20111028PAC to CAPAI Attach 24.pdf

Final Report

Low-Income Arrearage Study

Prepared for:
PacifiCorp

March 20, 2007

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Prepared by:
M. Sami Khawaja, Ph.D.
Kevin Monte de Ramos
Anne West
Doug Bruchs

Quantec, LLC
In association with
Roger Colton

Quantec Offices
720 SW Washington, Suite 400
Portland, OR 97205
[phone]; [phone] fax
www.quantecllc.com
28 E. Main St., Suite A
Reedsburg, WI 53959
[phone]; [phone] fax
1722 14th St., Suite 210
Boulder, CO 80302
[phone]; [phone] fax
Printed on recycled paperPrinted on recycled paper
3445 Grant St.
Eugene, OR 97405
[phone]; [phone] fax
20022 Cove Circle
Huntington Beach, CA 92646
[phone]

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Table of Contents
Executive Summary ............................................................................................ 1
Findings................................................................................................................................1
Level of Arrears...................................................................................................................1
Time Value Of Money.........................................................................................................3
Bill Coverage.......................................................................................................................3
Equal Pay And Time Payment Plans ...................................................................................4
Credit and Collection Expense.............................................................................................4
Conclusions..........................................................................................................................4
Recommended Strategies.....................................................................................................5
Identification of Low-Income Households..........................................................................5
Maximize Use of Energy Assistance...................................................................................6
Maximize Use of New Trends.............................................................................................6
Rate Discounts.....................................................................................................................6
Longer Term Solutions........................................................................................................7
1. Introduction ............................................................................................... 9
Project Objectives................................................................................................................9
Project Approach .................................................................................................................9
2. Discussion of Methods........................................................................... 11
Research Methodology ......................................................................................................11
Review Of Industry Credit Management Strategies..........................................................11
An Analysis Of PacifiCorp's Credit Management Practices..............................................11
Detailed Analysis of PacifiCorp's Low-Income Households ............................................11
3. Results ..................................................................................................... 19
A Profile Of The Low-Income Households.......................................................................19
Bill Coverage.....................................................................................................................20
Energy Cost Coverage .......................................................................................................23
Equal Pay And Time Payment Plans .................................................................................23
Total Annual Arrears .........................................................................................................25
Arrears By State.................................................................................................................27
Cost of Carrying Arrears....................................................................................................29
Cost of Capital ...................................................................................................................29
Credit and Collection Activities.........................................................................................29
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Collection Activity Costs...................................................................................................31
4. PacifiCorp's Low-Income Programs...................................................... 35
State Of California Initiatives............................................................................................35
State Of Idaho Initiatives ...................................................................................................36
State Of Oregon Initiatives ................................................................................................36
State Of Utah Initiatives.....................................................................................................37
State Of Washington Initiatives.........................................................................................38
State Of Wyoming Initiatives ............................................................................................39
5. Summary Of Industry Best Practices.................................................... 41
Quick Highlights Of Successful Programs ........................................................................43
Appendix A: Factors Influencing Arrears................................................... 47
Methodology......................................................................................................................47
Regression (Causal) Model of Arrears ..............................................................................47
Appendix B: PacifiCorp’s Residential Customer Class............................ 49
Credit and Collection Activities.........................................................................................52
Regulatory Protections.......................................................................................................53
FERC Form 1 Filings.........................................................................................................54
Aging of Accounts Receivables.........................................................................................56
Disconnect Orders and Cuts in Service .............................................................................59
Write-Offs..........................................................................................................................60
Collections On Payment Plans...........................................................................................62
Appendix C: Residential Service Fees ....................................................... 65
Appendix D: Low Income Arrearage Study Working Group..................... 66
Appendix E: Working Group Comments on Draft Report ........................ 67

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Executive Summary
PacifiCorp contracted with Quantec, LLC to conduct a study of the low-income population’s
arrearage problem within PacifiCorp’s six-state service territory.
The primary objectives established by PacifiCorp were as follows:
1. Assess the level of low-income arrearages
2. Estimate the impacts of the arrearages on PacifiCorp and its ratepayers
3. Recommend cost-effective strategies to reduce low-income arrearages, and
mitigate operational costs
Findings
To undertake the study, PacifiCorp provided Quantec with data for 47,734 households known to
have either received energy assistance funds, had their home weatherized through a low-income
program, or have participated in a low-income rate discount program between 2002 and 2006. From
this group, Quantec identified 13,753 households as having an arrearage in May of 2006. Since the
study focused on low-income households with arrears, not low-income households in general, all
results presented in the report – unless otherwise noted – were generated using data for the sample of
13,753 households.
Level of Arrears
• The average arrearage accumulation over the entire analysis period (2002 to 2006) of low-
income households exhibiting an arrearage was determined to be $238 as of December 31st,
2006. The total arrearage generated by these households in 2006 is approximately $660,000,
which represents only 2 percent of the total amount invoiced. At the end of the five year
study period, these customers have accumulated an estimated $3.3 million in total arrears.
• Synthesizing the observed rate of low-income households exhibiting an arrearage from the
analysis sample, as well as Census and PacifiCorp’s Energy Survey Decision data, the total
number of PacifiCorp’s low-income households with electric space or water heat and a
potential arrearage in 2006 was estimated as 18,994. This number is an estimate of all low-
income households meeting this criteria, not just those identified by PacifiCorp, for potential
inclusion in the study. Applying the findings of the analysis above to this estimation of total
low-income households, the total estimated arrearage level accumulated is $4.5 million over
the five-year analysis period, or an average of $900,000 annually.
• While the numbers provided above refer to the average total accumulation of arrearages over
the entire study period (2002 to 2006), the average annual accumulation of arrearages
(January to December) was also determined for 2003, 2004, 2005, and 2006. It should be
noted that 2002 was not calculated in order to allow arrearages to approximate their natural
level over the course of a full year after being artificially set at 0 at the outset of the study
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period. Additional explanation is offered in the body of the report. As shown in Figure 1 the
average annual accumulation of arrearages has declined. Again, the numbers provided in the
figure below represent the average annual accumulation of arrears over each individual
calendar year. For example, when payment histories of customers with arrears in 2006 were
analyzed, it was determined that they accumulated an average of $48 over the 12-month
period.
Figure 1. Average Annual Accumulation of Arrears
$48
$57$56
$64
2003 2004 2005 2006

• Oregon is the largest contributor to total arrears. This is primarily driven by the size of the
population, as well as by the prevalence of electric load (48,000 households out of 93,000
service-territory-wide according to PacifiCorp’s Energy Decision Survey data).
• The average annual invoice in 2006 was approximately $900 with a high of $1,063 in Oregon
and a low of $592 in Utah. This wide range is due to electricity usage. A much smaller
portion of Utah customers have electric heat and or water heat.
• It is worth noting that part of the arrears problem at PacifiCorp (as well as other utilities) is
related to timing of disbursement of energy assistance funds from the community action
agencies to PacifiCorp. This process, at time, takes several months to complete. An agency
will commit assistance funds to an account, but if the funding is not received for two months,
the account detail could indicate that there are arrears during the period.
• State- and utility-sponsored low-income funding levels in some of the states under study
have been increasing. For example, there have been significant increases in funding levels in
Wyoming and Oregon. Furthermore, PacifiCorp has committed state-specific total
contribution levels for low-income bill assistance annually for five years starting July 1,
2006. These contributions may be comprised of donations from employees, customers, the
Company or other sources. The amounts vary from $30,000 in California to $400,000 in
Oregon and Utah, each. The additional funding targeting low-income households will help to
decrease arrears.
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Time Value Of Money
• At the current interest rate of 5.3 percent and the cumulative arrears balance of
approximately $4.5 million, the carrying cost for PacifiCorp was estimated at nearly
$250,000 in 2006.
Bill Coverage
• As shown in Table 1 low-income households with observed arrears were found to have,
across PacifiCorp’s service territory, covered 75 percent of their annual electric bills in 2006.
In 2006, coverage varied from a low of 47 percent in Wyoming to a high of 95 percent in
California. As evident, states with established rate discount programs, not surprisingly,
exhibited higher customer coverage levels.
Table 1. Customer Bill Coverage
2003 2004 2005 2006 Overall
CA* 93% 90% 91% 95% 92%
ID 66% 67% 64% 64% 65%
OR 72% 69% 65% 63% 66%
UT* 79% 77% 77% 75% 80%
WA* 76% 76% 70% 73% 75%
WY 60% 55% 52% 47% 57%
Overall 79% 76% 74% 75% 75%
*Indicates states with an established rate discount program
• When bill assistance payments are included, overall total bill coverage was estimated at 97
percent (see Table 2).
Table 2. Total Bill Coverage
2003 2004 2005 2006 Overall
CA 101% 96% 98% 101% 99%
ID 94% 92% 97% 96% 94%
OR 95% 94% 99% 95% 96%
UT 97% 94% 96% 98% 96%
WA 94% 95% 96% 100% 97%
WY 103% 87% 93% 89% 92%
Overall 97% 94% 97% 98% 97%

