Oregon Starts New Phase in Energy Affordability Act Implementation
Posted on November 6, 2024 by Charlotte Shuff
Tags, Energy
This year, Oregon regulators are considering new ways to expand protections and programs for people struggling with their energy bills from for-profit utilities. This includes Avista, Cascade, Idaho Power, NW Natural, Pacific Power, and Portland General Electric. October marked the first time that all for-profit energy utilities have offered monthly bill discounts for qualifying customers. But many are still struggling to make ends meet and utility prices have continued to rise.
Now, Oregon is considering additional protections including debt forgiveness and expanded bill discounts for qualifying customers of for-profit utilities. Regulators are also seeking to expand programs that reduce energy usage to help low-income households permanently reduce energy bills.
Working to Address Energy Affordability Issues in Oregon
Over the past few years, Oregon has made strides in helping families that are struggling to pay their utility bills.
Phase 1 Timeline: Regulators Consider Equity & Income
2021 - Energy Affordability Act Passes: HB 2475 is a step toward ensuring that households with low incomes are not left behind as energy systems improve to address climate pollution. This law allows state energy regulators to consider income and equity factors that affect affordability in for-profit utility programs.
2022 - Bill Discount Programs Begin to Roll Out: Regulators worked with for-profit utility companies and advocates to create bill discount programs. These programs provide a percentage discount on each month’s energy bills for households that meet income and household size requirements. Five of the six for-profit utilities offered programs this year.
2023-2024 - Expanding Bill Discount Programs: As of October 2024, all of Oregon’s for-profit utilities offer bill discount programs to qualifying households. Enrollment has increased and, for some utilities, the discounted amount has increased since the programs began. Generally speaking, these programs are meeting roughly half of the current needs in each of their service areas.
2024 - Addressing Energy Bill Debt & Disconnections: Regulators are now working to add additional policies to help low-income households who are struggling to afford their energy bills. In a year marked with record numbers of families with past-due bills, it reminds us that discount programs on their own are not enough to holistically address affordability.
Phase 2: Beyond Bill Discounts
Despite bill discount programs, Oregon is still facing an energy affordability crisis. This second phase of work to implement HB 2475 is beginning in the fall of 2024 and will continue into 2025. Regulators are working closely with advocates to create these new rules and programs. (See Oregon Public Utility Commission docket UM 2211 for more information.)
Regulators are now looking to create new ways of managing this crisis:
- Understanding the crisis through better utility data
- Addressing the rise of past-due bills, including stronger disconnection protections
- Expanding programs to lower energy usage, not just energy bills
Better Data
Right now, utilities each have their own method and data points for reporting on energy burden. Regulators are seeking to streamline this reporting process so we can understand what for-profit utility customers statewide are dealing with. Without consistent and comparable data, it is impossible to tell the extent of the problems.
This new form of reporting will allow regulators and advocates to easily access information on customer impacts. The goal is to create a standardized reporting that will include:
- Total customers with past due bills and amount of debt for all utility customers
- Standard reporting on disconnections from non-payment
- Additional reporting related to energy burden
- Combining multiple reports into one place
- Creating an online platform with data visualization
Addressing Rising Past-Due Bills
When customers cannot pay their utility bills, they are at risk of getting shut off for non-payment. Despite utilities often claiming that disconnections are a “last resort”, four out of six for-profit utilities do not offer debt management or forgiveness plans to support customers. This year has seen a rise in both the number of customers in debt to their utilities and the amounts customers owe. Each utility has a different past-due threshold amount for when customers can be shut off. For example, Pacific Power can disconnect a customer owing just $50 in unpaid bills, while Portland General Electric can disconnect a customer when they reach $200.
Regulators are looking into solutions for customers who are behind on their bills. Recommendations have included:
- Expanding and enhancing disconnection protections, including more protections in winter and summer
- Eliminating reconnection fees for qualifying customers
- Requiring utility programs for debt relief, known as “arrearage forgiveness,” for qualifying customers
- Making payment plans more flexible with more time and more protections during the winter and summer
- Eliminating late fees for customers
- And more!
Programs to Reduce Energy Usage
Utility bills are created largely by calculating the amount of energy used by the cost per unit of energy. Discount programs are helpful in addressing the overall cost, but are not as helpful when energy usage is high due to energy inefficiency, like in older, drafty houses. Regulators have the power to help create programs that reduce how much energy is used each month, making bill discounts go even further.
Regulators are looking to expand the availability and access to no-cost programs that reduce energy usage for low-income households. These programs include:
- Weatherization, like adding insulation and thicker windows
- Energy efficiency programs, like replacing old furnaces with highly efficient heat pumps
- Focusing on multifamily housing and rural communities
- Collaborating with energy assistance providers to better identify households in need of these services
Since these efficiency programs are focused on in-home changes, they can reduce energy usage for the home itself, regardless of who is living there. This can have a lasting effect, especially for renters and affordable housing units.
How Big is the Problem?: Oregon Is in an Energy Affordability Crisis
Utility Prices Are Breaking Household Budgets
Over the last few years, Oregon utility prices have skyrocketed. As families have seen the price of everything go up, these massive energy bill increases are having a startling effect.
Since 2021, NW Natural households’ gas bills have increased by an average of $331 per year. Pacific Power households have seen an average of a $432 annual increase. And Portland General Electric households’ bills have gone up $597 a year on average.
These drastic increases in energy bills are combined with more extreme weather, raising the amount of energy households are using in the summer and winter. Rate increases, combined with higher energy use are pushing many Oregon residents to the brink.
When bills go up too much, people can’t afford to pay them. If a family can’t afford bills for multiple months, they are at risk for disconnection. Those who are disconnected can be sent deeper into financial distress. The only way a customer can have energy turned back on is by paying a substantial portion of what they owe or what they owe in full. On top of that, many must pay a reconnection fee to turn the power back on. This can be hundreds of dollars that must come out of already tight budgets.
We’re seeing more and more households with overdue bills. The total amount of money owed to utility companies is growing. And we’re seeing the consequences of this affordability crisis already.
Disconnections Skyrocketed in 2024
This year has been marked by record disconnections for households who are behind on their bills. Oregon’s largest for-profit utilities have shut off record numbers of customers for nonpayment in 2024.
Portland General Electric, the largest electric utility in Oregon, shut off more families than ever publicly recorded in 2024 for past-due bills. In April, PGE shut off 4,712 households—the most since reporting began in 2018. In May, PGE shut off 4,303 households. This marks the only time that a utility has reported exceeding four thousand disconnections two months in a row. By comparison, April 2023 saw 1,313 households shut off for non-payment.
These disconnections were the result of families’ inability to keep up with the cost of electricity. PGE’s 18% rate increase this year, combined with extreme weather, pushed people into an energy affordability crisis. During this time, PGE was seeing higher-than-expected profits in the first quarter of 2024. We’re seeing an increase in utility prices across Oregon’s for-profit utilities, not just PGE.
Energy Affordability Requires More Solutions
While the work outlined in this blog will be important in addressing the energy affordability crisis, it is not enough. This work represents only one piece of the puzzle. There are structural issues related to ratemaking that also need to be addressed to center customer affordability. CUB is also working separately to address the rising cost of energy in Oregon. While we need additional tools to better support communities that are currently impacted, we need to prevent prices from continuing to rise.
CUB is also working on:
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!
11/06/24 | 3 Comments | Oregon Starts New Phase in Energy Affordability Act Implementation