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Electric Industry Restructuring Law Begins
March 1, 2002 - (2002 - 004)(SB 1149)
Contacts: Roy Hemmingway, Chairman, 503 378-6611; Joan H. Smith, Commissioner, 503 378-6611; Lee Beyer, Commissioner, 503 378-6611; Bob Valdez, Public Information Officer, 503 378-8962
Salem, OR – Starting March 1, 2002, customers of Portland General Electric (PGE) and PacifiCorp will have more energy options. That’s when Oregon’s electric industry restructuring law takes effect.
Legislation (Senate Bill 1149) requiring electric industry restructuring for the state’s largest investor-owned utilities was signed into law in July of 1999. The law received broad-based support including the Oregon Public Utility Commission, the Citizens’ Utility Board, Industrial Customers of Northwest Utilities and Associated Oregon Industries.
Restructuring is designed to give consumers more options while at the same time encouraging the development of a competitive energy market. PGE and PacifiCorp will continue to deliver power, and will maintain the safety and reliability of the poles and wires that deliver power, regardless of who supplies it.
The implementation of Senate Bill 1149 is a combination of the law and the administrative rules adopted by the Oregon Public Utility Commission.
All large business consumers will be allowed to continue to purchase power from their current utility under a regulated cost-of-service rate or purchase energy directly from a certified Electricity Service Supplier (ESS).
Residential and small business consumers will choose cost-of-service or portfolio rate options. Small nonresidential consumers may also opt for Direct Access.
A 3% public purpose charge will be collected from retail customers. The money will be used to fund and encourage energy conservation and development of renewable energy.
A low-income bill assistance fee, administered by the Oregon Housing and Community Services Agency, will continue to be collected by PGE and PacifiCorp.
The electric restructuring law established a general framework, but it left much of the implementation up to the Oregon Public Utility Commission through its rulemaking and rate setting processes. The following is an outline of how the basic elements of SB 1149 will be implemented.
- The utility isn’t required to sell any assets which generate electricity
- Utilities can negotiate long term contracts to protect the consumer from the volatile spot market
- No consumer is forced into the energy market
- All consumers have the choice of receiving a regulated cost-of-service rate from the utility
- All nonresidential consumers will have the ability to purchase electricity either from an ESS or their existing utility
- Both large and small nonresidential consumers who buy power from an ESS will have the opportunity to return to a cost of service rate
- Each utility will provide default emergency rates in case an ESS halts service to a nonresidential customer
- Bills will be redesigned to reflect the various costs that factor into a total bill
- All consumers will receive information so that they may compare the fuel mix and emissions of the electricity supply options that are offered to them
Residential and small nonresidential consumers will receive a portfolio of energy options. Small nonresidential is defined as those who use less than 30kW monthly. The portfolio includes:
A traditional basic rate
A Time-of-Day Supply Service
A Fixed Renewable Service that includes new renewable resources
A "Renewable Usage" Service
A "Habitat Restoration" Service
Seasonal Flux (PacifiCorp only)
Small business customers can also opt for Direct Access.
A 12-member portfolio advisory committee crafted the options and recommended them to the Commission for approval. The committee included utility representatives, local governments, residential consumer and small non-residential groups, public/regional interest groups, and staff of the Oregon Public Utility Commission and Oregon Office of Energy.
Public Purpose Fee and Low Income Bill Assistance
The law establishes an annual expenditure by the utilities of 3% of their revenues to fund "Public Purposes," including energy efficiency, development of new renewable energy and low-income weatherization. Rates will increase on March 1, 2002 by 3% for PacifiCorp and by 2% for PGE to fund these activities. The public purpose fee will appear as a separate item on your bill.
The first 10% of the fund goes to Education Service Districts for energy audits and subsequent energy efficiency measures.
The remaining money goes into four public purpose accounts:
- 56.7%- Conservation
- 17.1%-Renewable energy
- 11.7% Low-income weatherization
- 04.5%-Low-income housing
The conservation and renewable energy funds are administered through a new nonprofit entity, the Oregon Energy Trust.
The law also established a $10 million a year low-income bill assistance fund to be spent in the territory of the utility that collects it. The current amount is 35 cents a month for residential consumers and .035 cents/kWh for nonresidential consumers. The Oregon Housing and Community Services Agency distributes the money through community action agencies.
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