« January 2008 | Main | March 2008 »

February 28, 2008

PGE's Management Cannot Control Costs So They Want to Raise Rates

Yesterday Portland General Electric Co. filed a general rate case, its last one having closed all of 2 weeks ago. Among their requests of the Public Utility Commission is an increase in their profit margin, from 10.1 to 10.75%, which could earn shareholders tens of millions more annually; and a sizable increase for general Operations & Maintenance and Administration & General costs. Altogether, residential customers' rates would jump 9.5% if PGE's request is granted.

We think they're way off base here. First off, the timing is not great. As we said, PGE's most recent general rate case, a yearlong process, has only just recently been completed. Until recently, PGE was filing general rate cases every 4 or 5 years. This aligns reasonably well with the regulatory framework which assures utility companies that their investment of hundreds of millions of dollars in power plants will be recompensed by customers; and assures customers that they will pay a moderate profit margin, and no more, to the company for taking the risk and managing the business well. General rate cases are the forums in which these new investments are examined for prudent management, and then brought into rates. It is unusual to say the least for a company to file general rate cases only one year apart with no large capital investment to provide a reason for the filing.

Secondly, let's look at this large increase in O&M and A&G. For example, there are 130 new staff positions listed in the filing, at a time when PGE should be trimming controllable costs. We have so far found no persuasive driver for this staffing increase. We have already indicated to PGE that we will be going over their proposed cost increases with a fine-toothed comb. And although we have only begun the process of analyzing PGE's rate increase filing, we expect to find a fair amount of unnecessary cost increases in it.

PGE customers have already been hit hard with numerous rate increases due to both investment in new power sources, and the suspension of the Residential Exchange (which had functioned for several decades as a way to share the benefits of the federal hydropower system with customers of investor-owned utilities). PGE customers are going to be facing the same rate increases from higher fossil-fuel costs that the rest of the country is facing, and PGE's continuing investment in new resources (something that was neglected during the 1990s under Enron) will require customers to pay up once more.

Asking for a larger profit margin at this time seems totally inappropriate. Interest rates are falling as the U.S. heads into a recession. Lower interest rates should cause the utilities' borrowing costs to decrease, and this should in turn lower profit margins. For PGE to ask for an increase, when it was only recently reset, is outrageous. In addition, The Oregonian reported on its front page yesterday that not only are gas prices expected to hit $4/gallon in the next year or two, but also (in a separate article) that the average residential electric bill would hit $100 if the PGE increase were to go through.

PGE is not controlling its costs well. Some costs are necessary and we ask only that they be least-cost and prudently incurred. Some of the necessary costs coming onto PGE's books in the near future, but which are not included in this filing, are: 1) new generating power plants; 2) hydro relicensing; 3) clean air costs for Boardman coal-fired plant; and 4) smart meters (which CUB has opposed but the Commission has yet to rule on). These combined projects will cost hundreds of millions of dollars. From CUB's perspective, customers cannot afford to add unnecessary increases on top of the ones which cannot be avoided. We pay PGE a Rate of Return in order to manage the company and our electricity delivery in an efficient manner, and they are failing to do so.

Come on, PGE!

Posted by Oregon CUB at 12:46 PM | Comments (0)

February 12, 2008

Meet CUB's Shaich Interns

For many years, now, CUB has been benefiting from the life and legacy of one of its earliest supporters. Way back in 1983, OSPIRG recruited a group of college students to work on gathering signatures to put on the statewide ballot the creation of an organization that would fight for consumer rights on utility issues. Three of the young people who answered the call were Jeff Bissonnette, U of O freshman in political science, Kevin Masterson, junior in economics, and Eric Shaich, junior in economics.

Jeff went on to a career in community organizing around the country, returning to Oregon in 1998 to become CUB's Organizing Director. Kevin went on to work at Oregon's Department of Environmental Quality, and served 2 terms on CUB's Board of Governors, including one term as Board Chair. Eric, an honors college graduate, interned at EcoNorthwest and then accepted a job at Bonneville Power Administration. All three, as well as others who worked on the original CUB campaign, continued to be active in politics and energy issues.

In 1991, at the age of 27, Eric Shaich died of Hodgkin's disease. He is remembered as a person with an unusual combination of determination, idealism, intellectual accomplishment, and easygoing humility. Soon after Eric's death, his parents, Harry and Gloria Shaich, approached Bob Jenks of CUB about setting up an endowment out of the proceeds of Eric's estate to work on some of the things he cared most about: energy, environmental advocacy, and education.

A fundraiser in 1993 that featured consumer advocate and Oregon State Representative Bev Stein helped grow the endowment and get the word out about the creation of this program. An advisory board of family and friends helped get the trust set up, transferred to CUB, and on its way.

Since the mid-1990s the Eric Shaich Memorial Fund Internship Program has funded an impressive series of interns, students who handled various projects for the CUB staff on their own way to a career in energy policy, or non-profit management, or some other related field. Today, we want to share a few of the stories of our Shaich interns with you.

Jed Jorgensen, Shaich Intern 1999. Jed currently works as the Marketing and Communications Manager of the Climate Trust. The Climate Trust funds projects that reduce, avoid, or sequester carbon dioxide emissions. During his time as an intern at CUB, Jed compiled research on Energy Star (certified energy efficient) products and submitted op-ed pieces to newspapers around the state encouraging consumers to increase the efficiency of their household appliances. In addition, Jed collected signatures in support of Measure 90 (which sought to prevent PGE from collecting profits from ratepayers on its failed Trojan Nuclear Power Plant) for the 2000 election.

