Electricity Rate Hikes in Oregon and Washington

Electricity Rate Hikes In Oregon And Washington

Geopolitics, inflation, and severe weather events are causing natural gas and coal prices to soar. The Russian invasion of Ukraine caused a surge in natural gas prices due to economic sanctions and severe weather in the United States has caused disruptions in natural gas extraction, curbing domestic supply. Then, price increases in natural gas are causing coal prices to soar due to increased demand. The end result is rising electricity prices across much of the United States, largely due to high fossil fuel costs. 

Unfortunately, many Oregon and Washington households saw their electricity rates go up in 2022 and will see more rate increases in 2023. However, the exact amount varies by utility company and location. In some cases, the increases will be a relatively modest few dollars a month. However, some rate hikes will be more significant, causing financial strain for some families. 

Paying a bill

Are electricity rates increasing in Oregon?

Yes, according to the Oregon Public Utilities Board, most Oregon residents will see electricity rate hikes in 2023 throughout the Willamette Valley and across the state. 

However, the exact dollar amount increase per month depends on the home’s power use, so some increases may be greater or less than estimated. Also, some power bills will increase more seasonally. For example, homes that use a lot of air conditioning may see greater increases in the summer. Likewise, households with electric heat may see larger increases during winter.

Will there be electricity rate hikes in Washington?

Like Oregon, Washington’s power rates are also rising across the Puget Sound area in Western Washington and beyond.

Are electricity prices going up across the United States or just in the Pacific Northwest?

Yes, power rates are increasing across the country. The United States Energy Information Administration estimates that rates went up 8% in 2022 compared to 2021 and will average 14.9 cents per kilowatt hour. However, electricity rates in Oregon and Washington tend to be a bit lower than national averages due to the widespread use of hydropower. 

Why are electricity rates increasing in Oregon & Washington?

A variety of factors are causing power rate hikes. A big one is an increased cost of generating electricity from natural gas and coal. Because the prices of these fossil fuel commodities have increased and have been erratic, the cost of producing electricity is also rising. Therefore, wholesale electricity rates are increasing, and utility companies are passing those price increases along to residential and commercial power consumers.

In addition, utility companies in the western United States say that wildfire planning and mitigation are boosting their expenses. An increase in wildfires across the Pacific Northwest is causing electric companies to mitigate fire risk in various ways, including public safety power shutoffs. These occur when the risk of wildfires is highest, and there is concern that sparks from power lines can ignite wildfires. Although it is essential to prevent wildfires to protect our forests, homes, safety, and health, it has a financial cost.

From January to November 2022, the annual inflation rate varied between 7% and 9.1%, and inflation is causing prices to increase for many goods and services. For example, inflation can increase labor costs for utility companies, and rising oil prices make it more expensive for them to operate fleets.

How can Oregon and Washington households reduce their electricity bills?

One of the best ways to reduce household power bills is to conserve electricity, and there are numerous ways to achieve this. When buying appliances, look for energy-saving models and conduct a home electricity audit to identify ways to reduce consumption and waste. 

If you have an electric water heater, examine how to reduce your hot water use to lower your power bill. For example, using a water-saving showerhead or a dishwasher instead of hand-washing dishes can reduce water heating bills. Also, launder clothes in cold water, fix leaking faucets, and turn off your water heater when you go on vacation.

Adjust your thermostat

In the summer, minimize the use of the air conditioner when possible through ventilation and using window treatments to prevent the sun from heating up your home. 

Switch out inefficient light bulbs with energy-saving LED bulbs and turn off electronics when not in use. If you have an additional refrigerator or freezer running in your home, turn it off when it isn’t needed. After you have reduced your monthly power consumption, consider going solar.

One of the best ways to dramatically lower your electricity bill is by installing a rooftop solar energy system on your home. This allows solar panels to provide most or all of your electricity. Then, you will only pay a monthly transmission and distribution fee and have very little supply charges on your utility bill. As electricity rates increase, so do your saving from having solar panels.

Many Smart Solar Energy customers pay just several dollars a month for power instead of a hundred or more! Contact us today to find out how much you can save on your monthly energy bills.

How does adding solar panels reduce my utility bills?

Households in Oregon and Washington can take advantage of net metering, also known as net energy billing. This means that your electric company will compensate you for the surplus power you feed to the power grid.

For example, if your solar panels produce more energy than your home needs on sunny days, Pacific Power, Portland General Electric, Seattle City Light, or your local power company will credit your account for every kWh you provide. Then, if you draw electricity from the grid at night or on cloudy days, you’ll get to use your solar energy credits. 

Is Getting Home Solar With Battery Backup A Good Idea?

Power bills typically have two major types of charges: the supply charge and the transmission & distribution fees. The former varies by how much electricity you use, while the latter applies to all utility customers. If you produce enough solar power, this can eliminate the supply charges on your power bill, which are usually the lion’s share of your electricity bill. 

It is essential to properly size your solar energy system to maximize the value of your system. At Smart Solar Energy, we are skilled at estimating solar energy production for the greatest utility savings. We use historical weather data and customize our projections to your property. For example, if there is shade on your roof, we take this into account, so you will have an accurate idea of how much you can save on your power bills before you install your PV panels. 

