CPI Retail Rates Change
A number of developments have occurred over the last two years that have impacted the cost CPI incurs to provide clean, safe, reliable and affordable power.
The devastating Labor Day wildfires of 2020 ravaged communities and over $20 million of CPI infrastructure in the Santiam Canyon. CPI has worked continuously since then rebuilding a more disaster resistant system throughout the affected areas and will continue doing so for several years to come.
Shortly after that a catastrophic ice storm hit western Oregon turning hundreds of poles into splinters and downing miles of power lines. Two wind storms and a snow storm were next, all of which caused significant, costly damage to CPI’s distribution system.
While inflation at the national level hovers between 5% and 6%, inflation on the equipment and materials used in the electric industry has far exceeded that.
Supplies of nearly every material we use – wood, steel, copper, aluminum, plastics – are severely constrained by both production and delivery problems. Equipment orders for transformers, switches, reclosers, and vehicles are also several months out and in many cases more than a year, if they are available at all.
CPI’s all-in wholesale power costs are forecasted to increase 3.5% starting October 1st.
Maintenance and replacement of aging substation equipment and transformers add significantly to capital costs.
Since the 2008 recession, we have experienced relatively flat energy sales, which has put increased pressure on margins.
Taking these and other developments into consideration, such as ordinary system capital improvement projects, and the need to bring in new capital as we retire legacy capital credits leads us to announce that the time has come for CPI to increase rates. Effective with bills mailed starting October 1st, CPI rates will increase by 6.2% or $7.25 per month for the average residential member using 1,100 kWhs.
We would prefer to make more modest adjustments each year if and when necessary, but deemed it prudent to delay needed rate action last year to give more time for members to adjust and recover from the effects of the coronavirus pandemic and the resulting economic downturn.