• Total cost of providing electricity is composed of energy and non-energy components. When
a household does not pay its entire bill, but more than covers the energy cost, the household
is contributing to coverage of non-energy costs. In other words, if this household is not on the
system, others have to pick up the portion of the non-energy cost, through higher rates, that
this household would no longer be covering. Total energy cost coverage by low-income
households was estimated at 112 percent.
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Equal Pay And Time Payment Plans
• Fifty-one percent of the low-income households participated in some form of a payment plan
during the analysis period. This includes time payment plans designed to help households
pay down arrearages, as well as equal payment plans.
Credit and Collection Expense
• Collection notices add to the cost of collection but make up the smallest portion.
Reminder notices and past due notices are added to existing bills, and are not
additional mailings. Final notices, mailed separately, cost almost $28,000 in
2006.
• Final notices delivered in the field cost the company an additional $200,000 in
2006.
• Fifty percent of the households in our study group who were scheduled for a
termination of service made a payment arrangement to avoid termination.
• PacifiCorp charges customers fees for disconnect and reconnect activities. Over
the four-year period, customers were charged a total of approximately $343,000
for such activities, including almost $118,000 in 2006. It is unknown how many
such fees were paid by customers since payments for specific fees can not be
differentiated from payments on subsequent monthly bills.
• We estimate that in 2006, collection activities aimed at soliciting additional
payments from customers exhibiting an arrearage, in addition to the cost of
disconnection and reconnection services, cost PacifiCorp approximately
$480,000. Assuming customers paid the fees associated with such activities in
full, the cost to PacifiCorp drops to about $360,000.
Conclusions
We applaud PacifiCorp for looking into the arrearage problem among low-income households, and
for their interest in finding potential cures. The findings in our study are not surprising. We do not
find the levels of arrears relative to PacifiCorp’s size to be significant. Nevertheless, the problem
does exist. On an annual basis, we estimate $900,000 in accumulated arrears, $50,000 in interest
expense, and about $360,000 in collection costs. This reflects the total potential size of the problem,
not necessarily the total either caused by company billings of collections or under the control of
PacifiCorp.
If strategies can be found to cost-effectively reduce the level of the problem, they should be pursued.
Not only would that be the compassionate thing to do for PacifiCorp’s low-income households, but
the strategies will also serve the bottom line.
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PacifiCorp already has many programs in place to help low-income households. These programs are
intended primarily to help households reduce their energy use. Most also end up helping households
keep up with their payments. In fact, as mentioned above, in 2006 PacifiCorp low-income
households are remarkably covering nearly 98 percent of their total bill.
Of the current offerings, we especially like the rate discount program in Washington, as it is tailored
to households based on their ability to pay. Rate discounts also exist in California and Utah. In both
cases, the discounts are flat across all income levels. These three payment programs across the
various states appear to be producing desired results.
Recommended Strategies
Although specific cost-effectiveness analyses were not conducted to evaluate each potential strategy,
cost-effectiveness was considered when reviewing possible arrearage abatement strategies and
subsequently generating a list of recommended strategies for PacifiCorp. Traditionally, programs
designed to help low-income clients with their utility bills have targeted the following areas:
• Energy Use—This includes weatherization, appliance efficiency, lighting efficiency, and
energy education.
• Cost of Energy—This primarily involves rate discounts.
• Emergency Energy Assistance—Funds from contributing customers, employees and
PacifiCorp.
In addition, other utility programs have sought to help low-income households through better
budgeting (e.g., equal payment programs) or by offering clients a fresh start by erasing previous
arrearage levels (usually based on ability to achieve certain program-established payment goals).
Finally, some utilities have tackled the problem through changes in operations.
One distinguishing feature of the various programs implemented by utilities is whether the arrearage
levels are used as a screening criterion. When households with high arrears are targeted, the
reduction in arrears is significantly better than targeting the general population of low-income
households.
Identification of Low-Income Households
The identification, design, implementation, and evaluation of PacifiCorp’s responses depends upon
the regular periodic generation and analysis of data on low-income households. To accomplish this,
PacifiCorp needs to create and implement processes that allow for the identification of confirmed
low-income households, the collection of regular data on the billing and payment patterns of those
households, the analysis of the data, and the translation of data into company policies and programs.
It should be noted that this process is complicated by the fact that PacifiCorp does not currently
request income information from its customers so as to not infringe on customer privacy.
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The National Association of Regulatory Utility Commissioners, (NARUC) issued a resolution in
February 2006 urging “. . . each individual State to gather utility billing and arrearage data from all
electric and gas utilities within its State commission jurisdiction.” The intent of this ruling is to
“support State and federal low-income assistance programs, such as LIHEAP; and to evaluate the
impact on customer affordability of essential electric and gas service.”
Maximize Use of Energy Assistance
PacifiCorp may want to maximize the external energy assistance available to its individual
confirmed low-income households. This process can be enhanced by having better tracking of low-
income households.
PacifiCorp unduly restricts its view of public energy assistance to the federal LIHEAP program.
Total energy-assistance dollars available through the Excess Shelter Deduction of the federal Food
Stamp program, as well as through utility allowances provided to tenants of public and assisted
housing, may well be greater than through LIHEAP. PacifiCorp should help its arrearage-confirmed
low-income households pursue that assistance, and seek to capture that assistance to help retire low-
income arrears. “The fiscal year 2001 agriculture appropriations bill included two significant
changes to the Food Stamp Program. The legislation increased the excess shelter cap to $340 in
fiscal year 2001 and then indexed the cap to changes in the Consumer Price Index for All Consumers
each year beginning in fiscal year 2002. To date, only two States have not taken advantage of this
option” (http://www.fns.usda.gov/fsp/rules/Legislation/history.htm).
The Company should make the various agencies aware of assistance resources available to their
clients. Program information should be relayed to households by the agencies, not PacifiCorp.
Maximize Use of New Trends
Prepaid meters are another option to consider. Many, for good reasons, are opposed to this solution
for low-income clients. We believe that its use, on a voluntary basis, can benefit the households as
well as the utility. Prepaid meters establish a direct link between price and consumption and, thus, it
encourages conservation. Also, with prepaid metering, households do not need significant amounts
of capital to get reconnected as they otherwise would under more traditional metering arrangements.
Under prepaid metering, if you run out of electricity, you just need few dollars to buy some more. If
you get disconnected with regular meters, you need to come up with several hundred dollars to get
reconnected.
Rate Discounts
PacifiCorp serves a low-income population, some portion of which will have inadequate resources to
pay its home energy bills in a full, regular, timely, and automatic basis. As a result of the absolute
mismatch of household resources and home energy bills, the company will incur unnecessary and
unproductive expenses, which ultimately also prove to be ineffective in accomplishing its purpose of
preventing or resolving arrearages.
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We understand that PacifiCorp is operating within a constrained environment. In some states rate
discounts already are legislated or commission ordered (e.g., California, Washington, and Utah). In
others (Idaho, Wyoming, and Oregon) rate discounts are not allowed without appropriate legislation.
We believe PacifiCorp should encourage passing of appropriate legislation to allow the use of rate
discounts (especially in Idaho and Wyoming). We also believe that Oregon Senate Bill 1149 should
be modified to use some of the funding for a rate discount program. We believe this is the best and
most efficient vehicle for improving affordability of electricity. The cost of intake and delivery is
extremely low compared to all other low-income assistance options.
Longer Term Solutions
Finally, PacifiCorp should take a long-term perspective in addressing the arrearages of its confirmed
low-income households. One aspect of an appropriate utility response to low-income arrearages is to
participate in larger social efforts to address the underlying issue of poverty. Such participation does
not call for PacifiCorp to be the sole participant, nor even necessarily the primary participant.
Nonetheless, PacifiCorp would benefit by emulating Entergy’s financial support of local and/or state
Individual Development Account (IDA) programs. Through the IDA asset-building approach,
PacifiCorp will not only help individual households move out of poverty and, thus, reduce the need
for programs directed toward low-income arrearages, but will also promote more stable and secure
communities that reduce the need for public and private energy assistance.
Finally, PacifiCorp should consider working with States on the LIHEAP allocation formula. During
our investigation we uncovered interesting patterns in use of energy assistance funds. For example,
Utah does not expend all their funds while Oregon funds are exhausted quickly. All interested parties
should request that the allocation formula, which has been in place for many years, be reviewed at
the federal level.
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1. Introduction
Project Objectives
On August 30, 2006 PacifiCorp contracted with Quantec, LLC to, “Provide a study [of low-income
customers with outstanding balances] and design for [a] possible implementation of an arrearage
management project for low-income customers that could be made applicable to all states that
PacifiCorp Serves.”
The primary objectives established by PacifiCorp were as follows:
1. Assess the level of low-income arrearages across PacifiCorp’s six service territories
2. Estimate the impacts of these arrears on PacifiCorp and its ratepayers
3. Recommend cost-effective strategies to reduce low-income arrears and
mitigate associated operational costs
Project Approach
To properly scope the magnitude and impact of low-income arrears on the utility, Quantec offered
PacifiCorp a five step approach to be completed over a six-month period as outlined below:
Step 1: Establish and communicate a detailed evaluation plan to PacifiCorp and
interested stakeholders
Step 2: Define and collect from PacifiCorp the following datasets: customer
demographics, customer billings, and utility collections activity
Step 3: Assess the significance of PacifiCorp's low-income arrearage problem,
investigate causative factors leading to unpaid balances, and test key
performance metrics
Step 4: Examine credit management and arrearage programs implemented by other
utilities
Step 5: Develop and recommend strategies to mitigate risks associated with
PacifiCorp's low-income clientele

