PUC Order Rings Final Bell in PGE Rate Case: Customers Notch Wins
Posted on January 8, 2019 by Mike Goetz
Tags, Energy
A fully litigated contested case proceeding that “goes the distance” before the Oregon Public Utility Commission (PUC) has more in common with a twelve-round heavyweight boxing bout than an after-school scrap at the flag pole. More of a marathon than a sprint. Although some contested cases settle relatively early in the process, Portland General Electric’s (PGE) most recent request for a general rate revision—filed February 15, 2018—saw several issues go all the way from initial filing to oral argument and briefing before a PUC decision was rendered last month. When a proceeding has been going on for nearly a year, the administrative record is voluminous. Issues are complex. Parties are unable to agree. In this case, CUB was able to weather the storm and notch victories for residential customers on several key issues in the filing by Oregon’s largest electric utility.
Now, this is not to say that some issues were not taken off the table during the process. This case featured five separate stipulations that resolved many of the case’s issues. A general rate case proceeding such as this is an opportunity for a utility to bring forward the multitude of various drivers that are increasing its costs. On top of that, most general rate case proceedings often include significant utility-proposed policy changes. At CUB, our mission is to take a deep dive into each issue contemplated by the filing to ensure that customers are only paying what they should, and that any departure from existing PUC ratemaking policy is good for customers, not just good for the company’s shareholders.
There were some real victories for customers encapsulated in the various stipulations reached in this proceeding. PGE’s initial filing sought an overall revenue increase of 4.78 percent, or $85.9 million. After scrutinizing their request line-by-line and negotiating with the company and a wide range of stakeholders at several settlement conferences, PGE walked away with an overall increase of 1.79 percent, or $32.7 million. Through effective advocacy, CUB and allies were able to trim PGE’s request by over half.
However, as I mentioned, a general rate case proceeding is just an opportunity for the utility to throw all its expenses into one bucket to receive cost recovery from the PUC. Sometimes larger policy changes are contemplated that have the potential to significantly shift risk and change how costs are recovered in the future. In this case, PGE sought a dramatic change in a ratemaking mechanism that would shift the risk of weather-related variances in retail utility sales to customers. Traditionally, if weather fluctuates severely in a year, in a manner that decreases a utility’s electricity sales, the utility’s shareholders are responsible for absorbing that shortfall. PGE sought to flip this long-held paradigm and shift the risk of weather-related variances onto customers. CUB fought this issue all the way to the end. In their final Order, the PUC agreed. This longstanding weather-related risk is to remain with shareholders.
As we enter a new year, we are already tracking new utility filings, with an eye on minimizing new costs and new risks for Oregon’s residential customers. Although one bout may be over, many new ones are only in their infancy. Stay tuned to our blog and website for more regulatory updates from CUB!
To keep up with CUB, like us on Facebook and follow us on Twitter!
01/08/19 | 0 Comments | PUC Order Rings Final Bell in PGE Rate Case: Customers Notch Wins