The Value of Locally-Governed Public Power Utilities

Community-owned utilities, like Central Lincoln, are not-for-profit entities that exist to provide essential services like electricity to their customers within a specified area. We are a people's utility district (PUD), and our rates are based on the actual cost of providing service and set by your locally elected board of directors. PUD rates are often much lower than rates charged by investor-owned utilities (IOUs), which must charge more to provide stockholder profits.

The Oregon Public Utility Commission (OPUC) has regulatory authority over IOUs operating within the state and employs various regulatory mechanisms and processes to ensure compliance with state requirements. The OPUC sets rates for investor-owned utilities like Pacific Power and Portland General Electric (PGE) and recently approved:

• an overall rate increase of 25% for Pacific Power customers in March 2024-the third double-digit rate increase in the last three years.
• a 17% rate increase for PGE customers in January 2024, following a nearly 20% rate increase in 2023.

Some of the rate increases are due to Pacific Power and PGE having to meet state-mandated energy targets and reduce greenhouse gas emissions (GHG) from the electricity they provide: 80% by 2030, 90% by 2035, and 100% by 2040. This means relying 100% on intermittent renewable energy sources such as solar and wind, which are more expensive to purchase and cannot meet firm power needs. Firm power needs refer to the consistent and reliable supply of electricity required to meet the demands of consumers at all times, regardless of fluctuations in demand or availability of renewable energy sources. Unlike intermittent energy sources such as wind and solar power, firm power sources can provide a stable and predictable supply of electricity, often on a 24/7 basis.

Central Lincoln is not in the same situation since our power is already GHG-free. Our goal is to establish rates that fully recover all costs, including ongoing investments in infrastructure. Central Lincoln had a 3% residential rate increase in 2022 and another 3% increase in 2023.

Our rates remain some of the lowest in Oregon and well below the national average. That is because of our access to the most abundant source of renewable energy-hydropower-from the Bonneville Power Administration (BPA). It is also due to local governance recognizing the issues facing our communities.

Hydropower accounts for nearly 7 percent of the nation's electricity supply-and nearly 85% of the electricity Central Lincoln sells to customers. Because the fuel (water) that turns the turbines to make electricity in a hydroelectric plant is free, the cost of operating a hydropower facility is low compared to other sources.

BPA is a federal agency responsible for transmitting electrical power generated by federal hydroelectric dams in the Pacific Northwest, particularly in the Columbia River Basin. It plays a significant role in supplying power to public utilities in Oregon and neighboring states.

All of the power we sell to our customers comes from BPA.