PacifiCorp has withdrawn plans to charge ratepayers an extra fee to cover the cost of potential wildfire lawsuits after regulators criticized the proposal for a lack of clarity.
In a July 26 filing with the Oregon Public Utility Commission (PUC), PacifiCorp withdrew plans for a Catastrophic Fire Fund “to allow time for additional development.”
The proposal was part of an overall rate increase package which, according to the most recent filings from the company, would raise rates for average residential users $23 monthly starting in January.
In the original proposal, filed with PUC Feb. 15, the company would have charged average Oregon users $7.60 monthly to pay into the fund, with similar fees proposed in the other states PacifiCorp services. These wildfire surcharges would have been paired with a $60 million yearly contribution from the company to create a $3 billion fund over 10 years to act as a kind of self-insurance.
PacifiCorp said the fund was necessary to protect itself when wildfire claims exceeded normal insurance coverage.
In a June 28 filing, PUC staff said the proposal lacked clarity on how the fund would be managed and used, and how PacifiCorp arrived at its fee amounts and the $3 billion target. They also expressed concerns that the costs of the fund would be passed on to ratepayers when the company has been so profitable it regularly paid nine-figure dividends to shareholders.
Specifically, the filing cited $550 million in dividends paid to parent company Berkshire Hathaway since the 2020 Labor Day fires. Last year a Portland jury found PacifiCorp liable for the fires through gross negligence and willful misconduct, and the company is bracing for $8 billion in possible damages.
PCU staff said it was “hardly fair” for the company to act wrongfully then pass on the liability of its actions to ratepayers. The filing said, if the Catastrophic Fire Fund were approved, it would be appropriate for PacifiCorp to contribute the $550 million in dividends to the fund.
In the July 26 filing, PacifiCorp said PUC staff unfairly criticized the company when there was no way PacifiCorp could have known before the trial it would be found liable for the fires. The filing said PacifiCorp would incorporate other feedback about the proposal for a possible revised PUC filing in 2025, or even a legislative solution.
