Dear Lane Electric Community
October is a time to begin preparing for Lane County’s wet, winter weather. It’s also a time for Lane Electric’s Board of Directors to start reviewing the draft budget proposal for next calendar year. There’s a direct connection between our coming winter weather and Lane Electric’s budget that I’d like to share with you this month.
Weather, specifically cold weather, affects how much revenue we can expect to receive to fund operations and maintenance. A colder wet season means more electricity use leading to higher electricity bills and higher bill revenues to support operations. Conversely, a warmer wet season translates to lower kilowatt-hour sales and revenues to support planned system maintenance and operations. For example, last year’s warmer winter caused Lane Electric’s kilowatt-hour sales to drop by nearly 8% below what we budgeted for. This led to our belt-tightening effort last year to save or postpone expenses.
Weather is hard to predict and so is the amount of revenue we can expect from kilowatt-hour sales to sustain your co-op.
For 2017, the National Weather Service recently changed their prediction for a weak La Niña (colder and wetter) season to a neutral-to-mild El Niño (warmer) season. In other words, we may see normal winter temperatures and precipitation, or not! This, in turn, means that we may expect normal energy usage revenues, or not! As you can see, relying on the weather to fund the reliability of our rural electric system is not easy.
Lane Electric’s 2017 draft budget will include staff’s best estimate of what revenues we can expect from a normal winter season. Your Board of Directors will review how staff proposes to use that money to best serve our members and maintain the electric system infrastructure. There are the usual cost pressures, such as a wholesale power cost increase from the Bonneville Power Administration, system improvements, and health care costs that the Board will address while keeping in mind affordability for our members.
In the coming months I’ll keep you updated on how this story unfolds and how it may affect your electricity bill. While the weather may be unpredictable, Lane Electric’s firm commitment to our members is to keep your electricity affordable and your electric service reliable and safe.