Portland General Electric residential customers will see their energy bills climb about $8 per month next year. The increase comes after multiple years of rate hikes and after a record number of disconnections due to non-payment by the utility earlier this year.
On Friday, the Oregon Public Utility Commission announced Portland General Electric residential, industrial and commercial customers would see a combined 3.3% increase on their energy bills starting Jan. 1.
But with additional adjustments, like power costs and energy efficiency programs PGE is involved in, residential ratepayers can expect to see an overall increase of about 5.5%. That’s about $8 more a month, bringing the average monthly bill to $160.
In February, PGE requested approval through its General Rate Case to raise rates by 7.4% for operational costs.
The approved rates are “significantly lower than what PGE requested,” PUC Chair Megan Decker said. “We cut down the increase primarily by severely reining in PGE’s expenses. We worked really hard to find ways to center affordability. We still did have to raise rates a little bit to cover the costs of those safety and reliability related investments that PGE has made.”
FILE - Solar panels and wind turbines work to create clean electric power, at Wheatridge Renewable Energy Facility, May 24, 2022. Investments in new renewables are one of may factors affecting utility rates in the state.
Kristyna Wentz-Graff / OPB
PGE’s rates are increasing due to the cost of capital investments in infrastructure and power costs. But the commission significantly limited the company’s request to grow expenses, as well as decreasing its profits. According to utility watchdog group Oregon Citizens’ Utility Board, that lower profit margin is saving customers $10 million annually.
“What I’d like Oregonians to know is that we are here to scrutinize the utility operations and to make sure that any rate changes are based only on what is a reasonable cost to provide the service that the utilities are required to provide,” Decker said. “When those costs go up, rates have to go up, but I don’t want people to be left with the impression that when rates go up, that’s because the utility is simply getting their way or padding their costs.”
PGE customers have seen their bills go up nearly 50% since 2019, with residential customers seeing the company’s highest increase in the last 20 years, a 20.7% rate hike, on Jan. 1, 2024. Energy rates are skyrocketing across the country, as more and more people are switching to energy-efficient appliances and driving more electric cars. The addition of more data centers is also contributing to higher costs. Extreme weather like heat waves and snowstorms puts an additional strain on a fragile grid.
Oregonians across all utilities are experiencing higher energy rates which in turn have contributed to a high amount of disconnections for nonpayment. On Thursday, the Public Utility Commission approved a 9.8% increase for Pacific Power’s residential customers.
PGE chief commercial and customer officer John McFarland said in a statement the company is doing what it can to keep prices low.
“To achieve this, we are making investments in a smarter and stronger energy grid to reduce outages, connect to more carbon-free energy resources and protect against damage from extreme weather and wildfires.”
More protections for impacted customers
According to PGE, from January through October, it disconnected more than 32,000 customers for nonpayment, the highest number of disconnections over the last five years.
“Electricity is an essential service and it keeps our food cold and our heat and our internet running,” Oregon CUB staff attorney Claire Valentine-Fossum said. “So if someone loses power because they’re disconnected, because they can’t afford the bill, this is more than just losing electricity.”
The utility commission prohibited PGE from disconnecting power to the state’s most vulnerable Oregonians through April 1. That includes people who have serious health conditions that could worsen during a power outage or require constant electricity for medical devices.
Valentine-Fossom said paying electricity bills during the winter months is the hardest time of year because of the high use of power to keep warm. The watchdog group is hoping for permanent protections, like moving the date when new rates go into effect, rather than the temporary protections so far put in place.
The state utility commission rejected an Oregon CUB rate cap proposal that would have limited increases to no more than 10%, or 7% plus inflation, whichever is lower. The commission said it would be difficult to implement, according to Oregon CUB.
But this year, Valentine-Fossum said, the level of community engagement in utility rate reviews increased drastically. Not only did Oregon CUB and other nonprofit organizations say they received calls, emails and letters from members of the public about the raising rates, she said the public submitted more than 3,000 comments to the PUC and that helped the PUC feel the public pressure.
“The level of engagement from the public and the amount of time that people took to write those comments and to respond and to reach out to their commissioners was something we hadn’t seen before,” she said.
Scrutiny from Wyden
Oregon Democratic U.S. Sen. Ron Wyden also threw his hat into the debate after hearing from members of the public.
Last month, Wyden sent a letter to PGE’s president and CEO Maria Pope, requesting more information about the company’s ever-increasing rates over the last five years.
Wyden said his office has received numerous letters from his constituents about increasing rates making it difficult to buy basic necessities.
“For folks that are walking an economic tightrope, balancing food and medicine bills with electricity prices, the rising prices are unsustainable,” he said in his letter.
Wyden requested PGE to share what steps the company is taking to limit increases, as well as how it is invested in energy efficiency.
PGE’s Pope responded quickly to the letter, stating power costs were the main driver for increasing rates.
“These customer price changes over the last five years have primarily been driven by the rising costs to purchase necessary power from the open energy market to serve customers,” Pope wrote in her letter. “Power costs, which PGE has limited options to control and are necessary to maintain reliable service to customers, have nearly tripled in the past five years.”
Other drivers included grid upgrades, adding more renewable energy to its portfolio, like the Wheatridge Renewable Energy facility in Eastern Oregon, and investments in strengthening transmission and distribution systems.
After the letter exchange, Wyden announced he had discussed pathways for PGE to move forward and said the utility will do “everything possible” to keep residential rates below the rate of inflation and to ensure industrial uses, like data centers, will not impact residential rates.
Wyden’s letter did not have an impact on the state utility regulatory decision, according to Public Utility Commission Chair Decker.
