PORTLAND GENERAL ELECTRIC COMPANY (NYSE:POR) Files An 8-K Other EventsItem 8.01 Other Events.
In February 2017, Portland General Electric Company (PGE, or the Company) filed with the Public Utility Commission of Oregon (OPUC) a general rate case based on a 2018 test year (2018 GRC, or the case). PGE’s initial filing proposed a $100 million increase in annual revenues representing an approximate 5.6% increase in overall customer prices and was based upon:
|
A capital structure of 50% debt and 50% equity; |
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A return on equity of 9.75%; and |
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An average rate base of $4.6 billion. |
PGE, OPUC staff and certain customer groups have now reached agreements that resolve all but one issue in the case.
On September 18, 2017, a stipulation was filed that reflects the agreements reached, with the one remaining issue related to a certain proposal to address the distribution, and associated benefits, of energy efficiency funding. In addition PGE updated its 2018 power cost estimates and load forecast, and revised depreciation costs based on the latest depreciation study.
The agreements result in an expected $32 million net increase in annual revenue requirements, which represents an approximate 1.8% increase in overall customer prices, and reflects:
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A capital structure of 50% debt and 50% equity; |
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A return on equity of 9.5%, down from the current authorized rate of 9.6%; |
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A cost of capital of 7.35%; and |
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An average rate base of $4.5 billion. |
The net increase in annual revenue requirement as proposed in the Company’s initial filing and as revised consists of the following (in millions):
|
As Filed February 28, 2017 |
$ |
||
|
Load and Power Cost Updates |
(16 |
) |
|
|
Depreciation Study Updates |
(8 |
) |
|
|
Base Business Revenue Requirement Updates: |
|||
|
Lower return on equity |
$ |
(10 |
) |
|
Lower labor costs |
(9 |
) |
|
|
Adjustment to depreciation expense |
(8 |
) |
|
|
Lower level of plant in service |
(5 |
) |
|
|
Other reductions to rate base |
(4 |
) |
|
|
Other various modifications |
(8 |
) |
|
|
Subtotal |
(44 |
) |
|
|
As Revised September 18, 2017 |
$ |
The net annual revenue requirement increase will be effective January 1, 2018.
Regulatory review of the 2018 GRC will continue until the final order is issued, which is expected in December 2017. Final revenue requirement amounts subject to revision include the load forecast (finalized in September 2017), power costs (finalized November 2017) and actual cost of debt, including any additional debt issuances. Any subsequent reductions in PGE's overall cost of long-term debt through June 30, 2018 will be reflected either in the final 2018 GRC update or through a supplemental tariff filing. All stipulations remain subject to OPUC approval.
The 2018 GRC filing (OPUC Docket UE 319), as well as copies of direct testimony, exhibits and stipulations discussed above, are expected to be made available on the OPUC Internet website at www.oregon.gov/puc.
About PORTLAND GENERAL ELECTRIC COMPANY (NYSE:POR)
Portland General Electric Company (PGE) is an electric utility company. The Company is engaged in the generation, wholesale purchase, transmission, distribution and retail sale of electricity in the state of Oregon. The Company also sells electricity and natural gas in the wholesale market to utilities, brokers and power marketers. The Company has approximately four natural gas-fired generating facilities, which include PW1, PW2, Beaver and Coyote Springs Unit 1 (Coyote Springs). PGE owns and operates over two wind farms, including Biglow Canyon Wind Farm (Biglow Canyon) and Tucannon River. Biglow Canyon, which is located in Sherman County, Oregon, is its renewable energy resource consisting of approximately 220 wind turbines with a total nameplate capacity of over 450 megawatts (MW). Its Tucannon River is located in southeastern Washington and consists of approximately 120 wind turbines with a total nameplate capacity of over 270 MW.