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Commission denies Pacific Power request to increase electric rates
The commission has denied a request by Pacific Power to raise electric rates by nearly 18 percent, saying the company failed to show the extent to which the company’s out-of-state facilities benefited Washington ratepayers.
The case involves a long-standing dispute over how to allocate costs in the utility’s six-state territory. The 1988 merger of Pacific Power & Light with Utah Power & Light combined two distinct service territories – the eastern region in Utah, Wyoming and Idaho served primarily by higher-cost coal and natural gas, and the western region in Washington, Oregon, and California served primarily by less-expensive hydropower – into a single utility called PacifiCorp, based in Portland, Oregon.
Because of the disparity in power costs between the two regions, state commissions since 1988 have struggled to find a uniform method to apportion system-wide costs. “As states in the eastern area, particularly Utah, have experienced greater load growth than states in the western area, the Pacific Power states are concerned that the costs to serve the load growth in Utah would be unfairly shifted to the western area,” the commissioners said in their order.
To date, only Idaho, Oregon, Utah and Wyoming have endorsed a common formula – known as the “Revised Protocol” – and most of their endorsements have come with conditions designed to protect ratepayers in each state.
In rejecting the allocation formula, the UTC found that the company “failed to carry the burden it alone bears to prove that resources in its eastern service territories, remote from Washington, provide tangible and quantifiable benefits to customers in this state.”
In its order, the commission said that while it would support a well-designed decoupling program, it could not approve a proposal for PacifiCorp until it determined the proper allocation of the utility’s costs to Washington.
Staff contact: Tom Schooley, (360) 664-1307
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