U.S. Sen. Ron Wyden took the uncommon step of pressing Portland General Electric to provide some straight answers following a wave of complaints about recent hikes in electricity rates and the impact they were having on people across the state.
PGE has since reacted, citing rising open-market electricity prices as well as growing industrial demand from large consumers like data centers.
In a letter last week, Wyden, a Democrat from Oregon, asked Maria Pope, the president and CEO of PGE, to explain why bills have increased by over 40% since 2021, how many residents have lost service, and what the company is doing to keep costs down.
After submitting the letter, Wyden told reporters, “These electric rates are literally the reason I’m getting calls, emails, and Oregonians approaching me on the street.”
According to Wyden, many people in our state feel as though they have been struck by a wrecking ball. Working families are balancing on a tight budget, as are families with children and elderly members. This is not sustainable, people are simply telling me.
Since rates are normally determined through a regulatory procedure supervised by a state’s Public Utility Commission, it is uncommon for a senator to question a private utility directly over rate increases.
Pope said that the cost of purchasing electricity from the open energy market has been the main factor for rate hikes over the past five years.
In the last five years, power costs—which PGE has little control over and which are essential to ensuring that consumers receive dependable service—have almost tripled, according to Pope.
The completion of renewable energy projects, improvements to the transmission and distribution system and other infrastructure, energy efficiency, bill discount programs, and wildfire mitigation are additional investments that contributed to the rate hikes, she added.
According to Pope, as of October of this year, the company had terminated 32,292 consumers for nonpayment, compared to 27,466 customers for the all of 2023. 80 percent of residential customers who were disconnected for nonpayment were reconnected in a day, according to PGE, while another 6 percent were reconnected in seven days.
Earlier this year, the Oregon Public Utility Commission stated that the current surge in disconnection may be due to pandemic-related ripple effects, where the state prohibited utilities from cutting off service, causing some customers to accrue astronomically huge past-due bills.
Pope also acknowledged that PGE is seeing an increase in requests for large quantities of electricity from businesses involved in artificial intelligence, data centers, and advanced manufacturing.
According to Pope, data centers and semiconductor fabrication have been the main drivers of the more than 34% increase in industrial energy supplies over the last five years. This is equivalent to a 1.9% rise in demand from business clients and a 6.4% increase from residential clients.
The increase in new industrial deliveries coincides with PGE’s efforts to meet the growing demands of electrifying homes, vehicles, and other aspects of daily life.
According to Pope, the rise in demand for electricity isn’t always a bad thing.
According to her, load growth contributes to affordability because the expenses of running the grid are distributed more widely as more people use it.
However, she also emphasized the necessity of modifying regulations to take into account how investments benefit various clients and how expenses are distributed in light of the evolving demands for heavy loads. It’s unclear if she intended to raise prices for industrial clients.
According to PGE, it is working to keep energy costs down by funding demand-response and energy-efficiency initiatives that assist households in reducing their energy expenses and usage during periods of high energy prices. However, residential consumers, not energy-hungry data centers, are the main target of those schemes.
In response, Wyden promised to do everything within his power to halt any such rate increases. However, it’s unclear what he can accomplish without a regulatory fix.
Rate hikes are authorized through a drawn-out, intricate procedure run by the Oregon Public Utilities Commission. Thousands of pages of testimony, statistics, and other items are included in the publicly accessible reviews.
Gosia Wozniacka discusses a variety of environmental topics, including climate change, environmental justice, and the switch to sustainable energy. You may contact her at 971-421-3154 or [email protected].
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