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PGE Sees 1.7 Percent Rate Increase for Residential Customers in January by Gail Kinsey Hill The Oregonian, November 12, 2005

Portland General Electric officials said Friday that residential customers likely will see their monthly bills creep up about 1.7 percent beginning Jan. 1, according to the utility's final estimate of 2006 costs for purchased power and fuel.

Just a few months ago, PGE had expected an increase of 3 percent to 4 percent for its residential customers. But final revisions, some related to power received from the federal Bonneville Power Administration, muted the rise. Rates for commercial customers, such as grocery stores and retail shops, will rise an estimated 5.3 percent. The increase for large industrial customers, such as semiconductor makers and steel manufacturers, will be about 5.7 percent.

PGE, which serves 765,000 customers and is Oregon's largest utility, is allowed by regulators to adjust rates annually. The increase -- or decrease -- is based on changes in projected costs for wholesale power and fuel purchases for the upcoming year.

Under the adjustment agreement, PGE files updated estimates quarterly with the Oregon Public Utility Commission.

It will file the final figures with regulators on Tuesday. The increases are subject to PUC approval, expected by Dec. 20.

Recent jumps in natural gas prices have been pushing up costs, according to utility officials. Not only does natural gas fuel many of PGE's power plants, but it in large part dictates wholesale power prices.

"Natural gas clearly has been the driver," said a PGE spokesman, Scott Simms.

Under the estimated increases, a typical PGE residential customer using 1,000 kilowatt hours would pay a monthly bill of $83.87, compared with $82.47 today. That's an increase of $1.40 a month, or $16.80 a year.

PGE expects to file what is known as a "general rate case" early next year. This rate request will include not just power and fuel costs but also other operating and administrative expenses. And, it will include the costs of the utility's new natural gas fired power plant, the $285 million Port Westward project.

PGE said it's too soon to estimate the size of the increase, although officials have said they hope to keep it well below 10 percent. New rates, also subject to PUC approval, would go into effect next fall.

The utility's last general rate case came under PUC review in 2001 when power costs throughout the West were soaring. PGE residential customers saw rates jump 30 percent, and business customers faced 50 percent increases. The utility is owned by the bankrupt Enron Corp.