OJTA is heading into Phase 2 of implementing the FAIR Energy Act!
Phase 1 of Multi-Year Ratemaking Has Wrapped Up!
During Oregon’s 2025 long Session, one of OJTA’s biggest successes was passing HB 3179 (the FAIR Energy Act) along with our partners Verde, Citizen’s Utility Board, Multnomah County, and Community Energy Project. HB 3129 was a response to the dire affordability crisis that all Oregonians face - with increases in utility bills up by 50% in four years (2021-2025). Disconnections continue to be on the rise, with record numbers of low-income families losing utility service each year because they can not afford it.
The FAIR Energy Act was signed by Governor Tina Kotek in June with affordability in mind- to rein in back-to-back energy bill rate hikes, and prohibit winter rate increases. And for the last year, OJTA and its partners have been part of an intensive and fast-moving rulemaking process in front of the Public Utility Commission (PUC) to implement the key portions of the FAIR Energy Act.
One of the key aspects of the FAIR Energy Act, was that it directed the PUC to develop multi-year plans for utilities as opposed to allowing them to file for yearly rate increases as per their normal practice, and limit the number of utilities that may request a rate increase in any given year– giving utility customers a much needed reprieve from back to back rate increases.
Order 26-242 was adopted on July 13, 2026!
Thanks to advocacy from OJTA and our partners, the first phase of the FAIR Energy Act’s implementation on multi-year plans is now complete! It was a long process of back and forth negotiating. Yet, we gained some key successes– despite utility pushback in wanting more flexibility, shorter timelines between rate cases, shorter multi-year plans, and less rules for themselves.
For one, the PUC ordered utilities to create five-year spending plans and to stick to a budget, and meet community-supportive metrics such as reducing disconnections and increasing community solar projects and microgrids.
Such a decision allows for more intentional planning from for-profit utilities, spending discipline, and more predictability in rates for consumers- over the course of five years. It also helps with administrative efficiency- effectively prohibiting utilities from filing for a rate increase every year, and instead, spreading these increases out.
Another key impact of Order 26-242 is that utilities will have to exercise budget discipline. Specifically, the multi-year plans that utilities develop will have to abide by an index-based revenue cap. This means that a utility’s maximum allowed total revenue is adjusted for things like inflation- as opposed to a utility’s own projections and forecasts. As such, this may strengthen incentives for cost management, operational efficiency, and longer-term planning.
SB 688 Implementation:
Lastly, SB 688 (Performance Based Ratemaking), which also passed during the 2025 long session, was implemented as part of the FAIR Energy Act docket. SB 688 required a new framework for utilities to consider community benefits related to affordability and emissions reductions as part of their ratemaking process.
Order 26-242 requires the use of targeted performance mechanisms that consider customer reliability, safety, and customer service. It also goes further to require performance on reducing disconnections, and increasing things like community solar projects.
So then, what’s next for the FAIR Energy Act?
The first phase of the FAIR Energy Act rulemaking did not answer all of the questions regulators and policy makers had. As of August 11th, Phase 2 has kicked off. That rulemaking will go until February 2027, and will evaluate things like whether gas and electric utilities should be treated differently whether these differences warrant tailored approaches, and other things such as procedural requirements (i.e. filing expectations, timelines) governing the updates of multi-year plans.
Stay tuned for more updates as we head into phase 2!
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