PacifiCorp seeks 13 percent rate increase
Feb 24, 2006

PORTLAND, Ore. (AP) -- PacifiCorp, the state's second-largest utility with 535,000 Oregon customers, is seeking to raise its electricity rates by 13.2 percent.

The Portland-based company filed the request with the Oregon Public Utility Commission on Thursday. If approved, it would take effect in December.

The request included a 10.8 percent hike in rates for residential customers, and a 19.8 percent increase for large industrial customers. Coupled with a $1 increase in the company's customer charge, an average Pacific Power residential customer using 1,000 kilowatt-hours of electricity a month would see their bill for electricity service jump from $67 a month to $75.25 a month.

The company said the increase is needed because of the higher cost of natural gas, investments in generation, transmission and distribution infrastructure, and general operating expenses.

The company has requested five general rate increases in the last 10 years. The PUC granted a 3.17 percent rate increase in September.

The new request comes at the same time the utility is being acquired by MidAmerican Energy Holdings Co., an Iowa-based energy conglomerate that is majority-owned by billionaire investor Warren Buffett's Berkshire Hathaway. The companies aim to close the deal by the end of March.

PacifiCorp has seldom received the full increases it has requested from Oregon regulators, but Thursday's filing still bothered consumer groups.

"This is PacifiCorp style," said Bob Jenks, executive director of the Citizens' Utility Board of Oregon. "They come in and ask for a huge increase right on the heels of their last case."

Michael Early, executive director of the Industrial Customers of Northwest Utilities, said he was concerned about the impact the proposed increase might have on Oregon's economic recovery.

PacifiCorp has consistently underearned its allowed rate of return, which stands at 10 percent. In prepared testimony submitted with Thursday's request, the company says its financial performance lags behind most investor-owned utilities in the country, partially because of unfavorable regulatory treatment.

"We don't go into these things lightly, or without being able to prove that this is necessary," said Bekki Witt, a PacifiCorp spokeswoman. "Yes, we have gotten smaller increases in past cases. But we're thinking we're in a position where we'll get a fair and reasonable outcome."

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Information from: The Oregonian, http://www.oregonlive.com