Sharp Rise in Pacific Power Rates Set for Approximately 15% on 1 January 2023

Sharp Rise in Pacific Power Rates: Recent rate hikes approved by the Oregon Public Utility Commission (PUC) will take effect on January 1, 2023, for customers of PacifiCorp (doing business as Pacific Power). The rise is the result of judgments made in two proceedings: a general rate case filing for non-energy related expenditures, such as spending to reduce wildfire risk, and an annual adjustment for power prices, which are noticeably higher owing to market volatility.

Sharp Rise in Pacific Power Rates Set for Approximately 15% on 1 January 2023

All client categories see an average rate increase of 14.8% as a result of the decisions. The average home customer may anticipate a rise in their monthly costs from $91.89 to $111.34 if they use 900-kilowatt hours per month. Depending on the actual energy use for different residential, commercial, and industrial client categories, the impact varies.

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Based on projections for both the higher cost of fuel (natural gas and coal) to manufacture power and the higher cost to acquire energy in the market, Pacific Power’s estimated cost to produce and buy electricity in 2023 is likely to climb significantly. Pacific Power noted issues with the world’s supply chains as one reason for the decline in supply and rise in energy prices.

Megan Decker, PUC Chair, stated that “we know that increasing rates at a time when Oregonians are already struggling with significant inflation causes issues for many consumers.” “Unfortunately, the price for utilities to produce and buy power is driven by fuel cost rises, supply chain delays brought on by international events, as well as rising volatility in regional electricity markets. There could be choices available for home consumers to assist decrease the impact on the bottom line, even though the utilities can’t prevent all of the effects of these increased rates in the near run.

In order to assist customers who are facing financial constraints, Pacific Power has introduced a new program that offers on-bill rate savings ranging from 20 to 40%. The most vulnerable customers of Pacific Power can also take advantage of a number of bill-assistance programs offered by regional community action organizations, such as the Low-Income Home Energy Assistance Program, COVID Energy Assistance Program, Oregon Energy Fund, and Oregon Energy Assistance Program.

Pacific Power also provides a number of budgeting choices for energy costs, such as time of usage and equal pay billing options. Customers of Pacific Power may also take advantage of information and subsidies to help them increase their energy efficiency and reduce their costs thanks to a relationship with Energy Trust of Oregon. Customers can discuss choices by calling 1-888-221-7070.

The many PUC rulings that contributed to the rise in total customer rates are broken down below.

Mechanism for Transitional Adjustment (TAM)

In order to update customer prices to account for the company’s real costs of producing and acquiring power, Pacific Power submits an annual transition adjustment mechanism (TAM) filing. Customer prices will rise by more than originally anticipated starting January 1, 2023, as a result of energy market volatility and rising expenses to produce and buy energy.

In October 2022, the PUC approved a settlement between Pacific Electricity, consumer advocacy organizations, and the PUC Staff for an increase in power costs of around $66.43 million after utilizing tax credits that benefit both Oregon customers and Pacific Power. Based on Pacific Power’s early power cost projections, that anticipated increase was made. However, a 20.3 percent rise in power cost rates over the initial prediction was noted in Pacific Power’s final November 15, 2022 power cost forecast.

Rate Revision in General

In a general rate process, the PUC recently granted a $46.7 million, or 3.7 percent, increase for non-energy expenditures, down from the $84.4 million increase that had originally been proposed. Numerous variables, including increases in wildfire mitigation and vegetation management spending, capital improvements, and several other increases to the company’s income demand, are behind this hike, which will also take effect on January 1.

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The parties’ agreement, which forbids Pacific Power from bringing a general rate case in Oregon with rates taking effect before January 1, 2025, was also authorized by the PUC.

In addition to serving almost 2.0 million retail customers overall in California, Idaho, Oregon, Utah, Washington, and Wyoming, PacifiCorp provides service to about 630,000 people in Oregon.

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