The
Oregonian
Judge orders Trojan refund or rate cut
DAVE HOGAN
PGE customers could be due $300 million, but an appeal is likely in the lengthy dispute about the closed nuclear plant
11/08/03
Portland General Electric must reduce its rates or refund money that it improperly
collected from ratepayers for its dismantled Trojan Nuclear Plant, a judge ruled
Friday.
Consumer advocates say the order could lead to more than $300 million in refunds
or rate reductions for PGE customers. The ruling is likely to be appealed, however,
so the ultimate outcome of the long, complex series of litigation is unclear.
"The bottom line is this opinion will be appealed, and the Court of Appeals
will weigh in," said Bob Jenks, executive director of the Citizens Utility
Board. "Customers shouldn't be waiting for checks in the mail as the result
of this decision."
Friday's ruling is the latest in a dizzying, decade-long series of court cases
and political developments around the issue of whether PGE can recover a return
on its Trojan investment as part of its rates after the plant closed in 1993.
The ruling came in a case brought by the Utility Reform Project, a nonprofit
that represents utility ratepayers before the state's Public Utility Commission
and in the courts. The group challenged an order by the commission adopting a
settlement among its staff, PGE and the Citizens Utility Board.
But Marion County Circuit Judge Paul Lipscomb agreed with the nonprofit's attorneys
that PGE's rates, as approved by the commission, were inconsistent with an earlier
court ruling that said the utility could not recover any return on its Trojan
investment as part of its rate structure after the nuclear plant was shut down.
Lipscomb directed the PUC "to immediately revise and reduce the existing
rate structure so as to fully and promptly offset and recover all past improperly
calculated and unlawfully collected rates." Or, alternatively, the utility
commission must "order PGE to immediately issue refunds for the full amount
of all excessive and unlawful charges collected by the utility for a return on
its Trojan investment."
Lipscomb used no dollar figures in his order. Dan Meek, an attorney for the
Utility Reform Project, estimated that the potential refunds or rate reductions
could total more than $300 million.
PGE and the state argued that law prevents the commission from considering improperly
calculated past rates when setting new rates and said the commission's actions
complied with state law in all other respects.
But Lipscomb blasted the idea that
the utility commission cannot consider rate calculations adopted in the past,
saying it would "become a powerful prescription
which would immunize the utility from any meaningful judicial review."
In short, Lipscomb said, that version "has more in keeping with the satiric
scenarios of Joseph Heller's "Catch-22" and Lewis Carroll's "Through
the Looking Glass" than with responsible utility rate regulation."
PGE disappointed with decision "We're disappointed and don't agree with
the judge's decision," said Kregg Arntson, a PGE spokesman. The company,
which has about 750,000 customers, probably will decide by next week whether
to appeal, he said.
"To retroactively go back and question past decisions sets a dangerous
precedent for the sanctity of the ratemaking process," Arntson said.
PGE had no estimate of how much it
might owe ratepayers. "It's impossible
to tell from the judge's decision," Arntson said. "There's no time
frame for recovery or anything."
The background of the case winds back 25 years. Oregon voters approved a law
in 1978 that prohibited utilities from charging ratepayers for property not being
used to provide service to customers. After the nuclear plant, just east of Rainier
on the Columbia River, closed, the utility commission allowed PGE to recover
decommissioning costs as well as another $250 million to cover 87 percent of
its undepreciated investment in the power plant.
First lawsuit in 1994 Consumer advocates first sued the PUC in 1994, claiming
it violated the law. They won in a trial court, and the Oregon Court of Appeals
upheld the decision in 1998.
The Oregon Supreme Court declined to review that ruling. But in 1999, legislators
passed a bill that would have overturned the appeals court decision. Consumer
advocates responded by collecting enough signatures to force a statewide vote,
and voters rejected the new legislation by a wide margin in 2000.
Before the vote took place, PGE, the Citizens Utility Board and state regulators
agreed to settle the litigation regarding Trojan investments in PGE's rates.
The Utility Reform Project challenged the settlement with the PUC, and the commission
held a contested case hearing before signing off on the settlement's provisions
last year.
The challenge of that decision is what brought the case to Lipscomb's court.
Kevin Neely, a spokesman for the attorney general's office, said lawyers representing
the state have not had a chance to study Friday's opinion.
"Our attorneys haven't had an opportunity to talk to the PUC about it,
and we will take a closer look at it Monday and decide what our course of action
will be," he said. Gail Kinsey Hill and Jeff Mapes of The Oregonian staff
contributed to this report.
Dave Hogan: 503-221-8531, davehogan[AT]news.oregonian.com
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