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News Release
Commission sets Final PGE Rates for 2003; and Resolves Power Cost Adjustment Mechanism Issues
 
December 19, 2002 (2002 - 038)
 
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 today approved a stipulation that makes the final adjustment to rates for customers of Portland General Electric (PGE) effective January 1, 2003. The stipulation agreed to by the Commission, Citizens’ Utility Board (CUB), and Industrial Customers of Northwest Utilities (ICNU) sets the amount PGE could recover in its remaining power cost mechanism account.
 
The decision combines the rate decreases from reduced power costs projected for 2003 with the amortization (paying off) of excess power costs from late 2001 through 2002.
 
With the final adjustments, residential rates for PGE customers will decline by 1.9 percent; commercial rates (schedule 32) will fall by 9 percent; and industrial rates (schedule 83) will be reduced by 10.7 to 16.9 percent.
 
Residential and commercial customers will pay down their share within two years. Industrial customers have the option of making a one-time lump payment or spreading out the cost over one year.
 
The decision allows PGE to recover $30.6 million dollars for a period from October 1, 2001 through December 31, 2002 for power costs and reduced energy revenues due to a subdued economy. Some of PGE’s power purchases were signed in 2000 and 2001 at a time of high market prices.
 
This adjustment differs from previous power cost adjustment mechanisms which dealt solely with power costs. This mechanism agreed to in UE-115, also included a sharing formula tied to energy revenues.
 
The amount in the account grew recently by $6.4 million due largely to an outage November 22, 2002 at one of PGE’s coal fired power plants, known as Colstrip Unit No. 3. The cause of the outage is still under investigation. The unit is expected to be off-line for the remainder of 2002.
 
This decision resolves the issues related to PGE’s remaining power cost sharing mechanism, which ends December 31, 2002. The parties to the stipulation reserve the right to raise issues related to Federal Energy Regulation Commission (FERC) investigations into alleged market manipulation in other proceedings.
 
The Commission will conduct a prudence review and audit of the power costs.
 
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