a higher block rate for extra power from the market.
In addition to a 19% rate increase over this three-year rate period, BPA implemented a Financial Reserves Policy Surcharge beginning Dec. 1, 2025. The surcharge is a temporary rate adjustment designed to rebuild BPA’s financial reserves when they fall below an established federal policy threshold.
All these factors contribute to the increased price of power members pay to WOEC.
“Those are not expenses we can absorb without impacting reliability,” Billi says. “To continue providing the level of service our members expect, we must ensure our rates reflect the actual cost of delivering power.”
WOEC’s service territory spans 1,224 square miles with 677 miles of poles and power lines to maintain. Residential customers make up 94% of WOEC’s membership, with only one somewhat denser populated municipality, Vernonia. Just 6% is small commercial and industrial. That combination creates a member base that is expensive to service. It is also a member base that is not growing, so kWh sales remain relatively flat.
One way WOEC will cut costs this year is by reducing the right-of-way vegetation management budget by 25%. Operations Manager Andy Larson has been working to get the vegetation management plan—which helps reduce outages and damage to the distribution system—on a 10-year cycle, meaning the entire system is mowed and trimmed over a 10-year period. The plan is currently on a 5-to 7-year rotation.
With costs rising, flat power sales, and a system that is expensive to maintain, WOEC members will see rate increases in the future. However, they can also expect WOEC staff to minimize those increases as much as possible.
“We work hard to control expenses, improve efficiency, and stretch every dollar because our mission is to provide safe and reliable service at the lowest possible cost,” Billi says.