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Oregon's biggest electric companies are seeking to increase their rates, a step they say is necessary to offset the costs of renewable energy sources like wind turbines. Both Portland General Electric (PGE) and PacifiCorp filed requests last week with the Oregon Public Utility Commission to raise rates for their customers starting in early 2010. Consumer advocates say they will fight the proposed increases, arguing that customers shouldn't be taking on additional charges when they're already feeling the effects of a down economy.
PacifiCorp, which roughly half a million customers (pdf) in Oregon might recognize as Pacific Power, has requested a 9.1 percent increase in rates. The last time the company raised rates was in 2007, when monthly charges went up five percent. PGE's 810,000 Oregon customers (pdf) will see a 2.3 percent increase in rates if the company's request is granted. The increase will be offset by lower power costs, however, and may be negligible according to company spokesman Steve Corson.
If PacifiCorp or PGE supply power to your home or business, what would a rate increase mean for you? Do you work in the electricity industry? What will happen if the Public Utility Commission doesn't approve raised rates? What is the price of renewable energy and who should be responsible for taking on those costs?
GUESTS:
- Pat Egan: Vice president of customer and public affairs for Pacific Power, a subsidiary of PacifiCorp
- Bob Jenks: Executive director of the Citizen’s Utility Board
- Steve Corson: Spokesman for Portland General Electric
- Michael Early: Executive director of Industrial Customers of Northwest Utilities
NOTE: In the interest of full disclosure, PacifiCorp is an underwriter of OPB.
Tagged as: alternative energy · pacific power · pge · the switch · utilities
Photo credit: jigpu/ Flickr /Creative Commons
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I think it's bad timing. Investing in renewable energy is a good idea, but the company should have some money set aside to do this and not have these activities require rate increases. Isn't there any "stimulus" money for these types of improvements?
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If they were adding new fossil fuel power, they'd be calling for rate increases too. That's what they do under our regulatory system.
The reality is that renewable energy is the best thing we have going for us. I'd rather spend my dollars here in Oregon paying for wind or solar power than giving it to out of state coal producers or for natural gas imports.
The reality is we have to change how we do business if we're going to leave a better legacy for our kids.
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While I agree with those who feel this is a terrible time for rate increases, given the high unemployment and other decreases in income, I do feel that this is a good time for all of us to take personal and corporate responsibility for conservation. Whether or not rates increase, we can all cut our usage significantly (and I don't mean cooking over a candle). How about a show about doing more with less? That said, I feel strongly that we need to invest in renewable sources of energy, and I understand that this evolution will be expensive.
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Hmmm... We require that the providers BUY new generating methods. We are surprised that they have costs? We don't want to pay for what we mandated...
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I suspect that if you use the true cost of wind versus coal, in the long term wind wins hands down because coal is killing our planet and wind requires no fuel cost.
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As a 35 yr participant in renewable energy, I find something missing here....conservation is far more beneficial than renewables and we need to reinvent our energy footprint.
Anytime the gov gets involved, the capitalist vultures come out. The RES is propagating this, and the utilities get the ‘gimmies’.
The future maint costs are not being brought out in the push for wind. Can you imagine what is costs to rebuild one of these?
My high wind location is restricted from participating in wind. The ‘friends of the gorge’ have a much more important agenda to espouse.
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To the gentlemen from the utility companies who say they "understand" what this rate increase means to their consumers what their salaries are? Have they taken pay cuts? Is it even possible for them to understand what a rate increase means to someone who works hard and tries to raise a family on less than $30,000 a year?
How much of our money that is supposedly going to develop these green projects is going to advertising them?
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I thought either PGE or Pacificorps experienced record profits just a couple of years ago (this is easy to see in their annual reports) while at the same time getting more customers than ever to pay higher rates for green energy. True?
And didn't the utilites support the RPS passed in 2007?
Investing in renewables creates a homegrown job base AND will drive the market price down. Don't forget: coal is subsidized.
If we need more energy: where do we want it to come from? We need to make responsible choices today for Oregon's tomorrow.
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Utilities have always gone for the most expensive plants because they get a mandated return on investment, ROI, and so the most money invested brings them the most profits in the short term.
The system needs to be changed for the benefit of the consumers, from a short term ROI investment horizon to a long term horizon that considers the true costs of each generating supply.
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For me, it's not a matter of "can we afford to do this now" it's a matter of fairness -- these represent investments for private, for-profit companies that have been making money hand-over-fist. Let the shareholders invest in this by reducing their profits, since they'll see the return.
Better yet, invest all the profits into things like sustainable energy that serve long-term public needs. This is one more reason why we need public utilities, if you ask me.
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Remember Enron? The utilities that survived that Deregulatory Disaster were owned by the public, like EWEB, Eugene Water and Electric Board, and the City of Los Angeles, and so it has proved out that the best idea is for the public to own their own utilities.
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There is a shortsightedness to discussing only the immediate cost of energy that handicaps the economic viability of true renewables. Yes carbon based/traditional energy sources may have a lower immediate cost, only because part of thier cost, namely the clean-up, (maybe war, but that is a seperate discussion) is covered by other sources. How many millions are being invested into cleaning up hanford's nuclear waste or oil spilled from tankers and pipelines? That cost does not show up on our electric bill but it exists, we still pay for it as a society through taxes etc. With renewables, a greater percentage if the true cost shows up on our immediate bill.
