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PUC Tells Utilities to Offer Price Plans by Jeff Mapes, Staff Reporter The Oregonian, March 21, 2001

By fall, Oregon customers could choose a "time-of-use" option
and pay less at off-peak hours or opt for a "green friendly" rate

SALEM -- Save a bundle by not turning your washing machine on until after 9 a.m. on weekdays.

Use your dishwasher at 7 p.m. Saturday, and the electricity could cost three times what it would be later that night.

On Sunday, relax. You get the cheap rate all day long.

Welcome to what could be the brave new world of electricity, at least if the Oregon Public Utility Commission persuades consumers to follow along.

The regulatory agency on Tuesday ordered the state's two large private utilities to offer residential and small-business customers five options by this fall for how they can buy and use electricity.

The commission devised the options as part of the 1999 law partially deregulating Oregon electricity markets. While officials expect most customers to stick with their current plan, they'd like to find ways to encourage people to curtail their use when demand is high.

Because electricity cannot be stored, utilities must buy or generate enough electricity to meet peak loads. With Northwest hydropower in short supply because of low water levels, the price of electricity at certain times of the day has become increasingly expensive, PUC Chairman Ron Eachus said.

Consumers who accept a time-of-use option will get a new meter that divides their electrical usage into three time blocks: peak, midpeak and off-peak hours. Eachus said the off-peak hours could cost as little as one-third of peak power.

Oregonians have been encouraged to shift their power use to slack hours to help the region out of its energy crunch.

"What we're trying to do is introduce some price benefit for that," Eachus said.

To sweeten the offer, officials said consumers could use the new time-use option for a year -- the minimum amount of time to try this option -- and be guaranteed they wouldn't have to pay more than with their normal rates.

"If after the first year, it's not the right rate for you, you'd get out of it," said Lisa Schwartz, a policy analyst for the state Energy Office.

The PUC's five options also include letting people stick with the status quo. That means they could still receive the regulated rates from the state's two big private utilities, Portland General Electric and PacifiCorp.

Together, the two utilities have about 1.2 million customers in Oregon.

The other three options involve environmentally friendly power. Two allow consumers to buy blocks of renewable energy such as wind or solar power, and one is aimed at promoting fish-friendly energy production. Consumers could move in and out of these options on a monthly basis.

The PUC plans to set rates for the new options this summer. They are then supposed to take effect Oct. 1 under the terms of the partial-deregulation law. After that date, larger business and industrial users served by PGE and PacifiCorp can buy power on the open market.

Given the energy shortage on the West Coast, however, few are expected to do so. Instead they can still receive power from their current utility under a rate similar to what they have now.

The new rate options won't apply to customers of the state's public utility districts, which are not covered by deregulation.

While time-of-day pricing is common for large users, utilities have only started to experiment with this kind of pricing for residential customers. One of the leaders is Puget Sound Energy, Washington state's largest utility.

Dorothy Bracken, a Puget Sound spokeswoman, said the utility installed the specialized meters at the homes of 400,000 customers.

Conrad Eustis, director of retail technology development for PGE, said marketing research showed that as many as 10 percent of users could find the option attractive.

Some people find it a game to reduce their energy costs, he said, while others could very much use the $5 or $10 a month they might save by making adjustments.