<BR> Standby for electric rate hikes
PacifiCorp has the State Utility Commission okay to increase rates; co-ops are looking at rates hikes and there is the threat of more rate hikes in October with deregulation
Electrical power shortages, rolling brownouts and California's legislatively capped electricity rates have been the top stories in the news recently. The entire issue is very complex, however; for 516,000 Oregon customers the bottom-line is that electric rates are going up.
PacificCorp, the parent company of Pacific Power, Inc., announced earlier this week that the Oregon Public Utility Commission approved a $22.8 million rate increase. The increase, which equals a three percent price hike, became effective yesterday.
According to the power company's announcement, the increase translates to a 2.55 percent increase for residential customers, adding about $1.62 to the monthly bill of a customer using approximately 1,000 kilowatt hours each month.
"We are gratified that the Commission recognizes the extraordinary regional power cost issues that are driving this request," Matthew Wright, vice president, regulation, said in the announcement. "While we recognize that any price increase is not easy for customers, it is also important that our prices more closely reflect the actual costs to serve our customers. We are hopeful that it will also encourage our customers to continue to use energy as efficiently as possible."
The increase, the power company explained, comes from a request originally filed last November. The request was based on the need to begin tracking excess net power costs that are above those covered in what was then current rates. Since the filing, regional power costs have continued to rise, PacifiCorp's release stated, and the company has already incurred more costs than it would be allowed to recover in a given year under Oregon's deferred accounting statutes.
Oregon's largest supplier of electrical power has created a web site full of energy saving tips - www.pacificorp.com.
PacifiCorp customers are not the only people getting hit with increases; the Oregon Rural Electric Cooperative Association is complaining about the possibility of a rate increase as high as 250 percent.
In a letter to each member of Oregon's Congressional delegation, Sandy FLicker, Executive Director of the co-op, explained that the source of power, Bonneville Power Administration (BPA) has proposed such a rate hike. This rate increase, Flicker pointed out, would impact 250,000 consumers served by the 17 member systems throughout rural Oregon.
This rate increase, Flicker explained in her letter, can be directly attributed to BPA over-subscribing by 3,400 megawatts to other non-preference customers, such as direct service industries (DSIs). This, she added, has forced BPA to augment its supply for preference customers, like electric co-ops, by purchasing power on the open market at exorbitant rates. "To add insult to injury, the DSIs remarked this power back to BPA at a profit of $1.8 billion this past year," Flicker wrote.
It is totally unconscionable, the letter continued, to think that electric co-op customers would be subjected to enormous increases in their electricity bill so that DSIs can resell this federal power at a profit. "We strongly encourage you to stop the "special deals" for DSIs by not allowing remarketing rights. This action will at least eliminate one contributing factor to this unacceptable rate increase."
As of press time, none of the state's Congressional delegation had made public any response.
On another related subject, watch for more rate increases later this fall. October 1, 2001, is when Oregon's deregulation takes effect. The plan was part of Senate Bill 1149 which was passed by the 1999 Legislature.
It's not clear what the immediate impact will be, however, one source claims that customers large and small will be thrown into an electrical market with no assurance of prices or terms of service. Customers using between 30 kilowatt and 1,000 kilowatts will be given a "standard offer" option to replace their current traditional utility service. Apparently nobody has yet defined exactly what a "standard offer" will be.
Not everyone believes the deregulation plan should go forward. "Oregon has the lest expense, most reliable electricity in the United States," Congressman Peter DeFazio has been quoted as saying. "There is no reason to go ahead with any experiment, whether you call it deregulation or restructuring."
A bill has been filed in Salem that would push back Oregon)s deregulation five years.