Pacific Power Requests 11.3% Residential Increase

This year, Pacific Power is asking for another billing rate increase that could raise Oregon power bills starting next spring. This request comes after the utility has raised billing rates by about 50% since 2021. Pacific Power is asking for more money from customers for infrastructure projects, higher insurance costs, profit margin increases, and coal projects across its system. The request also includes adjustments for the proposed sale of its Washington service area to Portland General Electric, which has not yet been approved by either state.

CUB is looking into this request with an eye for customer impact. We are working to ensure any additional money added to Oregonians’ power bills is fair and reasonable.

Potential Impacts to Pacific Power Customers

Pacific Power is asking for an 11.3% increase for residential customers starting in April 2027. If approved, this could add $15 to the highest bills in winter, from $175 to $190 for an average household, not accounting for extreme temperatures.

Included in this request is also a raise to the flat fee charged each month for general operation and customer service. Pacific Power wants to raise the basic charge for single-family customers from $13 to $17 per month. The increase would be from $8 to $9 for multi-family customers.

Too Soon to Project Reduced Impacts

When Pacific Power initially filed this request with regulators, the utility suggested that additional factors could reduce the overall impact to a 1-2% increase. CUB is concerned that this projection is premature and may cause confusion for customers.

Pacific Power seems to be framing this request as inconsequential, when that is not set in stone. While it is true that some costs are coming to a close from years past, the rest of the decreases Pacific Power is pointing to that bring the total impact down are not set in stone. While right now it is projecting that power costs are going down, we all can see how vulnerable costs are for fossil fuels with continuing global conflict. Pacific Power is also banking on the sale of its Washington territory going through, resulting in a three-year credit to Oregon customers.

What Is Pacific Power Asking For?

In the overall rate increase filing, Pacific Power includes a request for more money for:

• Increase profit margins
• Infrastructure projects
• Higher insurance costs
• Coal replacement

Increased Profit Margins: Pacific Power is asking for an increase in the allowable profits it can make for its shareholders. The proposal increases its approved Return on Equity to 9.7% (currently 9.5%). While this sounds like a small change, it would add more than $8 million a year to customers’ power bills.

Infrastructure Projects: Pacific Power is looking to recover spending from two big projects: the Willamette River Crossing Project, an underground line removal/replacement project, and Gateway South, a transmission project. The last time the utility asked for customers to pay for Gateway South, regulators added additional requirements before it could go onto power bills. CUB will be looking into these expenses to ensure they are reasonable.

Higher Insurance Costs: Since 2020, insurance costs for all utilities have gone up because of wildfire risks. Pacific Power is asking for over $49 million (spread over many years) to pay for both increased liability insurance premiums and self-insurance costs. CUB will be looking into these costs to make sure they benefit customers.

Coal Replacement: Oregon has a law that requires utilities to remove all coal expenses from customers’ bills by 2030. Pacific Power still has a number of coal plants on its books and in operation for other states on its system. With the sale of the Washington service territory, Pacific Power is asking Oregon customers to cover more coal costs than were previously allocated. The company is also asking for funding for repairs to damaged coal plants that will be on the books long after 2030, when they are no longer useful to Oregon customers. CUB will be working with the company to ensure that Oregon customers’ payments are fair and balanced with state policy.

Proposed Sale of Washington Service Area Creates More Questions

The biggest piece of this case is the proposed sale of Pacific Power’s Washington service area to Portland General Electric. Coal replacement has become more complicated because of this sale, as Washington is not taking any coal with it. With fewer customers to pay for coal resources, Oregon and the other four remaining states for Pacific Power’s parent company will have to pick up the bill.

If the Washington sale is approved, Pacific Power plans to add a big chunk of coal costs to Oregon power bills. While CUB and other interveners are still working to get all the information, Pacific Power currently estimates this could add $8 million to customer bills per year.

Oregon made a decision not to extend the life of coal plants. Through the sale, Pacific Power is asking to add coal plants that go against that decision. And we would have to pay more because of it!

While this sale would also come with a three-year credit to customers, it is unclear how much Oregon can expect. With four other states and shareholders also vying to receive a credit, there will be a lot of negotiations outside of this case in Oregon. CUB is skeptical that the benefits of this sale will be as good for Oregonians as Pacific Power is promoting.

Get Involved!

While there are still many unknowns about what impact these requests could have on Pacific Power bills in Oregon, we know one thing for sure: Oregonians are struggling to pay their energy bills.

We need your help to make sure that customers are at the forefront of this case. Tell regulators to focus on the needs of Oregonians when making their decision!

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