Jan. 12, 2007
PGE says OPUC decision on 2007 general rate case is balanced
Salem, Ore. — The Oregon Public Utility Commission today announced its decision regarding Portland General Electric’s 2007 general rate case, ending a thorough 10-month public review process. The OPUC approved an overall price increase of approximately 1.3 percent, which will be allocated across all PGE customer classes.
A price decrease of about 1.4 percent overall is expected to take effect Jan. 17. It primarily reflects decreases in the cost of decommissioning the Trojan Nuclear Plant and decreased depreciation expenses.
Later this year, prices will increase about 2.8 percent when PGE’s new generating plant at Port Westward becomes fully operational. The increase covers construction and operating costs of the new 400-megawatt plant near Clatskanie, Ore.
“It’s clear the Commission thoughtfully listened to all perspectives and issued a balanced decision. While we did not receive our full proposal, we particularly appreciate the Commission’s support of our Port Westward plant,” said Peggy Fowler, CEO and president. “They recognize our customers rely on us to provide reliable electricity, both now and in the future. Port Westward will provide us another resource to meet our customers’ growing needs.”
The OPUC has estimated the following impact of today’s action across PGE’s major cost-of-service customer classes: residential customers would see a 0.5 percent increase in their prices; mid-sized non-residential and farm customers would see a 1.5 percent increase; and large, non-residential customers would see a 2.7 percent increase.
As part of its ruling, the OPUC also approved a process by which PGE can continue to adjust rates to reflect power cost variations in future years. Each year, PGE will reset rates to reflect an updated forecast of net variable power costs for the next calendar year. In addition, PGE will employ a power cost adjustment that tracks the annual variability in power costs and shares the costs and benefits with customers.
The rate case includes a 50 percent equity capital structure and a 10.1 percent return on equity.
“The return on equity falls below our expectations. However, we appreciate the ability to annually update power costs. We are also satisfied that the Commission recognized the challenges we face in forecasting power costs by adopting a power cost adjustment mechanism,” said Pamela Lesh, PGE vice president of regulatory affairs and strategic planning.
PGE will continue to analyze the financial impact from today’s rate order and will provide updated 2007 earnings guidance in its upcoming fourth quarter 2006 earnings release.
To see the order, visit the OPUC Web site.
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About Portland General Electric
Portland General Electric, headquartered in Portland, Ore., is a fully integrated electric utility that serves more than 793,000 residential, commercial and industrial customers in Oregon.
Safe Harbor Statement
Statements in this news release that relate to future plans, objectives, expectations, performance, events and the like may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by words including, but not limited to, “anticipates,” “believes,” “intends,” “estimates,” “promises,” “expects,” “should,” “conditioned upon” and similar expressions. Investors are cautioned that any such forward-looking statements are subject to risks and uncertainties, including matters and events related to the application of rates across customer classes and the effect of a power cost adjustment mechanism and annual power cost update tariff; and completion of the Port Westward power plant. As a result, actual results may differ materially from those projected in the forward-looking statements. All forward-looking statements included in this news release are based on information available to the Company on the date hereof and such statements speak only as the date hereof. The Company assumes no obligation to update any such forward-looking statement. Prospective investors should also review the risks and uncertainties listed in the Company’s most recent Annual Report on Form 10-K and the Company’s reports on Forms 8-K and 10-Q filed with the United States Securities and Exchange Commission, including Managements Discussion and Analysis of Financial Condition and Results of Operations and the risks described therein from time to time.
For more information, contact:
Gail Baker, PGE,
503-464-8693
