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Oregon utility bills expected to jump
Tuesday, July 01, 2008 | No comments posted.
PORTLAND (AP) — Bad things come in threes.
Already faced with higher food and gas prices, consumers can expect to pay more for power as regional utilities buy expensive wholesale electricity to meet rising customer demand while investing heavily to meet renewable energy mandates.
Ratepayer advocates contend the increases could rival those from the 2000-01 energy crisis, when residential rates rose roughly 30 percent and industrial rates increased about 50 percent.
Northwest Natural Gas Co. is getting set to reveal its annual rate adjustment, and it doesn’t look promising for customers. Natural gas prices are about 70 percent higher than the level used to set rates last year. And so far, the company has locked in only 30 percent of next year’s supply.
Meanwhile, Portland General Electric, Oregon’s largest utility, filed a request with regulators in February to increase rates 8.9 percent beginning in January. In two weeks, the company is set to update the request to account for increasing fuel costs. Ratepayer advocates expect a significant increase in the number.
Jim Lobdell, the vice president in charge of PGE’s energy portfolio, said he doesn’t think rates will leap quite like they did during the energy crisis. But he acknowledged there is going to be heavy pressure on rates.
Since closing the Trojan Nuclear Plant in 1993, PGE has bought about 25 percent of its electricity on the open market. With its current growth trajectory, the utility’s own supply of energy will be about 1,500 megawatts short of meeting its peak demand in 2014, Lobdell said. That represents almost 32 percent PGE’s peak demand.
Meanwhile, the utility faces the expiration of long-term contracts for hydropower it buys from municipally owned utilities on the mid-Columbia River. PGE buys that hydropower today for between $10 and $24 per megawatt hour. To replace it on the open market will cost about $70 per megawatt hour.
“It’s like watching an accident in slow motion,” said Jason Eisdorfer, a lawyer for the Citizens Utility Board of Oregon. “All of these different market dynamics are coming together.”
Renewable power is one answer, and PGE, like other utilities, is adding wind farms to meet a new state mandate requiring it to generate 25 percent of its electricity from renewable sources by 2025.
The wind is free, but it costs hundreds of millions to build large wind farms. Moreover, the price is escalating because of the worldwide demand for turbines, a plummeting dollar and rising costs for everything from steel and concrete to transportation.
On top of that, PGE intends to spend $300 million installing pollution controls at its coal-fired plant in Boardman. The plant supplies about a fifth of PGE’s electricity, but is one of the state’s biggest sources of air pollution.
———
Information from: The Oregonian, http://www.oregonlive.com
Already faced with higher food and gas prices, consumers can expect to pay more for power as regional utilities buy expensive wholesale electricity to meet rising customer demand while investing heavily to meet renewable energy mandates.
Ratepayer advocates contend the increases could rival those from the 2000-01 energy crisis, when residential rates rose roughly 30 percent and industrial rates increased about 50 percent.
Northwest Natural Gas Co. is getting set to reveal its annual rate adjustment, and it doesn’t look promising for customers. Natural gas prices are about 70 percent higher than the level used to set rates last year. And so far, the company has locked in only 30 percent of next year’s supply.
Meanwhile, Portland General Electric, Oregon’s largest utility, filed a request with regulators in February to increase rates 8.9 percent beginning in January. In two weeks, the company is set to update the request to account for increasing fuel costs. Ratepayer advocates expect a significant increase in the number.
Jim Lobdell, the vice president in charge of PGE’s energy portfolio, said he doesn’t think rates will leap quite like they did during the energy crisis. But he acknowledged there is going to be heavy pressure on rates.
Since closing the Trojan Nuclear Plant in 1993, PGE has bought about 25 percent of its electricity on the open market. With its current growth trajectory, the utility’s own supply of energy will be about 1,500 megawatts short of meeting its peak demand in 2014, Lobdell said. That represents almost 32 percent PGE’s peak demand.
Meanwhile, the utility faces the expiration of long-term contracts for hydropower it buys from municipally owned utilities on the mid-Columbia River. PGE buys that hydropower today for between $10 and $24 per megawatt hour. To replace it on the open market will cost about $70 per megawatt hour.
“It’s like watching an accident in slow motion,” said Jason Eisdorfer, a lawyer for the Citizens Utility Board of Oregon. “All of these different market dynamics are coming together.”
Renewable power is one answer, and PGE, like other utilities, is adding wind farms to meet a new state mandate requiring it to generate 25 percent of its electricity from renewable sources by 2025.
The wind is free, but it costs hundreds of millions to build large wind farms. Moreover, the price is escalating because of the worldwide demand for turbines, a plummeting dollar and rising costs for everything from steel and concrete to transportation.
On top of that, PGE intends to spend $300 million installing pollution controls at its coal-fired plant in Boardman. The plant supplies about a fifth of PGE’s electricity, but is one of the state’s biggest sources of air pollution.
———
Information from: The Oregonian, http://www.oregonlive.com
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