August 18, 2014

<Name>

<Title>

<Address>

<City, ST Zip>

RE: Pacific Power’s Request to Increase Your Rates for the 2015 Energy Cost Adjustment Clause (ECAC) A.14-08-002 and Pacific Power’s Request to Increase Your Rates for Greenhouse Gas Allowance Costs and Revenues for 2015 A.14-08-003

Dear <Name>,

Pacific Power’s Energy Cost Adjustment Clause

On August 1, 2014, Pacific Power filed an application with the California Public Utilities Commission (CPUC) requesting a revenue increase of approximately $5 million or 4.1 percent, effective January 1, 2015. Pacific Power is requesting this increase in a proceeding known as the Energy Cost Adjustment Clause (ECAC).

The ECAC allows Pacific Power the opportunity to recover its costs to provide electricity to customers. Those costs include fuel expenses, wholesale purchase power expenses and energy transmission expenses. Pacific Power compares actual and forecast power costs to the actual amount of revenue collected from customers to cover those costs.

This year Pacific Power has filed a request to increase rates because its power costs are more than the amount of revenue collected in current rates to cover those costs. If this request is approved by the CPUC, the following estimated average impacts per class of customer would take effect January 1, 2015:

Customer Class / Proposed Average Percentage Increase / Proposed Dollar Increase
Residential / 3.9 percent / $2,400,000
Commercial & Industrial / 4.5 percent / $2,015,000
Irrigation / 4.2 percent / $576,000
Street Lighting / 2.6 percent / $23,000
Overall / 4.1 percent / $5,014,000

If the CPUC approves Pacific Power’s proposal, then residential customers using 900 kilowatt-hours per month will see an increase of approximately $5.45 or 3.9% on their monthly bill.

Pacific Power’s Greenhouse Gas Allowance Costs and Revenues

On August 1, 2014, Pacific Power filed an application with the California Public Utilities Commission (CPUC) requesting an increase of 0.8 percent, effective January 1, 2015, to cover the cost for purchasing greenhouse gas (GHG) allowances. GHG allowance costs will be recovered from all customers. Customers will see a kilowatt-hour based charge on their monthly bill labeled Carbon Pollution Permit Cost. The estimated impact of the proposed change in the surcharge is provided by customer class in the following table:

Customer Class / Proposed Average Percentage Increase
Residential / 0.8 percent
Commercial & Industrial / 0.8 percent
Irrigation / 0.8 percent
Street Lighting / 0.8 percent
Overall / 0.8 percent

The application also requested a change in the California Climate Credit associated with the return to customers of revenue from the sale of GHG allowances. As described in more detail below, the California Climate Credit is from the state of California’s program to fight climate change and contribute to a healthy environment. GHG allowance revenue, less program administrative and outreach costs, will be returned to eligible customers. Eligible customers and the level of return to each customer type are determined by the legislature and the CPUC. Eligible customer types are:

·  Emissions-Intensive and Trade-Exposed customers as defined by the California Air Resources Board (CARB) regulations and identified by CARB. The credit to these customers will be paid annually.

·  Small Business customers under 20 kilowatts. Pacific Power customers served under general service Schedule A-25 and customers under 20 kilowatts served under irrigation Schedule PA-20 will be considered Small Business. Small Business customers will receive a monthly bill credit. The credit will be based on kilowatt-hour usage.

·  Residential customer households will receive a fixed bill credit twice a year, in April and October. The amount will vary from year to year. The 2015 residential semi-annual credit requested in the application is $140.31.

About California’s Program to Reduce GHG Emissions

In 2006, the California Legislature passed Assembly Bill (AB) 32, the Global Warming Solutions Act, which required California to develop regulations that will reduce GHG emissions to 1990 levels by 2020. The Cap and Trade program, administered by CARB, is one element of achieving this goal. CARB encourages the reduction of GHG emissions by placing a cap on the amount of GHG emissions a facility can emit. This is regulated through the implementation of GHG emissions allowances, or permits. Under California’s GHG reduction program, starting in 2013, CARB allocated GHG emissions allowances to Pacific Power and other California electric utilities. Pacific Power is required to sell all of its allocated GHG emissions allowances at auction and return the revenue from the sale to its eligible customers, less some revenue to cover administrative and outreach costs. Pacific Power does not profit from the sale of these GHG emissions allowances. Pacific Power and other California utilities must also buy a sufficient number of GHG emissions allowances to cover their annual compliance obligation under the program. As explained previously, the costs for buying GHG emissions allowances is collected from all customers.

How to Find Out More About These Applications

A copy of both of these applications and related information may be reviewed on Pacific Power’s website at pacificpower.net/regulation, at the CPUC, or at the following Pacific Power offices:

Pacific Power Pacific Power

300 S. Main 1054 Northcrest Drive

Yreka, CA 96097 Crescent City, CA 95531

You may also contact Pacific Power by phone toll-free at 1-888-221-7070.

Para hablar con un representante en español, marque el número gratuito 1-888-225-2611.

Evidentiary Hearings

The CPUC may schedule evidentiary hearings to permit parties to the proceeding to present evidence through testimony and exhibits, and to provide opportunities for parties to question witnesses to clarify or challenge the testimony.

A CPUC Administrative Law Judge (Judge) presides over the evidentiary hearings. The hearings are open to the public, but only those who are formal parties to the proceeding are permitted to participate in these hearings.

The Office of Ratepayer Advocates, which consists of engineers, accountants, economists and attorneys, will independently evaluate the proposal and participate in the proceeding. Once hearings are completed, the Judge will consider all of the evidence and issue a proposed decision. When the CPUC acts on this application, it may adopt all or part of Pacific Power’s request, amend or modify it, or deny the application. The CPUC’s final decision may be different from Pacific Power’s application.

Protesting the Applications

Formal protests to the applications must be filed with the CPUC. For assistance in filing a protest with the CPUC, or to participate in this proceeding, please contact the Public Advisor’s Office at the address or email below.

Public Comment

As a Pacific Power customer, if you would like to submit informal comments, you may do so by contacting the Public Advisor’s Office. If you are writing a letter to the Public Advisor’s Office, please include the number of the application to which you are referring. All comments will be tallied, and available for the assigned Judge, Commissioners, and CPUC staff to review. Informal comments also become part of the formal correspondence file.

To contact the Public Advisor’s Office, please call or write:

The Public Advisor’s Office 415-703-2074

California Public Utilities Commission Toll free 1-866-849-8390

505 Van Ness Avenue TTY 415-703-5282

San Francisco, CA 94102 TTY toll free 1-866-836-7825

Or by email to:

To help manage your energy costs, Pacific Power offers income-eligible customers a discount on monthly electric bills as well as free weatherization services. Learn more and apply at pacificpower.net/energyassistance.

For tips to help you save energy and money every day, visit bewattsmart.com.

Sincerely,

Monte Mendenhall

Regional Community Manager