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Unique Alliance Staying The Course In Effort To Implement Oregon Restructuring
Implementation of Oregon's electricity restructuring law (SB1149 ) is proving as arduous as passing it. The unique collection of interests which worked to pass the bill, however, are working together again to design an implementation plan worthy of the Oregon Public Utility Commission's (OPUC) approval.
The biggest stumbling block to implementation of the bill is resolving what will happen to PacifiCorp's power generation assets, which will be left behind when and if the utility's customers leave in favor of alternative suppliers. The most straightforward action would be to sell the unused generation to the highest bidder, use the proceeds to pay off any debts, and then decide what to do with any money left over. PacifiCorp, however, operates in several Northwest states. The company's Oregon operations aren't distinct or identifiable except as a simple percentage of the whole utility, and Oregon does not have the authority to require a multi-state utility to sell its entire generation portfolio.
PacifiCorp's customers, however, argue if the generation isn't actually sold, it can still be appraised. And thus the value of the generation left behind by departing customers can be determined. This leftover "slice" could then be deregulated and turned over to the utility's shareholders. The shareholders would then pay departing customers an amount equal to the appraised value of the slice. Alternatively, the slice could be auctioned off to a third party and the proceeds given to departing customers.
Not surprisingly, PacifiCorp opposes relinquishing the value of its plants to its customers. But the OPUC staff position, which usually reflects that of the Commission, firmly maintains the value belongs to customers, not shareholders. They argue that the customers took on the financial risk for these plants once they were incorporated into PacifiCorp's ratebase, and thus should reap any benefit they might provide. PacifiCorp would likely challenge such a ruling in court or before the next legislature.
Meanwhile, SB1149 is already on the verge of helping Oregon's low-income households. Investments in low-income bill payment assistance resulting from passage of SB1149 begin this month, twenty-one months before the rest of the bill takes effect. The Advisory Committee on Energy (ACE) , which advises Oregon's Housing and Community Services Department on how to direct the $5 million annual bill assistance investment, will likely recommend no new program design for the remainder of the heating season.
Instead, money would be funneled for the first few months into the existing distribution channels to supplement exhausted federal assistance funds. The committee will design a better program in time for next winter.
The $5 million annual investment, which will jump to $10 million when SB1149 takes effect in October 2001, will add a flat 18 cents to the monthly electric bills of PGE and PacifiCorp residential customers. Larger commercial and industrial customers will pay .018 cents per kilowatt hour up to a maximum of $500 per month. For a large customer which uses one average megawatt of electricity each year, such as Nike, the charge works out to about $130 per month. The charge will appear on monthly bills beginning January 19.
Members of ACE include the group's Chair Jim Slusher of Oregon's Community Action Director's Organization ; Steven Weiss, NW Energy Coalition; Libby Henry, Eugene Water and Electric Board; John Glascock, American Association of Retired Persons; Joan Swanson, Oregon Energy Coordinators Association; Jay Formick, Oregon Heat; Tom Brodbeck, Multnomah County Weatherization and representatives from PacifiCorp, PGE, Northwest Natural and the Oregon Office of Energy .
Steven Weiss and Mark Glyde