Oregon State Regulators Approve Additional Electricity Rate Hikes for Residents in 2025

Most Oregonians in 2025 will face nearly 50% higher residential electricity rates than just five years ago.

The Oregon Public Utilities Commission, which is a three-person group appointed by the governor to oversee privately-owned utilities in the state, recently gave the green light for some significant rate hikes. Specifically, residential electricity rates for Pacific Power customers are set to go up almost 10%, effective January 1. Portland General Electric (PGE) customers will also see a 5.5% increase starting the same day. Overall, these hikes mean that residential rates for both utilities will be around 50% higher than they were in 2020, surpassing the rate of inflation during that time.

While these rate hikes are lower than what the companies had initially requested (Pacific Power wanted an 11% increase, and PGE was seeking a 7.4% bump), they are still significant. Collectively, these two investor-owned companies serve over 1.4 million customers in Oregon, including small businesses and industrial users. On average, Pacific Power’s rates will go up around 8.5%, and PGE’s rates will increase by about 6% for all types of customers in 2025.

Megan Decker, the chair of the commission, acknowledged customers’ frustrations but emphasized their efforts to scrutinize the issues and keep the utilities in check. They reviewed 60 different matters raised by the companies to support the rate increases, with Decker mentioning that PGE’s expense growth was scaled down significantly.

Looking ahead, Bob Jenks, the director of the Citizens’ Utility Board (a group representing utility consumers’ interests), believes that the commission should consider permanent changes in how and when rate increases are approved. He argues that essential services like electricity shouldn’t be priced like luxury goods.

These increases are attributed to a variety of factors, including inflation, the expansion of clean energy infrastructure, higher power purchasing costs, increased insurance expenses, and meeting the growing demand for electricity. For instance, data centers and semiconductor manufacturers have seen a significant rise in energy usage compared to five years ago.

To address concerns about vulnerable customers facing disconnections due to nonpayment, the Public Utilities Commission will prohibit companies from disconnecting low-income customers enrolled in bill discount programs between January 1 and April 1, alleviating winter-related hardships.

People at the lowest income levels will now be eligible for up to an 80% bill discount each month, an increase from the previous 60% discount requirement. Furthermore, new large industrial customers will have to forecast their energy needs accurately or face penalties.

In response to the 2020 Labor Day fires, Pacific Power will be allowed to raise rates to cover $25 million in restoration costs, less than originally requested by the company. The U.S. Attorney General’s Office is seeking reimbursement for federal agencies’ costs incurred while fighting one of the fires that the company was found liable for.

It’s important to note that Pacific Power is owned by PacifiCorp, a subsidiary of Warren Buffet’s Berkshire Hathaway. The actual value of PacifiCorp is a bit up in the air, with estimates ranging from $10.7 billion to over $19 billion, depending on who you ask. Nonetheless, these financial decisions and rate adjustments will undoubtedly impact Oregonians in the coming year.