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2. Discussion of Methods
Quantec worked closely with PacifiCorp to define the population to be studied, methods to be
employed, and the effort necessary to deliver valued and defensible recommendations to the
management team. We conducted two kick-off meetings at the beginning of the project. Our metrics
were presented to the advisory group for approval prior to project launch, and the advisory group
approved all metrics. Further, we agreed that the focus of the study would be low-income households
with arrears versus the low-income population in general.
Research Methodology
Review Of Industry Credit Management Strategies
Quantec pulled reference material from our library of industry publications and a searchable
repository of more than 200 client mandates. We also downloaded reports and data from online
resources and trade associations.
From this review, we developed a summary of best practices as they relate to utility credit
management strategies applied to low-income accounts. The resulting findings provide a context
within which to assess PacifiCorp's credit management practices.
An Analysis Of PacifiCorp's Credit Management Practices
Quantec requested organizational and departmental data related to the provision of electric service to
PacifiCorp’s residential customer households. PacifiCorp provided Quantec with key documents
relating to its operational efficiency, such as annual reports, FERC 1 filings, market studies,
collection workflows, summary of rate tariffs, low-income research reports, and state-level statistics
regarding collections performance.
Findings from these documents allowed us to profile the residential class, and the associated level of
collection activities. The subsequent analyses also provided comparative benchmarks, allowing us to
scope the magnitude of impacts resulting from payment practices of PacifiCorp's low-income
households. The results of this inquiry are provided in Appendix B.
Detailed Analysis of PacifiCorp's Low-Income Households
Quantec requested transaction histories for all known low-income accounts within PacifiCorp's
service territory. These were accounts that were either active at the time the data were pulled in
December 2006, or were inactive but known to have participated in a low-income assistance
program since 2002. PacifiCorp selected all accounts that met one or more of the following criteria:
1. Received low-income energy assistance grants
2. Participated in residential low-income energy-efficiency programs
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3. Participated in PacifiCorp's low-income bill discount rates (available in Utah, Washington,
and California)
Table 3 shows the number of households identified by PacifiCorp utilizing the criteria listed above
for each state (‘Selected for Analysis Sample by PacifiCorp’). Table 3 also displays the estimated
total number of PacifiCorp households living under the 150 percent Federal Poverty Guidelines as
identified in the 2000 Census for PacifiCorp’s service territory.1 To determine this number, the
percentage of total households in each county determined by the Census to be living in poverty was
applied to the total number of PacifiCorp residential accounts in that county. The resulting county
level data were then aggregated to the state level (‘Households Under 150% of FPG (Served by
PacifiCorp)’).
Next, utilizing statewide information from the PacifiCorp Energy Decisions Survey, we limited the
number of previously identified PacifiCorp low-income accounts to only those households with
electric space or water heat (‘Households with Electric Space or Water Heat’). These households are
more likely to generate significant electric utility bills and, as a result, carry arrears or request energy
assistance than households who do not have electric space or water heat. While applying this extra
step results in a more conservative estimate of the problem (some non-electric space and water
heating households do generate arrearages), it effectively prevents overestimation and limits
subsequent extrapolation of analysis results to only households likely to share similar characteristics.
In places where low-income bill discounts are available (Utah, Washington, and California), the hit
rate of low-income households is high: 82 percent for California and 29 percent for Washington.
Note that in Utah the households identified through the Lifeline rate exceeded the number of low-
income households with electric space or water heat. The reason for this is probably due to Lifeline
not having any space or water fuel requirement.
Much of the information provided in the table is expanded upon and illustrated graphically in Figure
2. As evident in the figure, several populations of various sizes were considered when conducting
this study and, therefore, several populations must be considered when interpreting the study’s
findings.

1 Although different program eligibilities vary across states, 150 percent was used as a proxy for all PacifiCorp states.
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Table 3. Proportion of Total Low-Income Households Identified For Analysis

Households
Under 150% of
FPG (Served by
PacifiCorp)
Households with
Electric Space or
Water Heat*
Selected for
Analysis
Sample by
PacifiCorp
Proportion of Total
Households with Electric
Space or Water Heat
Included in Analysis
CA** 11,072 9,428 7,713 81.8%
ID 8,874 4,881 267 5.5%
OR 72,092 48,301 9,799 20.3%
UT 80,779 11,309 25,714 227.4%
WA 17,436 13,077 3,728 28.5%
WY 17,439 5,581 513 9.2%
PacifiCorp 210,992 92,577 47,734 50.4%
*Estimated using PacifiCorp’s state-specific Energy Decisions Survey data
**The prison population (identified by PacifiCorp as 3,300) was removed and excluded from all analysis of Census
data.

As shown in both Table 3 above and the figure below, the largest group of households are those
identified as living at or below 150 percent of the Federal Poverty Guideline (n=210,992). Within
this group, slightly less than half (n=92,577) were determined using utility appliance saturation
data to possess either electric space or water heat. Concurrently, for the purposes of this study
PacifiCorp was able to identify a sample of 47,734 households (most of which are assumed, due
to their need for assistance, to have electric space or water heat) for the analysis. Further, within
this sample only a portion of the identified accounts were found to have an arrearage in 2006
(n=13,753).
For the purposes of this study, a household with an arrearage problem was defined as one
possessing a May arrear in excess of 31 days. Arrearages are in constant flux as monthly invoices
are issued, and payments, both by the customer and by assistance organizations, arrive erratically.
Therefore, May was utilized as the snapshot point to assess whether a given household had an
arrearage problem. May was selected because it is a shoulder month and it allows sufficient time
for winter assistances to be exhausted.

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Figure 2. Low-income Customer Population Categories

Selection Bias
Whenever a sample is used to estimate parameters of interest, the potential for introducing bias when
extrapolating the results is present. If the sample is random and is not different from the population
from which it was drawn, the bias is minimized. In this, as in any statistical analysis, a key question
is, how similar is the sample to the population?
Our sample of households is identified as recipients of some form of energy assistance and, thus, are
defined as low-income households. If a household has received energy assistance, participated in a
low-income energy-efficiency program, or has been placed on a low-income rate, then our sample
captured it (47,734 households; see Table 3 and Figure 2).
Little is known with regard to the identity and/or utility bill payment behaviors of the general low-
income population identified by the U.S. Census Bureau. As such, we are limited in our ability to
extrapolate our findings to the general low-income population.
In fact, we expect the low-income households identified by PacifiCorp to be different than the
general low-income population. The fact that our sample is composed of those that received
assistance of some sort makes them, by definition, different. Due to the receipt of assistance, their
arrears must be biased downward compared to those that did not receive assistance. However,
another argument can be made. Those that did not receive assistance are managing their bills, and
are not seeking assistance. Their arrears must be lower than those seeking help, making our sample
estimate of arrears biased upward.
Given that the analysis was conducted at the household arrearage problem level (13,753 households
in May 2006), the question of extrapolating the results must be carefully considered. Do these
estimates apply at the recipients of energy assistance level (47,734 households)? How about to those
low-income households known to have electric water or space heat but who did not necessarily
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receive energy assistance (92,577 households)? Or, finally, do they apply to the overall low-income
population of 210,992 households?
The answer is that the estimates derived from a sample should be applied to a population with which
they bear the greatest resemblance. In other words, while our estimates is most accurate for the
13,753 households, each time the estimates derived from this sample are extrapolated to a higher
level population group, they become less and less applicable.
Starting at the top, our argument on the appropriate application of the derived sample estimates is as
follows:
• Of the overall low-income population of 210,992 households, only those 92,577 households
with electric space or water heat are important to this analysis, as they are the ones more likely
to have higher energy bills and therefore meaningful arrears.
• If households are accumulating significant arrears, they are likely to seek help. Of the 92,577
low-income households with electric space or water heat, 47,734, slightly more than 50
percent, received help or participated in a low income program. The remaining households did
not receive help for a variety of reasons. We believe that extrapolation to this group is
warranted. We caution though, that our estimate of this group’s arrears is uncertain.
Table 4 provides the distribution of customer with arrearages by state.
Table 4. Low-Income Households in Arrears

