Foreseeing Future Utility Rates

By Nancy Tannler

After reading an article in the June edition about the cost of water in the near future, a reader inquired about other utility rates over the next 10 years.

Steve Corson, spokesperson for Portland General Electric (PGE) answered for that utility: PGE currently serves over 900,000 customers. Their rates are regulated by the Oregon Public Utility Commission (PUC) as are natural gas, telephone utilities and a few water companies in the state. (Portland’s water rates are approved by City Council.)

The reasons PGE requests a rate increase are varied and they do not happen every year. The last increase was in January 2019. Currently they are not in a general rate case increase, so there won’t be a proposal to the PUC this year.

Corson said the factors that do determine costs include operating expenses, distribution, customer service and if a new resource is brought online. PGE submits an application to PUC and the review process begins, usually taking about 10 months.

During this time, the data is open to outside groups to review. This includes the Citizens Utility Board, industrial groups and the general public. PGE holds public meetings for those interested.

Corson went on to explain the complexity of our energy system. Unbeknownst to most people, at any given hour of the day, energy is being monitored every five to fifteen minutes to find the most available and cheapest source. There is no energy storage, so it is being produced as we use it.

PGE draws from different utilities: hydro plants, wind farms, wind/solar and natural gas fired plants. It all depends upon the demand.

There is a major inter-tie between California and the Northwest. We sell them surplus energy in the summer when they need it most and in turn, they sell us energy in winter when our demands are highest. These networks reach all over the western United States. This is why we are never without electricity.

The climate crisis has utilities looking for new ways to reduce carbon and increase renewable energy.

PGE has partnered with NextEra Energy and are constructing a new energy facility in Eastern Oregon that will combine 300 megawatts of wind generation, 50 megawatts of solar generation and 30 megawatts of battery storage.

The project, Wheatridge Renewable Energy, will be the first of this scale in North America to integrate these three technologies, accelerating Oregon’s transition to clean energy.

“We’re looking out over the next 20-30 years to make sure we are on track with expectations of cleaner energy,” Corson said.

With this new facility and other cost increases, there will be changes in rates in the future. Over the last 10 years the increase has averaged 2.4 cents/kWh.

On another promising note, Corson said that the average usage for the typical residential customer is going down as appliances and homes become more energy efficient. Even though rates may go up, the actual bill will remain fairly flat.

NW Natural files a Purchased Gas Adjustment with the PUC of Oregon each year in September said spokesperson Stefanie Week. The outcome of a general rate case reflects changes to the cost of natural gas due to investments to strengthen and reinforce the system, provide maintenance and operating costs and technology upgrades.

This year NW Natural requested a general rate increase that would result in a net revenue increase of $71.4 million. The typical residential customer using 53 therms per month would see an average monthly bill increase of about $6.43. A commercial customer using 242 therms per month would see an average monthly bill increase of about $25.40. This increase will likely take effect November 1, 2020.

This month, NW Natural issued bill credits of about $16 for the average residential customer. Weeks said, “We maintain an affordable, essential service, especially during the challenging time due to COVID-19.” Customers of NW Natural gas bills are about 40 percent lower than they were 15 years ago.

Foreseeing Future Utility Rates

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