CUB Gets Portland General Electric to Agree to Eliminate Residential Customer Deposits

In a major win for customers, Portland General Electric (PGE) has agreed to permanently stop collecting residential customer deposits. This change removes a big barrier to accessing electricity service (and housing) for many low-income customers.

Across the country, nearly all utilities require deposits. Deposits are charged for customers beginning service at a new address who have low credit. In PGE’s case, customers had to pay a deposit equal to two monthly electric bills. 

This change came after CUB asked the Public Utility Commission to stop its practice of charging deposits.  The agreement is a significant victory in CUB’s work to protect residential customers of Oregon’s largest utility. Eliminating deposits will especially benefit those who are most vulnerable during this time of economic hardship.

Why Eliminate Customer Deposits?

Customer deposits increase energy burden for residential customers. Customer deposit polices explicitly target customers who are more vulnerable and can least afford a deposit. Low-income customers are often forced to choose which bills they can afford to pay, and deposits exacerbate this issue. CUB is also concerned that due to the COVID-19 pandemic, many customers have struggled to pay their bills. This will lead to more customers being subject to deposits. 

Oregon has a housing crisis. The average monthly rent for an apartment in Portland is about $1600. A full-time Portland worker on minimum wage earns $2600 each month before tax. Renting an apartment usually requires additional fees and deposits, as well. Utility deposits add to this cost, making it harder for households searching for affordable housing.

Deposits are unfair and unreasonable. Once a customer pays a deposit, the utility is allowed to use that money to fund its operations. CUB believes that asking customers who may have trouble paying their bills to pay extra to subsidize utility operations is unfair and unreasonable.

Eliminating Deposits in Oregon Utilities

CUB raised this issue throughout PGE’s rate case as a way to continue to protect low-income and credit struggling customers. This is not the first time CUB has raised the issue of deposits. In 2020, in light of the COVID-19 pandemic, CUB helped secure an agreement with regulators and all regulated Oregon energy utilities to suspend residential customer deposits through at least October 2022.

And in 2019, CUB was able to get Cascade Natural Gas Co. to agree to stop collecting deposits. Cascade is the smallest natural gas utility in Oregon. PGE is the largest electric company in the state. Elimination of deposits by both these utilities sets the stage for CUB to push for Oregon to eliminate deposits charged by all regulated utilities. Currently, Massachusetts is the only U.S. state that has eliminated the practice of charging deposits to utility customers

PGE’s agreement came about as part of the negotiations concerning its proposal to increase rates by $59 million. While review of that case is continuing, CUB, PGE and other parties have reached several agreements that reduce the rate hike by 83 percent.

In all, the agreement to end deposits is a big win for PGE’s residential customers, many of whom will feel positive impacts for years to come.

A permanent policy change like suspending residential customer deposits will help customers in a meaningful and lasting way. CUB is glad that PGE was willing to make this significant change to how it interacts with its customers.

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