Text Size:   A+ A- A   •   Text Only
Site Image

News Release
Commission Trims PacifiCorp Power Cost Request by Nearly Half; Rate Impact to be determined
July 18, 2002 (2002 – 020) (UM 995)
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 decided to allow PacifiCorp to recover $131 million in excess power costs the company incurred between November 1, 2000 and September 9, 2001, a period that included rapidly escalating power costs, a west-wide drought, and a thermal generation plant outage. The company originally requested $259 million.
A power cost sharing mechanism previously adopted in the case is responsible for a significant portion of the reduction. The mechanism shares power costs in excess of the level included in the current base rates charged by the company between customers and company stockholders
In the PacifiCorp case, the sharing mechanism originally resulted in customers being responsible for paying 62% of the amount of power costs over the level in current rates, and the company having to absorb 38%.
The mechanism reduced the company’s request to $160 million. The amount was further reduced by 15 percent to $131 million by a stipulation between the Commission staff and the company.
The mechanism in this case is very similar to the sharing mechanisms applied by the Commission in the Portland General Electric and Idaho Power deferred power cost cases, decided earlier this year, that dealt with the extraordinarily high wholesale power costs experienced by all three utilities during late 2000 and the middle of 2001.
In deciding the case, the Commission examined a number of issues including long-term power contracts, hydroelectric conditions, system management, company earnings and an outage of a company power plant in Utah.
In all of the issues, the Commission found the company acted prudently.
The impact on PacifiCorp customers has yet to be determined. At its August 6 public meeting the Commission will decide whether to begin paying down the balance at three percent or six percent a year. The company has requested six percent. The 2001 legislature changed the deferred accounting statute that allows an electric utility to amortize deferred power costs at up to six percent per year. If approved, new rates would be effective August 7, 2002.
PacifiCorp serves approximately 494,000 customers in Oregon.