The Hermiston city council voted Monday to raise electric rates for Hermiston Energy Services by $2 per month. The changes take effect Dec. 31.
Usage rates per kilowatt hour will stay the same, but base rates for residential customers will jump from $14 to $16. Small commercial users will see their rates go from $35 to $37, and demand charges for peak usage for all types of commercial customers will go from $5.75 to $6. HES does not currently have any industrial customers, but if one does arrive they will now pay a base charge of $250 instead of $200.
The council had postponed its vote on the issue from the Nov. 26 meeting, asking HES general manager Nate Rivera to return with more detailed information about the utility’s finances. Rivera said 52 percent of HES’s spending is for wholesale power from Bonneville Power Administration, 17 percent is for its contract with Umatilla Electric Cooperative, 11 percent is for debt service, 9 percent is for materials and services, 8 percent is for capital outlay and 3 percent is for personnel.
Increasing costs for wholesale power and maintenance would have put HES as a $1.2 million deficit during the current fiscal year, but Rivera said savings from a bond refinance and on construction spending last year have helped bring that down to a $163,102 deficit. Rivera said the rate increase would bring in about $157,000.
“That still leaves us with about a $6,000 deficit, and I think I can get that from other areas of my department,” he said.
Rivera said when BPA raises rates again in Oct. 2019 there is a strong possibility he will be back before the council asking for another rate adjustment, but he said he didn’t want to have to raise rates on customers any more than necessary. After a 10.95 percent increase in 2015, the council asked that HES try to break increases into smaller amounts over time to help customers transition.
He said the change will put the average residential bill for HES at $111, compared to $155 statewide and $186 nationally.
On Monday Rivera also shared information with the council about upcoming 5G technology, which will enable faster data speeds for cell phones.
Currently 4G and below operates on a system of cell towers that are 75 to 400 feet tall and cover up to 20 miles. Cell service providers are preparing to begin the jump to 5G, he said, which operates on 30 to 60 foot towers that cover up to 750 feet. Instead of building their own towers, providers will mostly use utility poles, street lights and other existing items to place their technology.
The industry successfully lobbied the FCC to greatly restrict cities’ ability to regulate that practice, he said, including limits on how much a city can charge the companies to place their equipment the public right of way.
“They took away a big area of local control,” Rivera said.
While revenue was one concern, Rivera said he was more concerned about safety. He worried about telecommunications employees without proper safety training accessing equipment so close to live wires, and asked what would happen if a vehicle hit a pole and there wasn’t anyone local who was able to service the 5G equipment. Without local agreements in place, Rivera said, a company might be able to abandon broken or outdated equipment on the city’s poles.
Mayor David Drotzmann said the League of Oregon Cities was aware of the problem and is working with other states to lobby for more local control of public rights of way.