BPA Bill Credit: Questions & Answers
PGE customers to see partial BPA benefits restored in April
In March 2008, PGE signed an interim agreement with the Bonneville Power Administration that partially restores a monthly bill credit that the federal power marketer suspended last year. The credit should reduce average PGE residential bills by about 6 percent beginning April 15, 2008.
BPA suspended the monthly credit due to a May 2007 decision by the 9th U.S. Circuit Court of Appeals. PGE formerly passed the entire credit through to its residential and small-farm customers, so beginning in June 2007 those customers saw a price increase because the credit no longer offset part of their electricity bill.
Under the interim agreement, BPA will make a lump sum payment to PGE of $43.2 million. Once PGE receives the payment, it will submit a plan to the Oregon Public Utility Commission to pass the money on to its residential and small farm customers, with benefits expected to resume beginning April 15. Depending on the final plan approved by the OPUC, the monthly bill for an average PGE residential customer should decrease by about $5.50. PGE continues to push for a higher level of benefits for its customers under BPA’s plan for permanent restoration of the credit. See our news release for details.
To learn more, see the information below.
What happened?
On May 21, 2007, BPA notified PGE, Pacific Power and five other Northwest electric utilities that a recent court decision forced BPA to suspend monthly power-cost benefits from the Northwest’s federal hydropower system. The utilities had passed those payments through to residential and small-farm customers as bill credits since 2001; the benefits have been provided in various forms for almost 30 years. The Oregon Public Utility Commission approved removal of the credit from electric utility bills effective June 1, 2007.
Since then, PGE has worked with BPA, state and federal officials, and other utilities to find a way to restore the credits. In March 2008 PGE signed an interim agreement with BPA to partially restore the credit for PGE customers while BPA develops a permanent plan. PGE continues to push for a higher level of long term benefits for its customers than BPA has proposed.
How will this affect my bill?
Pending approval of a distribution plan by the Oregon Public Utility Commission, under the interim agreement the average residential customer will see their bill drop by about $5.50 per month — a decrease of about 6.3 percent. Small-farm operations will also pay less, depending on energy usage. To see how it will affect you, look for “Federal Columbia River Benefits supplied by BPA” on your bill after April 15. This is the partially-restored credit. View your PGE bills online.
How many people does this affect?
Seventy-five percent of Oregonians and 91 percent of PGE customers received the credit before it was suspended and will now see it reappear on their bills. The change affects about 732,000 PGE customers and 2.72 million Oregonians.
What is the “Federal Columbia River Benefits” credit?
The 1980 Northwest Power Act directed BPA to share federal hydropower benefits with residential and small-farm customers of investor-owned utilities. A “Residential Exchange” program provided these residential and small-farm customers benefits in the form of monthly credits on their electric bills.
Why is this happening?
In May 2007, the U.S. Court of Appeals for the 9th Circuit ruled that the settlements implementing the monthly credits program were inconsistent with the Northwest Power Act. PGE, BPA and other utilities throughout the region have worked since then to find a system for calculating and distributing Residential Exchange benefits that will satisfy the court’s earlier objections.
Will PGE benefit from this change?
No. Under the law, every penny of the BPA credits go to PGE customers and those of the other affected Northwest utility companies. None of the payments have gone to the companies or their shareholders. Suspending the credit didn’t mean PGE increased rates, only that BPA no longer covered a portion of your bill. Restoration of the credit means that BPA will again offset part of the cost of the electricity you use.
What is PGE doing about the situation?
Our customers deserve their fair share of the benefits of the federal hydropower system in the Northwest. PGE has worked hard to get these benefits restored as quickly as possible, and is pursuing all appropriate avenues to restore a fair level of benefits. The interim agreement to restore partial benefits is a good first step, but we believe our customers deserve more. We continue to work with BPA, our Congressional delegation, the OPUC, other utilities and customer groups to find a workable solution that will restore a fair level of benefits in the long term. We have also appealed to the U.S. Supreme Court to overturn the Ninth Circuit Court decision that led to the suspension of the credit last year.
Look for our ad on this issue (PDF) in local newspapers.
What can I do?
BPA is in the midst of a public process to determine the rates it will charge for power beginning in the fall of 2008. That process will also determine the level of benefits offered to customers of utilities throughout the region under the Residential Exchange program in coming years. For information about the rate setting process and instructions on how to comment so that BPA will understand how important this issue is to Oregon residents, look for the link to “BPA’s 2007 Supplemental Wholesale Power Rate Case (WP-07 Supplemental)” on the agency’s public comment Web site. BPA plans to accept public comments until May 5, 2008.
What steps can I take now to control my bill?
For great energy-saving ideas and to learn about energy-efficiency cash incentives and tax credits, e-mail us or visit our Energy Savings section.
