PGE Avoids Accountability in Letter to Senator Wyden

Last week, Senator Ron Wyden asked the question thousands of Oregonians have been asking all year: why are PGE bills so high?

Sen. Wyden sent the state’s largest utility a letter demanding that Portland General Electric explain why billing rates have gone up 40% over the last 5 years. The company responded with more of the same—avoiding accountability and avoiding answering tough questions.

While CUB is disappointed in PGE’s response, our staff is working toward tangible policy solutions that will protect Oregon households for years to come.

Senator Wyden Demands Answers from PGE

On November 25, Senator Ron Wyden sent a letter to PGE asking the utility to answer why bills have gone up more than 40% since 2021. He said that his office has received many letters of concern from Oregonians worried about rising electricity prices.

Two days later, PGE responded to Sentor Wyden. This response was typical of what CUB has seen from PGE this year: evading responsibility, only answering half the question, and framing skyrocketing rates as inevitable.

“Portland General Electric is focused on keeping the cost of electricity as low as possible. PGE has been, and remains, committed to working with all stakeholders to address this complex challenge and to serve customers well.”

As of October, more than 32,000 Oregon households that were behind on bills were disconnected by PGE this year—more than ever recorded in Oregon. Those families lost not only electricity, but also heating and cooling, food in their refrigerators, medicine that needs to be kept cold, internet and a way to charge their phones, and face even more cascading impacts of disconnection. Especially for those thousands who have been shut off, it certainly does not seem that PGE is focused on keeping costs affordable. PGE must feel that shutting off electricity to 32,000 households is “working with all stakeholders to address” this challenge. 

PGE’s Inability to Control Rates is Causing Historic Harm

2024 has been a disaster for PGE customers. Billing rates went up 18% in January, right before an ice storm hit all PGE customers. With tens of thousands of people struggling to pay their electricity bills, disconnections have hit record highs. We saw these huge numbers even with the bill discount and other assistance programs in place.

And PGE keeps asking for more money from customers. Despite the massive impact on customers this year, PGE is asking for even more—two rate hikes in 2025 that combine to increase bills by nearly 9%. The company’s response to Sen. Wyden avoids taking responsibility for both the harm caused to customers and tries to shed responsibility for these skyrocketing costs.

Shut Offs for Past Due Bills Skyrocketed in 2024

PGE billing rates have gone up more than 40% since 2019. This year, customers have reached a breaking point. 2024 marks the largest number of disconnections recorded since reporting started in 2018. Already, more than 32,000 PGE households have been shut off for past-due bills. This surpassed the prior annual disconnections with still 2 months remaining in the year.

PGE shut off power to an average of 3,200 customers each month. This means the total number of disconnections for 2024 could break 38,000 households—30% higher than in 2019.

In the record-breaking month of April, PGE disconnected over 4,700 households. When considering that more than one person lives in many Oregon homes, we can reasonably estimate upwards of 11,500 Oregonians who lost their electricity in April alone. PGE also disconnected over 4,000 households in May and again in October. These highs are nearly double the monthly average in 2023.

When a home’s electricity gets shut off, it can very easily cause a cascading effect for that family. We use energy in so many ways in our homes: physical safety and comfort, food safety, communication, healthcare, education, entertainment, and more. Losing power comes with many hidden costs, especially for low-income households who can least afford these expenses.

If not reversed, shutoffs can also cause families to lose their housing entirely. Without electricity, renters can be evicted. Even if you own your home, living without power can be grounds to lose ownership. Skyrocketing bills threaten to make Oregon’s housing crisis worse.

PGE Attempts to Avoid Accountability for Rising Energy Bills

In its response to Sen. Wyden, PGE provides little explanation for bill increases other than power costs. CUB has found that while the cost of fuels to generate electricity has grown more expensive, we need to hold PGE accountable for its role in rising energy costs.

