New Year’s Eve may be a night for celebration, but this year, New Year’s Day may also be a day for consternation. That’s because on New Year’s Day, electric rates are going up once again for many people in Oregon. Last week, Oregon’s Public Utilities Commission approved yet another rate increase for customers of both Pacific Power and Portland General Electric — rate increases that mean customers will now be paying about 50% more than we did just a handful of years ago. As of Jan. 1, rates will go up another 10%, fast on the heels of several other rate increases in the past several years. Ouch.
If you’re someone who likes to think on the bright side, perhaps you can look at this from the “it could have been worse” angle. Originally, Pacific Power asked for a rate increase of 21.6%, according to the utility watchdog Oregon Citizens’ Utility Board, which regulators rejected — along with rejecting the utility’s request to raise its profit margins.
The power companies say they need to increase rates once again to keep up with increased energy costs, building out clean energy infrastructure, the costs of wildfires and the increased demand for energy from data centers and artificial intelligence.
But there are several things to take issue with there — one being that PacifiCorp, which owns Pacific Power, was found to be liable for a number of the 2020 Labor Day megafires. Just this week, the federal government filed yet another lawsuit against PacifiCorp in connection with the Archie Creek Fire in Douglas County.
Now, the company is having you pay for those alleged wildfire mistakes — along with helping them keep up with demand at data centers, when residential demand isn’t increasing at nearly the same rate. According to reporting in the Oregon Capital Chronicle, demand among PGE’s industrial customers like data centers has gone up 34% over the past five years, while residential demand is only up 5%. Should the average person be subsidizing the region’s demand for AI?
This whole thing is an indication of how basic parts of life, such as electricity, are becoming a luxury. Last year, both Pacific Power and PGE cut off the electricity of customers in record-breaking numbers. Some 20,000 Pacific Power customers had their power disconnected due to nonpayment in 2024, according to the CUB — up from 8,000 shutoffs the year prior. Those numbers are a clear signal that more and more people are unable to cover basic expenses, and a sign that the shareholders of Berkshire Hathaway — the parent company of PacifiCorp — are prized above the average person just trying to pay the bills.
PacifiCorp clocked some $324 million in net income in the third quarter of 2024, according to the energy newsletter NewsData — a marked increase from the third quarter of 2023, when it marked a $652 million net loss, largely due to wildfire costs. In Q4 of 2024, “retail revenues were up $195 million from higher average rates and $53 million from higher retail volumes,” the newsletter stated.
Having rate increases hit in the dead of winter, just after a holiday season that likely cost most households more money than usual, is yet another blow for the average person. That’s why the CUB attempted to get the Commission to move the hearings about rate increases to April, instead of January — a proposal the Commission ultimately rejected. What it did agree to, however, was to ban utilities from cutting off the power of low-income, bill-discount customers between Jan. 1 and April 1, and to approve an increase in the amount of discount lower-income customers can get. On top of that, moving forward, data centers and other large industrial customers will have to forecast their energy needs with 95% accuracy, or pay penalties for the miscalculation. That’s relevant, because when they don’t forecast accurately and end up needing more power in a pinch, the rest of us pay a premium for that last-minute power.
When the fires and contagion and shutdowns of the pandemic era ended, most of us breathed a sigh of relief, feeling glad to have all of that chaos behind us. But like it or not, it seems that when it comes to electric rates, we’ll be living through the effects of 2020 for a long time to come.
This article appears in Source Weekly December 26, 2024.
MAKE LOCAL JOURNALISM HAPPEN
Republish our articles for free, online or in print, under a Creative Commons license.
Fires are a real problem that must be paid for. Data centers and AI are a waste of resources.
We need real public utilities without the private sector and profiteers. They can hire local contractors to do maintenance. But we need power from, to and for the people.