Oregon utility warns of future rate hikes due to green mandates

By EPN Staff

Oregon’s second-largest electricity provider, PacifiCorp, warned regulators that the state’s green edicts will result in large rate increases unless the state adjusts the timeline so that the transition is affordable for customers and viable for the utility. 

In a Jan. 12 filing with the Oregon Public Utility Commission (PUC), the utility stated that the “Rapid clean energy deployment at the current pace would produce severe affordability impacts for Oregon customers. PacifiCorp’s 2025 Clean Energy Plan (2025 CEP) indicates that, given today’s technology and costs, meeting House Bill (HB) 2021 targets at the required scale would result in large rate increases.” 

The filing noted the challenges power companies have to add carbon-free energy sources, such as a lack of investment capital, a burdensome regulatory environment, wildfire risk and financial liability and lack of transmission lines and other power infrastructure. 

The PUC had sought comments from PacifiCorp and other utilities and impacted industries on the governor’s recent executive orders, which intend to address grid deficiencies.  

Why it matters

PacifiCorp’s residential rates have increased by nearly 50% since 2021, the Oregon Citizens' Utility Board found. That year, the Oregon legislature “established some of the most aggressive utility decarbonization mandates in the country,” according to Oregon Public Broadcasting. Oregon House Bill 2021 requires investor-owned utilities to electricity service suppliers to reduce greenhouse gas emissions by 80% by 2030, 90% by 2035, and 100% by 2040. 

In 2022, the Oregon Department of Environmental Quality adopted a Climate Protection Program (CPP), but the Oregon Court of Appeals struck it down on procedural grounds. A second version, adopted in 2024, sets limits on greenhouse gas emissions from fuel suppliers, natural gas utilities and the industry of 50% by 2035 compared to a 2017-2019 baseline and 90% by 2050. 

PacifiCorp, which accounts for 24% of electricity sales, and Portland General Electric (PGE), which accounts for a third of sales, are behind in meeting decarbonization mandates. PacifiCorp has reduced emissions by 19% and PGE 25%, the Portland Business Journal reported. 

In addition to shouldering the cost of green mandates, PacifiCorp has settled nearly 4,200 wildfire claims for $1.6 billion since 2020, the company disclosed. 

The bigger picture 

Although renewable energy sources, especially hydroelectric, produce 62% of Oregon’s electricity generation according to the US Energy Information Administration, the state has been slow to add renewable capacity. 

Last year, Oregon Public Broadcasting and ProPublica found the state ranked 47th in renewable energy growth over the past decade. Most planned projects were abandoned due to insufficient power line and substation capacity. Utilities in the region worry there will be rolling blackouts unless transmission capacity is increased. 

To address the system’s deficiencies, Gov. Tina Kotek issued two executive orders:  

Executive Order 25-25 intends to accelerate the pace of renewable wind and solar projects in the state before federal clean energy tax credits expire later this year.

Executive order 25-29 directs state agencies to implement greenhouse gas reduction strategies by investing in infrastructure, electrification of vehicles and buildings, increasing the supply of low-carbon fuels and strengthening grid resilience. 

Late last year, the PUC sought comment from utilities and other impacted industries on the executive orders.