Pacific Power seeks another double-digit rate increase for Oregon residents, businesses

The utility, which has some 600,000 customers in Oregon, increased rates last month by 12.9%, and 21% in 2023.

Battered by extreme weather and wildfire-related lawsuits, Pacific Power has asked state regulators to allow it to increase rates 16.9%, or about $29.47 per month on average for residential customers throughout Oregon.

If the Pacific Power rate case filed Thursday with the Oregon Public Utility Commission is approved at or near the requested 16.9% increase, it would be the third large increase in the past three years for its customers. The most recent rate increase of 12.9% took effect in January. In 2023, Pacific Power increased prices by 21% for residential customers.

“This is way too much,” said Bob Jenks, executive director of the Oregon Citizens Utility Board, a ratepayer activist group. “There’s no doubt that this is too much. Customers can’t afford this.”

Pacific Power said it is asking for the 16.9% increase to make transmission infrastructure improvements, invest in renewable energy and for wildfire risk management.

“While our essential operating costs remain low, extreme weather events and increased wildfire risks are impacting all households and businesses, raising the costs of providing our essential services,” Pacific Power Vice President Matt McVee said in a statement.

The company said it wants to increase rates for both residential and business customers to generate about $304 million.

Rates for investor-owned utilities that operate in Oregon are set by the PUC in exchange for exclusive territories. The rate cases typically take months to go through the approval process and don’t take effect until January of the following year.

Pacific Power’s coverage area in the Willamette Valley includes Dallas, Stayton, Albany, Corvallis, Lebanon, Sweet Home, Junction City, Creswell and Cottage Grove.

Pacific Power, also known as PacifiCorp, is owned in majority by Berkshire Hathaway Energy whose chief executive officer is billionaire Warren Buffett.

Are Pacific Power rates going up because of wildfire settlements, verdicts?

In the last year, PacifiCorp has paid out hundreds of millions to victims of wildfires following settlements, and juries have awarded plaintiffs millions more after determining its power lines ignited numerous fires.

PacifiCorp settled with victims of the Archie Creek Fire for $299 million and faces liability over its role in the 2020 Slater Fire and 2021 McKinney Fire.

In a class action lawsuit that blames the utility for igniting four of the 2020 Labor Day wildfires, juries have awarded two groups of plaintiffs $90 million and $85 million, respectively. Additional trials are still to come.

Increased rates “do not seek recovery of any damages from the litigation or settlements,” spokesman Simon Gutierrez said. “Any recovery of costs related to litigation would be a separate rate action.”

Last year, PacifiCorp asked the PUC for permission to track costs related to wildfire litigation so it could potentially seek to recover those costs in a later rate proceeding, PUC spokeswoman Kandi Young said.

“The PUC has not taken action on the request and has made no decision on whether wildfire litigation costs may be included in rates,” Young said.

Threat of wildfires, extreme weather driving cost increase in Oregon

PacifiCorp has poured a lot of money into wildfire mitigation due to climate change and the landscape becoming more fire-prone.

The company said wildfire-related factors that were driving the increase included rapidly growing wildfire insurance premiums, wildfire mitigation, vegetation management and the creation of a catastrophic fire fund, which would create a mechanism to manage risks associated with increased wildfire activity.  

Jenks said much of the rate increase request relates to wildfire-related costs, including wildfire mitigation, wildfire insurance and adding a layer of self-funded insurance.

“They’re up somewhere on $700 million of liability and they’ve got huge amounts more,” Jenks said. “That’s definitely a part of this case. That’s what’s led to their credit downgrade. That’s a significant issue of how do you deal with that.”

The company also mentioned extreme weather and extreme weather events, which have included multiple ice storms that knocked down power lines across western Oregon in 2021 and last month.

Climbing utility rates in Oregon

In December, the Oregon Public Utility Commission approved an 18% rate increase for residential customers Portland General Electric, which increased utility bills on average about $24 per month.

Jenks said Portland General Electric customers have had their rates increase about 30% over the past 14 months.

Northwest Natural Gas customers saw a 25% rate increase in 2022.

And now Pacific Power is asking for another big increase.

Jenks said the utility will not get the full increase they are asking for, but “even if they get half of this, that’s a huge amount of money to put into customer rates.”

“Customers can’t afford it,” he said

Bill Poehler covers Marion and Polk County for the Statesman Journal. Contact him at bpoehler@StatesmanJournal.com

Zach Urness has been an outdoors reporter in Oregon for 15 years and is host of the Explore Oregon Podcast. He can be reached at zurness@StatesmanJournal.com or (503) 399-6801. Find him on Twitter at @ZachsORoutdoors.