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August 29, 2007

CUB Files Brief on PGE Plant Forecast

There are days when CUB works on issues related to global warming, the future of energy production, or multibillion dollar corporate mergers. And then there are other days, the days when we filter through the minutiae of an annual power cost update tariff, looking for ways to prevent the company from overcharging customers.

Such was our week this week. We filed on Tuesday our Opening Brief in UE 192, regarding PGE's power cost forecast for its Boardman coal-fired electricity generation plant.

This plant, you may recall, was out of service for approximately 8 months in 2005-2006 due to a cracked rotor on the turbine and the plant operated poorly the rest of those years.

The question in this docket is how many days we forecast the plant to be operational next year. Traditionally, we have looked at the last 4 years of normal operation as a predictor of the next year's performance. In this case, PGE is proposing that we include significant portions of 2005 and 2006 in that 4-year examination of Boardman operation. A forecast based on those years would predict larger numbers of days off-line for the plant in 2008 than normal, which would require PGE to purchase more power in the market for about 6 cents per kwh (as opposed to the 1.5 cents that Boardman's power costs), and would therefore result in higher rates for customers. Because PGE negotiates coal and power contracts on the open market, the exact costs at issue here are confidential, but we believe that using the years 2005 and 2006 in creating the Boardman forecast would increase rates by several million dollars in 2008.

CUB is arguing against including 2005 and 2006 in the 4-year average that would set rates for the plant going forward. We think it's pretty clear that those years were unusual, and, assuming the plant is back to normal operations, as the company claims, shouldn't be repeated. We are suggesting that the years 2001 through 2004 make a better 4-year average of the plant's expected operation under normal conditions.

PGE calls CUB's recommended change in the 4-year average "arbitrary"; we call it just good sense. If you are going to predict for normal operations, you don't base those predictions on very abnormal circumstances.

We know this is not the most exciting news we've ever come to you with. It's not the most exciting work we've ever done either. It's just the nuts and bolts of good consumer advocacy and utility rate-making. It's the kind of detail work that customers cannot do and should not have to. It's why we're here.

Posted by Oregon CUB at 11:27 AM | Comments (0)

August 24, 2007

Kids' Energy Links

As we fill up our calendars with back-to-school events, outfit our children with backpacks, new school clothes, and assorted reading and writing tools, we might take just a little time to also talk energy with them. Kids today are more aware of environmental challenges than perhaps any generation before. Empower them to understand how our choices affect the future by teaching them some of the basics of energy production and usage, including how not to use more than you need. You'll probably learn something yourself in the process!

The following links looked good to us (though we are in no way advocating for these organizations or businesses or implying that we agree with every statement that might be found on their websites). Take a little time to explore these with your child. And have fun in the last few weeks of summer!

Eco Kids Energy Quiz

Energy Patrol

Energy Information Agency for Kids

Renewable Energy Information & Games

Discover Solar Energy

Academy of Energy

Kids Korner of Sioux Valley Energy

Energy Activities from Ergon

UK Kids Korner of Energy Fun

Think Energy

Posted by Oregon CUB at 12:56 PM | Comments (0)

August 16, 2007

Big Wins in the 2007 Legislative Session

Yet another session of the Oregon legislature has passed into the history books and CUB, with the help of its members, delivered some big wins for consumers. Of course, the session ended many weeks ago, but CUB, and our lobbyist Jeff Bissonnette, couldn't call it a day until the controversy surrounding the proposed diversion of public purpose funds was resolved. Now, we can finally report on the accomplishments of the session as a whole. The wins included ticking off just about every item on an ambitious Clean Energy Agenda, turning aside anti-consumer deregulation legislation for the telecommunications industry, and adding a layer of protection for consumers when a utility is the subject of a proposed purchase. All this during one of the shortest sessions in recent memory.

Jeff Bissonnette speaks to CUB Board members outside the Oregon House of Representatives during the 2007 Legislative Session.

Energy

SB 461: Passed and signed into law. Increases the Oregon Energy Assistance Program from $10 million to $15 million per year (indexed to load and residential customer growth), helping many more Oregonians pay their electric bill. This helps all consumers because keeping ratepayers connected to the system, rather than being disconnected and reconnected, lowers costs for everybody.

SB 838: Passed and signed into law. The Oregon Renewable Energy Act requires that 25% of the state's energy needs be met from renewable resources by 2025. Allows smaller utilities to meet a lower standard, but requires every utility to integrate renewable energy into future planning to meet future energy needs. In addition, the bill also allows for additional energy efficiency measures above the 3% public purpose charge already dedicated to energy conservation. Since efficiency is the lowest-cost way to acquire energy, this is a big step forward. Finally, the bill also extended the public purpose charge (which currently funds renewable and energy efficiency projects through the Energy Trust of Oregon) to 2025, beyond the former sunset of 2012. This demonstrates Oregon's continued commitment to a clean energy future and will help to stabilize the electrical system as a whole.

HB 2620: Passed and signed into law. Requires that 1.5 percent of all new public building construction be dedicated to including solar as part of the design.