Customers with
May 2006
Arrears
Selected for
Analysis Sample
by PacifiCorp
Percent with
May 2006 Arrears
CA 1,720 7,713 22%
ID 40 267 15%
OR 1,546 9,799 16%
UT 9,519 25,714 37%
WA 846 3,728 23%
WY 82 513 16%
PacifiCorp 13,753 47,734 29%

Performance Metrics
We defined a series of performance metrics prior to our data analysis. Each was created and tracked
for the households included in our analysis. It is important to note that since PacifiCorp tracks only a
customer’s current arrearage, the company was unable to provide historical arrearage records (i.e., a
specific customer’s arrearage balance at the outset of the study period). Since this information was
unknown, we established an artificial arrearage baseline of zero for each customer as of January
2002. While not all the identified customers carried an arrear at the start of 2002 it is likely many
did. To account for the fact the customer’s arrearage at the start of the study was unknown and an
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artificial baseline was imposed, arrearage balances were calculated during 2002 but not analyzed in
any of the metrics listed below.
Simply put, this method creates a one year buffer for each customer (to account for the full range of
seasonality and assistance payments) in which their arrearage level can return to approximately its
natural level. After this calibration, a comparison of household arrearage levels and payment
activities between years is appropriate. Again, although arrearage levels over the first year were
calculated (as to inform the analysis of the following years), none of the metrics below were
generated using 2002 data. This problem and approach are not uncommon when assessing utility
arrearages.
The specific metrics generated for this report include:
Annual Arrearage Growth. The growth of arrears over a specified 12-month period. For example,
if the total cumulative arrears at the end of December 2005 is $500 and at the end of the previous
December (2004) the total cumulative arrears was $100, then the annual arrearage growth is $400.
Simply, this metric captures the change in a customer’s arrearage level over any twelve monthly
billing cycles.
Customer Bill Coverage Customer bill coverage is the ratio of the sum of payment divided by sum
of utility invoices over twelve monthly billing cycles. For example, if in annual billed amount was
$1,000 and the household paid $500, annual bill coverage would be 0.50.
Total Bill Coverage. Total bill coverage differs from the household bill coverage in that this ratio
includes energy assistance payments in addition to customer payments.
Energy Cost Coverage. Total cost of providing electricity is composed of energy and non-energy
components. When a household does not pay its entire bill, but more than covers the energy cost, the
household is contributing to the coverage of non-energy costs. In other words, if this household is
not on the system, others have to pick up the portion of the non-energy cost, through higher rates,
that this household would no longer be covering. Simply, since the burden of non-energy costs is
shared by all households, any contribution to the non-energy cost by another customer lessens the
overall burden and merits keep the customer’s account active. This ratio is represented in the
following equation:
ChargeEnergy
AssistancePaymentCustomerCoverageCostEnergy +=
The Impact of Arrears
We examined five components thought to encompass the breadth of utility impacts associated with
outstanding debt. Pulling discussions from industry literature, we summarize below the following
impacts to estimate the cost of low-income arrears on PacifiCorp.
The Cost of Carrying Arrears. Each dollar in credit sales raises the working capital requirements
of the utility. To assign the incremental carrying costs associated with low-income arrears, we
looked at account balances that have aged 31 days or more.
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To calculate the carrying costs, we applied the quarterly weighted interest rate associated with
PacifiCorp's short-term debt,2 obtaining these rates from the company's quarterly financial reports.
To calculate the carrying cost on the observed low-income arrears, we required three pieces of
information: 1) an estimate of the magnitude of low-income arrears, 2) the terms by which the utility
finances its short-term debt, and 3) the number of days the arrears is outstanding.
For our assessment, we calculated the carrying cost using the following equation, assuming the
interest expense accrued daily on the balance of low-income arrears:
ArrearsdaysAPRArrearsCostCarrying−+=])^365/1(*[
Where carrying cost equals the interest expense associated with arrears, arrears is the outstanding
balance at the time of calculation, APR/365 is the daily interest rate for the period of accrual, and
days is the number of days the arrearage was outstanding.
Collection Activity Expense. PacifiCorp invests resources towards the collection of past-due
balances. Collection efforts begin with bill notices and escalate to in-field electric service
disconnects. The exact process used to collect these unpaid balances varies by state.
To estimate the collection activity expense, we counted the number of collection activities
documented by PacifiCorp over the period of study. A cost, provided by PacifiCorp, was assigned to
each collection activity and totaled. Not all activity costs are monetized here because costs are not
known. For example, costs to negotiate payment arrangements are not included in activity costs.
PacifiCorp attempts to recover some of the collections-related costs by billing the customer directly
for services such as field visits, and reconnect fees.
The calculation is therefore as follows:
∑=
i
iCostActivityiCountActivityExpenseActivityCollection)(*)(
Where collection activity expense is the cost to collect past-due accounts, activity count(i) is the
count of activities i occurring within the study period, and activity cost(i) is the cost associated with
activity i.
Write-Off Expense. Revenue that cannot be collected is written off as bad debt 180 days after the
closing bill is issued. Typically, a bad debt reserve is built into existing rates. The cost of bad debt
impacts both the utility and ratepayers and, therefore, represents an expense. The collections amount
written-off by PacifiCorp was reported to us directly for all known low-income households.

2 PacifiCorp's 10-K (annual) and 10-Q (quarterly) reports to the Securities & Exchange Commission (SEC) for 2004
through 2006.
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3. Results
A Profile Of The Low-Income Households
The three figures below show the distribution of low-income households across the service territory.
In terms of total number of households, Utah has the highest at 39 percent. Oregon has the largest
share when the electric space or water heat screen is applied (at 51 percent). Finally, in terms of
receipt of assistance, Utah again is the front-runner. However, it should be noted that the finding is
primarily due to Lifeline rate discount participation in Utah.
Figure 3. Distribution of Total Low-income Households by State (n=210,992)
CA
7%ID
4%
OR
34%
UT
39%
WA
8%
WY
8%

Figure 4. Distribution of Low-income Households with Electric Space or Water
Heat (n=92,577)
CA
12%ID
5%
OR
51%
UT
12%
WA
14%
WY
6%

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Figure 5. Distribution of Low-income Households in Receipt of Energy Assistance
(n=47,734)
CA
16%ID
1%
OR
21%
UT
53%
WA
8%
WY
1%

Across all years analyzed, the average customer annual bill is approximately $700. The highest
annual electric cost to low-income households is in Oregon and the lowest is in Utah. This result is
not surprising since Oregon has the most households with both electric space and water heat while
Utah has the least. The average annual invoice in 2006 was approximately $900 with a high of
$1,063 in Oregon and a low of $592 in Utah.
Figure 6. Overall (2003-2006) Annual Invoice Amount by State (n=13,753)
$-
$200
$400
$600
$800
$1,000
$1,200
CA ID OR UT WA WY Overall

Bill Coverage
Customer bill coverage is simply the ratio of the total amount paid by the households divided by the
total bill. This was calculated for the entire group of identified low-income households exhibiting a
May arrear for each state and for each quarter beginning in 2003. The numbers were calculated at a
quarterly level in order to show the seasonality of bill coverage. The pattern of bill coverage is
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nearly the same for all states with coverage percentage dropping during the winter and increasing
during the summer. The exception is California, where bill coverage frequently jumps above 100
percent. The low-income households in the other states are almost always below the 100 percent
line, meaning that they do not pay their entire bill. In 2006, coverage varied from a low of 47 percent
in Wyoming to a high of 95 percent in California. As evident, states with an established rate discount
program, not surprisingly, exhibited higher customer coverage levels. Overall (across all states and
years of analysis) the customer coverage was about 75 percent.
Figure 7. Customer Bill Coverage (n=13,753)
0%
20%
40%
60%
80%
100%
120%
140%
2003
_1
2003
_2
2003
_3
2003_4
2004_1
2004_2
2004_3
2004_4
2005_1
2005
_
2
2005
_
3
2005
_
4
2006
_
1
2006
_2
2006
_3
2006
_4
CA
ID
OR
UT
WA
WY

