How have recent FERC orders affected PGE’s price increase?
To meet customers’ power needs, PGE generates about half of its own power and purchases the other half on the wholesale market through contracts. Most of the purchases are done well in advance to assure a reliable supply, based on what PGE expects the weather to be, plus an extra cushion. If PGE has surplus power after meeting its customers’ needs, PGE sells it on the wholesale market. In the past couple of years, PGE had been able to offset higher power costs by selling surplus power on the wholesale market, but FERC’s actions to create price controls have hurt its ability to make those sales and pass the benefits on to customers. In August 2001, PGE joined together with other Western utilities to protest recent actions by FERC to create price controls on wholesale power sales in the West. This coalition of utilities concluded that FERC’s actions may create higher prices for some utilities’ retail customers and could result in power supply shortages in many areas of the West. How does
