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2001 Power Cost Adjustment Mechanism. Nine-month mechanism because of 10/01/01 effective date for new tariffs under PGE restructuring rate case Baseline negotiated, based loosely on 1997 rates and 2001 overall forecasted test year; assumed average water All changes from baseline tracked

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2001 power cost adjustment mechanism
2001 Power Cost Adjustment Mechanism
  • Nine-month mechanism because of 10/01/01 effective date for new tariffs under PGE restructuring rate case
  • Baseline negotiated, based loosely on 1997 rates and 2001 overall forecasted test year; assumed average water
  • All changes from baseline tracked
    • purchases
    • sales
    • fuel
  • Speculative wholesale trading excluded – PGE “tags” speculative trades
  • Ability to change base rates within the nine months if there is a significant underlying movement in the market
  • No earnings test because of dead-band and sharing tiers
  • All major parties stipulated to mechanism

56

power cost adjustment mechanism

$ 232.5

$ 211.1

$ 175.9

$ 140.7

$ 119.3

Power Cost Adjustment Mechanism

($ in millions)

  • Power Costs $260.5PCA $(35.9)

90/10 Sharing Tier

50/50 Sharing Tier

Deadband: PGE has100% of risks and rewards

50/50 Sharing Tier

90/10 Sharing Tier

Budgeted9 Month Regulated Power Costs

For Illustration purposes only. Not drawn to scale,

57

pge s restructuring filing ue 115
PGE’s Restructuring Filing – UE 115
  • On 10/2/00, we filed both an integrated and an unbundled case
  • Test year is 2002, with new rates to take effect 10/1/01(initial 15 months)
  • Case proceeds regardless of start date for direct access
  • All non-power cost issues settled with OPUC Staff except ROE
    • Achieved excellent settlement - 96% of filed cost of service for these areas
    • Some customer groups are contesting some of the settled issues but PGE is confident that the settlement will hold
  • Power cost issues settled as of June 12 with OPUC Staff, ICNU, and CUB. Baseline power cost to be set in late August.
  • ROE
    • PGE filed rebuttal on May 20 and early June hearings went well for PGE
    • Settlement remains possible

58

slide4

Restructuring Filing - Power Cost Settlement

  • Basic mechanism is similar to 2001 mechanism
    • Tiers of sharing, with less sharing as the variance between forecasted power costs and actual power costs is larger, positive or negative
    • Mechanism runs for 15 months: from October 1, 2001 to December 31, 2002
  • New Features
    • Quarterly amortization of any accrued balances
    • Forecasted power costs set using actual reservoir levels and expected rainfall, significantly reducing forecasted available hydro
    • Changes in energy revenues included in the equation
    • Catastrophic plant losses trigger a change in forecasted power costs and are outside the mechanism
  • PGE will file the forecasted power costs on or around August 15, reflecting trades and purchases through the end of July

60

power cost adjustment mechanism1
Power Cost Adjustment Mechanism

($ in millions)

95/5 Sharing Tier

+$200

90/10 Sharing Tier

+$100

85/15 Sharing Tier

+$38

50/50 Sharing Tier

+$28

Deadband: PGE has100% of risks and rewards

15-month baseline power cost*

-$28

50/50 Sharing Tier

-$38

85/15 Sharing Tier

-$100

90/10 Sharing Tier

-$200

95/5 Sharing Tier

*To be determined in August/September

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