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Commission Scales Back PGE Request to Raise Customer Rates



December 9, 2013 (2013-15)
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.  Electric rates for customers of Portland General Electric will increase in 2014, but not as much as the Portland-based utility had asked for them to go up.
The decision by the Oregon Public Utility Commission to trim the request marks the end of a ten-month process by Commission staff and customer groups to analyze the utility’s proposed rate hike.
PGE initially filed for a $105 million annual increase, or a 6.2 percent overall increase.  However, the Commission took a different view and reduced the request to roughly $60 million for an overall increase of 3.8 percent. The new rates take effect January 1, 2014. 
The average rate impacts are projected to be:
·          5.5 percent for residential customers
·          3.5 percent on average overall for commercial and industrial customers
A typical residential customer who uses 850 kWh a month will see their bill go from $93.03 to $98.20 or an increase of $5.17. 
“It’s never easy to increase customer rates, however, this decision strikes a balance of providing customers with safe and reliable service while at the same time providing PGE with the financial tools to meet today’s and future needs to serve its customers,” said Commission Chair Susan Ackerman.
Rates vary for customer class. The different rates are based on how much each customer class receives its power from PGE’s transmission system. Because much of the rate increase is earmarked for capital improvements and maintenance of the transmission system, customer groups that use that system the most bear the biggest portions of the costs. Costs decline for industrial customers because they receive power at a higher voltage, using less of the transmission system, the utility said.
Drivers for the increase include operations and maintenance costs, decommissioning of the Boardman coal plant, and new investments to improve service and reliability. Others include a new readiness center focused on disaster recovery, a backup data center, pension plan funding, and health insurance costs.
The Commission decision sets the return on equity (ROE) at 9.75 percent and a capital structure of 50 percent equity and 50 percent long-term debt.
PGE serves about 829,000 residential, commercial and industrial customers in Oregon
***Rates for PGE customers will change January 1, 2014, due to three other factors not related to the rate case. As a result, a typical residential customer, who uses an average of 850 kilowatt hours per month, will see their average monthly bill increase approximately $7, from $93 to $100.