Power Costs Are Not the Only Explanation

PGE provided some information about how rates have increased over the past four years, though it pointed largely to power costs as a driver. The utility said that because it cannot control the cost of the fuels it uses to generate electricity (natural gas, coal, hydro, etc.), these increases could not be avoided. But PGE has a well-paid staff that manages power costs and customers pay millions of dollars for its management of power costs. Are customers getting what we are paying for?

Power costs have gone up 27% since 2019 for all PGE customers. Total rates have gone up 46% since 2019 for all PGE customers. This means that nearly two-thirds of the increases in billing rates have nothing to do with power costs.

While it is true that regulators have approved all of these increases, the majority of rate increases come from PGE’s request. In 2023, regulators approved an 18% increase in rates for household customers. Then, they turned around and asked for another rate increase in 2024. Meanwhile, the company’s stock is up nearly 16% over the last year.  If the company was truly committed to keeping prices low for customers, it could give customers more time between increases.

PGE Ramps Up Spending, Shareholder Benefit

The spending target for this year, 2024, was established at $500 million in 2020. By February of last year, it had grown by almost 50% to $730 million. But its growth has accelerated since then, to $1.34 billion in April of this year - a 268% increase from the original spending target in just four years.

This increase in spending is from a wide range of investments by PGE. Some are useful for Oregon households, like wildfire mitigation and replacing old utility infrastructure. But some of the bigger projects are largely accommodating a big increase in demand from data centers and other industrial customers. While some are pointing the finger at clean energy, CUB has found that this is not the culprit for this year’s big rate increases.

Read More: Myth Busting: Why Clean Energy Is Not Making Energy More Expensive

2024 Has Been a Great Year for PGE’s Wealthy Investors

Utilities have an incentive to spend as much money as possible on useful capital projects. But just because a project is “useful” doesn’t mean that it needs to happen immediately. PGE is notorious for projecting high amounts of spending to investors while attempting to keep customers in the dark about how that spending will affect bills.

In the same month that PGE disconnected 4,700 households, the company reported massive earnings increases for its investors. PGE had a net income of $109 million in the first three months of the year, up from $74 million in 2023. For shareholders, earnings per share increased by more than 50%, from 80 cents per share to $1.21 per share.

At a recent presentation to investors, PGE announced that its 2024 profits will be above levels authorized by regulators. As of October, while shutting off 4000 customers, the company was promising investors over $3 per share.

The great results for PGE shareholders and the grim results for customers are two sides of the same coin. The combination of much higher rates and cold weather increased sales, providing more income for the company and its shareholders.

PGE is Not Adequately Managing Costs for Oregon Households

Sen. Wyden asked PGE for information on what the utility is doing to reduce the number of disconnections as costs continue to rise. PGE continues to prove that it is more concerned about growing the business than protecting the households it serves. 

PGE Needs to Charge Industrial Customers for Industrial Growth

As customer demand for electricity grows, utilities need to make necessary investments to provide more service. This can include purchasing more fuels, adding new substations, increasing the amount of heavy-duty power lines (transmission lines), and more.

Traditionally, adding more customers to the energy grid has benefited everyone. The cost of providing electricity to everyone goes down when the shared costs are split between more customers. But what happens when just a few customers are adding huge amounts of demand? The cost of service goes up but the number of customers splitting those costs doesn’t increase enough to help everyone.

PGE shared with Sen. Wyden that over the past 5 years, demand has grown significantly. Residential demand has increased by 6.4% since 2019. Meanwhile, industrial demand has increased by 34.7% since 2019, with high-tech industrial -particularly data centers as the largest growth recently within that class. As we’ve seen a boom in semiconductor manufacturing and data centers, PGE has needed to make a lot of new investments.

Since 2016, large industrial demand has grown by 140%. Residential customers’ demand has grown by 3.5%. In that same time, industrial rates have gone up 2.1 cents/kWh. Residential rates have gone up 7.6 cents/kWh. This means that Oregon households have seen rates go up nearly four times as much as industrial rates despite having nearly no impact on the increasing demand for energy.

