PUC Guts Portland General
The Oregon Public Utility Commission cut the amount of money Portland General Electric sought to collect from customers by $49.4 million in a decision announced Friday afternoon.
In two separate rate requests, PGE sought to raise revenues by a total of $70 million to cover general cost increases as well as the cost of developing the new Port Westward generating station.
The final decision looks more dramatic than it actually was, said Pamela Lesh, PGE vice president for regulatory affairs and strategic planning. The initial requests were filed nearly a year ago, and new data has reduced the company's revenue requirements. For instance, it has new forecasts for maintenance and operations costs that lowered the amount needed.
What was left, Lesh said, was the commission's opinion on the amount of profit PGE could reasonably earn and still attract both lenders and investors.
"We agreed with the parties that our forecast was different than what we initially filed it to be. I think the commission reached a balanced decision," she said, adding that company officials are still reviewing the 119-page decision.
In the first rate request, PGE sought a general rate increase of $25.1 million or 1.6 percent, in general revenues. The commission rejected the increase and actually decreased the amount PGE can collect from its customers by $21.6 million, or 1.4 percent -- $46.7 million less than sought.
The commission said it modified the rate request so that PGE won't recover any excess power costs if its earnings remain in the "reasonable range."
PGE had better success on its second request, to raise rates by $44.9 million to recover costs associated with the new $400 million gas-fired power plant at Port Westward. The commission granted a rate increase of $42.1 million, or 2.8 percent, which takes effect when the plant begins generating power for PGE customers, scheduled for March.
The net result of the PUC's decision is an overall rate increase of $20.5 million, or 1.34 percent, to the utility's 800,000 customers. The average residential bill will rise to $89.29, an increase of about 48 cents.
As a privately owned utility, PGE is subject to PUC regulators, who consider costs and revenues in setting rates.
Regulators in turn are required by federal case law to allow the owners of private utilities an opportunity to earn a reasonable rate of return on their investment. The PUC's decision grants PGE investors an overall return of 8.29 percent, below the 8.87 percent requested.
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