SB 375: Passed and signed into law. Increases energy efficiency standards for certain named appliances. As a companion to the groundbreaking bill CUB helped pass last session, the 2007 bill added energy-saving standards for more appliances. The bill also allows the state Department of Energy to align Oregon standards with other standards adopted by other states.

HB 2211 and HB 2212 (included in HB 3201): Passed and signed into law. Originally HB 2211 increased the state Business Energy Tax Credit and HB 2212 increased the Residential Energy Tax Credit to provide additional incentives for using renewable energy in homes and businesses around the state. The Business Energy Tax Credit was also amended so that homebuilders could get a tax credit for including renewable energy systems in homes they were building and selling. Both bills became a part of an omnibus tax credit bill, HB 3201, which gained legislative approval and the governor's signature.

HB 3488: Passed and signed into law. Provides two innovative ways to increase renewable energy use, especially solar. First, the bill amended an existing statute that allows a utility to front the cost of energy conservation projects to a customer and then be repaid through the customer's electric bill. HB 3488 added the ability to do the same thing for a renewable energy system. The bill only provides the authorization for such a program, with the Public Utility Commission to later approve the details. Second, the bill provided a tax incentive for third-party investment in large renewable energy systems that would offset the energy usage of a facility owned by a public entity or non-profit organization. The public or nonprofit entity would eventually own the system.

SB 994: Line-item veto of a diversion of public purpose funds. At the last minute, the legislative Ways and Means Committee attempted to divert ratepayer public purpose funds dedicated to energy conservation and renewable energy resources (to pay down a debt owed by the Oregon Museum of Science & Industry). While CUB did not have an objection to helping OMSI, using dedicated ratepayer funds was inappropriate. After much grassroots lobbying and negotiation, the Governor ultimately issued a line-item veto of the diversion.

Global Warming

HB 3543: Passed and signed into law. Created the Oregon Global Warming Commission to coordinate state policy development on addressing global warming and climate change long-term. The bill also created the Climate Change Research Institute within the Oregon System of Higher Education and established goals for the reduction of carbon emissions. The bill will be a cornerstone for future global warming policy proposals.

Telecommunications

HB 2621: Held in committee. This bill was pushed by Qwest and would have deregulated the telecommunications industry in Oregon. While the bill also provided some additional consumer protections, CUB determined that the trade-off was not good enough for consumers. Although Qwest worked very hard to move this bill forward, CUB -- along with a range of other interest groups -- managed to forestall the effort. Qwest will likely be back for another try.

Consumer Protection/Public Power

SB 443: Passed and signed into law. Provides for the possible creation of Oregon Community Power, a public entity that could purchase a current private utility if the utility was for sale and the customers and municipalities in the utility's service territory believed it would be in the customers' interest to bring the utility into public ownership. This bill was similar to another bill from the 2005 session, which CUB helped write but ended up opposing because of a provision that would have limited the benefits of the federal hydropower system to the new utility and raised customers' rates. This bill adequately addressed those concerns. This provides an alternative path to public ownership which would have been handy when Texas Pacific Group was trying to buy PGE. Consumers now have another way to protect themselves if they believe a potential purchase of an Oregon utility would not be in their best interest.

After All Is Said and Done...

Let's just say it was quite a session. And there's not much time to rest up because the Legislature has planned a month-long special session in February 2008 as part of an experiment to explore moving toward annual sessions. Rest assured, CUB will be in the thick of things come February and, as always, we'll need the help of our members to win more victories and turn aside anti-consumer proposals.

But for now, we thank you for your support in the 2007 session and know that we can all claim a part of a history-making session. Thanks, CUB members!

Posted by Oregon CUB at 02:25 PM | Comments (2)

August 09, 2007

Governor Vetoes Diversion of Ratepayer Funds

Today, Gov. Ted Kulongoski took a break from signing the hundreds of new bills that passed into law in the 2007 Legislative Session -- took a break, that is, to use his line-item veto power, to rescind the diversion of ratepayer money. The $4.6 million in question was going to be taken from the public purpose fund, created under a 1999 law to promote energy efficiency and renewable energy. The public purpose funds were paid by PGE customers, and have been proven to result in lower rates and a cleaner energy system.

The intent of the Legislature was to help the Oregon Museum of Science & Industry (OMSI) with a serious financial issue they are facing. We here at CUB will continue to work with the Governor's office and the rest of the informal coalition that has come together to help find the funds that OMSI needs. We think this can and will be done without taking money from utility ratepayers. After all, OMSI is as well-loved an Oregon institution as you will find anywhere in the state. We just think that helping the museum should not be the burden of a small subset of Oregon ratepayers.

In his letter regarding the veto, Gov. Kulongoski says, "the use of public purpose charge funds for this purpose [helping OMSI] is inappropriate." We agree. He goes on to affirm the State's position that: "Investment in energy conservation, the development of renewable energy resources and low-income weatherization and bill payment assistance are critically important to Oregon's future as a leader in the sustainability movement. Use of public purpose charge dollars for general governmental purposes is inconsistent with that effort and is a break in trust with electricity consumers and those who supported and enacted the public purpose charge. It is important that we maintain inviolable sideboards on the use of public purpose charge funds." We are very appreciative of the Governor's veto, because it protects the PGE ratepayers whose money was being taken, and whose rates were going to increase as a result.