When customer payment is combined with bill assistance, the bill coverage line is above 100 percent
most of the time for most states. Overall (across all states and years of analysis) the total coverage
was about 97 percent. Overall, California households cover their bills better than do households in
other states. This is a remarkable coverage for a low-income customer segment.
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Figure 8. Total Bill Coverage (n=13,753)
50%
60%
70%
80%
90%
100%
110%
120%
130%
140%
2003
_
1
2003_2
2003
_
3
2003_4
2004
_
1
2004_2
2004
_
3
2004_4
2005
_
1
2005_2
2005
_
3
2005_4
2006
_
1
2006_2
2006
_
3
2006_4
CA
ID
OR
UT
WA
WY

Bill coverage is greatly impacted by the receipt of energy-assistance payments. The total amount of
such payments and the percent of the total invoice assistance payments represented are presented, by
state and year, in Table 5. As evident in the table, the total assistance provided, as well as the
percentage of the total bill assistance represents, has increased annually since 2003.
Table 5. Assistance Payments By State (n=13,753)
2003 2004 2005 2006

Total
Assistance
% of
Total
Invoice
Total
Assistance
% of
Total
Invoice
Total
Assistance
% of Total
Invoice
Total
Assistance
% of
Total
Invoice
CA $ 46,628 7.3% $ 53,154 5.7% $ 79,068 7.5% $ 97,962 6.3%
ID $ 6,035 26.4% $ 9,289 24.2% $ 22,604 31.2% $ 16,748 31.0%
OR $ 259,986 22.7% $ 517,205 24.8% $ 876,052 33.0% $ 667,717 30.8%
UT $ 383,984 17.4% $ 573,506 17.2% $ 810,037 17.8% $ 1,290,947 23.1%
WA $ 45,225 17.4% $ 84,797 18.6% $ 168,913 25.3% $ 192,667 27.0%
WY $ 24,881 42.9% $ 29,086 32.5% $ 39,353 40.5% $ 42,012 41.8%
PacifiCorp $ 766,739 17.7% $ 1,267,037 18.3% $ 1,996,029 22.0% $ 2,308,052 22.7%

Rate discount programs lower home energy burdens by reducing the amount paid by low-income
households. In three states with rate discounts programs, we observed the highest customer bill
coverage ratios; namely California (92 percent), Utah (80 percent), and Washington (75 percent).
The average customer bill coverage ratios for states without a low-income rate discount are
significantly lower, as seen in Idaho (65 percent), Oregon (66 percent), and Wyoming (57 percent).
Legislation would be required to initiate a low-income bill discount program in Idaho and Wyoming.
In Oregon, due to SB1149, Oregon Energy Assistance Program funds are collected in lieu of a rate
discount.
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Energy Cost Coverage
Energy cost coverage looks at the household's ability to cover the energy costs. By doing so, we can
determine whether the customer, through out-of-pocket and assistance payments, is contributing to
the non-energy cost of assets necessary for electric distribution.
The results are presented in Table 6. For each state/year combination, the table shows the proportion
of households that are covering their energy cost (for example, in CA in 2003, 79 percent of the low-
income households covered their energy cost). The last two columns show the result of applying the
equation above for 2006. As evident in the table, 83 percent of the low-income population covered
their energy cost. Collectively, the households exceeded energy cost by 13 percent. The 13 percent is
their contribution to the utility’s non-energy assets. Total energy cost coverage is approximately 113
percent
When energy cost coverage exceeds 100 percent, loss of the load will lead to the need to distribute
the non-energy cost of the utility over fewer households and, therefore, to an increase in rates. The
low-income population in PacifiCorp territory, while not paying all of its bills, is covering the
energy cost and contributing to non-energy cost. Keeping their load on the system, from a pure rate
impact perspective, is better than losing them.
Table 6. Energy Cost Coverage--Customer Payments and Energy Assistance (n=13,753)
2003 2004 2005 2006

Percent of
Customers
Covering
Energy
Total
Energy
Cost
Coverage
Percent of
Customers
Covering
Energy
Total
Energy
Cost
Coverage
Percent of
Customers
Covering
Energy
Total
Energy
Cost
Coverage
Percent of
Customers
Covering
Energy
Total
Energy
Cost
Coverage
CA 79% 113% 72% 107% 76% 110% 83% 113%
ID 41% 100% 44% 96% 53% 102% 52% 100%
OR 62% 109% 62% 107% 69% 115% 66% 112%
UT 65% 111% 65% 110% 70% 113% 73% 117%
WA 61% 102% 59% 104% 64% 111% 70% 118%
WY 78% 131% 73% 112% 72% 119% 71% 117%
PacifiCorp 66% 110% 65% 108% 70% 113% 73% 115%

Equal Pay And Time Payment Plans
Table 7 shows the percent of sampled households that participated in each payment plan. Plan types
include equal pay, long term payment, and short term payment plans. The equal pay plan, designed
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so that the customer pays an equal amount every month, is not restricted to low-income households
and is open to all households without an arrearage. Households can participate in multiple pay plans
over time, but not concurrently. Table 7 also shows the contribution of the various program
participants to total unpaid balances across the years and states. Forty nine percent of households in
the sample were not on any type of payment plan. These households were responsible for 37 percent
of all unpaid balances. Table 7 also shows that 41 percent of all households in this group were only
on a long term payment plan during the period of study. These households were responsible for 55
percent of the year-end unpaid balance, which was a larger proportion of unpaid balance than
incurred by those who were not on payment plans. Households only participating in an equal pay
plan (7 percent of households) were responsible for only 3 percent of the year-end unpaid balances.
Table 7. Participation In Various Company Plans
Percent Of Total
Unpaid Balances
Percent Of
Households
Participating
Equal Pay Plan 3.4% 6.9%
Long Term Pay Plan 54.7% 40.5%
Short Term Pay Plan 1.0% 0.7%
Multiple Plans 4.0% 2.7%
No Plans 36.9% 49.2%

Table 8 shows the average amount of unpaid balance at the end of each of the four study years.
Households only on equal pay plans averaged $86 in year-end unpaid balance across the four years.
The lower annual unpaid balances exhibited by households on the equal pay plan was expected since
the plan is only offered to households without arrears at the time of signup. As evident in the
following table, households not participating in any plans show a lower end-of-year balance than
those participating in either the short or long term plan. Again, this result is not surprising since
households with the greatest arrearage problems are more likely to participate in a payment plan.
Regardless, stabilizing households so that they are only on equal payment plans should reduce the
overall year-end balance (arrearage). It is likely that moving households that are not on any plan into
the equal pay plan will help them stabilize their payments and reduce arrearage.
Table 8. Unpaid Balances by Program Type
Average Unpaid Balance at Year End (December)
Average 2003 2004 2005 2006 Average
Equal Pay Plan $84.50 $85.42 $98.30 $75.47 $85.92
Long Term Pay Plan $181.72 $232.15 $249.65 $236.31 $224.96
Short Term Pay Plan $219.88 $289.16 $228.31 $229.83 $241.80
Multiple Plans $217.83 $265.24 $291.53 $214.62 $247.30
No Plans $104.58 $130.64 $142.13 $130.88 $127.06

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Total Annual Arrears
Ultimately the focus of the analysis is determining the total amount in arrears across PacifiCorp’s
entire low-income population. Before discussing the applied extrapolation methodology or the
extrapolation results, Figure 9 provides another overview of size and relationship between the
following groups:
• Entire low-income population in PacifiCorp’s service territory (determined utilizing Census
data)
• Low-income population utilizing electricity for space or water heat
• Low-income population identified for the study (households that have requested bill
assistance, received weatherization services, and/or on a low-income bill discount)
• Low-income population found during the analysis to have an arrearage problem in 2006
Figure 9. Extrapolation Context

Table 9 builds upon the context of Figure 9, and walks the reader through the analysis and
extrapolation steps.
1. The total number of households that are below 150 percent Federal Poverty Guidelines is
210,992.
2. Of those, we estimated 92,577 households having either electric space or water heat.
3. According to data provided by PacifiCorp, 47,734 households had received some form of
low-income energy assistance (between 2002 and 2006).
4. In 2006, 13,753 unique households had an arrearage balance in May.
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5. The average accumulative arrearage of these 13,753 households from 2002 to 2006 was
$238.
6. The total cumulative arrears for this subpopulation is therefore $3,280,067.
7. However, this likely does not represent all of PacifiCorp’s low-income households that carry
arrearages. As noted above, of 92,577 households with electric space or water heat, 47,734
received assistance and 44,843 did not.
8. Of those 44,843 households who did not receive assistance, but have been identified as low-
income and utilizing electricity for space or water heat, we estimated the number of
households expected to have payment problems is 5,241.3
9. Therefore, the total arrearage problem ($4,529,991)is the sum of the outstanding arrearages
held by the identified households receiving assistance ($3,280,067) and the unidentified
customer who have not received assistances ($238*5,241 or $1,249,024).
Table 9. Total Arrears
Category Result
1) Total Low-income Population 210,992
2) Total with Electric Space or Water Heat 92,577
3) Total Recipients of Energy Assistance 47,734
4) Households in Sample with an arrearage in 2006 13,753
5) Average Cumulative Arrearage in 2006 $238
6) Total Annual Arrears Among Sampled Households $3,280,067
7) Number of Households with Electric Heat or Water Heat Not Receiving Assistance 44,843
8) Number Expected to Have Payment Problems 5,241
9) Total Arrears Problem Across All Households with Electric Heat or Water Heat $4,529,991