Solar Audit #2

Unfortunately, heavily shaded homes aren’t a good match for solar panels. During our proprietary solar audit, we will let you know if your roof is well-suited for a solar system. 

How will electricity rate hikes impact customers?

Many families are struggling to make ends meet due to inflation and the economic climate. Unfortunately, increases in power prices can disproportionately impact low to moderate-income households because their utility bills can make up a larger percentage of their total budget. Therefore, planning accordingly and creating strategies to ensure affordable power bills is helpful.

Will electricity rates increase again in 2024?

Seattle City Light and Puget Sound Energy in Washington have already proposed rate hikes for 2024. Although it isn’t certain that there will be electricity rate increases from other utility companies throughout Oregon and Washington, various factors point toward higher costs. 

The cost of fossil fuels has been high and unstable lately, so it is more expensive to generate electricity. Also, wildfire mitigation efforts are incurring costs for utility companies, boosting their operating expenses. Inflation is driving up various costs for companies, causing them to pass these cost increases on to customers.

Heat waves have also been increasing peak power demand, which can be costly for utilities. When power demand is highest, utility companies need to use more expensive means to generate electricity to prevent power outages, driving up costs.

How much utility rates will increase in 2024 is difficult to predict and depends on a variety of factors, such as the cost of natural gas and coal, inflation, and if there is a high wildfire risk. Although it is likely rates will continue to increase, it is difficult to know for sure.

One of the best ways for homeowners to reduce the impact of future rate hikes is to install solar PV panels. As power rates go up, so do your solar savings! In fact, renewable energy is often less expensive than even the cheapest new fossil fuel option, so many utility companies are using more renewable power to lower costs.

Add Your Heading Text How do I read my electric bill?

Many Oregon and Washington households find power bills challenging to read. Because they vary between utility companies, there is no uniform power bill, so we will provide some general guidance.

Electricity is measured in kilowatt-hours (kWh), which is equal to 1,000 watt-hours. An appliance that consumes 1,000 watts of power for one house will consume 1 kWh. A 100-watt light bulb consumes 1 kWh over 10 hours. The average home consumes 886 kWh of electricity a month.

Power bills often have the following components:

  • Your previous balance
  • Current balance
  • Taxes
  • Demand or time-of-use charges (varies by the utility company)
  • Monthly service charges are known as transmission and distribution fees (a flat charge for service)
  • Electricity consumption (measured in kWh and varies based on household use)
  • Supply charges based on your electricity use
  • Solar energy credits (for people with a solar panel system)

If you install solar panels and live in an area with net metering, your solar energy credits will offset or even eliminate your supply charges.

What is the energy mix in Oregon?

Electricity is generated from a variety of sources,  and this varies by utility company and location.

Utility Grid

In Oregon in 2020:

  • 38.9% from hydroelectric damns
  • 25.6% from coal
  • 21.5% from natural gas
  • 7% from wind energy
  • 3.5% from nuclear 
  • 1.7% from solar power

Unfortunately, Oregon produces nearly half of its power from coal and natural gas. In addition to creating greenhouse gasses that contribute to climate change, they are vulnerable to unstable prices due to political, environmental, and economic factors.

However, the use of solar and wind energy is increasing in Oregon, which will help reduce carbon emissions and stabilize electricity costs. Solar power has now become one of the lowest-cost sources of new power in the United States. The Inflation Reduction Act extended and expanded the federal tax benefits for installing renewable energy systems. Also, many Oregon and Washington residents are eligible for state solar incentives.

What is the energy mix in Washington?

Despite its proximity to Oregon, the electricity mix in Washington is somewhat different than in Oregon. Also, the power mix varies by utility company or PUD, so it isn’t uniform throughout the state.

Bonneville Dam

In Washington in 2020:

  • 54.8% from hydroelectric dams
  • 12.9% from natural gas
  • 11.3% unspecified
  • 10.2% from coal
  • 4.3% from nuclear energy
  • 5.4% from wind power
  • 0.3% from solar energy

As the world transitions to cleaner sources of power, the use of wind and solar power are increasing. Many Oregon and Washington homeowners are dramatically reducing their power bills by switching to solar energy.

Rising natural gas and coal prices, driven by geopolitical events, inflation, and severe weather, have led to increased electricity costs in the United States, particularly affecting Oregon and Washington. The Russian invasion of Ukraine and disruptions in natural gas extraction due to severe weather have caused a surge in natural gas prices, subsequently increasing coal prices. This, coupled with inflation and wildfire mitigation efforts, has prompted utility companies to pass on higher costs to consumers. In 2023, Oregon residents are facing electricity rate hikes from various utility companies, such as Portland General Electric (7.8% increase) and Pacific Power (12.2% increase). Similarly, Washington’s power rates are also rising, with Seattle City Light, Tacoma Public Utilities, Avista Utilities, and Puget Sound Energy announcing increases. The broader U.S. is experiencing electricity rate hikes, attributed to factors like increased costs of fossil fuel-based electricity generation and inflation.

Want to learn how much you can save on your monthly utility bills? 

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