Pacific Power Files for Rate Increase AGAIN!
Posted on February 24, 2006 by oregoncub
Tags, Utility Regulation
Don’t look now, but Pacific Power (under their corporate name PacifiCorp) is looking to raise your rates again. But didn’t we just get done talking about UE 170, their last rate case, you may ask? After a yearlong investigation of their rates and costs, the Commission gave a decision only 5 months ago which resulted in a 3% increase (down from 12% requested). As a matter of fact that rate case is still open, since Pacific Power filed a Motion for Reconsideration of the Public Utility Commission’s decision.
Amazingly enough, this is not an unusual situation. Since Pacific Power was purchased by Scottish Power in 1997, they have been very aggressive about seeking rate increases. The newest filed rate case, which we just received in the mail today, makes the 7th Pacific Power rate proceeding in 7 years. No other utility files rate cases at this accelerated pace.
In the past 6 case decisions, the Commission has granted Pacific Power an average of 28% of the rate increase they requested. Why is that number so low? They have tended to exaggerate their need for a rate increase, which is decided based upon costs. For example, in the current rate case filing, Pacific Power is asking for an additional $112 million, or a 13% overall increase in rates. For residential customers, this would come to a 10.8% increase.
Two issues stand out immediately for CUB, not even having fully read the filing. 1) Pacific Power wants the PUC to raise their return on equity (ROE) or profit margin up from 10% to 11.5%, a sizeable jump. 2) Pacific Power wants the PUC to reinstate the $26 million in tax costs, removed from their last requested rate increase under the aegis of SB 408 (which requires utility taxes collected to roughly match taxes paid). Hmmmm.
Pacific Power does have relatively low electricity rates in a nationwide comparison. This is because their generation assets are mostly low-cost coal, low-cost hydropower, and some natural gas generation. And while it’s true that natural gas prices spiked after the Gulf Coast Hurricanes last summer, those prices have been consistently dropping until now prices are at about $7 per MMBTU, half of the spiked price of $14.
This filing begins a process in which CUB plans to expend a huge amount of energy and resources in tracking and analyzing the actual costs, such as those mentioned above, of Pacific Power’s electricity generation and purchase. We will write hundreds of data requests, wade through thousands of pages of Pacific Power information, will produce at least two rounds of testimony, undergo cross-examination, attend hearings, file a Brief, and make oral argument. This is an intensive process but it’s a necessary process. As we’ve shown in the last 6 filings, such an effort pays off by reducing rate increases by millions and millions of dollars.
We’re not sure any rate increase is warranted, with the last Pacific Power rate case still pending. But we’ll meet them on the playing field. Again. And we’ll make sure that whatever fraction of this requested rate increase they may win, is justified.
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03/10/17 | 0 Comments | Pacific Power Files for Rate Increase AGAIN!