It should be noted that we feel very confident in the $3.28 million estimate of total cumulative
arrears. The additional $1.249 million, on the other hand, is an extrapolation that is built on
assumptions regarding the behavior of households outside of our analysis group. This estimate is
uncertain. However, we do feel that the direction of the bias is just as unlikely upward as it is
downward.
The timing and magnitude of assistance payments also has an impact on arrearage levels. While
most energy assistance in PacifiCorp’s service territory is offered during the heating season, the
disbursement of such assistance differs by state and is spread out over many months. Although it is
not possible to remove the impact of assistance payments from an analysis of low-income arrearages
(both households and PacifiCorp respond to the timing and magnitude of assistance payments) it is
important to note their potential impact on an analysis of utility arrearages.

3 Determined for individual states based on proportions of low-income households, those with electric space and water
heat, etc. The details of these calculations are not shown in Table 9.
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Arrears by State
As shown in Figure 10, Oregon is the largest contributor to total arrears. This is primarily driven by
the size of the population, as well as the prevalence of electric load.
Figure 10. Distribution Of Arrears By State (n=13,753)
CA ID
OR
UT
WA WY

Figure 11 shows that Oregon’s average level of accumulated household arrears is among the highest
in the service territory.
Figure 11. Average Cumulative Household Arrears By State in December 2006
(n=13,753)
-
50
100
150
200
250
300
350
CA ID OR UT WA WY Overall
Figure 12 displays the change in total accumulated arrears by state over the analysis period. While
overall, the total arrears more than doubled between 2003 and 2006, in Oregon, it increased in 2004
and 2005 and eventually decreased in 2006. The same pattern is observed in all states except Utah.
PacifiCorp explains the reduction in overall uncollectibles as due in large part to a greater focus on
collection practices. At the same time, spending on energy conservation programs increased
significantly in 2004 (along with an increase in energy-assistance funding). The first method collects
more money from households, while the second reduces the household consumption and the third
lessens the customer’s individual burden. Collectively, the factors reduce the amount the customer is
expected to pay and thereby decrease observed arrearage levels.
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Figure 12. Growth Rates In Total Arrears
100%
120%
140%
160%
180%
200%
220%
240%
260%
280%
300%
2003 2004 2005 2006
CA
ID
OR
UT
WA
WY
Overall

Another way of examining trends in arrears is to look at the amount accumulated one year at a time.
In other words, to compute the arrears growth in the year January 2006 to December 2006, we took
the difference in accumulated arrears in December of 2006 and subtracted those in December of
2005. Table 10 shows the average growth in arrears by state and year. As evident in the table the
overall annual growth in per household arrearages has generally declined since 2003 ($48 in 2006
compared to $64 in 2003). As noted above, this is likely due to a number of factors. Overall, arrears
have increased by about $55 annually for the last five years across the entire service territory.
Table 10. Per Household Annual Arrearage Accumulation
2003 2004 2005 2006 Annual
Average
California $45 $40 $ 51 $40 $44
Idaho $69 $102 $94 $92 $91
Oregon $113 $89 $83 $94 $93
Utah $54 $46 $48 $40 $46
Washington $71 $65 $65 $57 $64
Wyoming $93 $89 $84 $103 $92
PacifiCorp $64 $56 $57 $48 $55

A final note on arrears and their accumulation relates to receipt of assistance. In general LIHEAP
does not require that a disconnect notice be issued to qualify for regular assistance. However, in
order to qualify for crisis help, a disconnect notice must have been received. This may be
contributing to the observed levels of arrears. In some states, such as Washington, the situation may
be further exacerbated due to the presence of legislation, such as prior obligation.4

4Following disconnection, the account holder may request to be reconnected by claiming ‘prior obligation’. By doing so,
the account holder is not required to pay any outstanding balances before regaining service; however, the account
holder may be required to place funds on deposit and pay a reconnection fee.
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Cost of Carrying Arrears
We applied the quarterly weighted interest rate associated with PacifiCorp's short-term debt to
calculate the carrying cost of low-income arrears. Our discussion begins with a look at the arrearage
balances observed over the study period, trends in PacifiCorp's financing of short-term capital, and
the accumulated interest expense.
Cost of Capital
Interest rates have risen steadily from a low of 1.3 percent in 2003 to 5.3 percent in the last quarter
of 2006.5 We estimated above that the current arrearage levels across the states for low-income
households with electric heat or water heat, would be $4.53 million. At the current interest rate of
5.3 percent, this would result in a cost to PacifiCorp of $246,547 in 2006.
Credit and Collection Activities
An even greater impact on the cost of low-income arrears are the credit management strategies
employed at PacifiCorp. Using data recorded in the utility database, we were able to calculate the
cost of credit and collection activities.
Count of Collection Events
Each collection activity has a corresponding code in the database to identify which have occurred,
and those actions taken to cancel that activity. For example, a disconnect notice (the collection
activity) may result in the establishment of an agreeable payment plan (the reason the action was
canceled). Table 11 below shows the number and type of collection activities from 2003 through
2006.
Table 11. Frequency of Collection activity
Frequencies 2003 2004 2005 2006 Total
Reminder Notice 12,254 18,605 23,407 25,786 80,052
Past Due Notice 27,556 42,041 56,720 56,444 182,761
Final Notice 23,308 35,296 47,713 47,470 153,787
Final Field Notice 4,641 6,779 9,497 9,863 30,780
Scheduled Disconnect 10,901 16,578 22,722 23,372 73,573
Reconnect/Connect 1,677 3,041 4,286 4,452 13,456
Assigned to Collection 144 299 445 583 1,471
Total 80,481 122,639 164,790 167,970 535,880

5 PacifiCorp's 10-K (annual) and 10-Q (quarterly) reports to the Securities & Exchange Commission (SEC) for 2004
through 2006.
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We see the frequency of events follow logically from the initial past due notice through the
disconnect/reconnect. The reminder notice is sent before the past due notice to households without a
history of payment problems. The field final notice is typically used only in Utah.
Key observations from this table include the following:
• 182,761 past due notices were sent, followed by 153,787 final notices; collection activities
continued for 84% of the past due notices delivered.
• Of the 153,787 final notices, the electric service for 73,573 homes (47 percent) was
scheduled for termination.
• Invoice records show 13,456 households were reconnected6. We use this as the estimated
number of terminated accounts in our study group.
• There were 1,471 accounts assigned to an external collections agency.
• Over a four year period, 535,880 collection activities were undertaken with a steady rise in
activity from 2003 through 2006.
Assigning An Activity Cost
Collection activities are assigned a code in the customer information system to track the status of the
collection activity. While all activities have some cost associated with them, PacifiCorp was able to
provide costs only for the following services: disconnect/reconnect, field final notice, and estimates
on mailed correspondence. Table 12 lists those per activity costs assigned specific collection
activities. Readers will note the following:
• For all but the disconnection and reconnection fees, the costs are the same for each state.
• The disconnection and reconnection fees vary by state due to the personnel assigned, the
associated time, and hourly rates.
Table 12. Collection Activity Costs by State
Collection Activity CA ID OR UT WA WY
Disconnect/Reconnect Service $112.15 $19.75 $24.79 $20.34 $25.14 $56.78
Field Final Notice $20.34
Mailed Final Notice $0.59 $0.59 $0.59 $0.59 $0.59 $0.59

Some collections activities, such as reminder notices and past due notices, appear as additional
verbiage on a customer’s regular bill, and are not separately mailed. Therefore, while these are

