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Commission Trims PacifiCorp Rate Increase Request

 

December 20, 2012 (2012-015) (UE 246)
 
Contacts:  Susan Ackerman, Chair, 503 378-6611, Stephen Bloom, Commissioner, 503 378-6611, John Savage, Commissioner, 503 378-6611, Bob Valdez, Public Affairs Specialist, 503 378-8962
 
Salem, OR.  Oregon customers of PacifiCorp will see their electric rates barely budge next year due to a decision issued today by the Oregon Public Utility Commission.
 
Overall rates will go up by just 0.5 percent beginning Jan. 1, 2013, not the 3.5 percent increase the utility had requested when it submitted its initial filing to the Commission in March of this year. The request sought to include in rates expenses for power costs, general expenses, coal plant pollution measures, and a new transmission line. 
 
Commission staff and customer groups such as the Citizens’ Utility Board, Sierra Club, and others reached a partial settlement on most of the rate cases issues that trimmed the request to 2 percent.
 
The three-member Commission was left to decide two large ticket items; whether to include in customer rates the cost of environmental pollution control upgrades at seven of PacifiCorp’s coal-fired plants and a new transmission line.
 
The Commission approved including the transmission line related costs in customer rates. However, it will not go into rates until it is completed in the first half of 2013. On the coal plant upgrade expenses, the Commission decided to cut the utility’s requested coal plant upgrades by $17 million, which reduced the overall increase to 0.5 percent.
 
“This was an extremely difficult case for the Commission to decide.  We expect our utilities to be good environmental stewards; that’s why we support needed utility environmental investments,” Commission Chair Susan Ackerman said.
 
However, the order stated that PacifiCorp failed to provide persuasive evidence that it was directed by state regulators in Wyoming and Utah to act when and how it did.
 
“We also expect utilities to be diligent about analyzing all available alternatives. In this case, the utility’s analysis was simply not up to par. We were not convinced that the full amount of the utility’s investments were prudently made. Customers do not pay for imprudent investment,” Ackerman added.
 
Financial Decisions:
 
Rate of Return (ROR): Requested 7.92 percent received 7.66 percent
 
Return on Equity (ROE): Requested 10.20 percent received 9.80 percent
 
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