PGE’s Request to Raise Rates in 2025 Lives On
Posted on May 2, 2024 by Bob Jenks
Tags, Energy, General Interest
This spring, CUB set out on an ambitious mission: asking regulators to dismiss Portland General Electric (PGE)’s latest request to increase billing rates for customers. CUB has never done this before. Regulators have decided to allow PGE to continue with its request to increase bills again.
We filed a motion to dismiss the case because PGE submitted a request for another 7% increase just weeks after regulators approved an 18% increase. Nothing had changed except for customers’ bills getting higher.
We are disappointed. But we will continue to fight for a more fair process for customers and represent the needs of Oregonians. PGE customers will have another opportunity to make their voices heard on May 16.
Regulators Reject CUB’s Call to Dismiss PGE’s Request to Raise Rates
In a Motion filed to the Oregon Public Utility Commission, CUB asked regulators to reject PGE’s 7.2% increase for customers. PGE customers just saw bills increase this January. We argued that there has been no sufficient change to warrant the request since regulators set new rates just weeks ago in December 2023. This request to dismiss was supported by the Green Energy Institute and the Alliance of Western Energy Consumers, as well as a host of community organizations.
CUB also offered the Commission an alternative in our filing. If they would not be willing to dismiss the entire case, the motion also included an option to severely limit the scope of what PGE can request. This would include removing all of the items that the Commission just ruled against in December (higher profits, less financial risk for shareholders, and more).
Regulators Side with PGE, Ignoring Customer Outcry
On April 25, the Oregon Public Utility Commission denied CUB’s request. The process of allowing PGE to increase rates by another 7.2% in 2025 will continue.
At the oral argument on April 16, CUB argued that dismissal would acknowledge the impact continuous rate cases have had on Oregonians, and that PGE’s request to increase its revenues was too soon. Given the recent rate increases, the balance needed to shift away from what PGE needed to its customers’ needs.
It was pretty clear that the Commission was on a different page than CUB and customers.
This contrast is particularly stark when you consider the groundswell of outcry over PGE’s latest proposed increase. Over 1700 people have sent comments to the Oregon Public Utility Commission at the time of writing this blog. This is a massive amount of comments for a government body that most people have never heard of. Similar cases rarely receive over 100 comments.
Refusing to Dismiss PGE’s Request is a Sign of Larger Issues
The biggest issue is not our Motion to Dismiss, but who is being served by the regulatory process. CUB still believes that the Commission has the power to dismiss a rate case that is filed weeks after rates were just decided.
We will continue to work to fight for the interests of customers.
PGE Has No Strategy for Affordability
We think there is a big problem with PGE. CUB is concerned about PGE’s strategy towards decarbonization with an “all-of-the-above” strategy. CEO Maria Pope has also described their approach to transportation electrification as an “all of the above” approach. We’re also seeing this ethos in the amount and the volume of costs they are asking from customers, even beyond investments in reducing emissions.
“All-of-the-above” is not very strategic.
Strategy involves identifying the best way to deploy your resources. It requires prioritization. PGE acts as if everything is an investment opportunity and their customers have unlimited wallets. By choosing to prioritize all possible investments that move toward meeting the company’s goals, customers pay the price.
While PGE has a requirement to reduce emissions, its all-of-the-above strategy is not about clean, reliable energy. It’s about profits. Here, it is requesting to increase profit margins again. Regulators set their allowable profits at 9.5% in December 2023. Just 60 days later, the utility asked for more. Higher profits do not make the system cleaner and they certainly do not provide additional benefits for customers.
Customers Cannot Afford Endless Increases
We need a managed transition to clean energy, not one that does not consider customer impacts. This is not sustainable because customers cannot afford it. Customers need regulators to place some constraints around utility requests to increase rates. There should be a better balance between approving Company investments and what Oregonians can afford. CUB believes this is possible.
Dismissing the case would have sent a strong message that the Oregon Public Utility Commission and its regulatory process are focused on the needs of customers, not utilities and their shareholders. This is clear from the battery project PGE includes in its request to increase rates.
While PGE may claim that this increase is for battery storage, that increase does not need to happen right now. The first battery project is currently projected to come online on December 31, 2024, and the second is not until June 2025. Any delays will mean that it could easily not be serving customers when rates go up. PGE could be asking customers to pay more for batteries that aren’t even turned on. PGE could carry these costs, not customers.
Additionally, PGE is set to receive a tax incentive from the federal government once the battery project is finished. This means that PGE is asking customers to pay more now so the utility can refund that money later (and over a 5-year period). Effectively, PGE customers are being asked to lend the company money after raising rates by 30% since December 2022. Customers are not investors in their utilities, shareholders are.
We need regulators to protect customers from unnecessary bill increases. PGE can afford to take on these costs in the short term. Oregon households cannot afford to take on higher bills.
PGE Wants to Make it Easier to Raise Prices Every Winter
Paying in advance for battery storage is just the start. PGE wants to make it easier to pass the costs of investments to customers with less oversight and faster turnaround for raising bills.
PGE rates have increased by 30% since December 2022. Many customers have struggled to pay the huge bills associated with the cold January weather. But somehow the utility thinks that the problem with utility regulation is that it is too hard to raise rates. So they are proposing making it easier.
PGE has proposed a new policy that will allow them to add billions of dollars in new investments to customers’ bills every January. All without having to go through the work of a traditional regulatory process. Regulators’ processes are already not working for customers, we do not need to change the process to make it easier for utilities to raise bills with less consumer protections.
Customers Can Keep Up the Pressure
Customers can help. The Commission is hosting a virtual public input session on PGE on Thursday, May 16th. Customers should attend and tell the Commission their stories about how big winter rate increases from PGE affect them.
Let the Commission know if you think PGE should be given another rate hike.
Learn More About PGE’s Request
Using Battery Storage as an Excuse: PGE has requested a $202 million rate increase (~7%) under the guise of needing more money for battery storage projects. Yet, only about $17 million of the request is actually for battery storage.
While battery storage is the talking point, the case is much more of a wish list by management for:
- Higher profit margins
- Making it easier to raise prices every winter
- Shifting financial risk to customers
PGE Just Agreed to its Current Profit Margins: In 2023, PGE settled with parties at its current profit margins, and more. CUB, advocates, and the Commission just spent nine months litigating these requests. Asking for all of these items again a couple of months later is a waste of time and resources, especially when nothing has changed.
Read more about PGE’s Request: PGE Asks for Even More Rate Increases (CUB Blog)
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08/22/24 | 2 Comments | PGE’s Request to Raise Rates in 2025 Lives On