McMinnville Water & Light braces for rate hikes amid projected $720,000 operating loss

McMinnville Water & Light braces for rate hikes amid projected $720,000 operating lossThe Oregon utility is conducting a cost of service study to address rising expenses in its water division, which features a $9.4 million operating budget and a $15.2 million capital plan for the coming fiscal year.

MW&L's draft FY 2026-2027 water division budget includes $9.4 million for operations and $15.2 million for capital projects.

The utility anticipates a $720,000 operating loss for the water division in the upcoming fiscal year as expenses outpace revenues.

An ongoing water cost of service study is expected to yield a rate increase recommendation by July 2026.

The commission advanced plans to site a $385,000 solar array at its 22 MGD water treatment plant to offset energy costs by roughly $20,600 annually.

McMinnville Water & Light (MW&L) in Oregon is preparing for potential water rate adjustments to close a widening revenue gap. During an April 21, 2026, commission meeting, staff presented a draft FY 2026-2027 water division budget projecting a $720,000 operating loss, driven by general expenses outpacing current revenues. The draft water budget outlines $9.4 million in operating expenses and a $15.2 million capital program, which is largely tied to ongoing facility upgrades. According to Controller Shane Lehman, the projected shortfall for the upcoming year follows an estimated $358,000 operating loss for the current FY 2025-2026 period. The utility has not yet factored a rate increase into the draft budget. To address the deficit, MW&L is conducting a water cost of service study covering the next two fiscal years. Staff indicated that a formal rate adjustment recommendation is expected to be presented to the commission in July to help balance the budget. The utility's water division operates a 22 million-gallon-per-day treatment plant, 3.5 billion gallons of raw water storage, and 161 miles of distribution piping. The draft budget allocates approximately $1.6 million specifically for operations and maintenance, covering regulatory compliance sampling, backflow prevention, and general infrastructure upkeep. In a separate move to optimize operational costs, the commission advanced plans to install a $385,000 solar array at the water treatment plant. The 125-kW system is required under Oregon's Green Energy Technology statute due to a separate municipal facility expansion project. General Manager John Dietz noted that siting the panels at the treatment plant—which currently purchases power from a higher-cost neighboring cooperative—will maximize the return on investment, generating an estimated $20,600 in annual energy savings.