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Pacific Power's Smart Meter Upgrade Project
Pacific Power is in the process of upgrading meters throughout its Oregon service territory. The project is expected to be completed by August 2019. Installation of digital, broadcasting meters was approved by the Oregon Public Utility Commission (PUC) in late 2016, after Pacific Power demonstrated the upgrade would improve reliability and reduce costs for customers. Under its charge to represent customers of regulated utilities, the PUC has encouraged public and stakeholder involvement throughout the multi-year meter upgrade decision process.
The PUC has approved an option for customers who want to keep their manually read meters. Customers who choose this service pay the average cost of manually reading their meters. In order to keep the cost of standard utility service fair and affordable for all customers, those that want choices beyond the standard service are typically asked to pay the costs they incur. For more information about the PUC’s decision-making process and the ongoing discussion about opt-out options and fees, see the resources below.
 

Opt-out fee
In response to customer questions and comments, in November the Commission asked Pacific Power to consider opt-out options that required fewer manual reads by their staff. Pacific Power proposed an estimated bill option with quarterly 'true-ups' based on actual usage. This would reduce the annual cost for manual meter reading by minimizing the number of reads done each year from 12 to four, reducing the cost from $36 per month to $12. The PUC Staff reviewed the estimated bill option (ADV 918) and made recommendations to the Commission in their report filed within the docket.
At a Special Public Meeting on March 8, the Commission accepted PUC Staff's recommendations, requiring adjustments to Pacific Power's proposal. The following PUC Staff recommendations were approved by Commissioners:
  • Decrease the number of meters reads to three annually -- further reducing the monthly meter reading charge to $9
  • Utilize the standard two-tier per kWh price that all residential customers pay today -- ensuring customers using 1,000 kWh per month or less are not charged a higher average price
  • Launch this option without a pilot period -- reducing concerns by customers that the program may be temporary

Pacific Power smart meter opt-out customers must register for Pacific Power's Equal Payment Plan to take advantage of this reduced rate. Please call 888-221-7070 or visit https://www.pacificpower.net/ya/wtp/epp.wcssn.html to register.

View the media release for details or view the March 8 public meeting.

Concerns about double-billing
PacifiCorp’s current base rates were approved by the Commission in 2013.  The ratemaking process is a forward-looking exercise, whereby rates are based on forecasts of a utility’s revenue needs. In the 2013 rate proceeding, the Commission evaluated numerous estimates for all costs incurred by the utility to efficiently provide safe and reliable service – including services such as meter reading.
These estimates used to determine the base rates are not exact costs to be charged to customers for individual services. These estimates merely help inform an overall revenue requirement forecast for the utility, which the Commission then allocates among customer classes (residential, industrial, commercial, etc.) when it establishes the rate schedule for the various utility services. A revenue requirement forecast is, in effect, similar to a fixed-price bid to provide utility service.  Like all forecasts, the utility’s actual costs will vary from those forecast.  Some estimates of expenses will be too high, while others will be too low.  But once rates are established, the utility is obligated to charge only those rates until the Commission approves a change.
The fact that the Commission did not re-examine PacifiCorp’s 2013 base rates when the smart meter tariff was approved in 2017 does not mean there is a double charge for meter reading services. Again, the meter-reading estimates were not used to set an exact amount to charge customers, but rather was part of the overall “fixed-price” forecast to provide utility service. In order to revisit those base rates when approving PacifiCorp’s 2017 smart meter tariffs, the PUC would have been required to initiate a general rate proceeding and reexamine all the 2013 estimates used to set customer rates, which may have resulted in an overall increase in rates.  Instead, concluding PacifiCorp’s base rates remained just and reasonable for customers, we reviewed, and ultimately approved, the company’s AMI tariffs as a single-issue proceeding. This was based on a review of evidence that PacifiCorp’s cost per manual meter read would significantly increase under the program due to the loss of economies of scale. 
 

Useful links: The PUC’s public process & decision-making timeline

PUC Fact Sheet – smart meter decision-making timeline
UM 1667 Staff Report for December 6, 2016 Public Meeting – this report details cost estimates and the long-running Smart Grid process.
UE 322 Staff Report for March 7, 2017 Public Meeting – this report features PUC Staff recommendations and conditions for the project.
At the Nov. 6, 2018 Public Meeting, the PUC required Pacific Power to provide an update on the project and respond to questions the Commission had received from the public. While many of the public’s questions had been raised by stakeholders and PUC Staff previously and answered in the process of the upgrade decision, the PUC saw benefit in a timely, public review of the questions and responses.
·  View Pacific Power’s responses to frequently asked questions.
 
Questions or comments?
To share a public comment, ask further questions or address billing or other issues, contact the PUC’s Consumer Services Team at:
800-522-2404 or 503-378-6600