Oregon’s largest gas utility, NW Natural, has requested to raise residential customer rates by approximately 3% starting November 1, a reduction from the initially proposed 7% increase. This decision comes after significant advocacy from energy affordability groups that challenged the company’s profit margins, resulting in a substantial cut to their initial request for a financial boost.
The company serves over 2.5 million residents in Oregon and Southwest Washington. NW Natural’s original increase proposal was attributed to rising inflation, necessary system upgrades, equipment replacements at a storage facility and pipeline, and an increase in profits.
However, Oregon Citizens’ Utility Board (Oregon CUB) and several nonprofit organizations focused on energy affordability and climate justice discovered that nearly two-thirds of NW Natural’s $59.4 million increase request was aimed at increasing profits. Charlotte Shuff, communications and outreach director for Oregon CUB, emphasized the importance of keeping energy expenses manageable, stating, “We really shouldn’t be raising our energy bills… for just the benefit of shareholders.”
Negotiations led by Oregon CUB and other intervenors resulted in a new agreement during the general rate case process, a procedure that can take up to a year to finalize. As a result, NW Natural’s profit increase was significantly reduced from 1% to 0.1%, aligning more closely with the typical earnings seen in Oregon’s utilities.
The utility also faced cuts to additional proposed expenses, including membership dues and planned investments, further influencing the lowered rate hike.
If the Oregon Public Utilities Commission approves the new rate, customers could see an increase of roughly $2 per month instead of the initially suggested $5.55. However, as David Roy, spokesperson for NW Natural, pointed out, the exact increase will depend on market fluctuations in natural gas prices before the November implementation date.
Roy asserted that NW Natural consistently works to manage costs and minimize rate impacts, noting that customers currently pay less for natural gas on average than they did two decades ago. Despite these efforts, overall energy rates have been climbing across Oregon’s utilities, with some companies implementing increases of over 50% in the past five years, putting financial strain on residents.
Many households are facing tough choices between paying energy bills and other necessities such as groceries or medications. Recent data from Oregon CUB indicates that NW Natural disconnected 7,200 households due to nonpayment in 2023, which increased by another 2,000 in 2024, representing roughly 23,000 Oregonians.
Of these disconnections, around 400 involved low-income households already receiving assistance, with nearly 3,000 experiencing disconnections lasting longer than a week. Last year, approximately 70,000 households were disconnected from for-profit utilities for similar reasons, a significant number comprised of low-income families receiving energy bill discounts.
These troubling statistics reflect the ongoing struggle many face to keep up with rising energy expenses. However, a recent legislative measure, the Fairness & Affordability in Residential Energy Act, aims to address these issues. Starting in 2027, this act will limit substantial yearly rate hikes to only once every three years and require utilities to submit an annual report detailing upcoming rate increases and their implications for customers.
Additionally, the new law mandates that natural gas utilities, like NW Natural, implement new rates after the winter months, addressing concerns raised by advocates who suggest that increases prior to winter exacerbate disconnections due to heightened energy use for heating.
As the energy landscape evolves, customers and advocates continue to push for solutions that prioritize affordability and accessibility in energy services.
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