PacifiCorp filing forecasts 9.5% rate increase for Pacific Power customers in Oregon next year

The California Independent System Operator, which runs the state's power grid, said Monday that it would consider updated demand forecasts and feedback from utilities and other stakeholders before setting power rates for the summer.

PacifiCorp filing forecasts 9.5% rate increase for Pacific Power customers in Oregon next year

PacifiCorp won't be changing its base rates in Oregon until 2024. A general rate case which recently increased rates also included a clause to keep them constant at least until 2025.

The utility claims that another factor determining the final price customers pay is net power costs. This has led it to request a tentative 9.5% average rate increase in 2024 for Pacific Power's customers.

Net power costs are a calculation that takes into account a number of factors including the fluctuating price for wholesale power, natural gas and coal. All three are now expected to be higher than what was originally forecast when the state utility regulators decided PacifiCorp’s rates in late last year.

Joelle Steward is the vice president of regulation at PacifiCorp.

Portland General Electric, and NW Natural have also felt the impact.

Estimates that will be updated

The new PacifiCorp submission is an estimate of the future costs and will be updated by the Public Utility Commission before it issues a final decision at the end of this year. The PUC may also take into account input from stakeholders. This could result in a reduction in certain cost categories or a shift in the way costs are allocated between the six states PacifiCorp services.

PacifiCorp's request comes as part of the annual transition adjustment mechanism filing. This is used to adjust rates when cost, regulatory, and operational requirements differ from expectations.

PacifiCorp stated that while power and fuel inflation is part of this filing, several other factors have pushed its net power costs higher.

The utility's Chehalis facility in Washington is experiencing a de facto tax, as a result of a cap-and-invest decarbonization program.

The utility also said that new federal emission limits increase the costs of PacifiCorp by reducing coal production in Utah, and possibly Wyoming as well. PacifiCorp says that additional coal generation will be required to fill in the gap.

The conversion of a Wyoming Coal Plant to Natural Gas will have a further impact on coal generation, and increase market purchases. Meanwhile, the removal of four Klamath River Dams is expected reduce PacifiCorp’s future hydropower output by approximately one-sixth.

PacifiCorp stated that lower wholesale sales of the utility will also contribute towards the higher net electricity cost.

Two factors may push the net cost of power in the opposite direction, reducing the overall rise. The utility will earn more money if the load forecast in Oregon is higher. The opening of a new power line in late 2024 is expected to bring additional wind power, which will be relatively cheap, onto the PacifiCorp network.