Pacific Power Rate Increase Will Add $29.47 Monthly to Oregon Residential Consumer Bills

Pacific Power’s proposed rates increase will add $29.47 to Oregon residential customer’s monthly energy costs. The 17.9% hike is the third time rates have increased since 2019. The last hike was 4% and came into effect in 2022.

Lion’s Share of Energy Hike Will Cover Wildfire Liability Costs

The major portion of the income from Pacific Power’s latest energy price hike will cover the cost of the company’s liability when its power equipment starts wildfires. Last year, Pacific Power paid $299 million in settlement fees for lawsuits after Oregon’s 2020 Labor Day wildfires.

Since then, Pacific Power’s insurance costs have soared. Last year, the company’s wildfire liability costs reached a staggering $122 million, as opposed to its 2022 liability bill of $33 million.

Oregon Consumers Affected By the Price Hike

The power company serves Oregon consumers in the area bordered by Columbia, Wasco, Clackamas, Sherman, and Morrow in the north, Lincoln in the west, Baker in the east, and Lake in the south. Pacific Power serves 243 communities – 800,000 customers – across the state, but the latest increase excludes its consumers in Washington and northern California.

Catastrophic Fire Fund

A “Catastrophic Fire Fund” is being proposed into which Oregon energy consumers will contribute up to $77 million annually. The goal is to raise $3 billion into the fund to cover the company’s insurance shortfall for fire liability claims.

Pacific Power will pay 20% towards the fund, which includes a deductible for each claim. Consumers will pay the balance of the $240 million annual cost spread across the company’s 800,000 consumers in Oregon, northern California, and Washington.

Company spokesman Simon Gutierrez stated in an email that Pacific Power is committed to reducing containing costs to its consumers by offering alternative billing options and rate discounts. He points out that by failing to address the threats of wildfire costs, energy companies will face significant increases in the cost of everyday operations.

Consumers Will Pay Increased Costs in Mid-Winter

Bob Jenks of the Oregon Citizens’ Utility Board points out that consumers will find it “really difficult” to pay the new rates when they come into effect in the middle of winter. The proposed increase must now be approved by the Oregon Public Utility Commission before it will become effective in January 2025.

Apart from covering the costs of wildfire liabilities, Pacific Power will spend the rest of its income on green energy investments and improvements to its transmission infrastructure.

Takeaways

• “They have more money than God” is how Bob Jenks described the owners of Pacific Power, Berkshire Hathaway co-founded by Warren Buffett, one of the richest men on the planet.
• Pacific Power was granted a 17.5% increase by the California Public Utilities Commission last year for energy supplies to consumers in that state. This increase is significantly less than the company’s original proposal for a 25.7% increase.
• As of today, residential consumers of Portland General Electric (PGE) will pay 18% more for their energy needs. The increase will add $24 to their monthly energy bills. The additional funds raised by the increases will go towards upgrading transmission lines and the power grid, and for vegetation and tree maintenance. The current increase is PGE’s biggest rates hike in more than 20 years.
• PGE commercial consumers will pay 14.4% more, while industrial consumers will have a 12.5% increase added to their accounts.
• The Oregon Citizen’s Utility Board (CUB) was established in 1984 to make utility services affordable, reliable, and accessible. It has 40 years of experience as a consumer watchdog organization that works with policymakers, utility leaders, and community organizations to address issues surrounding the supply of utility services.

References

https://www.thefreshwatertrust.org/wp-content/uploads/2018/01/Pacific-Power-Service-Area-Map.pdf

https://www.pacificpower.net/about.html