Governor signs lifeline Bill

House 8ill2663 established a Lifeline plan to assist low-income Oregonians with their telephone bills THE BEAR FACTS The Citizens' Utility Board of Oregon's newsletter for members and friends.

2637 S.W. WATER P.O. BOX 6345 CI flZENS UTILITY BOARD PORTLAND, OR 97201 PORTLAND, OR 9n28 (503) 227-1984 July 1, 1987 Legislature caves in to pressure from uti'lities CUB for their attorney and expert with numerous other tax checkoff Senate. Under tremendous pressure, When it comes to utility issues, witness costs in a utility rate case if the bills. the former Republican supporters of political power and influence mean group had made a substantial contri­ Because of these problems in the intervenor funding sided with the more than common sense and good bution in the proceeding. Known as House, CUB supporters in the Senate utilities. The minority report passed by public policy. This is one of the lessons " intervenor funding" in states that tried another approach. The provi- a 16-14vote. of the 1987 legislature. Private utilities have such a program, the purpose is to . sions of SB 708 were added to a bill That vote essentially killed interven­ have long been one of the most encourage more public participation which had already passed the House. or funding. The defeat of intervenor powerful special interest lobbies in in utility rate cases. Oregon is one of Two versions of H B 2145 went from funding had become the priority Salem and this year was no exception. the few states in the country that the Senate committee to the Senate mission for the utiiities in the Clear examples of the utilities' power doesn't have public representation floor. One version, the "majority" Legislature. Once again, their power and influence are provided by Legisla­ funded either through tax dollars or an report, included intervenor funding. and influence stopped a good con­ tive action on two bills: Senate Bill 708 assessment on utilities. The other version, the "minority" sumer bill. and House Bill 3245. SB 708 had the support of CUB, report, did not. Attention focused on 2 Despite the setback, CU B can be (See page 3 for article on HB 3245.) OSPIRG, the National Federation of of the 3 Senate Republicans that had proud of its work this session. We INTERVENOR FUNDING Independent Business, the Solar En­ previously supported SB 708. (The knew at the beginning that it would be ergy Association of Oregon, the third, Nancy Ryles, had resigned to an uphill battle. By aU accounts, CUB's REJECTED Oregon PUC, and Governor Neil become a Public Utility Commission­ efforts kept intervenor funding alive far Senate Bill 708 was CUB's priority Goldschmidt. Not surprisingly, the bill er.) If these Senators could be longer than was expected. Many bill this session . This bill would have was strongly opposed by every private convinced to support the minOrity thanks go to those CUB members who given the Public Utility Commission utility in the state. report, the utilities would have the wrote or called their legislators in the authority to reimburse groups like On May 11, by a 17-12 vote, the votes to stop intervenor funding in the support of SB 708. Senate passed SB 708. 14 Democrats and 3 Republicans voted for the bill, while 3 Democrats and 9 Republicans voted against it. (One Republican opponent was not there for the vote.) After Senate passage, the bill was sent to the House, where it ran into trouble. House Republ icans, led by Minority Leader Larry Campbell, were united in their opposition to the bill. (NOTE: Campbell is a former Pacific ' Northwest Bell district manager.) Because of a slim 2-vote Democratic majority, this intransigence on the part oL House Reoublicans meant that of House Republiq~ns meant that every Democrat in the House had to support SB 708 in order for it to pass. Such was not the case. Representative Rocky Barilla, a first-term Democrat from Salem, was the "swing" vote on the House Environment & Energy Committee. Barilla would not support intervenor funding, stating it "would increase costs to consumers." Barilla spon­ sored an amendment that would allow CUB to receive funds from an income tax checkoff on personal income tax returns. This amendment required the Senate Majority Leader Bill Bradbury was bill to be referred to the House one of CU B"s strongest supporters in the Revenue Committee, where it "died" Legislature. A Lobbyist reviews the good & bad in '87 Legislature

