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October 21, 2005

Opportunities to Talk, to Shop, and to Receive CFLs Free

Here are a few events and opportunities we wanted to let CUB members know about:

Great Opportunities to Light Your Home with
Compact Fluorescent Bulbs

The Energy Trust has joined with select retailers and CFL manufacturers of Energy Star qualified lights to offer special lower prices on compact fluorescent bulbs (CFLs), through Dec. 31, 2005. Look for CFL bulbs at the special price of just 99¢ at participating retailers, which include certain locations of Fred Meyer, Bi-Mart, A-Boy Electric, Home Depot and others. For a complete list of stores, and information about why CFLs are a good deal, go online to PGE Energy Savings or call 1-800-ENTRUST (368-7878).

Sustainable Holiday Food & Gift Fair to Warm Hearts and Homes, A Benefit for Oregon HEAT

For the fourth year, Portland's home-grown Give Green! Holiday Food and Gift Fair will take place Saturday, November 12th and Sunday, November 13th, at the Doubletree Lloyd Center (1000 NE Multnomah). The Holiday Food & Gift Fair features local, sustainable and healthy foods and gifts. Attendees will sample and browse organic chocolate, wine, coffees, and meal ideas along with green clothing, gifts, and much more!

This event is a benefit for Oregon Home Energy Assistance Team (HEAT), a local nonprofit dedicated to providing low-income Oregonians with the resources to meet their energy needs, reduce usage and move toward self-reliance. Heating costs are estimated to soar this winter, leaving hundreds of thousands of Oregonians wondering whether they can afford to stay warm when the cold weather hits. Join us at Give Green! to support sustainable business and raise money for Oregonians in need. Doors open at 10:00 a.m. on Saturday, 11:00 a.m. on Sunday and there is a $3 suggested donation, with all proceeds to benefit Oregon HEAT. More information is available at www.givegreenfair.com.

MidAmerican Town Hall in Portland

The Portland Town Hall on MidAmerican's proposal to purchase PacifiCorp happens this coming Tuesday night, October 25th at 6:30 p.m. The Town Hall is being held at University of Portland's Chiles Center in the Hall of Fame Room (5000 N. Willamette Blvd). Go on down and express your thoughts about this proposed merger. In case you missed our analysis, or would like a refresher, here is a link to CUB's most recent article on the MidAmerican case.

Posted by Oregon CUB at 03:08 PM | Comments (0)

October 20, 2005

PacifiCorp Files Tax Return that Doesn't Add Up

Utilities in Oregon filed tax reports with the Public Utility Commission on Friday, a direct result of the passage of the Utility Tax Reform Bill, SB 408. The PUC has put together temporary rules based upon the tax reform law that should help assure utility customers that they are not overpaying their utilities for taxes that never reach state and federal government coffers.

However, there's a glitch. As reported in yesterday's Oregonian, PacifiCorp (dba Pacific Power) has filed a report which "did not comply with the temporary rules." By choosing a significantly different set of parameters for its tax figures, PacifiCorp was able to reach a number implying that it is customers who will owe more money, rather than the other way around. CUB Executive Director Bob Jenks called the tax report filed by PacifiCorp "meaningless."

Here's why:

1) The Public Utility Commission of Oregon regulates Oregon investor-owned-utilities (IOUs) -- the utilities don't regulate the Commission. We feel that it is inappropriate for PacifiCorp to choose not to comply with a clear set of rules set down by the Commission. Bob Jenks said, "In all the years I've been at CUB, I have never seen a utility simply not follow a Commission order." Based on PacifiCorp's own description of the parameters they used in the letter accompanying their tax report, those parameters do not match what the Commission ordered.

2) It is not clear at this time what methodology PacifiCorp used to reach the numbers they did, because no one has seen the process they used, outside the Company and Commission staff. We need to see the numbers and the process they used in order to adequately understand and critique the end result. However, CUB did an extensive analysis of PacifiCorp finances in their recent rate case which led to the Commission reducing PacifiCorp's rate increase by more than $16 million to account for over-collection of taxes. We are having trouble reconciling the numbers in that case with the numbers presented Friday.

3) The suggestion in PacifiCorp's report that customers paid $11 million less for taxes than their parent company paid, should not lead customers to believe that they will be paying $11 million more in rates in the future. We believe that PacifiCorp's interpretation is at odds with the Commission's order and the intent of the law. Once CUB and other consumer advocates have had a chance to view the numbers, we think that the numbers will show that tax payments made by customers to the utility were clearly greater than the money paid by the utility to government.

We think PacifiCorp's actions are inappropriate. We will work to make sure that PacifiCorp complies with the Commission's orders, to ensure that parties will get to review the data that underlies public assertions, and to establish permanent rules regarding taxes in rates that will serve customers well.

Posted by Oregon CUB at 10:05 AM | Comments (0)

October 14, 2005

CUB Filing MidAmerican Comments Today

As you probably know, MidAmerican Energy Holdings Company, owned by Berkshire Hathaway, owned by Warren Buffett, is the latest suitor at the Oregon electric utility debutante ball. MidAmerican wants to purchase PacifiCorp (Pacific Power here in Oregon) and has the enthusiastic approval of current owner ScottishPower. This suitor has brought a substantial bouquet, promising long-term ownership and plenty of capital investment. Still, there are issues that have CUB concerned.

