Portland, OR-based NW Natural received less than one-third of the general rate increase it had been seeking as the Oregon Public Utility Commission (PUC) on Monday approved an $8.7 million annual increase, or 1.28%, for the state’s largest natural gas utility.
The increased charges take effect Thursday, a PUC spokesperson said, adding that when the three-member regulatory panel issues its final order late this week “it will detail the rationale behind its decision” to deny the utility the $43.7 million, or 6%, rate hike it sought in a filing at the end of last year.
Major parts of the reduced increase included three main issues, including the gas utility’s authorized return on common equity (ROE) and two settlement agreements involving capital projects and the use of various rate mechanisms.
PUC Chair Susan Ackerman called the rate case “extremely complex and difficult to resolve” but predicted that it should “strike a fair balance” between needs of consumers and the company. Ackerman speculated that the small rate hike will be offset by “a drop in wholesale gas prices that also will take effect [Thursday] Nov. 1.”
The major differences were a 9.5% authorized ROE, compared to NW Natural’s request for 10%, removal of about $4.5 million of utility requested pension costs from rates, and the disallowing of $21.6 million for two pipeline expansion phases that the PUC determined were “not prudent at this time.”
Noting that this was NW Natural’s first general rate case in 10 years, the regulators did allow small increases for pipeline and system safety inspections, maintenance repairs and incident response and pensions.
The settlements approved as part of the case included a number of capital projects that will be included in rates subject to prudency reviews, and the company was allowed costs for some rate mechanisms with new adjustments to them.
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