CUB Calls for a Rate Increase Cap for Energy Bills
Posted on July 25, 2024 by Charlotte Shuff
Tags, Energy, General Interest
Over the last four years, CUB has seen a troubling trend of utilities asking for more money, more often. Oregon households are already struggling with the high cost of living and, with bills on the rise, energy affordability is a top CUB priority.
CUB is demanding action on out-of-control energy bills by calling on regulators to put a cap on rate increases. We’re asking the Oregon Public Utility Commission to limit how much utilities can increase billing rates each year to 10% (or 7% + inflation, whichever is lowest).
Utilities Are Asking for More, More Often
Over the last four years, we have seen a troubling trend of utilities raising rates more often and in higher amounts. With utilities asking for multiple increases each year, it can be challenging to know how much of an increase customers are facing.
We saw this with PGE’s increase in January 2024. While PGE’s original ask was a rate increase of 14%, multiple requests ended up pushing rates up by 18%. The final numbers were not calculated until mid-December 2023 before showing up on customer bills on January 1, 2024. This trend extends to Pacific Power and other electric customers, as well as gas customers.
In normal circumstances, it should be rare for utilities to increase rates by more than 10%. Unfortunately, we have seen a growing pattern of Oregon’s for-profit utilities asking for 15-20% increases nearly every year for the last four years. This is a call to Oregon regulators to implement a cap for all for-profit utilities.
CUB Calls for a 10% Cap on Raising Billing Rates
To combat this, CUB is proposing a new way of regulating how utilities can increase bills. CUB is proposing that the Oregon Public Utility Commission put a cap on rate increases.
We are asking the Commission to limit rate increases to 10% or 7% plus inflation, whichever is lowest. This cap would apply to the cumulative increase customers see over a year. Any requests over that cap would be pushed into the next year or beyond.
For electric utilities that typically increase billing rates in January, this would limit additional hikes until the following calendar year. For gas utilities that typically raise rates in the fall, anything over the cap would need to wait until spring or later.
Four of Six For-Profit Utilities Are Asking for More in 2024
This year, four of Oregon’s six for-profit utilities have requested to raise billing rates for customers. We’re seeing household energy bills increase because of the cost of fuels, rising demands on the system, and a need to replace old infrastructure.
NW Natural: 18% Increase Requested
NW Natural is asking for an additional $110 million (21%) from Oregon households this year. The gas utility wants to increase profit margins by tens of millions each year. NW Natural is also asking customers to pay for modernizing technology and upgrading its data centers, both of which CUB is scrutinizing.
NW Natural is again requesting more money from existing customers to subsidize growing its system. Last year, regulators cut this subsidy and agreed with CUB that this is bad for customers. Every new building adds new emissions, which must be cut under state climate regulations. NW Natural has no realistic plan to cut emissions and should not be allowed to continue to expand its system with customer money.
Read More: NW Natural Asks for an 18% Rate Increase for Oregon Households (CUB Blog)
Pacific Power: 21.6% Increase Requested
Pacific Power is asking for $322 million (21.6%) from customers that would go into effect next January. Courts found the utility grossly negligent in the 2020 Labor Day Fires and Pacific Power is facing a lot of money for damages. Now, it is scrambling to protect itself from future damages and attempting to charge customers for many wildfire-related costs.
Of the increase, over half is dedicated to wildfire-related costs. Pacific Power is asking for money for wildfire mitigation, increased insurance costs, and a fund for future wildfire damages. CUB is working to ensure customers are not held responsible for the gross negligence of Pacific Power. If approved, this rate increase would go into effect in January 2025.
Read More: Pacific Power Asks for 21.6% Rate Increase for 2025 (CUB Blog)
Portland General Electric: 7% Increase Requested
Despite an 18% increase in January, skyrocketing bills, and heavy outcry from customers, Portland General Electric is asking for another rate increase of 7.2% for residential customers on January 1, 2025. Rates for PGE households have already gone up by 30% from December 2022 to January 2024. Now is not the time to request even more from Oregon households.
PGE has requested $202 million under the guise of needing more money for battery storage projects. Only about $17 million is for battery storage. The other 92% of the increase would go to higher profit margins, shifting financial risk away from shareholders, and a mechanism to make it easier to increase customers’ bills every January. If approved, this increase would go into effect in January 2025.
Read More: PGE Asks for Even More Rate Increases (CUB Blog)
Idaho Power: 27% Increase Requested (Only 4% Approved)
Idaho Power’s rates will increase by only 4% in October 2024. While bills will not go up significantly, the initial request was substantially higher. Thanks to CUB’s advocacy (and a particularly good year for cheap hydroelectricity), customers avoided a major increase in energy bills.
This year, Idaho Power was trying to raise rates for Eastern Oregon customers by 27%. An average household would see an increase of $30 per month. The request covered over a decade of costs as this is the utility’s first request since 2011.
An increase of this size would have been incredibly damaging for customers. Eastern Oregon is already one of the most energy-burdened areas in the state. New bills would have gone up even higher than $30 during months when heating or air conditioning is turned on. A major increase of this size could have led to a rise in disconnections.
Read More: Idaho Power Set to Raise Rates by Only 3.68% in October (CUB Blog)
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08/22/24 | 1 Comment | CUB Calls for a Rate Increase Cap for Energy Bills