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News Release
OPUC Grants Small Rate Increase For Customers Of Northwest Natural
November 12, 1999 (1999-047)
Contacts: Ron Eachus, Chairman, 503 378-6611; Roger Hamilton, Commissioner 503 378-6611; Joan H. Smith, Commissioner, 503 378-6611; Ed Busch, Revenue Requirements Manager, 503 378-6625; Ron Karten, OPUC Public Information Officer, 503 378-8962
Salem, Ore. – The Oregon Public Utility Commission (OPUC) today approved a $246,000 rate increase for customers of NW Natural (NWN).
Overall, the increase amounts to 0.1%. Residential customers will see an increase of 1.3%, or $0.61 cents/month for a typical household using 68 therms/month. Commercial, institutional, and small industrial customers, using 324 therms/month, will see an additional $0.42 on their monthly bills, for a 0.22% increase. Large industrial customers will have rate decreases.
In this first rate case for the company since 1989, the company asked for a 3.8% increase, or an additional $14.7 million in rates.
The increase reflects annual cost recovery for $32 million of the company’s investment in the customer information system at the company’s Portland headquarters, and a $29 million additional investment in a natural gas storage compressor station built near the town of Mist, Oregon.
The company had asked for cost recovery of $39.8 million for the information system, but the Commission disallowed $7.8 million because the company spent more for the project than the Commission considered reasonable.
Residential customer rates increased in part because the Commission allocated the entire cost of both the customer information system and Mist facility among residential and commercial customers. Only these customer classes will benefit from the projects.
In the rate case, the Commission acknowledged that rates among different classes of NWN customers have not accurately reflected the actual costs of serving those classes. The Commission’s decision more properly aligned rates with the actual cost of providing service without subjecting residential customers to rate shock.
Among the other issues considered was a reassessment of the company’s authorized rate of return. The Commission allowed a 10.25% return on what is known as "common equity," or the value of a shareholder’s investment. The authorized return set in 1989 was 13.25%. In large part, the difference reflects changes in interest rates.
The Commission has allowed the company to implement the increase with three days notice to the Commission. It is expected to become effective by December 1, 1999.
NWN serves 412,000 customers in the Willamette Valley and coastal regions throughout the northwestern part of Oregon.
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