A New Year Brings New Regulatory Challenges
Posted on January 13, 2012 by Catriona McCracken
Tags, Consumers and Utility Customers, History of CUB and General CUB News, Utility Regulation
Here at CUB, we are entering the New Year with new energy, new ideas, new staff assignments, and an assortment of interesting new dockets. And the Public Utility Commission (PUC) once more has THREE commissioners – welcome new Commissioner Steve Bloom! (Pictured above, left, with CUB staff Andrea Crosby and Bob Jenks)
Staff Assignments
At the end of December we bid "Bon Voyage!" to John Sturm, who reached the end of his limited duration clerkship and part-time Staff Attorney position here at CUB. In his time at CUB John graduated from being a law clerk to being a full-fledged attorney, a good team player, able researcher, and blogger extraordinaire. John’s gentle sense of humor and kindness will be missed. Anyone seeking an attorney with experience in telecom, energy, environmental, or natural resources law should get in touch with John Sturm.
We also welcome Sommer Templet, who has also completed the transition from law clerk to part-time Staff Attorney. In her short time with CUB Sommer has proved to be an excellent researcher and talented writer, as well as to have wisdom beyond her years and a ready sense of humor and creativity. We are delighted that Sommer has decided to stay on at CUB!
New Dockets Opened at PUC
NW Natural’s 2011 General Rate Case. On December 30, 2011, NW Natural (NWN) filed a General Rate Case, its first since 2002. The rate case filing contains many moving parts and we have just begun analyzing it. Suffice to say, NWN, which in CUB’s analysis has been over-earning for some considerable time, and wants you and me to pay even higher rates. They are asking the PUC to sock it to residential customers with a 10.5% increase in residential rates. NWN also wants to change the current residential rate design, raising the monthly base charge from $5 to as much as $29 over a three year period. This means that even if a customer doesn’t use any gas during July or August, they would still receive a $29 bill for the monthly base charge. While the total amount all customers will pay for gas over the course of the year won’t change, the structure strikes us as fundamentally unfair, and akin to a grocery store charging customers a base fee every time they come through the door, regardless of how much they spend on their groceries. In addition, it is a change that will increase costs for customers who use only a little gas and will decrease costs for customers who use a lot of gas. NWN also wants an additional increase to cover environmental costs associated with the old manufactured gas plants the company used to make gas before the advent of pipelines.
Given that NW Natural already has a mechanism that protects its profits from loses due to customers installing energy efficiency measures, and it has a mechanism to protect its profits from customers using less gas due to warm weather, it seems to CUB that what NW Natural really wants is to change the way it is regulated so that it will always have guaranteed profits without taking any risk.
The bottom line is that this large, 10.5% increase is being requested when the economy is still struggling and unemployment in Oregon is still high. With its shareholders benefiting from substantial profits and its upper management being generously rewarded by the shareholders, it seems to CUB that NWN is out of touch with the realities facing the vast majority of ratepayers in Oregon; bills are already tough to pay. For all of these reasons, CUB’s regulatory staff intends to devote CUB’s efforts to scrubbing this filing to remove the fat and to challenge the company’s proposed change to the monthly base charge.
Cascade Natural Gas files its 2011 Integrated Resource Plan (IRP). Integrated Resource Plans describe how a utility intends to make investments to meet its obligations to provide energy to customers. Cascade Natural Gas Co. filed its 2011 IRP on January 3, 2012. The Regulatory Staff are just cracking this one open and will keep you informed as it develops.
PGE files to test the transition from coal to biomass at Boardman. CUB was successful in getting PGE to agree to replace the Boardman Coal Plant by the end of 2020 and at the end of December, 2011 PGE filed a docket to move forward with the transition. The new docket requests an accounting order that will allow PGE to run a test burn of biomass at Boardman in 2014. The purpose of the test is to determine whether it is feasible to replace coal burning at Boardman with biomass. CUB will be intervening in and investigating this filing and we’ll keep you up to date as it progresses. CUB began researching the Boardman case over the summer last year – to learn more check out these previous updates - What’s Next for Boardman? and Burning Biomass.
An investigation into fuel switching commences. Staff at the PUC asked the Commission to open an investigation into energy efficiency and fuel switching. This docket is expected to explore issues that have been raised by NW Natural relating to the best use of natural gas (direct use in homes versus generating electricity) and how energy efficiency incentives affect the fuel that is used to heat homes. CUB has intervened and will be monitoring this docket closely.
These are just a few of the recently filed dockets that CUB’s regulatory program staff will be spending its time on over the next few months. As the year goes forward, we are expecting many more utility filings, including some large requests to raise rates and make additional investments into coal generation. Lots of new and interesting issues will be discussed, and we look forward to keeping you apprised as we review these dockets and the PUC rules on them.
To keep up with CUB, like us on Facebook and follow us on Twitter!
03/28/17 | 0 Comments | A New Year Brings New Regulatory Challenges