City Council to hold public hearing on electric utility rates
Power customers in Forest Grove will get an opportunity Monday, Jan. 8, to have their say on a proposed rate increase.
City staff have proposed that the Forest Grove City Council approve a 3 percent increase in electricity rates, effective next month. This would be the sixth year in a row that electricity rates have gone up in the city.
After raising rates the previous fall and again earlier that year, the Forest Grove City Council received a report from staff in late 2014 recommending 6 percent increases in each of the following four fiscal years. However, while the council approved a 6 percent rate increase that took effect in January 2015, it later approved smaller rate hikes of 4.5 percent in 2016 and 4.75 percent in 2017.
This year's proposed rate increase would be the smallest in years. According to staff, the smaller amounts in 2016, 2017 and now 2018 are what is needed to meet Forest Grove Light & Power's financial goals. That is because the city agency's fund balance is "stronger than the financial model predicted it would be" in the 2014 rate study, according to a presentation given to the Forest Grove City Council late last year.
A portion of the proposed increase, amounting to 0.25 percent, would fund Forest Grove Light & Power's share of increases in the cost to the city for defined employee benefits.
The staff presentation from last year states several reasons for the proposed 3 percent rate increase:
• The Bonneville Power Administration, which sells power generated by hydroelectric dams on the Columbia River, raised its wholesale rates by 3.14 percent in October.
• Forest Grove Light & Power was required to sell power at a loss this fiscal year, because it purchased a portion at an increased rate in anticipation of high demand (above the BPA's defined "rate period high water mark.") An explanation of the BPA's tiered structure for wholesale power costs is available on the administration's website.
• Salaries and benefits for city staff, including those at Forest Grove Light & Power, are expected to continue increasing.
Monday's public hearing will be held in the Forest Grove Community Auditorium, 1915 Main St. The City Council meeting that evening begins at 7 p.m., and the hearing will be held during the meeting.
If approved, the rate increase would become effective on or after Feb. 19. Customers would begin to see it reflected on their April utility bills.