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Industry News

Delay Sought for Oregon Electric Dereg

LCG, March 27, 2001With partial deregulation of the Oregon electricity market set for October 1, rural electric cooperatives are pushing for a delay, because that is the same day the Bonneville Power Administration plans to increase rates.

There have been other moves to delay electric competition in Oregon, but they have been successfully resisted by Ron Eachus, a member of the Oregon Public Utility Commission and a Democrat, and Republican Gene Derfler, president of the state Senate.

But with the upcoming Bonneville wholesale power price hike, Eachus sent Derfler an e-mail message suggesting the delay of partial deregulation for a couple of months to disassociate it from the price increase. Derfler was open to the suggestion.

"If that would satisfy everybody, I think that would be a fair way to do it," Derfler said.

Oregon's deregulation scheme is odd in the first place. Residential and small business customers are encouraged to stick with their existing utilities and pay regulated rates. The state's consumer-owned utilities, representing about 25 percent of the Oregon market, are exempt. That leaves only the large customers of Portland General Electric Co. and PacifiCorp.

But all Oregonians could be affected by the Bonneville price increase, because the federal utility markets about half the wholesale power in the Pacific Northwest and is the major source of power for Oregon's 17 rural electric cooperatives and the state's municipal utilities.

Bonneville has said it is trying to hold the increases to less than 100 percent.

Bonneville spokesman confirmed most of its power goes to public power utilities and their customers could see rate increases of 50 percent or more.

The two investor-owned utilities also want to increase their rates. Portland General has asked regulators for a significant increase to take effect on October 1, which may earn the name "Black Monday," and PacifiCorp last Friday asked for a 24 percent increase for May through July to tide it over until the commission decides what to give it for August and thereafter.

Oregon's 17 rural cooperatives represent only 12 percent of the market but they serve the voters who elected the Republicans who run both houses of the state legislature.

Add to that the effect of electric deregulation on Oregon's neighbor to the south and it's easy to see that support for its electric deregulation law is waning. A survey done for Portland General in February showed that 69 percent of Oregonians were against the state's deregulation plan.

State Rep. Robert Ackerman, a Democrat who wants to repeal the deregulation law, says he thinks he has a chance against those like Eachus and Derfler who want to preserve it. "I think they are the political run," he said. "They're trying to distance themselves from California, and I don't think they can."

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