6 Identified through reconnect charges on that account; accounts reconnected under another name and account number
cannot be tracked or counted.
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known collections activities and have some internal cost, they are not assigned an additional cost
here.
We also know that additional costs related to collection activities exist but they cannot be precisely
quantified. Estimates would need to be derived from departmental data and internal studies. For
example, talking with the household on the phone about its outstanding balance, and eventually
negotiating a payment plan, has a cost within the call center. Likewise, an account assigned to a
collection agency has empirical cost to the utility, but the costs on a per-household basis are much
more difficult to quantify. PacifiCorp does not track these costs, and departmental data were not
available. Therefore, while there may be additional well-documented collection related events, the
average activity cost could not be provided or estimated. As such, the expenses quantified below will
understate the true cost of the collection methods employed by PacifiCorp.
Collection Activity Costs
Using collection activity codes provided in the data extraction, the frequency and costs associated
with the activities were computed in a bottom-up approach. It is widely accepted that this type of
approach understates the true cost of providing collection services. Table 13 below totals the cost of
collection activities from 2003 to through 2006. The following findings were observed:
• Final Field Notices make up the majority of the costs, totaling $626,000 over the
course of our study. These are final notices delivered in person rather than mailed
to the customer. The database shows almost 31,000 in-field notices delivered at a
cost of over $20 per notice.
• Collection notices occur much more frequently than other events, add to the cost
of collection, but make up the smallest portion of costs. Reminder notices and
past due notices are added to existing bills and are not additional mailings. Final
notices, mailed separately, cost almost $91,000 over the study period.
• Past due notices are typically included with regular bill mailings and do not have
an additional cost component to mail. Eight percent of households receiving a
past due notice made a payment or payment arrangement.
• Fifty percent of sampled households scheduled for a termination of service made
a payment arrangement to avoid termination. Activities associated with collection
activities cost the PacifiCorp an estimated $1.4 million dollars over the study
period (see Table 13).
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Table 13. Cost Per Collection Activity
Activities 2003 2004 2005 2006 Total
Mailed Final Notice $13,752 $20,825 $28,151 $28,007 $90,734
Field Final Notice $94,397.94 $137,884.86 $193,168.98 $200,613.42 $626,065.20
Disconnect Service/Reconnect7 $94,088.96 $163,457.53 $237,733.20 $251,563.19 $746,842.89
Total* $202,238.62 $322,167.03 $459,052.85 $480,183.91 $1,463,642.42
*Numerous less significant per collection costs are not presented in the table.

Cost Recovery Mechanisms
PacifiCorp charges households a fee for service connection and reconnection, as well as for field
visits associated with reconnections. The fees charged to the customer were extrapolated directly
from the database provided by PacifiCorp.
The costs incurred by the utility for collection activities were estimated using the fee schedule by
state provided by PacifiCorp. The fee schedule and database codes distinguished between, for
example, reconnections during business hours and those after hours. Costs were estimated by
multiplying the per-activity cost (using the state fee schedules) times the number of activities shown
in the database.
Table 14 below shows the estimated total gross costs incurred by the utility for delivering final field
notices and mailed notices, as well as disconnection and reconnection events. It also shows the
amount the customer was charged in related fees as required by the utility, and the estimated net
costs to the utility.
Key findings include:
• Customer fees do not cover the full cost of collection activities.
• Over a four year period, a conservative estimate of the fees that were charged to the
customer, associated with field visits, disconnection and reconnections, was $343,000.8
• Over a four year period, an estimate of the net cost to the utility was $1.1 million.

7 The number of terminations was estimated using the number of customers charged a reconnection fee. As such, the
number of terminations is likely to be underestimated since not all customers reconnect before the account is closed
and a new account number is issued. Those terminations cannot be tracked. The cost is estimated by applying both a
disconnect and reconnect fee using PacifiCorp’s fee schedule for the estimated 13,456 terminated customers.
8The fees charged for reconnection are $343,000 and nearly cover the estimated cost to the utility to reconnect service
($373,000).
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Table 14. Estimated Gross and Net Costs
2003 2004 2005 2006 Total
Estimated gross cost to PacifiCorp $202,238.62 $322,167.03 $459,052.85 $480,183.91 $1,463,642.42
Reconnect/Connect and Field Visit and
Disconnect Fees charged customers $36,074.23 $76,592.66 $112,688.98 $117,692.04 $343,047.91
Estimated net Cost to PacifiCorp $166,164.39 $245,574.37 $346,363.87 $362,491.87 $1,120,594.51

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4. PacifiCorp's Low-Income Programs
This chapter reviews PacifiCorp’s low-income programs and initiatives in each state.
Recommendations to assist households in addressing their arrearage will work with or build on
existing programs, where appropriate, to take advantage of existing infrastructure. Table 15
summarizes the low-income program initiatives by state, which are described below.
Table 15. Low-Income Initiatives By State
State Cash
Assistance Weatherization Payment
Plans
Bill
Discount
Bill
Payment
Assistance
through
Fuel
Funds
California √ √ √ √
Idaho √ √ √
Oregon* √ √ √ √
Utah √ √ √ √
Washington √ √ √ √
Wyoming √ (Proposed) √ √
*Only Bill Payment Assistance through Fuel Funds provided by PacifiCorp. All other initiatives
administered by Oregon Housing & Community Services.

State Of California Initiatives
California Low-Income Energy Efficiency
This weatherization program is provided by California utilities to households at or below 175
percent of the federal poverty level. Since 2000, all of California’s investor-owned utilities have had
standardized services offered to low-income households, and PacifiCorp has partnered with local
agencies since 1986. Since the program began, Pacific Power provided funds to weatherize over
1,900 households in their service territory.9
California Alternate Rates for Energy (CARE) Residential Discount
Eligible households (income at or below 175 percent of the federal poverty level) receive a 20
percent discount on electric bills.10 This discount, established by the California Legislature in 1989,
is offered by all California-regulated utilities.11

9 Quantec, LLC, 2004 Care Report Spreadsheet
10 California Public Utilities Commission Rulemaking 01-08-027 “Interim Opinion: Eligibility Criteria and Rate
Discount Level for Low-Income Assistance Programs” January, 2002
11 http://www.pacificpower.net/Article/Article23256.html
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Medical Allowance
Tariff Schedule D provides customers needing the use of a medical life-support device with
additional electric service at baseline usage rates. These rates are lower than non-baseline usage rates
which are incurred after a household’s kWh usage reaches the maximum for baseline rates.
Project HELP
Pacific Power has participated in California’s Project Help program for many years, making
matching dollar-for-dollar contributions since 2000. An increased commitment is now in place.
Beginning in July 2006 and lasting until July 2011, Pacific Power will cover the shortfall of
customer and employee donations to this fuel fund to ensure a total annual donation of $30,000.
Assistance is delivered by The Salvation Army. PacifiCorp solicits donations twice a year from
customers through bill inserts.
State Of Idaho Initiatives
Low-Income Weatherization Program
The Idaho Low-Income Weatherization Program, currently operates through Tariff Schedule 21.
PacifiCorp began partnering with local agencies in 1988.12 Households with incomes at or below
150 percent of the federal poverty level qualify for weatherization services which are offered
through two local community action agencies. The agencies are reimbursed for 50 percent of the cost
of all approved, fully cost-effective measures. In addition, since the agencies receive federal funds as
well, they are able to provide their services at no cost to the participants. Since the beginning of the
program, over 675 homes have been weatherized.
Lend A Hand
Rocky Mountain Power has participated in Idaho’s Lend A Hand Program for many years, making
matching dollar for dollar contributions since 2000. An increased commitment is now in place.
Beginning in July 2006 and lasting until July 2011, Rocky Mountain Power will cover the shortfall
of customer and employee donations to this fuel fund to ensure a total annual donation of $40,000.
Assistance is delivered by the Eastern Idaho Community Action Partnership and the South Eastern
Idaho Community Action Agency.13 Rocky Mountain Power solicits donations twice a year from
customers through bill inserts.
State Of Oregon Initiatives
Oregon HEAT
PacifiCorp has participated in Oregon HEAT for many years, making matching dollar for dollar
contributions since 2000. An increased commitment is now in place. Beginning in July 2006 and

12 Quantec, LLC, “Idaho Low-income Weatherization Program: Analysis in Support of Tariff Revision”, August, 2005.
13 http://www.rockymtnpower.net/Navigation/Navigation1358.html
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lasting until July 2011, Pacific Power will cover the shortfall of customer and employee donations to
this fuel fund to ensure a total annual donation of $400,000. Assistance is delivered by various
community action agencies.14 PacifiCorp solicits donations twice a year from customers through bill
inserts.
Oregon Energy Assistance Program (OEAP)
OEAP provides bill assistance to low-income Pacific Power customers (at or below 60 percent of
Oregon median income). The Program is supported through a customer meter charge, and authorized
by Tariff Schedule 91. Funds collected are administered by Oregon State’s Housing and Community
Services Department (OHCS). The Program was created by the state legislature in 1999, and
operates today serving over 20,000 households annually.15 The 2003 OEAP evaluation shows that,
approximately one year after payment, participant arrears were roughly $340 less than if the
Program had not existed.16
Energy Conservation Helping Oregonians (ECHO)
Between 2002 and 2004, Pacific Power contributed, through the public purpose surcharge,17
$4,633,070 to the ECHO Program, providing weatherization services administered by OHCS. These
funds helped weatherize 1,405 homes. OHCS estimates that first year energy savings for
weatherized homes equals approximately $358 per household.18
Prior to ECHO, PacifiCorp offered a company-funded weatherization program through Tariff
Schedule 7. The company reimbursed local community action agencies for 50 percent of the cost of
fully cost-effective measures local agencies installed.
State Of Utah Initiatives
Home Electric Lifeline Program (HELP)
Since calendar year 2000, income-eligible households (under 125 percent of the federal poverty
level) have been able to receive an $8 monthly credit on their bill. Customers that use life support
equipment are provided with an additional $10 discount. Funds are collected through Tariff Schedule
3 and total approximately $1.8 million annually and in 2005 assisted more than 23,000 households.19
The impact of HELP in reducing arrears was estimated at approximately $77 annually in a recent
program evaluation.20

