How We Set Our Rates

By Debra Smith, General Manager

Debra SmithIt’s been a while since I’ve written here in Coastlines to share specific information with you.  Last month, the Central Lincoln Board of Directors approved a new Strategic Plan and adopted a budget for the fiscal year that begins on July 1.  I’d like to share with you, our customer-owners, the process our Board uses to develop our strategic plan, create the budget and set customer rates.  That’s my purpose for writing to you.

Central Lincoln’s Strategic Plan is generally updated every two to three years and it’s designed to look out over a three to five year period.  The pace of change for electric utilities has been pretty slow since electrification began early in the twentieth century.  Central Lincoln has been serving customers along the central coast of Oregon for 75 years and although the historic photos we’ve been sharing in honor of our anniversary paint a picture of a very diffeent organization, our core purpose hasn’t changed much in the intervening decades.  Today, however, emerging technologies like distributed generation, demand response and battery storage have the potential to change how and what we do forever.  As part of the strategic planning process, your Board of Directors has adopted new statements of mission and vision.  Together, these set direction for the future and acknowledge that customers today want a voice in how their energy needs are met.

As a community-owned utility, our goal is to establish rates that fully recover all costs, including ongoing investment in infrastructure.  We’re not charged with making a “profit” and instead focus on keeping rates as low as possible for our customer-owners.  Our two biggest expense items are the power we purchase from the Bonneville Power Administration, and the cost of our personnel.  We couldn’t provide the products and services you count on, without an adequate budget for both.  The power we purchase from Bonneville is close to 60% of our total budget and we work collaboratively with other Northwest utilities to influence Bonneville’s rates.  We also strive to manage costs across the utility and our employees take their responsibility to you seriously in delivering on our mission.

We’re happy to report that the budget Central Lincoln’s Board of Directors approved last month did not include a rate increase for the coming year.  We appreciate the trust you place in us and we’re committed to honoring our legacy of providing reliable and affordable electricity, even while we look for new ways to serve you in the future.