Demand for electricity is growing, expectations around reliability and resilience are higher than ever, and costs are influenced by factors well beyond any one utility’s control. Electric utilities today operate in a far more complex environment than even a decade ago. At Umatilla Electric Cooperative, we manage those pressures thoughtfully and in a way which our members can rely on for fair rates and high reliability.
UEC operates differently than a for-profit, investor-owned utility. Our structure is simple: one member, one vote. Principles of fairness and equity guide our decisions across our diverse membership. Our obligation is to make disciplined choices to protect the cooperative for future generations. While perspectives on what is “fair” can differ, among our traditional members -including homes, farms, businesses and industrial - we strive to keep you abreast of the changing energy landscape.
Power supply acquisition and its costs remains the single largest factor shaping how utilities operate. In the Pacific Northwest, federal hydropower - largely provided through the Bonneville Power Administration - has long been the backbone of the system for traditional members. Bonneville’s hydropower is reliable but limited, and other portions of our load rely on different power sources and infrastructure investments.
The region’s low-cost federal hydropower is not available to meet the growth needs of our largest industrial members. Instead, they are served through separately designed rate and market-based power purchases. Those costs - including the risks associated with market price volatility - are passed directly through to the members who create them. This structure ensures that residential, agricultural, and small business members are not impacted by large, energy intensive growth.
Beyond power supply, utilities everywhere face shared pressures: higher material and equipment costs, supply chain constraints, rising insurance premiums tied to wildfire risk, increased regulatory requirements, and the lingering effects of inflation. At the same time, expectations for safety, reliability, and service continue to rise.
UEC manages the risks and uncertainties of operating a utility for our members, we do not simply react to these pressures. That means we are focused on long-term planning instead of short term fixes, maintaining operational efficiency, and ensuring each rate class appropriately pays its fair share of the costs to serve them.
A helpful way to understand this is by looking at how each dollar of UEC revenue is used. About 86 cents goes directly to purchasing electricity. Roughly 9 cents supports the operation and maintenance of the electric system. The remaining 5 cents is retained as margin to manage risk, cover unexpected costs, and maintain the financial strength of the cooperative. When margins exceed what is needed, they are returned to members through capital credits.
Risk management is also a critical part of this work. Service agreements, cost allocation practices, and financial safeguards help ensure new growth pays its way and that existing members are protected. Infrastructure funded by larger users is owned by the cooperative and our members, strengthening the electric infrastructure for improved reliability and over the long term.
UEC’s focus has been, and continues to be, stability, stewardship, and fairness. The energy landscape will continue to evolve, our commitment remains the same: to make informed decisions, manage pressure responsibly, and keep your cooperative strong for today and for generations to come.
Robert Echenrode
President/CEO