Editor's Note: Eric Stachon, CUB's funding powerfully illustrated his If only they had the chance have to go on record as opposing Vice-Chairperson, spent most of the continued support of CUB. CUB's bill. Some of CUB's strongest supporters last six months lobbying the Oregon Representative Nancy Peterson: Senators Jeannette Hamby and 8i11 in the House included: Legislatu re on behalf of CUB. The Support for the CUB ba llot measure Olson: Senators Hamby and Olson j udith Bauman Carl Hosticka following ratings are his personal was one of Peterson's main campaign originally voted for SB 708, the Dave Dix Dave McTeague opinions based on his experiences and issues when she first ran for the intervenor funding bill. However, Bill Dwyer Larry Sowa do not necessarily reflect CUB's Legislature in 1984. The strength of her when a vote on intervenor funding Wayne Fawbush Dick Springer organizational position. support has not diminished and came up again later on the Senate judie Hammerstad Representative Peterson remains AI Young floor, Hamby and Olson switched Tom Hanlon CUB Heroes CUB's strongest supporter in the their votes .. . effectively killing House. intervenor funding for this session. Senator 8i11 8radbury: As Senate Representative Ron Eachus: In his Biggest Disappointments Integrity was in short supply in this Majority Leader and long-time CUB second term, Representative Eachus Legi slature. supporter, Senator Bradbury did ever­ has become the legislature's most Representative Rocky 8arilla: ything he could to try to get intervenor knowledgeable member on utility W hile claiming to be a CUB supporter, CUB Opponents funding passed . He also took the lead issues. Eachus played a major role in Representative Barilla played a key in the Senate in representing consum­ drafting the telephone lifeline bill role in killing intervenor funding in the The following Senators voted against ers on all utility issues. which passed overwhelmingly. Eachus House. To add insult to injury, Barilla CUB every chance they had: Senator Jim Hill: Senator Hill also led the fight against PP&L's also led the fight in the House for Jo hn Brenneman Tony Mee ker chaired the Senate Business, Housing anti-public power bill, HB 3245. passage of the PP& L-sponsored H B Peter Brockman Glenn Otto and Finance Committee, where most 3245 (see article on page 3). Len n Hannon jim Si mmons utility legislation in the Senate was CUB Supporters M ajority Leader Shirley Gold and 'CUB' Houck Mike Thorne discussed. Senator Hill led the Senate Speaker of the House Vera Katz: In Ken Jernstedt GeneTimms floor fight for intervenor funding and, The following Senators supported these leadership positions, Gold and Bill Ken~emer Mae Yih li ke Bradbury, worked ri ght up to the CU B's intervenorfunding bill despite Katz could have played key supportive Bo b Ki ntigh Bill Bloom end trying to get intervenor funding strong utility opposition: roles for intervenor funding. Instead, passed into law . . jane Cease Bill McCoy they chose to submit to utility The following Representatives voted Senator Grattan Kerans: In 1983, as joyce Cohen Rod Monroe pressure. With the outcome of inter­ against intervenor funding in Speaker of the House, Kerans spon­ joan Dukes Frank Roberts venor funding in doubt in the House, committee: sored the first CUB bill in the Bill Frye Nancy Ryles Gold and Katz opposed a vote by the Andy Anderson Eldon Johnson legislat ure. Kerans' speeches on the Larry Hill Cl iff Trow full House on the issue. This meant George Gilman Fred Parkinson Sen ate floor on behalf of intervenor john Kitzhaber jan Wyers that members ofthe House did not Telecommunicatio·n.s in Oregon How the PUC decides your local phone rates by Rion Bourgeois CUB volunteer attorney_ interexchange carriers provide only Since the phone company is granted allowed to be passed on to the long distance service. PNB provides a monopoly by the state, it must also ratepayers? These costs can include The major players in the telecommu­ both local service and intra-LATA long obtain approval from the state of the equipment, telephone lines, employee nications industry in Oregon fall into distance service. Oregon is divided rates it charges to its customers. These salaries, advertising, lobbying expen­ three groups: Pacific Northwest Bell into two LATA's: Southern Oregon rates must be filed with and approved ses, transactions with affiliated compa­ (PNB); the independent telephone and Northern OregonlVancouver. by the Public Utility Commission nies, and legal expenses to prevent companies, such as United Telephon­ (PUC). The rates are called tariffs. CUB from inserting notices in the e, General Telephone, and Continen­ No competition is allowed for local phone bill envelopes. tal Telephone; and the "interexchange customers. Each local phone company '-'~~~""~~I_I~'----""''-''. carriers" like AT&T, American Net­ (PNB and the independent telephone * How much revenue will be work, and U.S. Sprint. companies) is assigned a geographical generated by the proposed rates? (This The independent telephone compa­ area for which they are granted a figure is the number of customers for nies provide only local service. The monopoly. No other company can Which costs will the each service times the rate for each provide local service in that area. service. company be allowed * How much should revenue exceed cost in order for the sharehol­ to pass on to ders or owners to receive a reasonable rate of return on their investment? ratepayers? If the company, the PUC staff, and intervenors (such as CUB) can not agree on these issues, then the PUC ~.