Our Year Looks Busy—How About Yours?

As we open up a brand new year, we here at CUB have taken a moment to review the work that we know awaits us in the next 12 months. We share our list of projects with you, our members, so that you are aware of what issues and opportunities will be approaching in 2008.

Legislative and Policy Work

First, we will be present during the Oregon Legislature’s February 2008 Session. Although we respect the limited nature of this one-month session, we will be doing the following things, if time permits: 1) we will revisit the bill (which did gain some traction toward the end of the 2007 session) which would require 20% energy reduction in all state buildings by the year 2015; and 2) we will potentially be moving a climate change bill which would require state agencies to evaluate programs and policies in order to achieve the carbon reduction goals outlined in the 2007 Climate Change Bill, HB 3543.

For nearly a decade, CUB has led policy discussions regarding utility structure, regulation, and energy, and much of that has been through its leadership role in the Fair and Clean Energy Coalition (which helped create the Energy Trust of Oregon). We will continue to refine policy and gather major players as we look ahead to the more complete Oregon Legislative Session beginning in January 2009.

We will continue to be a key player in the Western Climate Initiative discussions, an inter- state and province group working to create solutions for global warming pollution reduction. The first meeting of this group in the new year happens this week here in Portland, and CUB’s staff attorney, Jason Eisdorfer, will be there. A key goal of the group is to, by this summer, produce a model cap and trade bill, aimed at putting a limit on allowable levels of carbon dioxide emissions.

Because CUB and its sister organization, the CUB Educational Fund, have been increasingly involved in policy development, particularly with regard to energy issues, we have decided to change the name of the CUB Educational Fund to the CUB Policy Center. Same great staff, same high level of commitment and broad experience, same outreach and public education on utility issues, but we feel this is a more accurate name for the way the organizational work load is developing.

Regulatory Work

Where to begin? Well, how about with telecomm? Qwest has filed a request with the Public Utility Commission to remove price caps applying to basic local service, and to deregulate many other commonly used phone services as well (i.e., directory assistance). We are jointly filing a Motion to Dismiss this case later in the week. If the Commission dismisses the Qwest case, we will undoubtedly be fighting Qwest on raising rates in the Legislature again next year. If not, we will continue to fight them at the PUC this year.

Energy efficiency filings have been submitted by Portland General Electric and PacfiCorp, a direct consequence of a provision in the 2007 Renewable Energy Standards allowing the electric utilities to do more cost-effective energy efficiency. PacifiCorp’s filing we expect to be approved shortly, while PGE’s contains some problematic issues (such as a lost revenue mechanism which would raise customers’ rates, and which we believe to be unnecessary).

There are tax dockets open for all the major privately owned utilities subject to the Utility Tax Reform Bill of 2005, SB 408. The first changes in rates resulting from the tax reform will be going into effect this year. PGE customers should receive a rate reduction this summer.

Speaking of PGE, we are battling Oregon’s largest single electricity provider on the issue of Advanced Metering machines. PGE wants to spend millions of dollars on meters that do not require human meter readers, and claims that the move will save money down the line. At the same time, they are asking to have customers pick up the rest of the bill on the pilot set of advanced meters they installed near Mt. Hood 4 years ago. CUB cries foul and argues for waiting until the technology is more mature, PGE has less upward pressure on rates, and “smart” appliances are more readily available to work with the advanced meters on evening out peaks in usage.

Another case, questioning whether PGE acted prudently in the case of its long Boardman plant outage in 2005 and 2006, will take some time and will decide who should absorb the money lost while the plant was shut down—PGE or customers. CUB is trying to make the company pay for its own mistakes.

PGE may also file a general rate case this year, asking for higher rates based on their capital investment costs. We hope not.

There will certainly be the annual power cost rate cases for both PGE and PacifiCorp, in which the companies forecast their 2009 rates based on market prices, hydro conditions, and available generating resources. Idaho Power, serving customers in Eastern Oregon with electricity, will also be involved in a case which will determine the structure used to forecast its variable power cost rates.

The major natural gas companies in Oregon, NW Natural, Avista, and Cascade, have their own variable power cost cases, called PGA (short for Purchased Gas Adjustment) cases. In addition to specific PGA cases for each company, CUB is heavily involved in a more general PGA Investigation, which is reviewing the basic structure of the natural gas rate setting process in Oregon. CUB is arguing in that case for continued sharing of risk between natural gas companies and customers, as opposed to putting all such risk onto customers; and a mechanism which would require the companies to absorb moderate increases in cost, while allowing companies to seek recovery of extraordinary cost increases due to truly unforeseeable circumstances (remember Katrina?).

Last but not least is the issue of the Bonneville Power Administration’s distribution of federal hydropower benefits to residents of the Northwest. At issue specifically is the resolution of the disagreement regarding the Residential Exchange, a system which was used until May of 2007 to share the benefits of the BPA system with residential and small farm customers of privately held utilities. An interim agreement signed by BPA contract-signers (mostly publicly-owned utilities) would result in a long-term diminution of benefits to private-utility customers from approximately 16% one year ago to 2% at the end of the 20-year agreement. One consequence of this proposed distribution of benefits would be the shifting of benefits from Oregon to Washington, which has a higher percentage of public power customers. At the same time, BPA has made it nearly impossible for citizens to form a public and get access to cheap federal hydropower that way, leaving a dramatic gap between the rates of public and private utility customers, and leaving BPA on the wrong side of the Northwest Power Act.

CUB has been active in the policy debate surrounding the Residential Exchange and will file as an intervenor in the BPA rate case later this year, during which these issues will be hashed out at greater length, and with buckets of numbers.

We also have to be ready to respond to unexpected rate case filings, and individual member concerns. If another megacorporation comes looking to buy one of our utilities, or if a low-income assistance program needs help to stay on course, CUB will make room on the calendar to do that work as well.

We appreciate the support of our members as we continue in this new year with our consumer advocacy and energy policy agenda. May we stay strong working together in 2008.

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