Portland General Electric and Pacific Power File 2022 Power Cost Updates
Posted on April 28, 2022 by Will Gehrke
Tags, Energy
Portland General Electric (PGE) has asked regulators to increase its residential customer rates by 2.6 percent. Pacific Power has asked to increase residential rates by 5.2 percent. The requests are triggered by power cost changes. These numbers will change throughout 2022 because the forecasted cost of power is updated on a continuing basis. Both utilities will change their power cost prices on January 1, 2023 following lengthy proceedings with CUB and Oregon regulators.
Every year, Pacific Power and PGE seek to recover changes in their power costs from customers. Power costs fluctuate and account for fueling power plants and buying energy from developers and other utilities on the market. These cases are important because power costs are a major component of prices charged to customers.
In Oregon, power costs are based on a forecast of what they are expected to be in the following year. This year, both companies are forecasting power cost increases, largely due to an expected rise in the cost of wholesale electricity and natural gas.
PGE and Pacific Power own and operate several power plants to meet customers’ electricity needs. These power plants are operated based on safety requirements and economics. If a plant’s operating cost is less than the market price for electricity, that plant is “in the money” and is run to generate sales that benefit customers. If the market price is lower than the operating cost, the electric utility will back down the plant’s generation and buy cheaper wholesale power.
Across the West, wholesale power prices have increased due to higher natural gas prices, demand, and changing electric generation methods. On high electricity use days (such as heat waves or winter storms), Pacific Power and PGE seek to buy wholesale power to meet the increased demand. All things being equal, increased wholesale prices lead to higher retail electricity prices.
Both utilities are now projecting higher prices due to increased electricity needs and higher wholesale electricity costs. PGE’s projected increase is partly offset by greater performance of its zero-fuel-cost hydroelectric plants in 2023. Pacific Power is also expecting less market sales of electricity in 2023.
Over the next few months, CUB will review the utilities’ requests to ensure that any ensuing adjustments to residential customer rates are fair and reasonable.
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04/28/22 | 0 Comments | Portland General Electric and Pacific Power File 2022 Power Cost Updates