UM 2019

Key events and submissions in the Portland General Electric (PGE) UM 2019 proceeding related to deferred accounting for wildfire risk mitigation costs include:

- January 2019: Oregon Governor signs Executive Order 19-01, creating the Governor’s Council on Wildfire Response and signaling urgency for wildfire mitigation 1.

- May 31, 2019: PGE files its initial application to defer incremental operating and maintenance (O&M) costs related to wildfire mitigation 2, 3.

- July 1, 2020: PGE applies for reauthorization to continue deferring wildfire mitigation costs for July 1, 2020 through June 30, 2021 2, 2.

- July 1, 2021: PGE files another application to reauthorize deferral for the period July 1, 2021 through June 30, 2022 1, 1.

- June 30, 2022: PGE files to update and reauthorize deferral for January 1, 2022 through December 31, 2022 4, 3, 5.

- August 19, 2022: PGE submits Advice Filing 22-18 to create Schedule 151 for wildfire mitigation cost recovery (later moved to Docket UE 412) 3.

- December 30, 2022: PGE files to reauthorize deferral for January 1, 2023 through December 31, 2023 5, 5.

- May 10, 2023: Commission approves an automatic adjustment clause for wildfire mitigation costs in Order No. 23-173 3.

- December 28, 2023: Commission approves PGE's deferral application for 2023 at a regular public meeting 3, 3.

- December 29, 2023: PGE files its 2024 Wildfire Mitigation Plan (WMP) and a deferral reauthorization application for January 1, 2024 through December 31, 2024 3, 6, 3.

- February 8, 2024: Commission enters Order No. 24-035, adopting staff’s recommendation on a PGE reauthorization request 7.

- May 9, 2024: Staff recommends denial of PGE’s three early deferral requests (2019–2021 periods) 8.

- May 20, 2024: Commission issues Order No. 24-164, referencing the approval of wildfire mitigation costs for later periods and establishing cost recovery under new statutes 9.

- July 8, 2025: Staff recommends approval of PGE's application to reauthorize deferred accounting for costs associated with wildfire risk mitigation measures and vegetation management for the 12-month period beginning January 1, 2025 10.

The excerpts from the docket primarily focus on the evolution and management of Portland General Electric's (PGE) wildfire mitigation programs, rather than traditional "growth areas" in a business expansion sense. However, the following areas of programmatic and operational growth can be identified:

Wildfire Mitigation Program Development and Expansion
- Growth is seen in the increasing scope and complexity of wildfire mitigation planning and implementation, driven by both regulatory changes (notably SB 762) and evolving risk from wildfire. Key elements include risk mapping and simulations, grid operations and protocols, vegetation management (including the Advanced Wildfire Risk Reduction program and enhanced techniques), community outreach, and public safety power shutoff (PSPS) events 1, 2, 3.

Key considerations:
- Costs: The incremental operating and maintenance costs for wildfire mitigation have increased significantly over time, with an estimated $45.3 million for 2024 alone 1.
- Regulatory requirements: SB 762 and related statutes require utilities to develop, file, and implement comprehensive wildfire protection plans, with cost recovery mechanisms established by the commission 4.
- Cost recovery and rate impacts: Deferral and recovery of these costs are subject to regulatory review, including the “three percent test” that limits annual deferral amortizations to 3% of prior year gross revenues 2, 5.
- Prudence and review: All costs are subject to prudence review by commission staff, and there is no sharing mechanism—all prudently incurred costs/benefits are passed to customers 2, 5.

Vegetation Management and System Hardening
- Enhanced vegetation management and system hardening are repeatedly identified as key growth areas within wildfire mitigation. This includes both traditional vegetation clearance and new advanced techniques, as well as upgrades to grid infrastructure for fire resilience 1, 3.

Key considerations:
- These activities are labor- and capital-intensive, and their costs must be justified as prudent and necessary for safety.
- Implementation must be balanced to minimize service disruptions (e.g., from PSPS events) while achieving risk reduction 2, 3.

Community Outreach and Public Awareness
- Increasing investment in community engagement to inform and prepare customers for wildfire risks and utility mitigation actions 2, 3.

Key considerations:
- Effective outreach can reduce negative impacts of PSPS events and build public support for mitigation investments.
- Outreach efforts are included in cost recovery requests and must be demonstrated as prudent.

In summary, the growth areas identified are the expansion of wildfire mitigation measures (including risk mapping, vegetation management, grid hardening, and community outreach), each with key considerations related to regulatory compliance, cost recovery, prudence review, customer impact, and alignment with statutory requirements 2, 4.

The stakeholders in the Portland General Electric (PGE) wildfire mitigation deferral dockets (UM 2019 and related) include:

- Portland General Electric (PGE)
- Oregon Public Utility Commission (PUC) Staff
- Alliance of Western Energy Consumers (AWEC)
- Citizens’ Utility Board of Oregon (CUB)
- Small Business Utility Advocates (SBUA)
- Walmart
- Calpine Solutions/Calpine Energy Solutions, LLC
- Community Action Partnership of Oregon
- Energy Strategies LLC
- Natural Resources Defense Council (NRDC)
- NW Energy Coalition
- Various attorneys and consultants representing business and advocacy groups

Positions on Proposals:
- PUC Staff: Recommended denial of PGE's requests for deferral of wildfire risk mitigation costs for the periods May 31, 2019–May 30, 2020; July 1, 2020–June 30, 2021; and July 1, 2021–December 31, 2021, stating the financial impact was not sufficient to warrant deferral. AWEC supported the staff recommendation. PGE did not oppose the staff recommendation. CUB did not respond when asked for comments 1, 2.
- AWEC: Supported the staff recommendation to deny PGE’s deferral requests for the specified periods 1, 2.
- PGE: Did not oppose the staff recommendation to deny the deferrals for the periods listed above, though in other filings PGE has sought deferred accounting treatment for incremental and decremental wildfire mitigation costs in later years 1, 2.
- CUB: No response was received on the staff’s draft recommendation regarding these deferrals 1, 2.

