On December 19, 2024, the Oregon Public Utility Commission issued a final order in Pacific Power’s General Rate Case, Docket No. UE 433. Order No. 24-477 authorized a revenue requirement increase of 8.5 percent, maintains a 9.5 percent return on equity, and establishes a 7.401 percent rate of return based on a 50/49.99/.01 capital structure (equity/debt/preferred stock).
The Commission ruled on 60 contested issues, including rate spread and rate design, issues pertaining to large load customers, decommissioning costs for coal plants, costs for the conversion of Jim Bridger Generating Station from coal to gas, the gateway south transmission project, distribution system planning, costs of qualifying facilities under the Public Utility Regulatory Policies Act, PacifiCorp employee compensation, Allowance for Funds Used During Construction, low-income issues (including bill discounts and arrearage management), energy efficiency, and several wildfire components, including mitigation, planning and insurance costs.
Several parties and the Commission grappled with PacifiCorp’s proposal to assess additional charges to large load customers that either fall short of using their contracted-for reserved capacity (Capacity Reservation Charge), or use more than their reserved capacity (Excess Demand Charge). PacifiCorp proposed a charge of $4.81 per kW, billed monthly, for each kW of unused capacity reserved by a customer with a peak load of 25 MW or higher. PacifiCorp also proposed an Excess Demand Charge for each kW above capacity reserved by those same customers, requesting the rate be set at four times the Capacity Reservation Charge.
Testimony from parties including the Company, Commission Staff, Oregon Citizens’ Utility Board, and large customers discussed the amount of the new charges, applicability of the charges, and whether other models currently in use in other jurisdictions to recover costs related to unused capacity, such as a minimum demand charge, should be implemented instead.
The Commission’s final order approved PacifiCorp’s implementation of the new charges, with several modifications. First, the charges will apply to customers of 50 MW and greater, rather than the proposed 25 MW threshold. The Capacity Reservation Charge was set at $3.68/kW, with a buffer of 10%. The peak load will be calculated as the largest load over the last 36 months for existing customers with existing contracts, and 12 months for new customers. The Excess Demand Charge was set at three times the Capacity Reservation Charge. Customers are allowed to aggregate load under certain criteria, and revenues will be tracked and returned to customers through a deferral.
The Commission denied PacifiCorp’s request to authorize unilateral denial a load request as “speculative,” finding the request in conflict with the utility’s general obligation to serve.
Sanger Law, PC represented Vitesse, LLC in the PacifiCorp general rate case. Vitesse, LLC is a wholly-owned subsidiary of Meta Platforms, Inc. Meta has ambitious climate and renewable energy goals, including sourcing 100 percent of its global operations from renewable energy and achieving net zero greenhouse gas emissions across its value chain by 2030.
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.
