Pacific Power Asks for More Money, Less Oversight

Posted on July 11, 2024 by Charlotte Shuff
Tags, Energy, General Interest

This year, Pacific Power is trying to raise rates by 21.6% for Oregon households. A typical household could see an average increase of $29.47 each month. This amount would be much higher during the winter and summer when heaters or air conditioners are turned on. Especially as we see increases in extreme weather, this increase would be unmanageable for many Oregonians.

As CUB has dived deeper into the company’s request, we have found a troubling trend of Pacific Power asking customers for huge amounts of money with little to no oversight.

The utility is proposing that customers pay $185 million for wildfire-related costs. However, many of these new expenses are designed to provide the company with a financial cushion without any plan for how the funds will be used. Pacific Power is refusing to share important information with customers, despite sharing much more with Wall Street investors.

What’s Included in This Increase?

Pacific Power is trying to raise rates by 21.6% for Oregon households. A typical household could see an average increase of $29.47 each month.

Pacific Power’s request to increase bills is mainly coming from wildfire-related costs. Of the $322 million request, $165 million is related to wildfire liability costs, insurance, and mitigation. CUB is working to ensure customers are not held responsible for the gross negligence of Pacific Power.

Read More: Pacific Power Asks for 21.6% Rate Increase for 2025 (CUB Blog)

Pacific Power Attempts to Avoid Accountability, Transparency

CUB calls on Pacific Power to be transparent with customers about where their money will be spent. We are also calling on regulators to reject any bill increase that would put customers on the hook for Pacific Power’s gross negligence in causing wildfires. We urged regulators to consider whether this is even legally allowed.

Dodging Questions on Wildfire Liability Costs

So far, Pacific Power has refused to tell customers or CUB how much it expects to pay in liability as a result of various wildfires. In fact, we had to ask a judge to compel Pacific Power to share projected wildfire liability costs and how it considered paying for these costs. At the same time, it has been transparent with Wall Street about these numbers.

While we eventually received a response from Pacific Power on total projected wildfire liability, the answer is not comforting. The utility is projecting nearly $2 billion total in lawsuits and settlements with Oregon wildfire victims.

Attempting to Make Customers, Wildfire Victims Pay for Wildfire Liability Costs

Because of Pacific Power’s unwillingness to answer basic questions, we do not know what it is asking customers to pay for through its proposed new surcharges. This means that it is very difficult to say if wildfire victims could be forced to contribute to their own compensation on their utility bills.

One survivor of the 2020 Labor Day fire, Victor Palfreyman, testified against Pacific Power’s proposal. Victor shared his harrowing story of sheltering in a gravel pit to escape the fire. He and his family lost everything.

PacifiCorp should pay for the harm it causes through its own profits, not by charging ratepayers more.”
-Victor Palfreyman, survivor of the South Obenchain fire

Pacific Power is asking for $77 million a year from Oregon customers to pay into a Catastrophic Fire Fund. While shareholders would pay into the fund, too, customers are being asked to cover 80% of the costs. Without any transparency, it is impossible to know if these funds will go to payouts where the company was found responsible for a wildfire.

“PacifiCorp’s proposal is fundamentally unfair. The Fund would allow PacifiCorp to escape its responsibility to the James class, as well as other Labor Day 2020 fire survivors and survivors of future fires it may cause. Fire survivors should not be required to pay for PacifiCorp’s own liability, and particularly for its own gross negligence, recklessness and willful conduct. PacifiCorp should pay for the harm it causes through its own profits, not by charging ratepayers more.” - Victor Palfreyman, Testimony to the Oregon Public Utility Commission

Fire survivors, like Victor and his family, could be paying for their own compensation. Meanwhile, Pacific Power would cover only a fraction of the costs of the wildfires it started.

We Need a Cap on Rate Increases

Over the last four years, we have seen a troubling trend of utilities raising rates more often and in higher amounts. With utilities asking for multiple increases each year, it can be challenging to know how much of an increase customers are facing.

