Yet Again, PGE Requests Residential Rate Increase

Yet again, Oregon’s largest electric utility is requesting a rate increase from Oregon households. PGE is asking regulators to approve a 3.9% rate increase (about $8 a month) for residential customers. If approved, PGE would add $65.6 million a year to bills starting July 2027. This request marks PGE’s eighth consecutive year of new rate increases.

CUB continues to believe that PGE assigns too much of its overall costs to residential customers, leading to expensive, unaffordable bills. We won’t let customers be left footing the bill, and we’re pushing back on PGE’s latest bill increases.

Want to learn even more about this case? Check out Docket UE 473 at the Oregon Public Utility Commission website!

What is the Impact to PGE Customers?

Across all customers, PGE is asking for a nearly 5% increase in power bills. For households, the proposed hike is nearly 4%, or about $8 a month on average. An average PGE household could expect an average bill of $178 a month starting in July 2027 if this request is approved. This will be a higher dollar amount increase in the winter months for those with electric furnaces or heaters.

This is the first time that PGE’s rate increase will impact data centers separately from other customers. Data centers are facing a nearly 8% increase in their power bills. This is a big win for Oregonians, as it clearly shows that more costs are benefiting data centers and are finally being assigned to the industry that is creating the need for many investments.

Why Does PGE Want to Raise Rates?

PGE is making a number of sizable investments across all parts of its system. While the ask for next year is to add $65.6 million, these costs, if approved, would stay on customers’ bills for decades. These investments will not all go onto residential customers’ power bills, but will be spread across all types of customers.

PGE’s biggest investments include:

• Transmission investments ($300 million spread over 50 years)*
• Distribution investments (Starting at $456 million spread over 50 years)
• Upgrades to power generation ($174 million spread over 25 years)*
• Reserve funds, unspecified ($236 million spread over unknown years)
• Higher profits (estimated, millions added each year)

*These costs will primarily impact data centers, not residential customers.

PGE is asking regulators to raise the cap on its allowable profit. In 2024, the Oregon Public Utility Commission lowered PGE’s profit margin in response to concerns about customer affordability. The utility is requesting to go from a 9.34% profit to a 9.75% profit. This change would add millions of dollars to customers’ bills each year, going beyond what it was allowed before regulators made the reduction.

While some of these costs may be reasonable, CUB is concerned that many of these costs are unnecessary. We are also keeping a close eye on which costs are going onto residential customers’ bills, when they should be assigned to other customers (like data centers).

Costs CUB is Digging Into

Reserve Funds

Reserve Funds: money set aside for categories of spending but not specific projects ($236 million)

CUB is highly concerned about a large pool of money that PGE is requesting for “reserves.” We’re worried that PGE is attempting to create a slush fund that allows spending with little to no oversight.

While it’s normal to include some amount of reserve funds, this method is anything but normal. Typically, extra money is built into a project itself to allow for more flexibility in a budget to go up a little bit. When a utility builds new infrastructure, this can take years. Accounting for prices to change for equipment or labor is a smart approach. But PGE is asking for reserve funds outside of any project and before regulators have approved a new infrastructure project.

PGE’s approach would leave spending to be approved by PGE management, not regulators. This means that there would be no justification for the spending. That means no oversight to ensure that the money is being spent on necessary projects. No review for cheaper alternatives. No protections for customers.

The point of this slush fund is to facilitate more capital spending — and more profits for shareholders — but not to ensure that customers are only paying for necessary costs.

Distribution Costs

PGE is including a number of big projects for the distribution system:

• Underground cabling: Burying some cables underground for safely delivering electricity, such as under waterways or in high fire risk areas ($104 million project)
• Wood pole replacement: updating the poles that hold up power lines when they fail safety inspection ($214 million project)
• Residential line construction: adding new homes to the electric system, such as a new house or apartment building ($104 million)

Distribution costs are the largest reason why PGE wants to increase rates for household customers. Residential customers pay for 60% of all distribution costs, so we are particularly interested in what is happening in this category of spending.

While many of these costs may be needed to have a safe and reliable electric grid, CUB will be taking a close look to ensure that Oregonians are getting a good deal.

Residential Meter Replacement

Residential meter replacement: replacing the smart meters that measure home electricity usage ($33.8 mil)

CUB is on high alert for PGE overspending — or gold plating — its system. One place we’re investigating is the residential meter replacement. PGE offers no evidence that their current smart meters are failing and need to be replaced. While the company says that it’s more cost-effective to replace all of them at once, we aren’t so sure.

CUB is worried that this meter replacement isn’t about necessary investments, but about maintaining spending to make profits for shareholders. You’ll see that this is a common concern across the board on this rate increase request.

PGE’s Narrow Focus on Profits Harms Customers

It seems like the most important issue for PGE is meeting targets for capital investments, not affordability for customers.

Oregonians rely on power for just about everything in life. Access to affordable electricity saves lives and helps our communities thrive. We need our utilities to act like companies that are providing an essential service, not profit machines for shareholders.

After nearly two years of an energy affordability crisis, Oregonians deserve reliable electricity that doesn’t break the bank.

PGE Has a Spending Problem; Customers Have an Affordability Problem

As CUB has said for years, PGE has a spending problem.

PGE has been a major offender in allowing costs to balloon without much accountability. In 2020, PGE set a capital spending target for 2024 at $500 million. By February of 2023, it had grown by almost 50% to $730 million. But its growth kept accelerating, to $1.34 billion in April of 2024 - a 268% increase from the original spending target in just four years.

But as Oregonians have said over and over, customers have an energy affordability problem.

PGE customers have been hit hard. Between 2021 and 2025, PGE has raised rates by nearly 50% for residential customers. This has resulted in a cascade of disconnections for families that can not afford their bills. PGE’s household rates are already higher than the national average and the highest among major utilities in Oregon.

PGE is Offering False Solutions with Little Collaboration

Oregon is on track to rein in endless increases for gas and electric bills starting in 2027. With the passage of the FAIR Energy Act in 2025, utilities will soon have to face new budgeting requirements, limits on how often they can ask for increases, and more. But PGE wants to take control of the new rules for limiting how utilities can charge customers.

In this case, PGE is attempting to propose its own “solutions” for rolling out the FAIR Energy Act without collaborating with advocates or regulators. By doing this, the utility would be going outside of an already year-long process and setting a dangerous precedent that could harm customers.

We can’t let one utility set the rules for rate increases for everyone. PGE can’t go outside of the official process of the FAIR Energy Act just because it wants to write its own rules. CUB is calling on regulators to rein in PGE and all utilities as our state legislators intended.

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