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Policy changes support economic growth

Baker City, Oregon (OTEC) — Extensive changes to Oregon Trail Electric Cooperative’s tariff policy —  aimed at improving member satisfaction and stimulating economic growth — were recently initiated by the cooperative.

During the March 20 OTEC board of directors meeting, the cooperative’s governing body gave the green light to comprehensive changes to the line extension portion of the tariff.

The board policy committee approached this process with three major goals in mind; simplifying the process, easing the financial burden on the membership and focusing on the members’ overall satisfaction and fairness when dealing with this section of the tariff. Goals were identified after reviewing member feedback from OTEC staff and talking to community partners and members.

One of the approved programs included in the tariff focuses on a new low interest loan program to help members pay for their portion of line extension costs. Under the previous rules, all construction costs had to be paid upfront before any construction was started.

“The loan and the construction credits will generally cover the cost for about 80 percent of all work orders,” OTEC Chief Financial Officer Anthony Bailey said. “We don’t want the cost of a line extension to slow down potential economic development.”
Members may borrow up to $5,000 to assist with costs to build a residential or small commercial service. Members can borrow up to $10,000 for irrigation or large commercial services. Loans are for a maximum of five years at 2 percent interest.
One of the other tariff changes expanded credits to further reduce the amounts members must pay for construction of line extensions. Construction credits are contributions by the cooperative given upfront to offset the cost of installing new power lines. OTEC has expanded these credits beyond residential services to include irrigation and commercial classes.

In addition, OTEC has also reintroduced a line-cost share program that had previously been discontinued and had produced frustration among some members about the inability to recover any of their original investment of a new line.

Until this rule changed, the first member to install a line extension paid the full cost and had no way to recover any portion of those costs when a second member connected to that same power line. 

Under the new policy when the first member pays to build a new line extension — to complete new construction — that member can recover a portion of their original costs from others who connect to the line up to five years from the date of construction.

OTEC revamped other tariff policies, including removing a 4 percent fee previously charged for subdivisions, meaning one less fee developers will have to pay as they plan to build a new home, and removal of minimum contracts for residential services as compared to the previous policy that required a minimum contract for any residential service costing more than $10,000.

The new policies are now in effect.

“These major policy changes are actions being taken in response to OTEC’s new strategy that has direct focus on our members’ satisfaction, growth and innovation. In addition, it is an example of OTEC’s commitment to community, just one of the seven cooperative principles that guide our business practices,” OTEC Chief Executive Officer and General Manager Les Penning said.