Alert CUB Member tips us off to billing cycle problem
Posted on June 28, 2005 by oregoncub
Tags, Utility Regulation
It can pay to look closely at those utility bills. At least, that’s what one of our Corvallis members is finding. His careful reading of a Pacific Power bill alerted him to the fact that his billing cycle was abnormally long, and that the cost of his electric power went up because of it. He in turn alerted CUB, and we took it very seriously.
As a matter of fact, we did extensive analysis of PacifiCorp (Pacific Power’s parent company) billing cycles and came up with some surprising numbers. In 2004, more than 60,000 Pacific Power customers had January bills that were 36 days or longer. This is a problem for a couple of reasons: 1) December and January is the peak load for most of Oregon, when cold weather causes those with electric heat to see their highest electric bills of the year; and 2) the Pacific Power rate structure charges customers one price for the first 500 kilowatt hours used, a higher price for the next 500 kwh, and still a higher price for any usage over 1000 kwh. So a 37-day billing cycle during peak usage months could bump a customer into the highest price for their power, and really increase their bill.
CUB addressed this issue in our current testimony, filed Monday, June 27th, regarding PacifiCorp’s current rate case, UE 170. We proposed that the rate blocks be adjusted along with the length of the billing cycle, so that even if that cycle stretches out a week longer than normal, the customer will not be penalized in their power rates. We estimate that, if implemented, this change could save Pacific Power customers $9 million per year.
This rate case is also the first in which CUB directly addresses the issue of phantom taxation. PacifiCorp asked for an increase of 12.5% in rates, or $102 million dollars. We have already negotiated a decrease to $69 million in that figure, and we will ask that a further $49 million be removed from that rate increase. That includes the $15 million in taxes that are currently included in rates but which we know will not be paid. We are also arguing that the profit margin for the company be reduced from 11.12% to 9.5%. We feel that this is reasonable and, taking into account recent tax cuts benefiting investors, will provide a solid rate of return for shareholders.
Each rate case is made up of a multitude of issues, some fairly straightforward and others pretty complex. We appreciate the time and careful attention of the CUB member who provided us with one of the main rate reduction arguments of this particular case. We encourage all CUB members to let us know if you see something on your bill that doesn’t make sense. We might be able to use it, as in this case, to save millions of dollars for thousands of people.
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03/10/17 | 0 Comments | Alert CUB Member tips us off to billing cycle problem