Board of Commissioners Meeting Highlights - May 1, 2018
As a public utility, it's important for us to be open and transparent with you - our customer-owners. Here are some highlights for this month's meeting of your citizen-elected Board of Commissioners.
Residential electric pricing committee
Staff delivered the preliminary findings of the 2017 residential electric pricing committee, gathered from a group of eight EWEB customers to study and provide guidance on potential structural changes to how we set residential electric prices.
Utilities in Lane County, throughout the state and across the nation are working to better align charges with actual costs. It's a complex undertaking, and customers sometimes struggle to understand the reasoning behind the changes.
Our "basic charge" is intended to recover fixed costs for service, traditionally limited to metering and billing services. However, the costs for maintaining poles, substations, power lines and other infrastructure also remain the same no matter how much electricity customers consume.
When a utility is overly-reliant on consumption-based charges to recover its fixed costs, revenue stability is at risk, particularly when electricity usage is flat or declining. It also means that higher usage customers can, in effect, end up subsidizing a portion of the fixed costs of low usage customers.
The pricing redesign discussions attempted to address revenue stability and customer equity issues, focusing on three residential electric pricing mechanisms and how such changes would impact different customers.
- Tiered rates (removing tiers entirely or moving the existing tier from 800 kilowatt hours to a higher consumption level)
- Increasing the basic charge to recover more fixed utility costs (with a corresponding decrease in the energy charge)
- Establishing a new residential demand charge to replace the volumetric delivery charge
The committee advised EWEB to approach redesign with an eye toward the future and in a simple, incremental manner.
Commissioners supported a collapse of the consumption tiers, agreeing that in the current form, the tiers act more as a price penalty for winter heating than as a conservation incentive. Some commissioners supported a cautious and gradual approach to increasing the basic charge, while others did not support any basic charge increase at this time.
Staff and commissioners will continue working on this important issue.
Customer service policy updates are in motion
Staff over the past few months has been asking the Board of Commissioners to review and suggest modifications to various customer service policies. This work has led to proposed changes that acknowledge customer service as a priority, and a "Promise To Customers" that includes enhanced privacy protections.
In May, commissioners provided feedback and direction on utility service charges and prices. EWEB charges some of the fees as a result of field visits, such as to connect or disconnect service. In the future, some of these activities will be performed remotely thanks to our modernization efforts, including the use of communicating smart meters. Commissioners supported revising or doing away with some of those fees related to field visits if such visits are no longer necessary.
The customer service policy update discussions will continue in June.
Strategic plan review
General Manager Frank Lawson sought feedback from commissioners on EWEB's Strategic Plan, adopted in August 2017. The plan has provided guidance for several decisions over the last eight months, including those associated with alternative water sources and smart meters.
Based on comments from commissioners and customers, Lawson sought direction on whether to include changes in the plan language that address:
- The makeup of the future power generation portfolio to include words such as "renewables," "green," "non-carbon," or "fossil-free"
- Better define EWEB's role in climate recovery, including programs and policies that focus on decarbonization (energy resource, transportation, industrial)
- More clarity regarding EWEB's role in social and community programs, including limited-income
Commissioners agreed that EWEB decisions and policies will have a significant impact on climate recovery now and in the future. They supported adding language around climate recovery, including electrification initiatives and pursuing future resource decisions that are low-carbon or carbon-free.
Other agenda items to note
Staff presented commissioners with the new first quarter Strategic and Operational Report, similar to a 10-Q form required of publicly traded companies. The report provides a comprehensive and transparent view of EWEB results.
