PORTLAND GENERAL ELECTRIC COMPANY (NYSE:POR) Files An 8-K Other EventsItem 8.01 Other Events.
In February 2018, Portland General Electric Company (PGE, or the Company) filed with the Public Utility Commission of Oregon (OPUC) a general rate case based on a 2019 test year (2019 GRC, or the case). PGE’s initial filing proposed an $86 million increase in annual revenues representing an approximate 4.8% increase in overall customer prices and was based upon:
|
A capital structure of 50% debt and 50% equity; |
|
A return on equity of 9.5%; and |
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An average rate base of $4.86 billion. |
PGE, OPUC staff, and certain customer groups have now reached agreements that resolve the majority of issues in the case. Certain future cost recovery mechanisms remain undecided including the storm recovery mechanism, decoupling as it relates to weather, and application of weather trends in the load forecasting models.
In August and September of 2018, stipulations have been filed that reflect the agreements reached, which, along with previously filed updates to 2019 power cost estimates and load forecast, result in the changes described below.
The agreements and updates result in an expected $34 million net increase in annual revenue requirement, which represents an approximate 1.8% increase in overall customer prices, and reflect:
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A capital structure of 50% debt and 50% equity; |
|
A return on equity of 9.5%; |
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A cost of capital of 7.3%; and |
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An average rate base of $4.75 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 15, 2018 |
$ |
||
|
Load and Power Cost Updates |
(16 |
) |
|
|
Base Business Revenue Requirement Updates: |
|||
|
Adjustments to O&M expense |
$ |
(20 |
) |
|
Adjustment to depreciation expense |
(3 |
) |
|
|
Lower level of plant in service |
(7 |
) |
|
|
Other reductions to rate base |
(3 |
) |
|
|
Other various modifications |
(3 |
) |
|
|
Subtotal |
(36 |
) |
|
|
As Revised September 6, 2018 |
$ |
The net annual revenue requirement increase is expected to be effective January 1, 2019.
Regulatory review of the 2019 GRC will continue until the final order is issued, which is expected in December 2018. Final revenue requirement amounts subject to revisions include: i) an updated pension expense estimate (finalized September 2018); ii) load forecast (finalized in September 2018); and iii) power costs (finalized November 2018). All stipulations remain subject to OPUC approval.
The 2019 GRC filing (OPUC Docket UE 335), 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.
