The Ratepayers Union: By Marcia Barrentine Energy has become the focal point of an economic and political crisis both locally and nationwide. It isn’t hard to understand why. In 1972 only 3.5% of an average working persons paycheck went to energy; today that figure is 13%. For customers of Portland General Electric (PGE) the cost of electricity alone has risen 28% this year. 138% over the last 5 years. For working women and men who have seen inflation and high prices reduce their actual spendable income by 7% during those same 5 years it’s a double whammy: they have less money to spend but must fork out a larger chunk of their paycheck each month for a basic necessity of life — energy. For people on fixed low incomes, often senior citizens, the “choice” faced this winter will be between heating their homes and buying groceries. These realities have brought forth some political responses to spiraling energy costs. In Portland, a relatively new organization, the Ratepayers Union, is responding agressively and decisively to our local energy problems. The Ratepayers Union was formed last March by people who had been involved in various segments of the energy movement (anti-nuclear, public power, rate reform) and who saw the need to unite forces and develop a more comprehensive approach to the energy crisis. The Ratepayers Union works for the formation of Peoples Utility Districts (PUDs) to obtain public ownership and democratic control of utilities, for an end to nuclear power, and for the transition to renewable resources and energy efficient technologies. The first action the Ratepayers Union took was to intervene on the behalf of residential ratepayers w:hen Pacific Power & Light (PP&L) filed fora 15% rate increase this spring. In June, Public Utility Commissioner (PUC) John Lobdell gave PP&L an automatic 7% rate increase without public hearings. We sued the Commissioner in District Court and won. The 7% rate hike was stopped and full hearings held as a result. Although, following the hearings, Lobdell still granted the company what we For people on fixed low incomes, the choice faced this winter will be between heating their homes and buying groceries. consider to be an unjustifiably high rate increase, some victories were won that will set a precedent favoring consumers in the future. The most significant was the order that PP&L can not charge to it’s ratepayers the costs of “abandoned projects” — those generating facilities which the company studied or began construction on, then later decided to abandon. This means that when PP&L finally abandons the now shakey Pebble Springs Nuclear plants the ratepayers will not have to pay for this $1 billion mistake. More recently the Ratepayers Union intervened in PUC hearings against the latest 21% rate increase requested by Portland General Electric. This time we brought in two expert witnesses to help us challenge the company’s case. PGE's need for increased rates results largely from poor management decisions, an excessive construction program, and dependence on the unreliable Trojan nuclear plant. Utilities that are heavily involved in nuclear power must now pay higher interest on borrowed funds because they are perceived as a more risky investment than non-nuclear utilities. In addition, private utilities are guaranteed sufficient income from rates to pay the “ rate of return" on funds invested by stockholders and banks. This guaranteed rate of return insures that the companies ratepayers will pay the cost of poor management decisions. In its current request for 21% PGE is asking for $39 million in increased rates and a 15.2% rate of return. On November 15, Commissioner Lobdell authorized a “ Power Cost Adjustment” (PCA) for PGE which resulted in an immediate 16% rate hike (14.4% for residential customers). The PCA is not an ordinary rate increase, but a new form of rate setting that will allow PGE to raise its rates every 4 months without hearings. Similar techniques in other states, designed to “pass through” the utilities increased fuel costs, have resulted in gross abuses of the ratepayers by the utilities. PGE’s request for a 21% increase is still pending. Commissioner Lobdell is expected to hand down a decision on that rate hike in January. While there are gains to be made through rate case intervention they are mainly short term. As long as we don’t own the utility company and don’t have decision making power we have little control over inefficient management. excessive construction programs, continued involvement in nuclear power, and the high electric bills that result. The change from an investor owned utility (IOU) like PGE or PP&L to a ratepayer owned Peoples Utility District (PUD) will move decision making authority from a stockholder elected Board of Directors to a Board elected by the people. In addition to increasing democracy and local control, a PUD will decrease rates. Because a PUD can be financed by tax-frep bonding like a city or county, its finance costs are lower than an IOU. A PUD will also spend fewer ratepayer dollars on high executive salaries, and expensive office buildings. and under the preference clause is entitled to low-cost hydroelectric power from the Bonneville Power Administration. The Ratepayers Union is involved in building a campaign for a Portland area Peoples Utility District. We are working with the Consumer Power League. Grange. Trojan Decommissioning Alliance, neighborhood associations, and labor organizations, to bring the issue of citizen control of energy resources before Portland voters on the November 1980 ballot. Decisions about how we use and produce energy may be the most important decisions impacting our future. By working together for our common interests we can make our views heard and challenge the utility monopolies. For more information about the Ratepayers Union write to: The Ratepayers Union P.O. Box 14244 Portland. Oregon 97214 or calls us at: 287-8918 15
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