Electricity bills to increase

May 25, 2007

Klamath Falls Herald and News

Steve Kadel

Residential and small-farm electricity bills throughout the Klamath Basin will increase 13 percent beginning next month due to a recent court ruling.

More than 44,000 customers in Klamath and Lake counties will be affected, said Toby Freeman, Pacific Power’s regional community manager. The utility estimates the average family’s bill of $77 will go up about $10.

The price boost stems from a May 3 decision by the 9th U.S. Circuit Court of Appeals that ends monthly “residential exchange credits.” It curtails pass-through credits from Bonneville Power Administration to utilities such as Pacific Power.

Court decision

The court’s decision came after litigation from some of the region’s public utilities, which argued that the residential exchange credit gave an unusually large benefit to investor-owned utilities. That resulted in higher rates for consumer-owned utilities, they argued.

BPA said this week in a letter to Pacific Power and six other shareholder-owned electric utilities that it was forced to suspend the pass-through credits, which total $25 million monthly.

Seventy-five percent of Oregon electricity users are affected. The higher rates will reflect usage beginning June 1.

Freeman said Pacific Power and others affected by the ruling are considering ways to reverse the decision, including asking the 9th Circuit Court to rehear the case.

“The next step would be going to the U.S. Supreme Court,” he said. “Our hope is that there will be a short-term solution that will avoid or reduce impacts on our customers. We are working with a lot of folks to address this situation.

“We think the impact on the region will be significant, we think this is unfair, and we think it is inconsistent with the intent of the Northwest Power Act.”

Restoring the credits that have been in place for 30 years “is a simple question of equity for all Northwest electric consumers,” said Pacific Power president Pat Reiten.

The court decision means benefits from the federal power system go to just one-fourth of Oregon ’s electricity consumers, he said.

Help being sought

Reiten and Freeman added that help in reversing the decision is being sought from Oregon ’s congressional delegation.

The Oregon Public Utility Commission also criticized the court decision. Its chairman, Lee Beyer, noted the ruling would take $128 million annually from rate payers served by Pacific Power, Portland General Electric and Idaho Power.

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