The city’s due for a rate increase but residents may continue to pay less than neighboring communities

By Bob Kaplan

Across the country, folks are alarmed at the rapidly increasing cost of electricity and gas in our household budgets. Based on data collected monthly in 75 urban areas by the federal Department of Energy, average retail electric rates have increased by almost 40% over the last five years.

Fortunately, that’s not the case in Ashland. While the cost of delivering kilowatt-hours to our homes has risen, Ashland Electric has been able to hold our rates steady with just one increase of 5.1% in 2021. I’m sorry to say we’re due for an increase, but fortunately it’s not likely to match recent increases elsewhere. The City Council will be reviewing the cost of service data next month to consider whether a rate increase is needed.

Last year, I wrote a Council Corner column on Ashland’s electric utility: Ashland Electric — the power is in our hands. I was very upbeat about the fact that we own and operate our own electric utility — unlike all our neighboring communities, from Mount Shasta to Roseburg and from Crescent City to Lakeview, who purchase electricity from Pacific Power, a for-profit subsidiary of Berkshire Hathaway Energy. Ashland Electric consistently receives the Excellence in Reliability award from the American Public Power Association.

Our city leaders decided over 100 years ago that the city should be in charge of supplying electricity in Ashland. To this day, we continue to reap the benefits of that decision!

How do our rates compare?

In my previous column, I included a table comparing Ashland’s and Pacific Power’s residential electric rates. The bottom line at that time was that Ashland households paid substantially less for electricity — 16% less for an average household consuming 1,000 kWh per month. This cost comparison includes Ashland’s electric tax that has been in place for almost 50 years.

I thought I’d run the numbers again so we can all have them at the ready when we talk about electric rates over Thanksgiving dinner!

The bottom line: Ashland households now pay 21% less for our electricity than everyone else in the valley. And remember, this includes our electricity tax.

There are a few other features of our electric rates I’d like to point out.

Support for energy conservation

Ashland’s tiered rate schedule means households that use less electricity pay a lower rate — 7.57 cents per kilowatt-hour for the first 500 kWh before stepping up to 9.11 cents per kWh for second-tier rates, compared with Pacific Power’s higher 14.373 cents per kilowatt-hour across the board from the very first kilowatt-hour. That’s consistent with our values. We want folks to conserve electricity if they can, so we make basic service as cheap as possible and charge more as usage goes up.

This means that an Ashland household using only 500 kWh a month pays $67.63 (including the electricity tax) while a household outside Ashland’s city limits pays $85.87 — that’s 27% more!

Furthermore, Ashland Electric also helps residents reduce electricity consumption by providing rebates for energy efficiency investments, including space and water heating equipment. We recently increased those incentives for everybody and we now also pay double for low-income households. Learn more about the city’s energy efficiency incentives here.

Expanded discounts for low income households

Last spring, the City Council approved an expansion of our utility discount program for low-income households. While the electricity discount used to be available only during winter heating months, the new program offers the discount throughout the year for electricity, water and sewer service. Households earning less than 200% of the federal poverty line are eligible for a 30% discount each month up to an annual maximum of $400. Importantly, households receiving a utility discount must have an energy and water efficiency audit within two years of enrolling in the program. These are conducted free of charge and can help identify opportunities to reduce utility costs through conservation, which has long-lasting benefits for the household. More info on the utility discount program can be found here. By the way, did you know you can round up your utility bill to help your neighbors? About 500 Ashlanders already do that!

Good news from our wholesale supplier

Ashland Electric has purchased wholesale power from Bonneville Power Administration since 1982. We also generate power locally at our 850 kW hydropower plant below Reeder Reservoir, and we have 6.5 megawatts (1 MW = 1,000 kW) of local solar capacity installed by residents and businesses, Southern Oregon University, Ashland School District and the city. These local resources meet about 5% of our annual load.

Last month, the City Council approved a 16-year contract with Bonneville that begins when the current contract ends in 2028. That’s good news because BPA’s wholesale rates are among the lowest in the country and have been very stable over time. That’s one of the reasons we can keep retail rates low while continuing to offer rebates that help Ashland residents and businesses invest in energy efficiency. The new contract will also make it easier to develop additional solar facilities and storage to meet excess load growth and enhance resilience. With about 95% of our electricity coming from renewable sources, Ashland Electric will continue to be among the cleanest electric utilities in the state according to annual reporting by Oregon’s Department of Environmental Quality. It’s far cleaner than Pacific Power, which generates almost two-thirds of its electricity by burning coal and methane.

Ashland’s Electricity Tax

I pointed out above that my rate comparisons include Ashland’s electricity tax, and I want to provide some additional background on that. The City Council enacted the tax almost 50 years ago, in April 1976, even before property tax limitations were imposed in the 1990s with Measures 5 and 50. As Oregon’s cities have struggled to find other revenue sources, Ashland has been able to fund a wider range of public services thanks to our electricity tax and our food and beverage tax.

So if the topic of electric rates comes up as we gather for Thanksgiving dinner this year, we can be thankful for the lower rates and the multiple benefits that come from owning our electric utility. Let’s give thanks too for the dedicated city staff who keep our electricity flowing around the clock all year long with very few outages. 

Email Ashland City Councilor Bob Kaplan at [email protected]. Email letters to the editor and Viewpoint submissions to [email protected].