ORDER NO. 96-053

ENTERED MAR 4 1996

THIS IS AN ELECTRONIC COPY

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UE 93

DISPOSITION: APPLICATION FOR RECONSIDERATION DENIED

On November 20, 1995, the Public Utility Commission of Oregon issued Order No. 95-1216, which adopted a stipulation entered into by Portland General Electric and the Staff of the Public Utility Commission. The order authorized PGE to file revised tariffs consistent with the stipulation. The new tariffs involve a net revenue increase and rate increases in varying amounts for customer groups.

On January 16, 1996, the Citizens' Utility Board (CUB) filed an application for reconsideration. PGE filed a response opposing reconsideration on

February 12, 1996.

OPINION

OAR 860-14-095 calls for rehearing or reconsideration of an order under certain circumstances. Subsection (3) provides that the Commission will grant an application for reconsideration if the applicant shows that there is new evidence, a change in the law or agency policy since the date of the order, an error in law or fact in the order, or good cause for further examination of a matter essential to the decision. The Commission concludes that CUB's application does not provide a basis for reconsideration.

The focus of CUB's application is its argument that reductions in the cost of natural gas should be taken into account in setting PGE's rates at this time. It alleges that Order No. 95-1216 contains incomplete examinations of the issues, an inadequate examination of the evidence, and a refusal to reexamine the adequacy of natural gas forecasts carried over from UE 88. In fact, the order in question thoroughly discusses CUB's arguments made during the proceeding relating to natural gas costs. CUB's application for reconsideration provides nothing new on the subject and is actually a reiteration of the arguments made during the proceeding and dealt with in the order. The order sets out our decision in the matter and explains that decision. There is no basis for reconsidering the order.

The Commission is aware, however, of the importance of the issue raised by CUB. We will not permit the company to indefinitely continue to receive a windfall from lower natural gas prices. Eventually, such reductions, if they continue, must accrue to the benefit of ratepayers. PGE acknowledges that it will need to propose actions for 1997 that will take into account "presumed reductions in forecast spot market power costs." It states that it is unable to propose a specific course of action at this time because of various uncertainties relating to the future of its decoupling procedure, changes in the power markets, and possible adoption of alternative form of regulation principles.

The Commission accepts that these uncertainties may make it impossible to adopt a specific plan at this time. However, we do expect PGE, Staff, and other interested parties to take up this issue during 1996 and to work toward a plan for dealing with the issue prior to the expiration of PGE's decoupling procedure at the end of 1996.

ORDER

The application for reconsideration of Order No. 95-1216 by the Citizens' Utility Board of Oregon is

Made, entered, and effective____________________________________.

A party may appeal this order pursuant to ORS 756.580.