Can rate changes incentivize consumer behavior?

EUGENE: While discussing rate changes, Eugene Water & Electric Board commissioners considered how these adjustments might influence Eugene businesses and residents to move toward more eco-friendly power and water alternatives that could improve the overall community.

“We want people to use less energy and electricity, and no matter what happens it will always be beneficial for us to use less electricity,” said Commissioner Mindy Schlossberg. “It takes a while to build habits in people, even though we might not need to do it right now, I think it’s important.”

Currently, the Eugene metro area has fixed rate charges, meaning that customers who use less electricity than other households or companies are being subsidized by the utility’s kilowatt-per-hour measurement. The calculation keeps the fixed charge lower for residents. However, opting for more energy-efficient methods can unintentionally push fixed rates for neighbors.

General Manager Frank Lawson explained that other Oregon communities have fixed charges 2 1/2 times greater than EWEB. Despite a lower rate, Eugene tenants and small businesses alike continue to struggle to pay for utilities—a difficult balance to maintain as each group has its problems as well, he noted.

“Our businesses could move elsewhere if things get too expensive, setting all the burden on them also doesn’t help low-income in our community,” Commissioner Sonya Carlson noted. “Without these businesses, there are no jobs. There is no perfect solution, we all have to give a little bit in order to create the rate design we want in the future.”

“I would love to see us try to weatherize the rental stock to move to more efficient heating and cooling methods. Right now, there is no incentive for a landlord to put in a heat pump, to weatherize a house because they aren’t paying. This is an issue we’ve had for years,” according to Commissioner John Barofsky. “The cleanest kilowatt is the one that isn’t being used,” he added.

Although discussing this matter for the majority of their meeting, the board left with a multitude of questions to consider before their scheduled October assessment.

“Should we charge a different rate based on your income? Should we charge a restaurant a different amount than a hospital or a brewery? Should who you are and what you use the electricity for matter? Or should we focus on the price of the service we are offering?” asked Lawson.

Besides rate changes, the board also discussed communications with Eugene’s administration.

Commissioner Brofsky, board president Matt McRea, and General Manager Lawson recently met with Eugene Mayor Lucy Vinis, city manager Sarah Madery, and Counselor Groves to discuss policy-related needs. Topics included climate programs, water supply, and wildfire mitigation with an eye toward productive changes and shared goals for the metro area. Lawson emphasized the meetings will continue to find overlaps between the values of city government and the utility, in hopes of helping each other.

“As a community, we won’t know until they (the city) know what EWEB will be charged,” Frank Lawson said, as some stormwater, wastewater, and fire mitigation fees are mandated on the board. Those types of charges will impact community rates, he noted.

By October, the board plans to have developed a proposal that outlines the various elements and values of the new rate structure.