Oregon Utilities Do Flip Flop on Rate Requests

The same day that Avista Corp.'s utility affiliate filed a request for a natural gas price adjustment with the Oregon Public Utility Commission, the state's largest provider, Portland General Electric, rescinded its own request last week for a 17.1% rate hike that would have taken effect next month.

On Wednesday, Avista Utilities requested a Purchase Gas Cost Adjustment (PGA) from OPUC, reflecting increases from the company's suppliers in the cost of gas purchased for use by its customers. As a natural gas distribution company, Avista said it needs to pass along the higher costs of acquiring gas from suppliers for its customers, a problem facing many utilities along the Pacific Coast.

PGA filings normally are made once a year to reflect either increases or decreases in the gas supplies, said Avista, but market conditions have been "far from normal," and recent increases in market prices "made the filing necessary."

Avista's filing, which proposes an effective date of Jan. 19, 2001, requests an overall increase of 35%, or $22.5 million in revenues, to reflect changes in the cost of gas it has purchased. Avista Utilities serves about 79,000 natural gas customers in Oregon.

If approved by Oregon regulators, a residential customer using an average 60 therms of natural gas a month would see an increase of $15.90, with a total bill of about $61.30. Larger-use commercial and industrial customers in the state would see a higher percentage increase because of lower base rates.

In what would be good news in the short term for the state's consumers, Oregon's largest utility, PGE, said it would not need its 17.1% increase in residential rates starting Jan. 1, 2001, and asked the OPUC to rescind the request. PGE customers still could face increased rates if wholesale electricity prices remain high, however. PGE replaced its previous rate request, first filed in November, with a proposal to shift the risk of buying and selling wholesale power to consumers.

PGE said it decided to cancel the November request after performing a computer analysis Dec. 15-18. PGE found that it would have a surplus of energy this winter if "normal" weather conditions continue. The surplus could be sold to California utilities, and those profits would eliminate the need for a rate hike. PGE's surplus came from purchases it made about a year ago when wholesale prices were low. PGE expects to sell its surplus for around $.30 kWh after buying it for $.04 to $.06.

OPUC rescinded PGE's previous rate request, but will not rule on the amended request or Avista's request for two weeks.

Carolyn Davis, Houston

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