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News Release
Commission Approves Small Rate Increase
For PacifiCorp Customers

June 23, 1999 (1999-027)
Contacts: Ron Eachus, Chairman, 503 378-6611; Roger Hamilton, Commissioner 503 378-6611; Joan H. Smith, Commissioner, 503 378-6611; Ron Karten, Public Information Officer, 503 378-8962
Salem, Ore. – Beginning July 1, Oregon customers of PacifiCorp will pay an average additional 1.23 percent on their electric bills as a result of a $9.3 million price increase approved Tuesday by the Oregon Public Utility Commission (OPUC).
An average residential customer using 1,000 kWh per month will see a monthly bill increase of 74 cents. Commercial customers will see a rate increase ranging from .5% to .89%, while large industrial customers will see the largest rate increase of 1.91%. Overall, the company will see revenues increase by $9.3 million, or 1.24 percent.
The largest part of the rate increase, 1.2%, or $8.96 million, is a result of an increase in the "system benefit charge" that all customers pay and through which the company recovers its investments in energy efficiency.
PacifiCorp operates under an alternative form of regulation (AFOR) plan adopted by the Commission in May, 1998. The plan allows PacifiCorp to annually adjust prices based upon changes in inflation and a productivity index offset. The Commission authorized two small increases of this type in mid-1998
The plan also adjusts rates based upon a predetermined revenue cap for the distribution system. Industrial rates increased more than for other classes of customers because there was a shortfall in distribution revenues from that class of customer.
Industrial customers asked for a delay in implementing the rate increase because they believed the shortfall in distribution revenues was due to forecasting errors, not loss of revenues from customer conservation efforts, as they believed the AFOR intended.
The Commission asked its Staff to review the reasons for the shortfall and to analyze the effects of the distribution revenue cap under various scenarios in the future.
"The industrial customers raised some important issues," Commission Chairman Ron Eachus said. "We need to see if there are unintended consequences in this approach."
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