Overall rates for residential customers of Oregon’s two largest monopoly electric utilities are up about 50% since 2020. (Robert Zullo/States Newsroom)
Ted Martin, a 71-year-old retired carpenter, tries to keep his expenses down like other senior citizens on limited incomes in his community in Tigard.
But his electric bills are soaring. He and his wife paid nearly $140 in November, $250 in December and $320 in February.
And Pacific General Electric told them to expect a bill approaching $400 in March.
In response to the high bills, they’ve been keeping their thermostat at 51 degrees Fahrenheit in their two-bedroom, one-story home, or turned the heat off entirely.
“It would be laughable if it wasn’t so sad and dangerous for them to be operating in this fashion,” Martin said. “We clearly understand that there is little we can do given the circumstances. PGE is the only game in town.”
He’s not alone.
Hundreds of thousands of residential customers of Oregon’s private, investor-owned electric utilities in low-income and fixed-income households are struggling to keep up with double digit rate hikes since 2020.
The state’s Public Utility Commission — a three-person governor-appointed group charged with regulating the rates of privately owned electric and gas utilities in Oregon — approved a 5.5% increase in December for PGE’s residential customers and a nearly 10% increase in residential electricity rates for Pacific Power customers. Overall rates for residential customers of both utilities – which collectively serve more than 1.4 million customers in Oregon – are now up about 50% since 2020, with the Public Utility Commission approving increases nearly every year for the past five years. Residential rate increases have risen more than twice the rate of inflation during that period.
To help, Rep. Nathan Sosa, D-Hillsboro, is proposing House Bill 3179, the Fair Energy Act, which would give the Public Utility Commission more power to scrutinize the reasoning for a residential rate increase, and decide when private, investor-owned gas and electric utilities could request them. Sosa discussed the bill Thursday in a divisive legislative hearing in the House Committee on Commerce and Consumer Protection that pitted advocates, who said the bill is needed to protect Oregonians, against utility officials, who said it would lead to shareholder disinvestment, and even higher prices.
Provisions in House Bill 3179
For the first time, House Bill 3178 would limit private, investor-owned utility rate requests, allowing them only once every 18 months. Exceptions could be granted in the event of a natural disaster or weather emergency.
Rate increases would have to go into effect before Nov. 1 or after March 31 so ratepayers would not suddenly be hit with a bigger bill in winter when usage is highest. The bill would also require that:
- Utilities report expense categories online to show residential customers where their payment goes.
- The Public Utility Commission looks at socio-economic data of customers when considering rate increases, including factors such as median customer income, regional unemployment rate and number of customers receiving public services.
- The PUC analyzes company profits from the 24 months leading up to a rate hike request to determine whether the rate increase is appropriate.
The bill also would give the commission the power to provide low-interest financing for some utility infrastructure so companies aren’t entirely dependent on profits to pay for that.
What’s driving increases
Rate increases in recent years, according to the electric companies, have been prompted by inflation, the cost of building more infrastructure for clean energy generation and storage, the rising costs of buying power, higher insurance costs, wildfire response and prevention, and meeting new customer demand. Demand for PGE’s industrial customers, including new data centers and semiconductor manufacturers like Intel, is up more than 34% in the last five years, while residential demand is up 5%.
Natasha Jackson, a lobbyist for the regional trade group Northwest Gas Association that represents the three large investor-owned natural gas utilities in the state, blamed rate increases in the last five years — some as high as 50% for customers of NW Natural, the state’s largest gas utility — on Oregon’s Climate Protection Program. She asked that gas utilities be left out of the bill.
The Climate Protection Program requires that over the next two decades that natural gas companies lower the carbon intensity of their gas to reduce the planet-warming emissions it creates when extracted, distributed and burned.
A spokesperson for Cascade Natural Gas, a private gas utility serving about 75,000 customers in Oregon, said the company would be open to stopping winter rate increases, being more transparent about bills and expanding the length of time allowed between rate increases. But the spokesperson, Al Spector, said the company does not like the rest of the bill.
Officials from PGE and PacificPower argued that the bill would drive up costs and said sensitive customer socio-economic data should not be something they collect and share with the utilities commission. Kristen Sheeran, vice president of policy and resource planning at PGE, said the biggest driver in rate increases over the last five years has been the cost of power, which the company has little control over.
“We look forward to rolling up our sleeves and working with all of you and the stakeholders to address these concerns and arrive at legislative solutions to support energy affordability this session,” she said.
The biggest unintended consequence of approving electricity rate hikes, according to Bob Jenks, director of the watchdog group Citizens Utilities’ Board, has been record power shutoffs for Oregonians: 64,000 last year, Jenks told lawmakers.
“Customers can be this disconnected for as little as a past due bill of $50 right now,” Jenks told the committee.
PGE disconnected about 32,000 customers at some point in 2024 — 4,800 more than in 2023. In 2024, PGE’s residential rates went up 21%.
Profits go up
Meanwhile, the company’s total revenue increased by more than $1 billion between 2020 and 2024, according to the company’s financial reports. In 2020, PGE had an annual revenue of about $2.1 billion. By 2024, that increased to nearly $3.5 billion. The company’s profits were $313 million in 2024, up almost $100 million from the year before and twice its profit of about $155 million in 2020.
Pacific Power is owned by PacifiCorp, a subsidiary of Warren Buffet’s Berkshire Hathaway, a multinational conglomerate. Prior to the 2020 Labor Day fires, PacifiCorp sent Berkshire shareholders $600 million to $875 million in annual dividends, according to filings with the Securities and Exchange Commission.
The goal of House Bill 3179, according to Jenks, is to get the Public Utility Commission to focus on customers, not utilities, in approving rate increases.
“The current regulatory structure is dominated by utility requests for higher rates, not affordability for customers,” Jenks told the committee. “For-profit utilities make money by making big infrastructure investments, upon which they receive a rate of return. That’s where they earn their profits. This worked well in the early 20th century, when we were trying to build out the electric network, so everyone had lights and heat, but a system that incentivized this spending has led to a utility-centered regulatory system that focuses on cost recovery associated with that spending.”
Now, Jenks said, utilities go to ratepayers to recover the costs of everything: volatile fossil fuel prices, renewable energy investments, energy efficiency work, wildfire mitigation, storm recovery, decommissioning coal plants, environmental clean up, community solar projects and more.
“We’ve lost the focus on establishing rates that are fair and reasonable to the customer. Affordability is not really considered in the rate-setting process,” he said. “We need utilities to change their practices to better center the customer in the request for rate increases, and we need to ensure that the regulators have the tools to mitigate those rate increases and ensure affordability.”
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