Oregon GOP reps oppose a proposed 18 percent increase to energy suppliers

SALEM – (News release from Rep. Bobby Levy) In response to the Oregon Department of Energy’s (ODOE) proposed 18% increase in the Energy Supplier Assessment Tax (ESA), House Republicans issued a letter, led by Representative Bobby Levy (R-Echo), expressing their opposition to the increase. As the state moves into the next budget cycle, government agencies have been instructed to limit any increase in budget allocation to 1%. Further, at a July 29 meeting, ODOE presented a list of “potential reduction options” without specifying estimated savings or indicating any planned action on those items to reduce the burden on ratepayers.

“Limiting government spending is a good thing. Passing on the costs to consumers is not. This plan will lead to higher costs for consumers at a time when they are already struggling to pay bills. ODOE could do more to mitigate and reduce the cost burden, and the legislature must thoroughly examine all options as we prepare the next budget,” said Rep. Levy.

Signatories include Rep. Bobby Levy (R-Echo), Leader Jeff Helfrich (R-Hood River), Rep. Emily McIntire (R-Eagle Point), Rep. James Hieb (R-Canby), Rep. Court Boice (R-Coos Bay), Rep. Werner Reschke (R-Klamath Falls), Rep. Boomer Wright (R-Reedsport), Rep. Anna Scharf (R-Amity), Rep. Rick Lewis (R-Silverton), Rep. Jami Cate (R-Lebanon), Rep. Vikki Breese-Iverson (R-Prineville), Rep. Dwayne Yunker (R-Grants Pass), Rep. Mark Owens (R-Crane), Rep. Christine Goodwin (R-Canyonville), and Rep. Tracy Cramer (R-Gervais).

 You can read the letter here.

Response from Oregon Department of Energy Communications Director Jennifer Kalez:

I’d be happy to provide additional context about the Agency Request Budget’s proposed increase. At this time, it is primarily driven by a couple of factors:

1. An increase in personal services costs as cost-of-living adjustments take effect, as well as an increase in government service charges.
2. In the last biennium, ODOE was able to keep the Energy Supplier Assessment increase low because we had General Fund positions for our incentive programs that contribute to ODOE’s “indirect rate” for things like those government service charges. When there are fewer General Fund or other non-ESA positions in our budget, such as in this Agency Request Budget, more of the administrative burden falls on the ESA.

Regarding Governor Kotek’s direction to limit Agency Request Budgets to no more than 1% of the Current Service Level, our ARB does follow that direction. ODOE’s ARB is limited to a 1% increase above CSL for both General Fund and ESA; most of the projected increase in the ESA over the last biennium happens at Current Service Level where increases to personal services, government service charges, etc. are factored in.

Another important note is that we expect our budget to change as Oregon receives and incorporates additional federal funding, such as the Climate Pollution Reduction Grant, Solar for All, and Home Energy Rebates. We are not able to include that in our ARB just yet since the funds aren’t here. But once they are incorporated, they will support agency overhead and reduce the amount of overhead needed from ESA dollars. If the Legislature includes additional General Fund positions in our budget, that would also have the effect of reducing ESA. We shared this information in our public budget meeting to let the public and ESA payers know that we could see a further reduction in ESA from our requested budget.

For more context on the ESA itself, it is important to note that it’s not a tax. It is an assessment charged to fuel providers and utilities that produce energy in Oregon. It’s apportioned out to ratepayers based on their reported revenues, and is capped at 0.375% of revenues. For 2023, ODOE assessed $7.91 million on $7.45 billion of gross operating revenues – this represented an assessment rate of 0.106%, well below that maximum 0.375% allowed. All Oregonians pay for the ESA when they pay for energy. Based on Oregon’s population, the 2023 ESA equaled about $1.87 per Oregonian for the year. ODOE estimates that most utility customers’ bills would be about 4 to 5 cents per month higher if the ARB were to pass as-is. We recognize that energy rates are increasing and that every penny counts for many Oregonians. We are committed to doing what we can to limit the increase in ESA – and we look forward to collaborating with state leaders as the budget process continues over the next year.

Photo: Rep. Bobby Levy

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