In our comments filed today on the MidAmerican case (UM 1209) with the Oregon Public Utility Commission, CUB addresses the following of those issues:

1) First and foremost, CUB would like to know what effect this purchase, and the large amounts of capital investment proposed, would have on customer rates. Already PacifiCorp is forecasting rate increases of 4% a year, every year into the foreseeable future. We know the Buffett/Berkshire/MidAmerican plans would mean even higher increases, but we don't know exactly what those would look like. In our comments we state, "there is, without exaggeration, not a single direct reference to the affordability or reasonableness of rates for PacifiCorp customers under MidAmerican ownership" in their application. We applaud MidAmerican's willingness to invest in the company they wish to purchase, but that must be balanced by a realistic look at how customers' rates would be impacted.

2) Also, our research shows that MidAmerican has been able to achieve a higher profit, or rate of return, in Iowa, than is allowed under Oregon utility regulations. The regulated system does include opportunities for manipulating larger profit margins that simply aren't accounted for under the regulations (such as double leveraged holding company structures, and the phantom tax situation we passed SB 408 to rectify). CUB would like to make sure that Oregon customers will not be paying an inflated rate of return to MidAmerican shareholders.

3) CUB is asking the Commission to consider carefully the issue of power shifts: "This application presents two types of loss of local control and input: loss eastward toward Salt Lake City, Des Moines and Omaha, and loss upward to increasingly larger and more distant corporate layers." Oregon has worked hard to develop what is perhaps the finest renewable and energy efficiency programs in the country. We don't want to lose them because some executives we never see from Iowa do not believe they are important. Job shifts to Utah are also at issue. And of course, whenever the corporate structure expands, it can become infinitely more difficult to get the information you need, reach the person you need, or have a problem addressed.

4) Finally, the repeal of the Public Utility Holding Company Act of 1935 (rest in peace) leaves utility customers "like a snail out of its shell... now exposed to massive holding companies seeking to increase profit by any means." Warren Buffett is already a rich man with a large empire. If PacifiCorp should become a part of that empire, and should it expand even further as he seems to have planned, we need the Commission to be setting conditions now to protect customers later. For example, we believe the Commission should set conditions guaranteeing preservation of, and access to, information regarding investments and rate setting. That will not level the playing field between international mega-corporations and Oregon utility customers, but it is a way to keep track of what is really going on with our utility.

This case is really just getting going. We file with the PUC today, and will be interested to see the response to our concerns. A copy of our actual Comments can be accessed here.

Posted by Oregon CUB at 02:00 PM | Comments (0)

October 06, 2005

Gas Prices Bring Conservation Projects to the Fore

Well, it's probably not news to you that natural gas prices are going up. Fortunately, our rise in Oregon at approximately 15% is considerably better than the 75% increase in natural gas prices seen in some deregulated market states. In light of these increased gas prices occurring across the country (which affects both gas and electricity markets), we felt it was a good time to give an overview of the renewable and energy efficiency work that CUB has been doing with local utility companies, both gas and electric. The less we use, the less we pay.

Cascade Natural Gas
The most recent shift has been the announced proposal this week by Cascade Natural Gas that they would like to join the Energy Trust of Oregon. This would greatly enhance the options and availability of energy efficiency programs for customers of CNG (in Bend and other parts of Central Oregon). CUB has been calling for this shift, since it removes a fundamental conflict of interest for the utility, which is in the business of selling a maximum amount of power, not minimizing the power sold. We are therefore very pleased to see the Company making this move to enhance energy efficiency and conservation efforts by allowing the successful Energy Trust to manage their programs.

Idaho Power
Over in Eastern Oregon, Idaho Power has recently made huge strides in their own energy efficiency programs. Although the Energy Trust doesn't operate out in Idaho Power territory, Idaho Power agreed to conditions proposed by CUB in their most recent rate case that they would make a six-fold increase in their energy efficiency programs funding. We believe that this large increase in funding will lead to big improvements in the energy efficiency programs offered.

NW Natural
NW Natural has been a member of the Energy Trust for 2 years, allowing utility customers to get energy audits, conservation tips, and energy-saving devices for both their electric and gas systems at one time. Looking ahead, NW Natural has been discussing (with CUB and a group called the Climate Trust) a visionary pilot program that would allow customers to buy a cleaner gas product, by including an offset of CO2 in the cost of the gas. This program, if implemented, would be the first of its kind that we know of in the country, and would be a great step forward in addressing the issue of global warming. We hope the project comes to fruition and will certainly let CUB members know if/when it does.

PacifiCorp (Pacific Power)
PacifiCorp's current electricity production leans heavily on the use of coal-burning plants. Not only are the environmental impacts of coal significant, but we anticipate economic fall-out within the next decade in the form of carbon regulation, surcharges on carbon emissions used to mitigate effects of greenhouse gases on the warming of the planet. This carbon regulation will help protect the environment but will affect rates. CUB has been urging PacifiCorp to acknowledge this issue and begin planning strategies that address carbon regulation, both for the environment and so customers are not blind-sided with large increases in rates. In their most recent Integrated Resource Planning (a document in which utilities plan how to supply their customers for the next 20 years with power), we were able to get PacifiCorp to directly examine these issues in more depth than ever before. We are hopeful that this will lead to a diversifying of PacifiCorp's electricity production to include more renewable energy sources.

Portland General Electric
And speaking of renewables, have you heard yet about the new 75-megawatt wind farm that PGE is building in Central-Eastern Oregon? It is called Klondike II and is expected to be rolling out electricity by 2006. We are very excited to see PGE embracing the possibilities of more cleanly generated power, such as wind.

Legislative Victories
An overview of CUB's work on energy efficiency and renewables would not be complete without mentioning two bills that we worked on and helped pass during the 2005 Legislative Session. The first will require higher energy efficiency standards for 11 commercial and residential products, saving energy and water. The second will expand the tax credit for residential solar power systems. (Read more about these bills here.)

Posted by Oregon CUB at 09:10 AM | Comments (0)