PGE Files for Largest Bill Increase in 20 Years

Posted on April 4, 2023 by Charlotte Shuff
Tags, Energy, General Interest

Light bulb in front of a graph with an increasing trend line

This spring, Portland General Electric (PGE) is asking regulators to approve a new bill increase for customers. At $338 million, this is the largest request in over 20 years. PGE’s request includes new investments in utility infrastructure and adjustments for increased power costs.

CUB is looking into this request. We will be heavily involved throughout the process to advocate for the interests of Oregon households.

We also expect that PGE will file at least four other smaller bill increase requests this year alone, on top of this large one.

CUB Concerns About This Large Increase

This would be the largest rate increase in more than 20 years, since the Western Power Crisis in 2001. CUB has serious concerns about the size of this increase and its impact on customers.

We recognize the need for utilities to invest in their system and that the cost of power is increasing. However, an increase of this size could be incredibly difficult for many customers. Oregon households have already seen significant increases in their energy bills this year. CUB will continue to dig into these requests. We push for reducing the increase for customers as much as possible.

CUB also has major concerns about additional increase requests coming down the line later this year. In addition to this big increase, PGE is already or likely to pursue more bill surcharges for single-issue cases.

We are pushing back against the rising tide of surcharges facing Oregon energy customers. In this case, CUB will continue to fight for a more holistic approach to utility regulation. (Read more: Are Utility Customers Being Nickled and Dimed? - CUB Blog)

What Customers Could Expect in 2024 Bills

The proposed bill increase will impact households differently depending on the type of housing and energy usage. Multifamily residents could see an average increase of $15.81 each month (a 16.3% increase). Single-family residents could see an average increase of $22.71 each month (a 15.9% increase)

Regulators will look into PGE’s request in the coming months and make a final decision in December. New billing rates will go into effect on January 1, 2024.

What is Included in This Rate Increase

Overall, PGE is requesting $336 million more from all customers each year. They are asking residential customers to cover $192 million of the total increase.

PGE’s request includes two main pieces: 1) new investments in utility infrastructure and 2) adjustments for increased power costs.

PGE is also asking to increase its profit for customers. Portland General Electric currently receives a 9.5% profit margin, which they want to increase to 9.8%. This would add tens of millions to customer bills each year. CUB opposes the Company’s request to increase its profit.

New Investments in Infrastructure

Faraday Hydroelectricity Facility: In 2018, PGE planned on spending $84 million rebuilding the Faraday facility on the Clackamas River (near Estacada). The project has been delayed by 4 years and has ballooned in cost. PGE is now requesting to collect $147.8 million from customers for the project.

CUB will be investigating the costs related to this project as a major issue in this case. The cost of this project increased significantly from the original planning in 2018. We are concerned that PGE may be asking customers to cover more than is reasonable.

Investments in System Technology: PGE is asking customers to cover costs related to a number of new software investments. These include new software for smart grids, monitoring the system, and upgrading from paper to digital. CUB will also look into these costs.

Investment in Generating Electricity: PGE is asking to spend money on two wind facilities, Biglow and Tuccanon, to improve the performance of the facilities. PGE is also planning on spending funds to reduce emissions at one of its natural gas power plants in Columbia County, Oregon. CUB is reviewing the reasonableness of these costs.

Adjusting for Higher Power Costs

Under Oregon rules, utilities are allowed to update the cost of fuel for electricity generation each year. The cost of electricity, natural gas, and coal has increased power costs for PGE customers. Globally, the cost of energy has increased due to global supply interruptions from recent geopolitical conflicts.

PGE also wants to change how they adjust customer bills for power costs each year. Under the new policy it is seeking, the costs would be an annual “true-up.” Each year, the utility estimates costs for fuels. In the new system, customers would cover 90% of the difference between what the utility spent and what was predicted.

This goes against existing standard business practices for Oregon utilities. It also significantly reduces financial risk for PGE shareholders.

CUB does not support allowing PGE to reduce financial responsibility for shareholders while also increasing their profit margins.

Customers Have the Opportunity to Weigh In

On May 3, 2023, PGE customers and community advocates will have a chance to weigh in on this rate increase. The Public Utility Commission, Oregon’s utility regulators, will be hosting a Public Comment Hearing at 6:00 pm via Zoom. CUB will post an update once the meeting details are released.

For more information on what to expect from a public hearing, visit this recent post from the CUB Blog!

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