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Oregon Regulators Ask for Aid to Cope with Rate Increase by Sarah Skidmore, Associated Press San Diego Union-Tribune, June 1, 2007

PORTLAND, Ore. - Oregon utility regulators are asking Congress to provide financial relief to the more than 1 million customers in this state hit by this week's hike in electricity rates.

The Oregon Public Utility Commission said Friday that each day of the unexpected rate hike, which stems from a federal appeals court ruling, costs Oregon customers $351,000. And the commission suggested a one-year rate change relief for customers would assist them while the issue is hashed out among utilities, regulators and the court.

The commission also joined other Northwest utility regulators to urge the Justice Department to allow Bonneville Power Administration to seek reconsideration of the ruling that ultimately led to the rate change. The Oregon Public Utility Commission approved the rate hike on Monday, which affects some residential and small-farm electricity customers of private utilities.

The change took effect Friday, raising rates by 13 percent for PGE and PacifCorp customers and 6 percent for customers of Idaho Power.

"When we reluctantly raised customers' rates this week due to the cutoff of BPA benefits, we also made a commitment to do everything within our power to restore the benefits customers are entitled to," Commission Chairman Lee Beyer said in a statement. "We are optimistic our Congressional delegation will see how serious this issue is and we strongly urge them to get involved in crafting solutions."

The rate hike affects about 75 percent of electricity customers in Oregon.

The change is a ripple effect of a recent federal appeals court ruling in a lawsuit filed against the Bonneville Power Administration by public utilities.

In a May 3 ruling, the 9th U.S. Circuit Court of Appeals said the BPA, which is a federal agency that provides a large bulk of the energy for the region, had previously overstepped its authority when it set an annual subsidy to reduce electricity rates for residential and small farm customers of the privately owned utilities.

The BPA and its utility customers have long fought over the appropriate level of the subsidy, known as the "residential exchange" program.

The exchange - established by the Northwest Power Act in 1980 - allows private utilities to swap higher-cost power they generate for lower-cost hydropower generated by the BPA. The exchange usually comes in the form of a financial payment, not an actual power exchange, and customers see it as a credit on their monthly bills.

The court decision did not require BPA to stop the payments. But earlier this month, BPA said it was immediately suspending payment of $28 million a month in residential exchange benefits because of uncertainty over the ruling.

The BPA says it continues to work with utilities one-on-one and is looking at other means to resolve the conflict that grows increasingly tense.

"Oregon has a great financial stake in the distribution of benefits from our regional power system," the commission said in a letter to Oregon's Congressional delegation. "They deserve no less than full and fair access to low-cost federal power."

Rep. Earl Blumenauer also spoke out on the situation Friday. In a letter to BPA, Blumenauer expressed dismay over BPA continuing its long-term planning while the issue remains unresolved.

"I urge you in the strongest terms to maintain flexibility at this time and not move ahead with securing long-term agreements until we are able to reach a fair conclusion," Blumenauer wrote.

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