Pacific Power Rates Spike 14.5% January 1 Due To Wind and Renewables

From Watts Up With That Blog

Pacific Power Rates Spike 14.5% Due To Wind and Renewables

...almost three-fourths of its new costs support projects such as its recently completed Biglow Canyon wind farm in Sherman County and improvements to a hydroelectric dam on the Clackamas River.

By Ted Sickinger, The Oregonian
Come New Year’s, better strip the lights off the house and the Christmas tree ASAP.

Customers of Pacific Power will see their electric rates spike 14.5 percent in January. The increase comes in a one-two punch: an 8.4 percent general rate increase state utility regulators approved Friday, and a 6.1 percent increase for increased power costs they are expected to approve Dec. 28. Both take effect Jan. 1.

Meanwhile, customers of the state’s largest electric utility, Portland General Electric Co., will see a lesser, but still significant, rate increase of about 3.9 percent. A few mandatory cost adjustments in the works will bump that overall increase to 4.2 percent, effective Jan. 1.

The biggest factor driving the increases: renewable power.

Oregon’s public policy choices during the past few years are coming home to roost in rates, a trend that will continue and likely be exacerbated in coming years by environmental edicts dealing with global warming and haze reduction.

For the time being, state mandates requiring utilities to meet 25 percent of customer demand with renewable power by 2025 — with interim targets before then — are jump-starting utility investments in wind farms, hydroelectric projects and the transmission lines to access remote, windy areas. Those projects have a long life span and low fuel costs. But the upfront capital costs are steep, and the resource is intermittent.

The largest part of Pacific Power’s general rate case was driven by a new transmission line and the two new Wyoming wind farms it connects to the utility’s customers. The company also installed pollution controls at a coal plant in Wyoming and needs to replace cheap electricity it has been buying under long-term contracts that are expiring.

“It’s a big increase,” said Pat Egan, a spokesman for Pacific Power. “We know this is not a great time for this.”

But in the end, he said, the utility has little choice. It has been told to invest in renewables.

 

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