EWEB & Lane Electric Cooperative Launch Study of Potential McKenzie Valley Service Area Realignment

A realignment would cater to each utility’s strengths, with EWEB focusing on urban customers and Lane Electric on rural areas.

The Eugene Water & Electric Board (EWEB) and Lane Electric Cooperative have initiated a joint study to evaluate the long-term future of electric service in the McKenzie River Valley.

The study will explore whether a potential transfer of service territory from EWEB to Lane Electric could improve efficiency, enhance reliability, and better align with each utility’s strengths.

The McKenzie Valley, home to about 3,000 EWEB customers who live between Thurston Road and Vida, represents a geographically complex and rural segment of EWEB’s service area. Although this area accounts for only 3% of EWEB’s customer base, it covers roughly 25% of its total service territory – creating significant operational and financial challenges.

A primary driver behind the evaluation is the differing strengths of the 2 utilities. EWEB is structured to serve a dense, urban customer base centered in Eugene, while Lane Electric is focused on serving rural areas. Currently, the cooperative delivers power to member-owners in the upper McKenzie Valley, from north of Vida to Belknap Springs.

“This collaboration is about doing what’s best for all customers in the region,” said EWEB General Manager Frank Lawson. “We’re committed to a thoughtful and transparent process, and any potential transfer would need to be mutually beneficial for both utilities and the communities we serve.”

“We believe our service model is a strong fit for this territory,” said Lane Electric Cooperative General Manager Scott Coe. “As a rural cooperative, we have servicemen dedicated to sections of our system. This speeds up outage responses and provides unique expertise in our operations. We look forward to working with our partners at EWEB to determine the best path forward for the lower McKenzie Valley.”

A potential transfer will not include EWEB’s generation assets in the McKenzie Valley, such as the Leaburg and Walterville hydroelectric facilities.

The evaluation process, expected to continue through the end of 2025, will consider a wide range of factors, including the value of infrastructure and assets, customer experience, workforce considerations, and impacts to existing energy supply agreements.

A 2020 Cost of Service Analysis found that serving the McKenzie Valley costs EWEB 14% more than it recovers in residential rates. These elevated costs stem from factors like remote infrastructure access, increased vegetation management needs, and the extended travel required for field crews.

By transitioning service to Lane Electric – whose operations are optimized for rural terrain – customers in the McKenzie Valley could benefit from improved alignment with a utility tailored to their needs. At the same time, EWEB would gain operational efficiencies and be able to better concentrate resources on critical urban infrastructure and resiliency improvements.

Potential benefits include:

• For Eugene-area customers: Enhanced focus on aging infrastructure and improved reliability in the urban core, where 97% of EWEB customers live.
• For McKenzie Valley residents: Continued safe, reliable service at comparable rates, with more direct local representation through Lane Electric’s elected board of directors. McKenzie Valley customers are currently represented by an at-large, elected commissioner on the EWEB Board of Commissioners.
• For both utilities: Streamlined operations, better allocation of capital investments, and improved long-term strategic alignment.

The evaluation process will include multiple opportunities for public input to the elected boards of both EWEB and Lane Electric. The utilities will communicate any proposed changes well in advance, ensuring transparency and opportunities for public input along the way.

Both utilities are committed to conducting a thorough and collaborative evaluation, with the shared goal of providing safe, reliable, and sustainable electric service for all communities involved.