PGE Files Rate Case - CUB Gears Up to Fight
Posted on March 16, 2006 by oregoncub
Tags, Utility Regulation
PGE filed a rate case with the PUC yesterday, hoping to attain a rate increase of $143 overall, an 8.5% increase in residential customers’ rates. This rate case will set rates going forward from January 2007. CUB is disappointed but not surprised by this rate filing. We believe PGE would be wiser to wait on asking for increased money from customers, but we don’t set the timing of these cases - that is up to the company.
The details of PGE’s arguments are not known to us yet, since we have not yet started wading through the thousands of pages of the filing itself. What we do know is that PGE believes it isn’t making enough money, and has asked the PUC to give it a profit margin of 10.75% rather than the 10% that has been given in recent cases. We aren’t sure why they feel, particularly at this moment with the news full of Enron trials and disputes between PGE and the City of Portland, it is appropriate to ask for this higher rate of return. However, we will undoubtedly find out more as the case progresses.
Public perception aside, we also believe the case, from the standpoint of its contents, is poorly timed. Much of the impetus behind the case seems to stem from PGE’s desire to set up a mechanism to automatically enter their new power plant at Port Westward into rates, as soon as it comes on line. A couple of problems arise for CUB on this issue: this rate case goes into effect in January of next year but Port Westward is not expected to be operational until March or April at the earliest; also, it is quite possible that Port Westward’s opening might not occur until the summer or fall of 2007, and other costs associated with running it might well have changed by then. CUB believes that the time to add a power plant into rates is after that plant opens, which makes much of the content of this filing premature.
PGE’s rates are already among the highest in the Pacific Northwest and we are not convinced any rate hike is currently justified. Furthermore, because we know the impact that a rate increase could have on customers, we are going to go through this filing with a fine-tooth comb and question every cost. As we said earlier, it is not for CUB to set the timing of these rate cases. We simply respond to the cases as they are filed, taking in our toolkit of ratemaking experience and concern for customers’ financial well-being. We will be taking apart this case and putting it back together again in arguments before the PUC that will hopefully result in a much different rate case outcome than the one PGE has requested. The standard, after all, is “fair, just, and reasonable” rates, and not a penny more.
To keep up with CUB, like us on Facebook and follow us on Twitter!
03/10/17 | 0 Comments | PGE Files Rate Case - CUB Gears Up to Fight