PORTLAND, Ore. — PacifiCorp, parent company of Pacific Power, has filed to potentially raise customers' rates to pay for the damages it owes for starting wildfires in 2020.
The utility has been battling a class action lawsuit alleging that it failed to de-energize power lines that sparked fires in the Santiam Canyon and other areas, and the jury ruled this week that Pacific Power was negligent and should be held financially liable for homes destroyed in the fires. A few days later, the jury also concluded that Pacific Power should pay punitive damages.
The company submitted a filing to the Oregon Public Utility Commission on Thursday, asking regulators to allow PacifiCorp to defer costs associated with the lawsuits until a later date.
PUC approval of the request would give the company the option to pass on millions of dollars in damages for wildfire liability onto consumers.
Bob Jenks, Executive Director of Oregon Citizens' Utility Board, an advocacy group, said he believe the PUC should reject this request to keep a "pipeline" open to transfer costs to customers.
“They're asking victims of wildfires to to pay for the cost of their neglect," Jenks said. "It's fundamentally not customers' responsibility to pay for reckless behavior of utilities. Courts create liability to punish and hold someone accountable."
In its filing, Pacific Power said the $90 million it owes in relation to four wildfires is the result of "unique and unforeseen circumstances outside of the Company’s reasonable control."
PacifiCorp spokesperson Simon Gutierrez shared a statement with KGW, saying the company is not requesting the PUC to take action at this time.
"This is a backstop to preserve our ability to take action in the event there is impact to the financial stability of the company," the statement reads. "Considering the uncertainty and potential impact surrounding the company’s wildfire litigation, at this time no longer term decisions have been made on recovery of costs."
Jenks said customers can't afford to pay for PacifiCorp's liability and what a Multnomah County jury found to be a mismanagement of wildfire mitigation and forest practices.
"Under Oregon law, customers pay for the prudently incurred costs of operating utilities. The costs have to be prudent and they have to be reasonable." Jenks said. "A jury just found the company reckless, they found it grossly negligent, they found it did this willfully. That's not prudent.”
The PUC, as a regulatory agency, would decide if PacifiCorp's request is an appropriate deferral and if so, how much money would be allowed to be passed onto customers.
PUC spokesperson Kandi Young said the PUC has "not yet determined" next steps for processing PacifiCorp's filing and "may not for some time."
"Because deferral filings are made to preserve the utility’s option to pursue its request for cost recovery after more information about the costs develops, it is common for PUC action to be taken many months, or even years, after deferral filings are made," Young said.
Jenks, speaking on behalf of the Oregon Citizens' Utility Board, said PUC should reject PacifiCorp's request now, instead of waiting for a later review, to show that it won't allow deferring costs to avoid financial and legal responsibility.
“Why should we have (potentially) a billion dollars of liability hanging over customers if this isn't appropriate," Jenks said. "Then let's make the decision that it's not appropriate and go forward."
Jenks said it's likely that the rates of Pacific Power customers could increase as the company spends more to manage power lines and prevent wildfires in the years to come.
However, Pacific Power would need to prove to the PUC that rate increases are associated with wildfire mitigation costs, not costs associated with lawsuit liability and the jury's verdicts.
Young recognized that PacifiCorp requested to delay any ruling until the costs associated with the wildfire lawsuits are more fully known, even though the public is acutely aware of the subject now.
"The PUC recognizes the controversy that surrounds this filing," Young said. "When the time comes to take action, the PUC will establish an open and transparent public process in which all interested persons have the opportunity to present information and argument to the Commission, including PUC Staff, ratepayer advocates, PacifiCorp, other participants, and members of the public."
