Protecting Oregon Customers from Wildfire Risk and Cost Increases
Posted on March 17, 2023 by Charlotte Shuff
Tags, Energy
This spring, Pacific Power and Portland General Electric are both asking state regulators to approve more money for addressing wildfires. This will allow them to comply with a recent law that created wildfire protection plans.
CUB supports investments that make our utilities more reliable and safe in the face of a changing climate and increasing wildfires across the state. Our goal is not to oppose wildfire prevention spending. But we want to make sure customers are not being overcharged.
New Wildfire Mitigation Plans
These new electric utility plans include investments to prevent wildfire risk to and from the electricity grid. They also seek to increase safety and conduct outreach to at-risk communities.
Customers will ultimately pay for these costs. Currently, the costs are relatively small for individual bills. For an average Portland General Electric household, wildfire mitigation will cost about $1.35 each month.
However, these costs may be much higher in the future. The utilities are requesting approval of a single-issue surcharge that would allow recovery of potentially large wildfire costs without considering how high their existing rates are.
An Example of a Single-Issue Surcharge
These wildfire mitigation cost recovery requests are just one example of what we in the industry call “single-issue rate increases.” Here, utilities only seek recovery of costs only related to wildfire mitigation efforts, and ultimately charge customers.
This is different from traditional rate-making in a general rate case. There, utility rates at a reasonable level are set based on the costs and benefits across their entire system. Single issue surcharges help avoid this holistic regulation and can lead to utilities avoiding oversight.
Single-issue requests are pretty common and happen for a variety of reasons. Wildfire mitigation is just one example. Utilities are currently charging customers in similar ways for many other single-issue projects. Examples include supporting electric vehicle infrastructure, pilot programs for battery storage in homes, costs related to the 2021 ice storm, and much more.
As of the writing of this blog, Portland General Electric lists 32 such charges (see “Adjustment Schedules” in the full list). While some of these charges are required from various laws, many are not.
Single-issue surcharges like this one are part of a larger trend that concerns advocates like CUB.
Increasingly, utilities are asking to raise customers’ bills for one-off costs. These smaller cases add up to lead to a lot of costs passed to customers that they might already be paying enough to cover.
CUB is pushing for more holistic utility regulation. We want to ensure that customers are only paying what they need to fairly balance the interests of utilities and customers. Our analysts and attorneys are investigating how an increase in single-issue requests is impacting customers.
Stay Up to Date on Oregon Utility Issues
CUB will continue to advocate for people in Oregon on major utility issues. Sign up for the CUB email list for the latest updates, action alerts, and news on policies that affect the utilities your home relies on.
To keep up with CUB, like us on Facebook and follow us on Twitter!
04/12/23 | 0 Comments | Protecting Oregon Customers from Wildfire Risk and Cost Increases