Under a controversial state law passed three years ago (SB 408), the Oregon Public Utility Commission (PUC) made its first across-the-board rate adjustments late last Friday for the state’s four major private-sector utilities. This theoretically matches the tax bills paid by the utilities with the amounts they collect in retail utility rates to pay for them.

Two utilities were found to be undercollected and are authorized rate increases of 3% (PacifiCorp) and 3.8% (Northwest Natural Gas Corp.). The other two received decreases of 1.4% (Portland General Electric, or PGE) and 1.9% (Avista Natural Gas) because they were overcollected.

The rate increases for PacifiCorp and Northwest Natural Gas and the decreases for PGE and Spokane, WA-based Avista take effect June 1.

Oregon’s major private-sector utilities filed with the PUC in January, submitting their 2006 tax reports (see Daily GPI, Jan. 17). Regulatory staff has since reviewed the filings, carrying out its responsibilities under the 2005 SB 408 that has been a source of controversy as much or more so as the tax issue it was enacted to resolve.

Last year two of the major utilities called for repealing the law, but when the utilities made their initial mandatory tax filings in October, the PUC moved quickly to begin its six-month review process. The law grew out of a concern that utilities were collecting more in taxes as part of customer rates than they were paying out to governments.

“We did what the legislature directed us to do,” said PUC Chairman Lee Beyer, trying to stress assurances to customers that the amount of their bills now going for taxes reflects what is actually paid by each utility.

The average amounts of monthly rate changes for residential customers are a $1.10 reduction for PGE; a $1 decrease for Avista gas customers; a $2.05 one-time increase for PacifiCorp; and because of some other unrelated tax issues, Northwest Natural will get an $8.37 one-time decrease for its residential customers, the PUC said.

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.