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News Release
 
Commission Approves PacifiCorp Rate Hike
 
September 7, 2001 (2001 - 032)(UE116)
 
Contacts: Roy Hemmingway, Chairman, 503 378-6611; Joan H. Smith, Commissioner, 503 378-6611; Lee Beyer, Commissioner, 503 378-6611; Bob Valdez, Public Information Officer, 503 378-8962
 
Salem, OR – The Oregon Public Utility Commission has approved new rates for customers of PacifiCorp effective no earlier than September 10, 2001.
 
The decision is the culmination of a nearly yearlong examination of PacifiCorp's rate request by the Commission and its staff as well as the Citizens'Utility Board (CUB), Industrial Customers of Northwest Utilities (ICNU) and other parties. The process included public meetings in Portland, Bend and Medford.
 
The overall increase, net of the benefits of low-cost subscription power from the Bonneville Power Administration (BPA), is just over 1 percent. Residential customers may see a slight decrease, while commercial and industrial customers face about a 2 percent increase. The specific rates changes will be determined on September 10, 2001, when the company submits a filing complying with the terms of the Commission's order.
 
On November 1, 2000, PacifiCorp filed an application for a general rate increase of $160.6 million, or 20.4 percent, in Oregon revenues. The authorized increase is almost $100 million less than the company requested, a reduction resulting from a series of agreements among the parties and decisions by the Commission on contested issues. The amount charged to customers is further offset by BPA benefits of close to $60 million a year.
 
The rate increase was held to a minimum due to a number of mitigating factors:
  • PacifiCorp is less affected by fluctuations in wholesale power costs than some other utilities because it generates roughly 90 percent of its own energy and thus has less exposure to the volatile market;

  • PacifiCorp also has a significant number of coal-fueled generating plants, unlike utilities that are more dependent on natural gas to generate electricity. Coal prices have not experienced the recent price increases to the degree natural gas has;

  • Residential and small farm consumer rates will include a Bonneville Power Administration credit that is included in a new BPA contract with PacifiCorp. PacifiCorp opted to receive its benefit as a cash payment;
 
The Commission is also adopting a tiered rate structure for residential customers in which rates will increase based on how much energy a customer uses a month. It consists of a three block inverted energy rate. The first block is to be 500 kWh and below, the second block to be between 500 and 1,000 kWh, and the third block to be over 1,000 kWh.
 
The order includes a mechanism to deal with power cost issues beyond September. The mechanism allows for a rate adjustment, either up or down, based on PacifiCorp's actual power costs through a Bridge Period effective until May 31, 2002. The mechanism allows for a rate change effective January 1, 2002. In the interim, the Commission and interested parties, will work to develop a new power cost adjustment model. The Commission, PacifiCorp, CUB and ICNU endorsed the agreement.
 
Last November, PacifiCorp filed a deferred accounting application to track wholesale power costs. The company has been collecting a 3 percent charge since February 2001 to recover some of its excess power costs. The utility is expected to make a filing in the near future to increase the charge from 3 to 6 percent following an increase in the statutory limit by the 2001 Oregon Legislature.
 
PacifiCorp serves approximately 516,000 customers in Oregon.
 
 
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