“Load growth helps affordability because the more people using the grid, the more the costs to operate the grid are spread out.”

- PGE to Senator Wyden, November 17, 2024

CUB has found no proof that rapidly rising demand from industrial customers is helping Oregon households. If PGE wants to claim that growing the system this way is good for residential customers, it needs to prove it.

PGE Stalls on Addressing Data Centers

Despite growing concern about the impact of data centers on Oregon energy costs, PGE has repeatedly stalled the process that would address this issue. Not only is PGE not controlling costs for Oregon families, but it is also actively delaying finding a solution.

In 2023, regulators at the Oregon Public Utility Commission opened an investigation into how PGE can manage costs for residential customers when industrial energy demand is driving up costs. Regulators requested that PGE file a proposal to protect residential customers by December of 2023. Now, in December of 2024, PGE has yet to file the requested proposal.

Data centers are different from other historic industry booms that have come to Oregon. While a large factory may also use a significant amount of energy, they also are typically long-term businesses. Moving a production line is costly, so factories tend to stay put. By contrast, data centers are big offices that house a lot of computers. Packing up and leaving for better tax credits or lower energy rates is comparatively easy.

The risk that data centers pose is that they can come to town, demand a lot of electricity, force a utility to invest a lot to provide it and leave anytime they want. This could leave the utility’s other customers holding the bag—likely to the tune of millions of dollars in investments. We cannot risk letting Oregon families cover the cost of an already risky business.

PGE Delays New Programs to Help Households

As we face historic levels of disconnections, the solutions we have to offer households aren’t enough. While bill discount programs are a necessary tool to help customers better afford their energy bills, they are just one strategy. We know assistance programs like LIHEAP and OEAP are overburdened and underfunded. Oregon needs to fix the systems that make these programs necessary.

In the fall of 2024, regulators at the Oregon Public Utility Commission began a process to address the disconnection crisis in Oregon. Now, Oregon is considering additional protections including debt forgiveness and expanded bill discounts for qualifying customers of for-profit utilities. Regulators are also seeking to expand programs that reduce energy usage to help low-income households permanently reduce energy bills.

But PGE and other utilities have repeatedly sought to delay providing more support for those struggling with affording their energy bills. After nearly three years of notice to plan for adding new programs and protections, PGE told regulators this October that it needs even more time before it can provide programs to help customers with overdue bills or add greater disconnection protections. This has been the pattern for increasing bill discounts, as well.

These Problems Are Not Unique to PGE

All of the issues that are detailed here are not unique to PGE. Utilities across the state are asking for more money more often. Billing rates have increased across the board in Oregon’s for-profit utilities with an average of 40% rate hikes since 2021. Pacific Power and NW Natural customers are also seeing rising disconnection numbers. And other for-profit utilities have joined PGE in attempting to delay solutions that would protect customers.

We need all of our utilities to be strategic about how they spend their money.

Statewide Solutions Are in Sight

At the Public Utility Commission, CUB has been fighting for new protections against disconnection and new programs to support residential customers. We are working with regulators to create new ways of managing the energy affordability crisis:

• Understanding the crisis through better utility data
• Addressing the rise of past-due bills, including stronger disconnection protections
• Expanding programs to lower energy usage, not just energy bills

Read More: Oregon Starts New Phase in Energy Affordability Act Implementation

The 2025 Legislative Session is about to begin in Oregon, giving lawmakers an opportunity to address this problem even further. CUB will be working with legislators on a law that supports:

• Affordable energy bills: empowering regulators to set the lowest rates possible
• No winter rate hikes: helping customers avoid big increases during high usage months
• Transparency for customers: providing public information on what customers are paying for and when rate changes are expected

Oregonians deserve access to affordable, safe electricity—essential services should not be set at luxury prices.

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