Other stakeholders (such as Walmart, Calpine Solutions, SBUA, NRDC, etc.) are on service lists and may participate, but there is no specific information in the excerpts about their positions on the proposals in this docket.

Summary:
- For denial of PGE wildfire mitigation cost deferrals (2019–2021): PUC Staff, AWEC, PGE (did not oppose), CUB (no position stated).
- Against denial: No explicit opposition is documented in the provided excerpts.
- Other listed stakeholders: No clear stance provided in excerpts.

The docket discusses several financial and timeline risks and concerns related to Portland General Electric's (PGE) applications for deferral of wildfire risk mitigation costs:

Financial Risks and Concerns:
- The Oregon Public Utility Commission (OPUC) considers whether the financial impact of the deferred costs is substantial or material enough to justify deferral. For the deferral periods at issue (2019–2021), the expenses incurred ($2.397 million, $1.939 million, and $5.316 million) resulted in financial impacts of 9.7, 7.7, and 19.6 basis points on PGE's return on equity (ROE), which are well within the range of normal business risk and not considered substantial or material by commission standards. Previous denials for deferral have occurred for impacts of 18–86 basis points and 36 basis points, which were found not substantial enough 1.
- The commission distinguishes between "stochastic" risks (predictable, part of normal operations) and "scenario" risks (unpredictable, not modeled). Wildfire mitigation costs are classified as stochastic risks, and thus generally not appropriate for deferral unless the financial impact is substantial. The commission found PGE's wildfire mitigation costs did not meet this threshold 1, 1.
- Incremental wildfire mitigation costs after May 2022 are recovered through mechanisms established in PGE’s general rate case and under new legislation, reducing financial uncertainty going forward 1.

Timeline Risks and Concerns:
- The deferral applications cover costs from May 31, 2019 to December 31, 2021, with subsequent years' costs addressed under new regulatory frameworks, including Senate Bill 762 and the establishment of Schedule 151 for wildfire mitigation cost recovery. This shift means earlier costs are scrutinized under older standards, while future costs have a more predictable, contemporaneous recovery mechanism 2.
- There is a risk that actual costs may differ from projections, especially in prospective deferral years, leading to possible under- or over-recovery. Staff recommends approval of some deferrals even when projected incremental costs are zero, to capture any difference between actual and projected expenses 3, 4.
- Delays in commission action on certain deferral applications can create uncertainty about the timing and method of cost recovery, especially for costs incurred before the implementation of Schedule 151 or SB 762 3.

In summary, the main concerns are that the financial impacts of wildfire mitigation costs in the relevant years are not large enough to warrant special deferral treatment, and that changes in regulatory frameworks have created transitional risks regarding how and when such costs are recovered 1, 1, 2.

Docket UM 2019 concerns Portland General Electric's (PGE) requests to defer and recover costs associated with implementing wildfire risk mitigation measures. The docket documents a multi-year series of applications by PGE to the Oregon Public Utility Commission (OPUC) for authorization and reauthorization to defer the incremental operations and maintenance (O&M) expenses related to wildfire mitigation, with the goal of matching costs and benefits for customers and minimizing frequent rate changes.

Key elements:

- Initial Application: PGE filed its first application on May 31, 2019, estimating $2.5 million in deferral, mainly for vegetation inspection and clearing around utility poles in high-risk areas. Subsequent annual applications estimated increasing O&M expenditures: $5 million for July 2020–June 2021, and $7 million for July–December 2021. Actual spending was generally below the estimates 1.
- Regulatory Changes: Following legislation (SB 762) in 2021, utilities like PGE are now required to develop and file wildfire protection plans (WMPs) and are permitted to recover reasonable wildfire mitigation costs through rates. The OPUC established a new schedule (Schedule 151) for the contemporaneous recovery of these expenses starting in 2023–2024 2.
- Recent and Prospective Deferrals: For 2024 and 2025, PGE continues to seek deferred accounting for incremental and decremental wildfire mitigation costs compared to what is included in base rates or Schedule 151. The estimated incremental O&M cost for 2024 was approximately $45.3 million; 2025 incremental costs are forecasted to be minimal 3, 4.
- Commission Decisions: The OPUC staff recommended denying PGE’s initial three deferral requests from 2019–2021, finding the financial impact insufficient to warrant deferral under commission standards. However, recovery mechanisms have since shifted, with most wildfire mitigation costs recovered through Schedule 151 and subject to regular review and prudence checks 1, 2.
- Cost Recovery: Costs associated with wildfire mitigation are now included in customer rates via Schedule 151 and are subject to ongoing adjustment, regulatory oversight, and prudence review. Deferred amounts are recorded as regulatory assets or liabilities, with amortization subject to a "three percent test" relative to PGE's gross revenues 3, 4.

In summary, UM 2019 tracks PGE’s evolving regulatory approach and OPUC’s oversight of wildfire mitigation cost deferrals, recovery, and accounting as state law and wildfire risk management expectations have changed from 2019 through at least 2025.