We are also appreciative of the willingness of the Legislative leadership and the Co-Chairs of the Ways and Means Committee that passed the bill, to be involved in working to find alternative solutions to the issue. We found during recent discussions that the public purpose fund -- its boundaries, its origins, and its ultimate purpose -- is not well enough understood by many in the Capitol building.

CUB Executive Director Bob Jenks had this to say about the veto and the protection of public purpose funds: "We give a lot of credit to the Governor for taking a stand to protect customers and energy efficiency programs by vetoing this diversion of public purpose funds. We also take some responsibility for the lack of understanding which led lawmakers to include the provision in the first place. We're going to redouble our efforts at educating our leaders in Salem and the general public about what an important role these funds have in protecting our environment and keeping rates low."

The veto would never have occurred without the public uproar that alerted the Governor's office and Legislative leadership to the severity of the problem. We want to thank all the CUB members and other supporters who participated by contacting their elected leaders with a message to "stop the diversion of ratepayer money."

It's been nearly 2 months since the 2007 session ended and yet the session only really ended for CUB today. Now we'll have the chance to sit back and take stock of the many wonderful changes that came from the Legislative session this year. We'll be working on a Legislative round-up for you in the next few weeks.

Posted by Oregon CUB at 02:24 PM | Comments (0)

August 02, 2007

CUB Speaks Publicly About Sharing of Federal Hydro System

Yesterday evening, Bonneville Power Administration held its first (and hopefully not last) public meeting to discuss the Residential Exchange, since the suspension of Residential Exchange benefits to customers of privately owned utilities, such as PGE and PacifiCorp, two months ago. Those private utility customers have seen increases of 13-14%, or an average of $10 per month, as those utilities pass along the costs to customers that once were covered by BPA as those Northwest residents' share of the federal hydropower system. The meeting room was packed, with public utility representatives (who had just finished a meeting in the building) and also with low income customer advocates, privately-owned utility staff representing their customers, and, of course, CUB was there too. As one of four invited speakers, CUB Executive Director Bob Jenks laid out his understanding of the situation as it now sits and where we need to go from here.

About a week ago, BPA Administrator Steve Wright signed the Record of Decision (ROD), a document laying out the 20-year policy for division of BPA power benefits, an agreement that resulted from many months of discussion. CUB was very disappointed that the ROD was signed without a clear message that a major factor in the implementation of benefits, the Residential Exchange, must be settled before the policy can be in any way made whole. There are, in fact, millions of residential customers, 60% of Northwest residents, who have not yet been made whole in this process.

Those customers have lost their access to financial benefits from the federal hydropower system because the Residential Exchange, which delivered those benefits, has been suspended. They have lost their ability to form a new public and receive the priority benefits from BPA that would have been their right as a public entity up to this time, because new BPA policy severely limits benefits to any newly-formed, publicly-owned utilities. And they have lost their seat at the table, since customer advocates such as CUB have not been invited into the process of reworking the Exchange policy in the months since the Exchange was suspended and rates have soared. The importance of the matter has prompted statements from state and national leaders, such as the op-ed in today's Oregonian by Senator Wyden and Representative Blumenauer.

Because the issue is so complex, Bob gave attendees a broader historical context. He spoke of his grandfather, who traveled the length of the Columbia River many years ago. As a region, we have all given up the freedom of a wild river and the ability to travel it as in years past. We all, and particularly the native peoples of the Northwest, have lost the former abundance of the salmon runs. The trade-off for what we have lost as a region has been inexpensive electrical power shared amongst all residents, to a greater or lesser extent. Now the majority of Oregon utility customers are receiving no benefits to offset the losses we all share.

The increase residential customers of privately-owned utilities have seen on recent utility bills comes on top of other recent rate hikes, and low-income advocates testified to the fact that this is a heavy burden for many families to bear. One public power representative answered this issue yesterday by saying basically that this issue is not about poor people, it's about the law. CUB does not dispute that federal law gives priority rights to customers of the publicly-owned utilities of the Northwest; however, we are certain that the law can also support a robust benefit for the millions of other households who do not happen to live in public power districts. A reasonable, equitable sharing of the federal hydro benefits with all the neighbors in the Northwest is a practical way to manage the system for the good of the region. We also think it's the right way to enact the law of the land.

CUB realizes our tone may get a bit frosty at times discussing the Exchange, as when we say: "The policy embedded in this ROD simply cannot go forward without a fair resolution to the Residential Exchange, period. Our frustration level is running high and our patience is running out." You see, we've been shut out in the cold on this issue and we're not ones to sit outside waiting forever. We've been shut out of the power benefits in the form of the Exchange that should rightly belong to all Northwest residents, shut out of the possibility of becoming public power customers and accessing benefits in that way, and shut out of the process at which these weighty matters are discussed and decided. We're going to go bundle up, grab a hot drink, and continue to examine our options for moving forward.

Posted by Oregon CUB at 03:14 PM | Comments (4)