This way of discussing renewables as being "more expensive" is disingenuous, as the true cost is in fact comperable to traditional energies and framing rate increases this way is part of what has us 20 years behind in utilizing renewable energies compared to where we should be.
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I agree with you. The externalities produced by non-renewable forms of energy have to be accounted for in the end, whether it is polution of the traditonal kind or polution that causes global warming. If the true economic cost was accounted for, the answer would be clear.
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- Bob Jenks: Executive director of the Citizen’s Utility Board
The CUB has been the only great defender of the publics interest in utilities and I heartily recommend that people contribute to them to help them continue their efforts. They have saved the public lots of money and are well worth the investment in them.
Many thanks to Bob and your team!
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In our travels over the years we have driven though many wind farms in California, Vermont, Oregon and Washington and I am always left wondering why only about 1/3 or less of the windmills are turning. This leads me to believe that we already have an abundance of potential alternative energy that is not being used.
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In order to achieve the goals of low electric rates and reduce the amount of coal burned we need to have at least one liquid natural gas terminal on the Northwest Pacific coast. Alaska has much natural gas that has been pumped into underground resorviors that should be used instead of coal. I have worked in the wind power industry and favor wind and solar but know the limitations. We should not let the perfect stand in the way of the good.
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Liquified natural gas has got to be one of the most expensive risk-adjusted sources of energy we could pursue. Guaranteed world gas price volatility, higher exposure to the very high capital costs for the infrastructure, and high exposure to carbon regulation since the life-cycle emissions of LNG (freezing, shipping, thawing. then pipelne transport) are very high compared to domestic pipeline gas.
Lets put that capital to work in bettter options.
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Let me reply to jimhighway. Domestic pipeline gas comes hundreds or a thousand miles from the Rocky Mountains or farther east and is controlled by Enron type corporations who could monopolize the supply while with a sea terminal gas could be purchased at free market prices. If a corporation wishes to risk it's own capital to build one we should not allow selfish narrow interests to block the project. If you think long pipelines are harmless then see the Erin Brockovich movie.
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It is hard to imagine rates _not_ going up with the current push for more
renewable energy sources, particularly wind. Certainly, as pointed out
already, the up-front equipment/construction costs of wind turbines are
substantial, however, what's rarely mentioned is that due to the
variability of wind and solar you need to increase your back up sources
and those back ups need to be easily switched on and off as needed. That
on-demand requirement shortens the list to basically natural gas (NG) and
hydro. Hydro though has become less and less on-demand since the
regulatory agencies are tasked with conflicting goals: fish needs, flood
control, and energy production. That puts more emphasis on NG
powered electrical generation which we'll need to have more of if we want
more windmills. It may be possible for a so-call "smart grid" to reduce
the amount of NG power needed as back up but that's still a ways in the
future and it too will be expensive to implement. There really is no way
around it: energy generation is expensive, whatever the source. Better
to reduce demand by phasing out old technologies like incandescent bulbs, old computers, and tank water heaters. -
While Bob Jenks was on the show trying to speak for the "people," I found it very distasteful. Here's why: About nine years ago I made a donation to CUB to support their efforts in keeping US West/Qwest in check. I lost my taste for that fight, but CUB has never lost their taste for my money. Yep, just like Bob was claiming the utilities were going for profits, CUB was calling me twice a year demanding that I donate so they could carry on the fight. Those calls came despite my repeated demand to be taken off their list and repeated letters to stop calling. It wasn't until I called the Feds to file a complaint that the calls finally stopped.
Now I have to admit it wasn’t Bob himself making the call, but it the Boiler Room, high-pressure sales, professional fundraising machines that CUB hired that kept calling back. So to hear Bob Jenks on OPB ranting against the money grubbing utilities, I think he should spend some time looking into the mirror first. Glass houses and stones, Bob, don’t mix. -
I think that to increase rates, in part, due to population growth is disingenous. Obviously those new people going to be paying for the additional power they are going to use. If the utility isn't willing to take the time to budget and plan for the construction of new generation then they should have to face the consequences to their shareholders.
Also, why the heck do we even have a privately owned, for profit utility? What market forces are in play that make sense for us to agree that part of the rates we pay should be considered someone else's profits?
In regard to the way we determine the mix of energy sources that we use, the bottom line factors are the damage from global warming (long term costs) and the economics of investing in changes to renewables (short term costs). We simply need to use a realistic, science based risk analysis of the long term costs of global warming and ensure that we spread out the time to transition to renewables in such a way that accounts for the ability of the tax payer to afford it. Unfortunately, right now the economy is doing poorly. As long as the financial risks of global warming allow us time, it makes sense to set the speed transition to what the public can afford and consider transitional forms of power (like natural gas).
Again, we know we need to change and the long term benefits are clear (saving the planet, the cheapness of renewably generated electricity), however, Rome wasn't built in a day and the public can only afford so much.
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Comments are now closed.
I love PGE. Last week I was wondering if I should create flyers and put them into all the paper boxes of my neighbors on the hill I live on, asking them to think about us getting together to put a wind generator at the top of the hill. Then I wrote to PGE and asked how do this. They were quick about calling back, very patient, informed and helpful. They gave me leads on how to continue with this project. They want to help. My only problem now is to work past my shyness to contact my neighbors.
If PGE need more money, I can't resent them for it. They're honestly trying to help us.