Walidah Imarisha, Shaich Intern 2001. Walidah has recently returned to Portland after spending several years in Philadelphia working on a wide variety of social justice issues. She produced a documentary about the after-effects of Hurricane Katrina in New Orleans and is a poet. Catch her spoken word performances if you can!

Linda Tomassi, Shaich Intern 2002. Linda worked to help defend the Energy Trust of Oregon from attacks during its early years, creating fact sheets and speaking to neighborhood groups. Linda currently works as the Administrative Director of Oregon Women Lawyers, and is serving her first term on the CUB Board of Governors, where she brings fierce enthusiasm and formidable organizational skills.

Melanie Leaf Bissonnette, Shaich Intern 2003. Melanie worked on scheduling forums for low-income energy efficiency issues, and updating organizational information for the Fair and Clean Energy Coalition. Melanie currently works as the Web Coordinator for the Energy Trust of Oregon, and is a licensed Massage Therapist. She and Jeff were married in Fall of 2006 at the Malheur Field Station with close friends and family in attendance.

Ken Snider, Shaich Intern 2004-2005. Ken brought his experience with Community Media and his studies at the Non-Profit Management Center of PSU to CUB. He helped revamp our website and improved our grant-writing capabilities. Ken is now working with the Metro Hazardous Waste Recycling Program and volunteering with the Sierra Club trying to protect Oregon's high desert areas.

Phillip Kelsven, Shaich Intern 2006. Phillip is currently Evaluation Analyst with the Energy Trust of Oregon, and founder of The Future of Energy Group for young energy professionals focused on moving our energy economy in a greener direction. Phillip received an Applied Energy Economics Certificate from PSU, on his way to a Master's degree in Economics, and did loads of research for us on the utility tax reform issue, as well as utility mergers then in process.

Alice Bray, Shaich Intern 2006. Alice is currently working freelance with the Bonneville Environmental Foundation on solar power development issues. Alice received her J.D. from Northwestern School of Law of Lewis & Clark College. Alice wrote a white paper on the issue of Integrated Gasification Combined Cycle Coal plants, researched telecommunications privacy issues, and helped set up a well-received Symposium on Energy, the Environment, and the Law at Lewis & Clark. (This symposium led to CUB's staff attorney teaching a full course at the law school this past fall focused on Energy Law.)

Thomas Balcom, Shaich Intern 2007. Thomas is currently finishing up his Bachelor's Degree at Willamette University (also the alma mater for Bob Jenks). Thomas was a researcher and assistant extraordinaire to Jeff Bissonnette during the Oregon Legislative Session of 2007, an incredible asset during a busy time.

Jessica Aiona, Shaich Intern 2007-2008. Jessica recently graduated from Bowdoin College with a degree in Economics and Environmental Policy. At CUB, Jessica has researched telecommunications and energy issues, and she presented her ongoing work of "signature stories" of how clean energy projects benefit both the environment and the economy to the Oregon Apollo Alliance in January.

We gathered five of our interns together over pizza last week to catch up. Jessica, Alice, Ken, Jed, and Linda were able to join with Bob Jenks, Jeff Bissonnette, and Shannon Floyd on CUB staff. We had a good time and found out that the internship program got excellent feedback from participants. Many of the interns did not know about each other, and so we spent some time reminiscing about how connections were made (we haven't advertised for interns - all of them have come to us through word of mouth), and what skills were learned, whether setting up vendor relationships, researching technical issues, or organizing community events. Every internship has been totally different, based upon the skills and interest of the intern. Connections within the energy policy and non-profit community were one of the most valuable things most of our interns said they gained.

It's often been said that the energy and utility field is kind of dry and technical. CUB strives to break that mold by representing the people served by utilities, and CUB's interns bring fresh energy and ideas to our work. They are a vital part of our work and we thank all of them, and we appreciate the legacy of Eric Shaich which makes this internship possible.

Posted by Oregon CUB at 03:55 PM | Comments (0)

February 05, 2008

Wireless Do Not Call List Rumors Untrue

We love it, here at CUB, when we are able to respond directly to a query and open up a topic for public discussion. Particularly if we can soothe some fears in the process. Such was the case this past week: Bob Jenks met with a CUB ally who asked about the rumors circulating about the necessity of registering cell phone numbers with a separate Do Not Call List. Emails have been asserting that soon cell phone numbers will be released in the form of a national directory for telemarketing. The calls would be bad enough; that wireless users would have to pay for the privilege of receiving telemarketing calls would make it even worse. "If it's true, why isn't CUB talking about it?" she asked, "And if it's not true, why hasn't CUB let people know?" Luckily, it's not true.

The day after the aforementioned meeting, the cell phone Do Not Call issue again came up, this time in a press release from the Oregon Public Utility Commission. The PUC stated that these rumors are untrue, and that cell phones are not about to become fodder for telemarketing. It is true that there has been some discussion among wireless companies of creating a national directory of wireless numbers, but so far this has not occurred, and it remains illegal for companies to use automated dialing to call wireless phones. The FCC, which has a page discussing this issue also, understands that a significant portion of the cost of telemarketing would fall on cell phone users who pay for all airtime, and we believe they will not approve something so inherently unfair.

There is one Do Not Call List, which was begun in June 2003. Over 100 million Americans have registered their numbers on the list, and anyone who wishes to have the extra protection may register their cell phone number on this list. The original plan was to have a 5-year limit on registration, but because it would involve kicking so many millions of voluntary participants off the list, the FTC is talking with Congress about options for extending registration beyond the June 2008 5-year anniversary.

So do not fear the terrible specter of receiving credit card offers and special travel deals while you're waiting in line at the supermarket or rushing to get home for dinner. And if they call you during dinner on your home phone, register that number with the Do Not Call List - soon!

Posted by Oregon CUB at 03:15 PM | Comments (2)