We saw this with PGE’s increase in January 2024. While PGE’s original ask was a rate increase of 14%, multiple requests ended up pushing rates up by 18%. The final numbers were not calculated until mid-December 2023 before showing up on customer bills on January 1, 2024. This trend extends to Pacific Power and other electric customers, as well as gas customers.

To combat this, CUB is proposing a new way of regulating how utilities can increase bills. CUB is proposing that the Oregon Public Utility Commission put a cap on rate increases. We are asking the Commission to limit rate increases to 7% plus inflation or to 10%, whichever is lowest. This cap would apply to the cumulative increase customers see over a year. Any requests over that cap would be pushed into the next year or beyond.

In normal circumstances, it should be rare for utilities to increase rates by more than 10%. Unfortunately, we have seen a growing pattern of Oregon’s for-profit utilities asking for 15-20% increases nearly every year for the last four years. This is a call to Oregon regulators to implement a cap for all for-profit utilities, not just Pacific Power.

Utility Prices Are Already Too High

We’re seeing a troubling trend in Oregon utilities: companies are asking for more money more often. As utility bills in Oregon continue to rise in 2024, CUB is asking tough questions from state regulators and demanding action on affordability. We’re also calling for a cap on how much utility companies can raise rates each year.

This is the Third Year of Major Increases for Pacific Power

Pacific Power customers saw rates increase by 11% on January 1, 2024. This increase was largely due to an increased price of natural gas (methane) used to generate electricity.

At the beginning of 2023, Pacific Power raised rates by 21%. This increase was primarily due to high natural gas (methane) and wildfire mitigation costs. Although this was a large increase, CUB’s advocacy helped lower the impact on Oregon households.

Advocates Call for Forgiveness for Past Due Bills

Tiered Bill Discount Programs Are Not Enough
Pacific Power currently offers two discounts, 20 or 40% for customers with qualifying incomes at or below 60% State Median Income (SMI). While these discounts have helped alleviate some of the impacts of rate increases over the past three years, they are not deep enough to make significant dents in customer energy burden.

Overall, Pacific Power homes’ energy bills have increased by 35% since December 2021. Despite these increases, the company has not proposed to deepen its discounts for qualifying customers.

Advocates from Community Energy Project, Coalition of Communities of Color, and Verde are calling on regulators to deepen the bill discounts and other holistic protections to effectively address energy burden. CUB is also investigating options for adding additional protections.

Learn more and see if you qualify here.

Forgiving Past Due Bills
Community Energy Project, Coalition of Communities of Color, and Verde have called for Pacific Power to forgive past-due bills for many customers. Their proposal specifically targets low-income customers in the 0-20% State Median Income range. A family of four in this income bracket earns $21,333 per year or less.

These advocates testified: “Of the approximately 49,730 customers currently enrolled in the [Low-Income Discount] program, at least 40% have a history of arrearages greater than 30 days past due. A utility cannot have an impactful [Low-Income Discount] program that helps customers get out of debt without providing assistance to manage low-income customer’s arrears.”

While a bill assistance program may help with future bills, it does not address past-due bills or any energy bill debt a customer may have. These advocates argue that adding a forgiveness program, known as arrearage forgiveness, would help reduce the energy burden felt by lowest-income customers.

Disconnections Are Already Skyrocketing
More than 2700 households were shut off in April of this year because of non-payment, with 460 of these families without power for over 7 days. By comparison, April 2023 saw 596 households disconnected from their electricity, with 38 families without power for over 7 days. Bills going out around Feb 1 would contain January’s usage, including soaring bills from the 2024 ice storm. Customers have 60 days to pay bills, so shut-offs in April are a direct consequence of January bills and the ice storm.

Pacific Power raised rates by 11% on January 1. This also means that February bills were higher from both freezing temperatures and these new billing rates. Without intervention, these trends could continue—and significantly worsen—if customers face a 21.6% increase again next January.

Stay Up to Date on Oregon Utility Issues

CUB will continue to advocate for people in Oregon on major utility issues. Sign up for the CUB email list for the latest updates, action alerts, and news on policies that affect the utilities your home relies on.

Donate to CUB

To keep up with CUB, like us on Facebook and follow us on Twitter!