Scott Swanson
Of The New Era
Pacific Power customers are looking at a possible 13.2 percent rate increase later this year if the Oregon Public Utility Commission approves a request the company filed in February, the company’s Regional Community Manager Doris Johnston told local business representatives Thursday, May 25.
Johnston spoke to a meeting of the monthly Breakfast Club, sponsored by the Sweet Home Economic Development Group, at the Senior Center.
She said that utility companies usually request more than they actually expect to get when they ask for a rate increase, but that MidAmerican Energy Holdings Co., which purchased Pacific Power last March from ScottishPower, prefers to ask for only what it needs. Pacific Power’s utility’s last general rate increase, which went into effect last October, was only for 3.2 percent, “drastically” lower than it had requested, Johnston said.
She said that the increases are driven by higher fuel costs required to generate electricity. Also, Johnston said, the company is dealing with aging infrastructure and generation facilities that are proving costly to maintain.
“We’re like any other business,” she said. “The issues that affect other businesses affect us too.”
If the PUC approves the proposed rate increase, which would take effect in December, residential rates would rise 10.8 percent; small commercial (30 kilowatt-hours per month and below) 19.8 percent; medium commercial (30-100 kwh) 9.4 percent; large commercial (above 100 kwh) 12.9 percent; industrial 19.8 percent and irrigation 19.8 percent.
Johnston said the company generates a lot of its own power, primarily through natural gas and coal-fueled generators, and constantly buys and sells power in an attempt to get the best price possible.
Johnston said Pacific Power has managed costs to keep its prices relatively flat over the past several years. She said the average Pacific Power residential customer using 1,000 kilowatt-hours of electricity a month was paying $66.48 in November 2000. Currently, that same customer is paying $67 a month for electricity service.
Despite these successes, Pacific Power has earned significantly below its allowed return for many years.
“Our return on investment lags behind comparable utilities,” Johnston said. “Everybody thinks that if you have a regulated monopoly, you have a guaranteed rate of return. That’s not the case.”
She said that Pacific Power filed a protest after the OPUC granted it the 3.2 percent increase last year.
She noted that the company, which serves more than 535,000 customers in Oregon, was ranked fourth in the western region last summer by the J.D. Power and Associates 2005 Electric Utility Residential Customer Satisfaction Study results.
“Raising rates is not a fun thing to do,” Johnston said. “As a utility, we try to mitigate as much as possible to keep rates low.”
The Breakfast Club will meet at 6:30 a.m. on June 29 at the Senior Center. SHEDG President Ron Moore will talk about SHEDG’s past and its direction in the future. RSVPs are required by June 21 by calling 367-6185.