Oregon utilities file for rate adjustments

Rural PacificCorp customers hardest hit by tax filings

Mitch Lies
Capital Press

October 16, 2007

Depending on who supplies your utilities in Oregon, come next June, you can expect utility rates to either increase or decrease.

According to the four utility tax filings submitted this week to the Oregon Public Utilities Commission, customers of Portland General Electric and Avista Natural Gas could receive a rate credit beginning next June.

Northwest Natural customers, conversely, could see a rate increase.

Hardest hit could be PacificCorp customers. PacificCorp overpaid taxes by $32.6 million, according to the filings.

Under law, the utility is required to charge customers for the overpayment.

The tax filings for 2006 were the first filings under a 2005 law Oregon lawmakers crafted in response to the Enron crisis. The law was designed to ensure the amount collected for taxes in customer rates matches the amount paid by utilities

By law, PacificCorp is required to raise its rates to account for the $32.6 million overpayment, plus a loss of $5.5 million in interest.

Company executives said the utility is proposing to moderate the impact on customers by limiting the average increase to about 3 percent. The increase would be effective June 1 of next year.

"We are proposing to defer recovery of approximately $11 million until Oregon legislators have an opportunity to reconsider the law," said Pat Reiten, president of Pacific Power.

Reiten said he believes the law is faulty. He said the utility will lobby to change the law in the 2009 session.

"We understand the frustration with the Enron situation that led to this legislation's passage, but the law is faulty in several respects for utilities that do pay their taxes," Reiten said.

Scott Bolton, director of government affairs for Pacific Power, said the utility's rural industrial customers will be hardest hit under the law because of high average usage.

"Our rural customers are getting caught in the crossfire of that situation," Bolton said.

Rural industrial customers of PacificCorp can expect a rate increase of around 4.4 percent Bolton said. Residential customers are looking at a rate increase of around 2.4 percent.

Under the filings made Oct. 15 to the PUC, NW Natural customers also can expect a rate increase. NW Natural overpaid taxes by $1.7 million.

Customers of PGE, conversely, may receive a $37 million refund, while customers of Avista Utilities may get back $1.1 million.

The PUC has 180 days to review the filings.

Pacific Power serves 713,000 customers in Oregon , Washington and California , including customers in 27 Oregon counties. 

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