Plan would raise residential electric bills by about $3 per month starting next year to support system maintenance and long-term financial stability

By Damian Mann for Ashland.news

A majority of the Ashland City Council Wednesday night favored a proposal that would hike electric rates by an average 3.9% in each of the next five years.

The increase would add an average $3 to the residential electric bill each month starting next year. Rates haven’t been raised since July 1, 2021.

A base customer fee of $16.25 would increase by 50 cents under the proposal.

The cumulative rate raise of 3.9% per year would compound to a total 21.1% increase over the course of five years.

Mark Beauchamp, president of Utility Financial Solutions LLC, a consulting firm hired by the city, told the council that, without the increases, the city would confront a $4.5 million negative cash balance by 2030.

He said the rate increases would allow the city to properly maintain the utility system and provide a cushion in case of disasters and to replace aging systems.

The rate changes would also anticipate future increases from the source of the hydroelectric power used by the city, Bonneville Power Administration.

Beauchamp said the city has done a good job providing electricity to local residents, and it is one of the few cities in the country to provide its own electric service.

“You have probably one of the lowest electric rates in the country,” he said.

He said customers typically expect modest rate increases and also expect the system to operate efficiently.

“I’m trying to make sure you stay that way and make your customers happy,” Beauchamp said.

He said the city’s utility is also currently debt-free.

All city councilors except Councilor Gina DuQuenne endorsed the plan.

After the meeting, she said the numbers looked good and make sense, but she couldn’t back more city fee increases on local residents.

“It’s the principle — the people are already financially burdened,” DuQuenne said. “I can’t support this.”

While the average rate increase would be 3.9%, some users could see a maximum of 4.9% or a minimum of 2.9%.

Besides residential users, there are commercial and telecommunications users, as well as various government and municipal operations.

Under the proposed rates, the utility would achieve a projected cash balance of almost $6 million by 2030.  Councilor Dylan Bloom wondered what would happen if the city delayed increasing electric rates.

Ashland City Manager Sabrina Cotta said the longer the electric utility stayed in the red, the less able it would be to respond to emergencies and that would also result in laying off employees.

Beauchamp said that if the utility operated in the red it would be unable to finance larger infrastructure projects, jeopardizing the reliability of the system.

He said delaying rate increases would ultimately result in double-digit rate increases in later years, rather than a rate increases of less than 5%, which ratepayers would generally find “acceptable.”

“You always try to avoid double-digit rate increases,” he said.

Delaying would also result in less reliability for the system as a whole, Beauchamp said.

In the event of a disaster, the utility would burn through cash reserves quickly, so Beauchamp recommended having a 90-day cash reserve to maintain the system.

He said inflationary pressures can also affect a utility. Three years ago the cost of a transformer jumped 45% in one year, he said.

Beauchamp said the rate increases should be viewed as providing sufficient support for operations and capital improvements for the local utility.

“This is the key to maintain financial health,” he said.

Councilor Bob Kaplan said  not investing in capital improvements to the electric system would result in more deferred maintenance.

Kaplan said he wanted to make sure the low-income rate plan would still be in effect under the new plan.

“We want to make sure our low-income households are protected,” he said.

The council agreed to review the low-income program at a later date.

Councilor Jeff Dahle said the proposal would provide a way of “fighting entropy” to deal with aging infrastructure and to provide a reliable electrical service.

Councilor Derek Sherell said he found the proposal “acceptable,” and looked forward to approving a resolution to adopt it in the near future

Bloom said rate increases would provide a firm footing for the financial future of the utility.

“It’s about doing what we need to do,” he said. “I’d rather pay $3 extra a month now than $10 in a few years.”

Kaplan said that for the next two years the 3.9% would still show a negative number for operating income, but by 2028 a succession of rate increases would finally add up to show a positive number for operations.

DuQuenne wondered if the new rate would pay recent salary increases.

City Manager Cotta said that in part the rate increases would pay for lineman and electric staff.

Councilor Eric Hansen said he the rate study provided sufficient detail to get behind the 3.9%.

“I support a modest rate increase,” he said.

Mayor Tonya Graham said rate increases are one of the hardest things a council can do.

While never happy to see a rate increase, she said the presentation to the council is “a middle-ground proposal.”

Wednesday’s special study session was not a business meeting, so the recommendation will be brought back at a future meeting for formal adoption.

Reach freelance writer Damian Mann at dmannnews@gmail.com.

Related stories:

Ashland City Council to discuss electric rate hikes during Wednesday special study session (Dec. 15, 2025)

City Corner: Ashland’s residential electric rates — lowest in Southern Oregon (Nov. 18, 2025)

Mayor casts deciding vote against putting fees approval measure on ballot (Nov. 5, 2025)

Ashland boosts rebates for installation of energy efficient heating systems, water heaters (Nov. 5, 2025)

Study session: Council discussed budget, utilities assistance program (April 18, 2025)

City Corner: Ashland secures grants to help residents with energy efficiency (Sept. 12, 2204)