Hood River Electric Cooperative members learn of rate hikes trickling down from the Bonneville Power Administration
By Stu Watson
Popularized in the 1964 song from the movie “Mary Poppins,” the wisdom that “a spoonful of sugar makes the medicine go down” rang true March 16 for members of Hood River Electric Co-op attending the 71st annual meeting.
Before Manager John Gerstenberger told retail customers they would be looking at pass-through rate hikes ranging from 7.4 percent to 9.9 percent, board President Butch Gehrig reminded those on hand at the Hood River County Fairgrounds that, once business was done, there would be pie.
Waiting off to the side were more than 50 pies, in 14 different flavors, baked by members of the Parkdale Grange. Vanilla ice cream would be scooped by Gehrig himself.
But first, a bit about those rate hikes.
The Bonneville Power Administration bumped rates to HREC and other co-ops by 6.4 percent in 2015, and is pushing cost hikes of up to 8 percent downstream to end users this year.
As a result, Gerstenberger said, HREC will boost rates by 8.5 percent to residential users, 7.4 percent to small commercial customers, 9.9 percent to big commercial accounts and 8.9 percent to irrigators.
He said industry organizations are keeping a close eye on upstream activity, including court action that could require more flow through the Snake River dams to help salmon runs.
“Such a spill would reduce generation at the dams, further eroding BPA’s revenue,” Gerstenberger said.
On the plus side, he noted the co-op came through the snowy winter in relatively good shape. For one thing, the delivery system dodged significant ice related outages.
Because of preventive measures, the co-op had enhanced the integrity of lines, poles and transformers. On average, the co-op service area experienced about one outage per week in 2016. That low outage level held HREC overtime hours to 10 percent of what most utilities experience.
“Overtime for our linemen varied from 20 to 50 hours for the year,” Gerstenberger said. “Linemen at other utilities work 200 to 500 hours overtime a year.”
Prevention included more than 100 projects to remove tree branches from above lines, installation of insulation to prevent shorts caused by animals dancing on hot connections, and identifying and replacing deteriorating poles before they could topple and take out service.
Gerstenberger also noted that CACHE—HREC’s partner provider of broadband internet—continues to add customers, boosting gross revenue to more than $1.2 million and generating enough funds to buy all the necessary equipment for network upgrades and expansion.
In other presentations, auditor Nate Reagan said the books looked “clean,” and noted that a slight dip in revenues compared to a rise in operating expenses of $285,722 pointed to the need for the rate hike.
The net margin for the year increased to $659,184 from $608,724 a year ago. In this context, Reagan said, net margin is returned to members of the co-op as capital credits.
New counsel Charles Fadeley paid tribute to the late Meredith Van Valkenburgh, who died a few months after his retirement from HREC service in 2016.
“We’re not suing anyone, and no one is suing us,” Fadeley said, summarizing the solid legal position of the co-op.
Board elections concluded the business portion of the session, with members selecting Butch Gehrig, Bernie Wells and Opal DeBoard for continued service.
After everyone retired to the pie tables, Tom Slagle tucked into the first of his two pieces—with ice cream, he noted. A retired attorney from Alaska, he helped his wife, Nancy, and her sisters, Diane and Mary Parrott, transfer many pies to the meeting venue in his car.
Told by one listener that putting that many pies in a personal car sounded a lot like an accident waiting to happen, Slagle chuckled. “I was driving very carefully,” he said. Cheryl Thomas of Pine Grove and Lois Vance of Parkdale were grateful, as they enjoyed slices of blackberry pie with smiles on their faces.