It's been decades since electric customers of the Pacific Northwest made their most expensive and frustrating foray into the energy business with ambitious plans for five nuclear plants under the Washington Public Power Supply System. One would think we would have learned our lesson from this multi-billion dollar mistake, but now we can hear the giant sucking sound again. This time, the money vacuum is aimed squarely at Oregonians, and the vacuum was turned on when Oregon's deregulation plan was implemented.
Here are some highlights of Oregon's deregulation plan: About two-thirds of Oregon's electric utility customers, those served by Portland General Electric and PacifiCorp, are subject to the rules of this law that was passed by the Oregon Legislature in 1999 and put in motion early in 2002. Since that time, almost a year later, the two utilities have spent more than $115 million in ratepayer money to comply with the law and get the plan up and running. That's not counting the indirect staffing costs for the two investor-owned utilities, and, of course, administration and overhead costs for the Oregon Public Utility Commission to oversee the whole thing.
Meanwhile, just as the state deregulation plan dictates, customers of these utilities are also now paying a new 3 percent "pass-through" charge on their bills. This fee covers the cost of a new agency which administers programs such as low-income weatherization, energy efficiency and renewable power (programs, incidentally, utilities used to do on their own). I'm not sure what a "pass-through" means elsewhere, but from my perspective as an Eastern Oregonian, it looks like a "tax" to me. It's especially troublesome to think that this new agency, which is called the Energy Trust of Oregon, is absolutely flush with cash from the collections of this 3 percent tax at a time when my fellow lawmakers and I are struggling to fill multi-million dollar holes in the state's budget.
So, given all the expense of this new plan, what have we got to show for it? Unfortunately, not much. While the utilities state that they have been following the rules to support the law, they also candidly concede that what is being offered to customers could have occurred through the old regulated system, but without most of the cost and bureaucracy created by the law. The direct access rule in deregulation lets the big energy users buy electricity from companies other than the one that traditionally served them. Recent news reports have indicated that very few of these customers have exercised their option to choose direct access. Plus, only a handful of alternative power companies have expressed an interest in doing business in Oregon. So, what we have is a $115 million investment by all customers and an ongoing 3 percent monthly reminder that we have just created an expensive program that doesn't offer much.
It all boils down to this: Before we do more with Oregon's electricity deregulation plan, let's take a serious look at what we've got. Are the past reasons for deregulation still valid today? Is the plan doing what it should? There has been talk in the Oregon Legislature about expanding and modifying the deregulation plan, but I would suggest we put a moratorium on any new provisions. What's the harm in taking a break? Just imagine if they had decided to keep building all those WPPSS nuclear power plants.
Sen. Ted Ferrioli, R-John Day, can be reached in Salem at (503) 986-1730, by mail at Sen. Ted Ferrioli, 900 Court St. N.E., S-217, Salem, OR 97301 or via e-mail at: firstname.lastname@example.org.