City Council Reduces Electric Costs for All Customers by 3%

Hermiston residents will see savings on their power bills in 2026 as the City Council approved a proposal to reduce the city’s electric franchise fee rate for all customers. Adjusting the fee from 7% to 4% is expected to reduce electricity costs for the typical household by $40 to $60 a year, depending on usage.

The changes also eliminate the City’s existing economic development incentive program tied to electric utility franchise fees. Created in 2022 to support data center development, the incentive program triggered significant new revenue for the city but is no longer needed. The rapid expansion of data center operations within Hermiston has dramatically increased franchise fee collections, which allows a reduced universal rate to now benefit all customers while still growing city revenue. 

Under the revised structure, data centers currently operating in the city will no longer be eligible for refunds as part of the incentive program, and will join all other customers in paying the same 4% fee on all power usage. A review by staff shows that despite the rate cut for residents and businesses, overall franchise fee revenues are projected to increase by $1 million to $2 million per year between 2026 and 2030, driven by data center power usage. 

The new rate remains well within the market range among Oregon communities and provides a more transparent, sustainable, and regionally aligned approach to franchise fees.