Idaho's Progressive Utility Rules

Rewarding utilities for conservation success through "decoupling."
This post is part of the research project: Economic Turnaround

Utilities are among the few remaining large companies that are relatively solvent and profitable. Harnessing their might to retrofits for all would be a powerful step toward economic stimulus.

But most utilities in Cascadia are conflicted about helping their customers save energy. On the one hand, they’re legally obligated to do it. On the other hand, if they do it successfully, they don’t make as much money.

Resolving this conflict in favor of conservation requires an innovative form of utility regulation called “decoupling.” A decoupled utility makes profits not in proportion to its sales but in proportion to its success in advancing efficiency. (Decoupled utilities, furthermore, have nothing to fear from comprehensive, auctioned cap and trade with built-in protections for working families.)

In recent years, Cascadian utilities and utility regulators have been making stepwise progress on decoupling. Oregon’s two big natural gas companies—NW Natural and Cascade—are decoupled, as is the natural gas division of Spokane-based Avista. California decoupled all its utilities in one sweeping move a few years ago. Perhaps more surprisingly, since March of 2007, Idaho Power has operated under the most progressive decoupling rules in Cascadia. You heard me: Idaho Power.

Oregon’s electric companies and most of Washington’s utilities operate under the conflicted old rules. But we may see progress soon. At present, the Oregon Public Utility Commission is considering a proposal from Portland General Electric to decouple its electric rates. If the commission approves PGE’s proposal, then Oregon’s other big electric utility PacifiCorps probably will follow.

Then we’ll need action from Washington and British Columbia.

Decoupling is an ideologically neutral innovation that helps save energy, lower customer bills, reduce greenhouse gas emissions, and unlock green-collar jobs. Interestingly, in both Washington and British Columbia, decoupling is getting held up by the right of the political spectrum. BC’s center-right climate champion Premier Gordon Campbell has yet to follow his ideological soul mate Arnold Schwarzenegger and decouple utility profits from sales. In Washington, whose Puget Sound Power & Light once led the continent on decoupling (before the wave of deregulation ended all that in the mid-1990s), center-right Attorney General Rob McKenna—or his office—has been a consistent obstacle to decoupling, whenever it’s proposed before the Transportation and Utilities Commission. Perhaps decoupled California’s Republican governor—or just about any elected official in deep R Idaho—could put in calls to the premier and the AG?

 

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Comments

  1. John Gear says:

    On the other hand, with Seattle City Light being a muni and most of the rest of Washington served by public utility districts, you don’t need action from the UTC to have decoupling. Public utilities can immediately rates from consumption whenever a majority of commissioners understand the necessity.

  2. Mike Crabe says:

    John, I also think that it is good idea when public utilities can immediately cut rates from consumption. It is up to people to take action and change usual ways.

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