PGE Direct Access Status Quo Retained

On December 18, 2018, the Oregon Public Utility Commission (Oregon Commission) issued its final order resolving Portland General Electric Company’s (PGE’s) most recent general rate case. The Oregon Commission resolved numerous issues related to PGE’s overall customer rates, and adopted several different stipulations that the rate case parties had reached on various topics, allowing PGE a rate increase of 1.8 percent, rather than the 4.8 percent PGE originally requested. Importantly, the Oregon Commission maintained the status quo for PGE’s modestly successful direct access program.  

PGE initially proposed significant changes to its direct access program. Direct access is when retail electric consumers are allowed to purchase their electricity from a third party electricity service supplier (ESS) instead of their regulated utility (in this case PGE). Oregon law allows industrial and commercial ratepayers (but not residential) ratepayers the right to purchase their power from ESSs. Specifically, PGE proposed to increase the time period over which departing loads would be required to pay “transition charges” or “exit fees”, from 5 years to 10 years, and to decertify an ESS that did not follow certain scheduling practices.

In the case, several parties (including OPUC Staff, Fred Meyer, Albertsons, and Calpine Solutions) reached a settlement on this issue that essentially kept the current program in place. That settlement was opposed by the Citizens Utility Board (CUB) because CUB insisted that changing to 10 years of transition adjustments was required to protect PGE’s existing customers from alleged cost shifting associated with departing loads. The industrial customers (Alliance of Western Energy Consumers, or AWEC) also opposed the stipulation, because they argued that the cap on participation in direct access should be increased, rather than retained, as the stipulation proposed. The Northwest and Intermountain Power Producers Coalition (NIPPC) did not sign the stipulation, out of deference to AWEC’s objections to the cap on participation. However, NIPPC filed briefs arguing against CUB’s position, and stated support for the Oregon Commission adopting the direct access stipulation.

In its order, the Oregon Commission adopted the direct access stipulation, meaning that the transition adjustments will continue to apply for only a five-year period. Under the terms of the settlement, no party can propose changes to this until after 2021. In rejecting CUB’s proposals, the Oregon Commission found that CUB had not established that ten years of transition charges were warranted. The Oregon Commission clarified that in adopting the stipulation as reasonable, though, it was not reaching a legal conclusion regarding whether cost shifting was or was not occurring. The Oregon Commission found that any proposal to adopt a ten-year transition charge would have to be supported by a “detailed analysis,” and that such an analysis was not put forth in the case. This outcome means that PGE’s current direct access program will remain largely unchanged for at least the next two years.

Most issues in the case were resolved through non-contested settlements, but there were a number of litigated issues that were resolved, including storage recovery through PGE’s renewable automatic adjustment clause, load forecasting for trended weather, a major storm accrual mechanism, and decoupling.

Sanger Law represented NIPPC in PGE’s rate case, and submitted briefs in support of the direct access settlement. NIPPC represents electricity market participants in the Pacific Northwest, including independent power producers, electricity service suppliers and transmission companies. NIPPC is committed to facilitating cost effective electricity sales, offering consumers choice in their energy supply and advancing fair, competitive power markets.

Sanger Law’s briefs argued that: 1) CUB’s proposal was not supported in the record, and that there was no evidence of cost shifting under the current transition adjustment policy; 2) it was essential the Oregon Commission not allow any deterioration in the direct access program in order to meet its obligations under SB 1149, the law, which mandated the program; and 3) PGE’s remaining ratepayers would benefit from direct access, a benefit the Oregon Commission would need to explore before increasing transition adjustments.

The Commission’s order can be read Here.

 

 

Disclaimer
These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.