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Caps on utility rate hikes may be coming in 2025

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Tuesday, December 17, 2024   

After years of double-digit rate hikes on electricity bills, some relief might be in sight.

Oregon Citizens' Utility Board, or CUB, has proposed a 7% to 10% yearly limit on rate increases for Pacific Gas & Electric and Pacific Power.

It is up to the Oregon Public Utility Commission to approve the proposal, and it will be making a decision this week.

Bob Jenks - CUB's executive director - said customers are struggling to absorb the 40% or 50% rate hikes from the last few years, and that something needs to be done to rein in this trend.

"We're concerned that this isn't going to stop," said Jenks. "This is in the interest of utilities to keep raising rates like this as long as they can."

Last winter's ice storm led to record power shutoffs for Oregon households, due to lack of payment of their utility bills.

If the PUC decides to adopt the cap, than PG&E's planned 10.9% increase and Pacific Power's planned 14.9% increase for January would need to be lowered.

Jenks said the system favors large companies, which pay much lower rates than households.

While industries need less infrastructure due to proximity to power supplies, he noted that new data centers are driving the need to grow the grid.

Yet, residential rates are rising more than three times faster than industrial rates.

"We think that residential customers and small-business customers are being asked to subsidize the big server farms," said Jenks, "the big data centers, like Amazon and Meta."

The Portland suburb of Hillsboro is newly home to many power-hungry data centers.

Jenks said PG&E's recent numbers show the centers use more electricity than all the residents in Washington County combined, and those numbers are expected to keep growing.

Jenks said CUB's proposal requires the PUC to mitigate rate increases that are higher than 10%.

They can do that by deferring part of the increase to the following year, or by setting the rate to the lowest level legally allowed that would still be profitable for the utility.

"Needless to say," said Jenks, "the utilities don't agree. "





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