-..-...... ~. ..-..-..~~..-.,~~~ Commissioners must decide the case. There are specific rates.for each of the services provided by the phone com­ A recent example of a local == pany, including residential flat rate telephone rate case is the United Sources of revenue local service, business flate rate local Telephone Company rate case-in· service, measured service, Touch­ November 1985 (referred to as Docket (for local telephone companies): Tone, call-waiting, and other services. No. UT 41). United based their case -Local customer monthly billings If a local telephone company wants on their costs, revenues, and eco'n'o­ -"Access charges" from long-distance to increase its rates, it must file the mic conditions for the first half of companies (AT&T, Sprint, AmNet, etc.) tariffs in a rate case before the PUc. 1985. CUB intervened, and requested Other parties, like CUB, may intervene that United provide information on to contest the proposed rates. There United's costs, revenues, and econo­ Additional revenue for PNB: are three basic issues to be decided in mic conditions for all of 1985, -Toll rates these cases: including decreasing interest and infla­ tion rates. When United provided the information, it became clear that they When you make a long distance call in Oregon, the long distance company * What are the costs which the did not need a rate increase, and they must pay for access to the local telephone company in the area to which you company will incur, that will be withdrew their rate case . are calling. These charges are eventually passed on to you, the consumer. (See article below.)

I __~ . ·· ~~ "" _ _I • ------~. ! --"--- .... -. • c.ocal'lo-lTg-aISlan-ce~ -rares: now .rney Interact In contrast to local telephone customers, it must gain access to the billings to local customers; access PNB and Independents service which is monopolized, long equipment of the local tetephone charges from interexchange carriers; ordered to reduce rates distance or toll service is competitive. company. The equipment of the local and toll revenues received from AT&T, AmNet, Sprint and other long company is called the local exchange. monthly billings to its long distance CUB protested this unfair rate distance companies compete for Long distance companies are called customers.· When PNB files a rate increase and particip.ated in hearings customers on high density long interexchange carriers. case, it seeks approval of th ree types of before the PUC to demand that all distance routes like Portland to For example, if you live in Portland rates: local, access charges, and long local telephone customers in Oregon Eugene, Portland to Seattle, San Fran­ distance rates. Since its local custom­ receive a rate reduction, and that PNB cisco to New York. In addition, Pacific ers are monopolized and cannot customers receive a refund of the Northwest Bell (PNB) is allowed to change to another company, PNB amount they had been overcharged. compete for long distance customers . would prefer to maximize its local Because of CUB's intervention, PNB's and provide intraLATA toll service. rates. residential customers received an (Oregon is divided into two LATAs - or Under former Public Utility Commis­ average refund of $14.94, and all local calling areas - PNB can provide long sioner Gene Maudlin, the local rates telephone ratepayers in Oregon re­ ceived a rate reduction of approxi­ distance service within the LATA, but you obtain local service from PNB for PN B customers were allowed to not from one area to another.) increase in proportion to long distance mately $2 per month. which has a monopoly for local Because of the companies' overear­ service in Portland. However, you rates until PNB's local customers were paying the highest rates in the West. nings, PNB was ordered by Commis­ may subscribe to a variety of long sioner Charles Davis to reduce its rates distance companies. If you subscribe PNB could then keep its toll rates down, to the advantage of a select few by $45 million annually. A close to AmNet and decide to make a long examination of your local phone bill distance call to Hood River, your call customers who generated large monthly long distance bills. will reveal savings in many areas. For would begin in the PNB local residential customers, your local bill exchange in Portland, be carried over will soon reflect a decrease of $2 per long distance circuits rented by PNB to Local rates went up, large cus­ month. If you have touch-tone service, AmNet (at a bulk rate discount), and tomer Iqng distance rates the charge of 55 cents per month will end in the United local exchange in went down disappear from your bill. Extended $oulh_t ~ Hood River. In addition to paying PNB PHS ~ ~"'nee.wvk._.,.. Area Service in the Portland