Portland-based

filed three requests with Oregon regulators this week to increase rates by a total of 4.3 percent to cover power costs, coal plant upgrades, a solar project and a transmission expansion.

The increase comes on top of the 4.4 percent increase Oregon customers saw in January and rate hikes last year totaling nearly 15 percent. The bulk of the latest request would cover capital costs such as emission controls at coal plants and would take effect Jan. 1, 2013 if approved.

The rate request was less than expected as PacifiCorp shifted some capital costs to ratepayers in other states. But advocates still point out the company has raised rates in Oregon by about 50 percent since 2006, the year it was acquired by

, a subsidiary of

conglomerate.

And there appears to be no end in sight.

Though PacifiCorp says it does everything possible to manage costs, its representatives are telling Utah customers to expect rate increases nearly every year for the next decade as it makes capital investments to clean up coal plant emissions and build wind farms, transmission lines and natural gas plants.

Utility managers say rate increases will differ among the states where it operates, and Oregon may not see the same impact as states where demand is growing.

Nevertheless, the utility is in a "build cycle." Customers, it appears, will be in a "bill cycle."

"They may be able to defend each of their individual investments as reasonable," said Bob Jenks, executive director of the

. "My question is whether they can defend pancaking all these things on top of each other as reasonable. They're not managing it well."

RECORD PROFITS



Ratepayers say PacifiCorp has become a great investment vehicle for Berkshire, which has injected billions into PacifiCorp capital projects. In his annual letter to shareholders, Buffett described MidAmerican as one of Berkshire's "fabulous five" operating companies because of record profits -- profits he expects to continue this year.

But advocates say it is exhausting ratepayers

"Oregon is still in an economic recession," said Melinda Davison, a lawyer for industrial customers of

, a trade group. "At a time when you have customers barely hanging on, you should be delaying capital expenditures unless they are absolutely necessary. The question is at what point the public utility commission will say enough is enough."

Rate increases are particularly tough to swallow, Davison said, when power prices have plummeted.

Utility managers say they have little choice. Customers have enjoyed relatively lower rates for years thanks to the company's fleet of coal-fired power plants -- 26 boilers spread over 11 location in five states. But stricter pollution regulations are forcing costly environmental upgrades. The cost of coal, both from its own captive mines and contracts, has been increasing.

"We're not investing in any new coal plants, but we're trying to get value out of plants that are producing low-cost power," said Paul Vogel, a spokesman for PacifiCorp. "In order to operate these plants, we need to comply."

Meanwhile, lawmakers in Oregon, California and Washington are requiring utilities to build renewables, generally meaning wind farms. Oregon's renewable energy standard requires utilities to meet 25 percent of demand with renewable energy by 2025.

And PacifiCorp is pursuing transmission upgrades to move power around its six-state operating territory. Vogel said the company scrutinizes transmission needs on an annual basis and scales down where possible.

"We hear that concern loud and clear," he said.

ASK FOR THE MOON



Disagreement over individual items in a utility rate case is standard fare. Conventional wisdom among ratepayers is that utilities ask for the moon, then see their request trimmed as regulators, ratepayer groups and other stakeholders wade through their voluminous filings and reject certain costs.

Yet the volume, at least, is louder these days. PacifiCorp executives were dressed down by Oregon's public utility commissioners at a recent meeting where the company was reviewing its long-term resource plans. Commissioners insisted on a more detailed analysis of coal plant upgrades. They wanted more energy efficiency.

And they said they wanted corporate chieftains in Des Moines, Iowa, to get the message that business as usual wasn't working.

Regulators are set to issue an order on PacifiCorp's resource plan in coming weeks. The company reportedly has agreed to more energy efficiency to stave off investment in a new natural gas plant. Coal plant upgrades will be held aside and considered separately.

That may be a long debate. To meet stricter federal pollution rules and keep the coal-fires burning, PacifiCorp foresees spending more than $4 billion on equipment and additional operating costs by 2023. The company's analysis suggests that's the least-cost, least-risk way to meet customer needs.

The pollution controls would do nothing to reduce the plants' vast output of carbon dioxide, however. If Congress ultimately institutes a carbon tax to combat global warming, many plants could become uneconomical to run.

The danger, critics contend, is the company will sink so much capital into the plants to meet clean air standards it will be harder to justify their retirement, or result in vast unrecovered costs. Moreover, PacifiCorp has already heavily invested in pollution upgrades at some plants without a full-blown analysis as to whether those plants will survive.

To Jenks, of the Citizens' Utility Board, PacifiCorp appears to be deliberately breaking up investments and working them into rates piecemeal.

"You study and analyze a cost before you incur it, not afterward," he said. "We're going to have a big fight over a lot of coal."

CONSERVATION-MINDED



Rate shock isn't limited to Oregon, though the composition and size of the increases, as well as the underlying politics, differ by state. Regulators in Wyoming, for instance, are unlikely to oppose PacifiCorp's coal investments, which provide jobs there. Oregon regulators have pushed harder on energy efficiency and renewables, with ratepayers footing the bill. And while growing demand drives new investments in power plants in Utah, it is flat in Oregon.

Utah's residential and small commercial customer advocate, Michele Beck, said contentious issues there include PacifiCorp's hedging strategies for natural gas, its renewable energy credits to customers and transmission expansion needs.

Repeated rate hikes in Wyoming are drawing fire from customers.

And in Idaho, the company has fought with Monsanto Co. over transmission investments.

In the rate filing Thursday, PacifiCorp responded to the Oregon Public Utility Commission's earlier concerns about cost allocation among different states by lowering Oregon ratepayers' share of those costs.

"Oregon's share of system costs is $9.5 million lower in this filing than if the allocation factors from the last case had been used," Vogel said. "It's what we have to have and no more."

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