area (also for the use of the long distance This policy reached its zenith under called Multiple Exchange Service) will circuits, AmNet must also pay United become optional and the cost of $2.28 and PNB for access to their local a rate case proposed by PNB and local telephone companies which allowed per month will disappear if you exchanges. These "access charges" choose not to take this service. As competitive providers of toll the phone companies to incre,ase their are eventually passed on to you, the The cost of a local Portland line will service, the long distance carriers are local rates by $2 per month beginning consumer, as part of the long distance decrease as much as $4.83 per month, not required to obtain approval of in January of 1986. T"'e companies carrier's toll rate. going from $20.88 down to $16.05. their rates. They are allowed to charge were also supposed to reduce their A local telephone company there­ The cost for connecting a new line what the market will bear. PNB, as a access charges by appropriate fore has two sources of revenue to pay goes down from $31 to $12 per provider of both a monopoly and a amounts so that the independent for the local exchange: the revenues residential line, and from $48 to $31 competitive service, must still file and companies would not receive any from its monthly billings·to its local for a business line. obtain approval of its toll rates to customers; and access charges additional revenue. prevent the company from subsidizing charged to interexchange carriers like Unlike the independent telephone its competitive services with its AmNet for access to the local companies, PNB wanted to increase monopolized services. exchange. its local rates more than it decreased its access charges and toll rates. At ' PNB's request and without apublic How long distance companies Sources of revenue for PN B hearing, Commissioner Maudlin grant­ gain access to local lines ed PNB a $19.4 million annual local Since PNB provides both local rate increase, but only required the In order for a long distance service and intraLATA toll service, it company to decrease its access interexchange carrier'like AT&T or has three major sources of revenue: charges and toll rates by $8 million Sprint to complete a call for one of its Local revenue received from monthly annually. PG E case closes decision expected in August Hearings in the Portland General Power participated in over 16 hearings Electric Company (PGE) general rate and conferences, took legal deposi­ case have come to a close, more than tions of 11 PGE employees, and a year after PGE asked for a $67 million examined thousands of pages of PGE revenue requirement increase. documents. CUB has been an intervenor and has CUB presented testimony which played a dominant role in the case on argued that: behalf of consumers. The case came to 1) PGE should be required to a close with formal hearings held in return to ratepayers some $60 million Salem May 19th through May 27th. A of Investment Tax Credit benefits; final decision in the case is expected 2) PGE ratepayers should receive from the PUC in early August. 100 percent of the benefits of a $100 On behalf of CUB, Attorney John million after-tax profit PGE received on Stephens and Expert Witness Thomas a sale of power from its Boardman I~ plant; and 3) PGE's Coalstrip No.4 plant in Montana should be either kept out of . , the rate base entirely, or should be placed in the rate base on a reduced basis. If CUB's position is accepted in this case, PGE's rates would drop in excess of $25 million. CUB believes its participation will have a substantial impact on the outcome of this case in benefits to consumers. Legislature takes sides in CUB seeks new Board Members public/private power battle The Citizens' Utility Board is now an election. However, when a posi­ The battle between public and authority to amend the Constitution; taking applications to fill 3 vacant tion is vacated in mid-term, the Board private power utilities in Oregon is at amendments can only be approved by positions on the CU B Board of is required to appoint a person to fill least 50 years old . .. and it's likely to a vote of the people. PP&L apparently Governors. One of the positions is in the vacancy within 90 days. continue for quite some time. But has no interest in having Oregonians Congressional District 2, and two are CUB Board members serve as private utility attacks on public power decide the matter. in District 4. All CUB members in volunteers and are required to attend may never get uglier or more HB 3245 suspends The Constitution these districts are eligible to apply for monthly meetings throughout the embarassing than they did this Legisla­ for a two-year period and has a the positions. state .. In addition, members may be tive session . "retroactive" effective date. The CUB Board will appoint new asked to serve on committees. The focus of the most recent battle Most observers have little doubt that members to fill the remainder of the Interested CUB members may ob­ involves a dispute between the the bill will be thrown out in court. terms which were vacated by Charles tain application forms by writing the Emerald People's Utility District and The main purpose ofthe bill seems to Montee of Pendleton, Chris Palmer of CUB office at 2637 SW Water Ave., Pacific Power & Light. Emerald PUD, be to harrass Emerald - to delay Myrtle Point, and Kurt Harlan of Portland, OR 97201 , or by calling which serves part of Lane County, was Emerald's eventual takeover of the Eugene. Both Montee's and Harlan's 227-1984. Application forms are due created in 1976 by a vote of former dams and to increase Emerald's legal positions will end in June 1988, back at the CUB office by 5:00 p.m. on PP&L customers. Emerald owns distri­ costs. Palmer's position ends in June 1989. July 15th. CUB is encouraging women bution and transmission facilities, but One can imagine the uproar if there . Normally, Board members are elec­ and members of minority groups to no power plants. For years,· Emerald was a bill to suspend, for 2 years, ted to the Board by CUB members _in apply. has expressed an interest in 4 Constitutional provisions such as hydroelectric dams that PP&L owns on freedom of speech or religion. The the North Umpqua River. The way vote on HB 3245 is testimony to Consumers' Council in Englan_d__ was deaJedl or Emerald lasLNovem- ~RR...I~c..--.- i Dfl UOD.rCILO.\ _/.o.r ._b o...... l ~~_ ;-"!- t~ _._ . ~ I '--QC. L':' IllIrUCl l LC VVCI lIl'C" LC51:)IGllUft:::. ~ ber when the Oregon Supreme Court, By Mavis McCormic, meter accuracy tests, and safeguards l~~""''''''~'''''''-''~'-'~~·, t Board Member, Dist. 2 from utility cutoffs are provided in a unanimous ruling, stated that PUD's have the right to cO,ndemn Best Wishes to i While in London recently, I inquired through a series of ECC bulletins. dams on public waterways. into the system for protecting Cutoffs for nonpayment of bills is a PP&L had House Bill 3245 intro­ Charles Montee ! consumers' interests in England, a source of concern there as well as duced to prevent Emerald from CUB wishes to thank Charles ! country which has had a nationalized here, although only 10 percent of acquiring the dams. The bill establish­ Montee for his dedicated service electrical supply system for forty years households heat with electricity in I es a 2-year moratorium on PUD to the Board of Governors. : (the Central Electricity Generating England . One additional method of condemnation authority and requires Montee, Pendleton resident Board) . Information was furnished by handling utility payments is available a I the state's Energy Policy Review Tony Boorman, Deputy Director of there - the payment meter, which is a who was elected to the Board in , Committee to "study" the publici ' the Electricity Consumers' Council version of the old shillings in. the slot 1986, resigned his postion fol- t private power struggle. (ECC). system. It is one of the alternatives lowing heart surgery this spring. I The biggest flaw with the bill is that The Council serves utility consumers considered rather than stopping elec- The Board of Governors wishes I Emerald's right to acquire the dams is in England and Wales in many of the tric service. Two notices are him a continued successful re- provided in the Oregon Constitution . I same ways that CUB does in Oregon; given, suggestions for arranging pay­ covery! The Legislature does not have the I however, there are striking differences ment are made, and a final 10 weeks ,...... -.~..-....-....-...... -...~f •.-II ... " ...II_I; in financing, staff, and the actions are allowed before disconnection of which can be taken regarding rate utility service. changes. Just as the British gas industry has The ECC, which was established in been denationalized or "privatised", 1977, is funded by the Government. the electricity industrywill probably For 1985/86 its budget was about be taken out of government owner­ $360,000, and several staff members ship soon. Mr. Boorman commented were employed throughout the re­ that such a change would not gion. When electricity rate increases significantly affect the functioning of are proposed, the Council is consul­ the ECC. ted, but no rate hearings are held. This In the 1986 ECC Annual Report, means there are no opportunities for Chairman John Hatch said, "The intervening by legal action. While Government's privatisation pro­ CUB members may envy the ECC's gramme has focussed attention on financing and larger staff, we do have consumer councils. There is now, some options not available to the ECC, perhaps, a wider consensus than ever such as public hearings and intervenor before that effective consumer coun­ action. cils are needed, where a corporation Consumer education on energy con­ has market dominance and supplies servation, monitoring energy use, basic necessities of life."

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" 1., J: .f__ : Solar '87 Thank you! Portland will host Sola~ '87, an When those Pacific Northwest Bell interdisciplinary solar technologies refund checks came in the mail, many conference July 11-16,1987. The supporters remembered CUB and conference is sponsored jointly by the endorsed their checks over as a American Solar Energy Society, Inc. donation. CUB wishes to thank all of (ASES) and the Solar Energy Society of its members and supporters who Canada, Inc. (SESCI). About 800 remembered CUB's victory by dona­ conference attendees are expected ting their refunds or their expected from throughout the U.s. and Canada. savings in a "special appeal". CUB Solar '87 will consist of four days of received over $6,000 in donations refereed papers and symposia, keyn­ from grateful members. ote speakers, and exhibits. CUB also wishes to thank all of our All conference 'events will be held at members who renewed their member­ the Hilton Hotel, located in down­ ships in May and June. If you received town Portland at 921 SW 6th Ave. a renewal notice in the mail, you still On-site registration for the conference have time to send it in before getting a and workshops will begin at 8:00 a.m. second notice. on Saturday, July 11, and will continue throughout the conference. For information contact the Solar Energy Assiociation of Oregon at 2637 CU B BOARD OF GOVE RNORS SW Water Ave., Portland, OR 97201, District 1 District 2 or phone 224-SUNS. Di strict S Mavis McCormic Kathy Weaver Tom Novick 3234 SE 24th PO Box 236 Lloyd Marbet 027 SWArthur Portland, OR 97202 Keno, OR 97627 19142 S. Bakers Ferry Rd . Portland, OR 97201 239-7695 883-8410 222-9641 Boring, OR 97009 637-3549 Jesse Loffer Austin Collins Elmer Moke 740 NE Memorial Dr. 3125 NE Schuyler 7280 SW Wilson Ct. Grants Pass, OR 97526 Portland, OR 97212 Jim Bernau 2545 Cloverdale Dr. 5E Beaverton, OR 97005 476-5764 282-6266 641-4778 Turner, OR 97392 District 3 District 4 364-4450 Jim Long Eric Stachon Rt. 1 Box 233 Robert Ackerman Peter Greenberg Cornelius, OR 97113 027SWArthur 1212 South "A" 51. 2340SW 15th Portland, OR 97201 647-0021 Springfield, OR 97477 Albany, OR 97321 222-9641 746-6573 926-5771

Citizens Utility Board of Oregon NonProfit Org. P.O. Box 6345 U.S. Postage Portland, OR 97228 PAID Portland, OR. Address Correction Requested Pennit No. 2134

...... Cover Photo: Governor Neil Goldschmidt signs the Lifeline bill into law. Representatives Ron Cease (right of Goldschmidt), Andy Anderson (left), CUB Lobbyist Eric Stachon (behind Gold­ schmidt), and others join in the celebration.