14 http://www.liheap.ncat.org/Utility/OR/pp.htm
15 http://www.oregon.gov/OHCS/CRD/SOS/docs/OEAPFactSheetCurrent.pdf
16 Quantec, LLC, “Oregon Energy Assistance Program Evaluation”, January, 2003
17 Tariff Schedule 290
18 http://www.oregon.gov/OHCS/CRD/SOS/docs/Pov_Conf_06_Wx_Pres_Final.pdf
19 http://community.utah.gov/housing_and_community_development/SEAL/HELP/abouthelp.html
20 Quantec, LLC, “Utah HELP:Program Evaluation”, January, 2005
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Utah Low-Income Weatherization Program
The Low-Income Weatherization program assists low-income households in controlling energy
consumption and heating costs through comprehensive home weatherization. PacifiCorp began
involvement with low-income weatherization in the early 1990s. The services are provided through
Tariff Schedule 118. The Utah Department of Community and Culture (DCC) is reimbursed at 50
percent of the cost for approved, fully cost-effective measures. PacifiCorp rebates, along with state
and federal funds available to DCC allow for the services to be provided at no cost to customers. In
2006, 518 homes received baseload measures and 16 households received full weatherization
services.21
Lend A Hand
Rocky Mountain Power has participated in Utah’s Lend A Hand Program many years, making
matching dollar for dollar contributions since 2000. An increased commitment is now in place.
Beginning in July 2006 and lasting until July 2011, Rocky Mountain Power will cover the shortfall
of customer and employee donations to this fuel fund to ensure a total annual donation of $400,000.
Assistance is delivered by the America Red Cross.22 Rocky Mountain Power solicits donations twice
a year from customers through bill inserts.
State Of Washington Initiatives
Low-Income Bill Assistance (LIBA) Program
The LIBA program provides a per kWh bill credit for families at or below 125 percent of the Federal
Poverty Level (FPL), which matches Washington State LIHEAP eligibility requirements. The
program, provided by Tariff Schedule 17, began providing services in 2001 and continues today.
Participation in the LIBA program began with 2,400 households annually. Currently, participation is
capped at a total of 2,618 households. There are three discount tiers with the lowest income
households receiving the largest discount. Arrearages improved for participants at an annual rate of
$55/year for the first year based on a 12.7 percent reduction in their home energy burden. Collection
actions also decreased as a result of participation in the Program.23
Low-Income Weatherization Program
The Low-Income Weatherization Program, provided through Tariff Schedule 114, assists low-
income households in controlling energy consumption and heating costs through comprehensive
home weatherization. Services, implemented through a partnership with local weatherization
agencies, have been provided to qualifying households since 1986. PacifiCorp rebates, along with
state and federal funds available to the implementing local agencies allow for the services to be
provided at no cost to the customer. As of December 31, 2006, the Program had provided services to
a total of to 6,093 Pacific Power households. The most recent Program evaluation showed net annual

21 Quantec, LLC Memo, “Utah 2007 Low-income Weatherization Program Enhancements” January, 2007
22 http://www.liheap.ncat.org/profiles/Utah.htm
23 Quantec, LLC “Washington Low-Income Bill Assistance Program: Phase II, Impact Analysis” October, 2003
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energy savings of 1,840 kWh per completed household,24 representing 12 percent of pre-Program
energy consumption.
Project HELP
Pacific Power has participated in Project HELP for many years, making matching dollar for dollar
contributions since 2000. An increased commitment is now in place. Beginning in July 2006 and
lasting until July 2011, Pacific Power will cover the shortfall of customer and employee donations to
this fuel fund to ensure a total annual donation of $80,000. Assistance is delivered by Northwest
Community Action Center and The Salvation Army in the Pacific Power service territory.25 Pacific
Power solicits donations twice a year from customers through bill inserts.
State Of Wyoming Initiatives
Low-Income Weatherization Program (Proposed)
The proposed Wyoming Low-Income Weatherization Program will be available to Rocky Mountain
Power customers with incomes at or below 215 percent of federal poverty guidelines. The rebate (50
percent of the cost of approved, fully cost effective measures) will be provided directly to three local
agencies that will administer the Program.26 The agencies also receive state and federal funding that
allows services to be provided at no cost to participants.
Energy Share Of Wyoming
Rocky Mountain Power has participated in Energy Share of Wyoming for many years, making
matching dollar-for-dollar contributions since 2000. An increased commitment is now in place.
Beginning in July 2006 and lasting until July 2011, Rocky Mountain Power will cover the shortfall
of customer and employee donations to this fuel fund to ensure a total annual donation of $70,000.
Assistance is delivered by The Salvation Army.27 Rocky Mountain Power solicits donations twice a
year from customers through bill inserts.

24 Quantec, LLC “Washington Low-income Weatherization Program”, January, 2007
25 http://www.liheap.ncat.org/profiles/WA.htm
26 Quantec, LLC, “Wyoming Low-income Weatherization Program: Analysis in Support of Tariff Filing”, November,
2006
27 http://www.rockymtnpower.net/Navigation/Navigation1358.html
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5. Summary Of Industry Best Practices
An understanding of credit management strategies focused upon customer arrearage and bad debt is
facilitated by dividing the discussion into three contexts. These contextual bases are: Accessibility to
service, Affordability of service, and Continuity of service. Table 16 below provides an overview of
these three contextual bases in terms of industry focus and associated efforts and program designs.
Table 16. Industry Approaches Highlighted
Accessibility Affordability Continuity
Focus: Maintenance Of Service
Industry Approach:
Deposit Loans: Third party utility
deposited on behalf of customer in
need.
Deposit Waiver: Voluntary or
mandated wavier of utility service
deposit requirements.
Crisis Assistance: Third party
payment made on behalf of
consumer to prevent service
termination.
Prior Notice: Requires utilities to
provide formal notice before
disconnecting service.
Proactive Reconnections: Utility
initiates contact to reconnect service
prior to winter heating season.
Winter Moratoria: Regulatory rule
preventing the disconnection of
service during heating season.
Temperature-based Moratoria:
Regulatory rule preventing the
disconnection of service when
temperatures require heating or
cooling.
Dispute Resolution: Consumer-
initiated mediation of utility service
request.
Prior Approval: Requires utilities to
Focus: Cost Of Service
Industry Approach:
Rate Discounts: Special tariffs for
households meeting income/poverty
guidelines.
Energy Assistance: Third party
grants to offset home energy
burdens; both public and private.
Conservation Loans: Third party
guarantees for energy efficiency
improvement; also, includes the
provision of no/low-interest loans
Home Weatherization: Retrofits that
lower the cost necessary to heat/cool
a home; public/private initiatives.
Home Energy Audits: Assistance
provided to inform occupants of
energy efficient options/behaviors.
Targeted Conservation: Needs-
based prioritization of energy
efficiency.
Arrearage Forgiveness: Incentives
offered households who make
regular and timely payments;
payments often based on the
household's ability to pay.
Percent of Income Payment Plans:
Monthly installments for utility
service based on a person's income.
Fixed Price Tariff: Provides
Focus: Terms/Conditions
Industry Approach:
Budget Counseling: Services
provided to help prioritize household
spending preferences.
Prior Notice: Requires utilities to
provide formal notice before
disconnecting service.
Negotiated Payment Arrangements:
Extension of utility service based on
compliance with payment terms
negotiated by the consumer.
Amortized Billing: Estimated annual
billings spread over a fixed period,
generally equal monthly payment.
Partial Payments: Collection
activities are suspended with the
receipt of any payment amount.
Service Limiters: Restricts the
amount of simultaneous load until
outstanding bills are resolved.
Structured Payment Arrangements:
Formulaic payment arrangements
that spread existing liabilities across
a great number of months; often
embedding past due balances.
Deferred Billings: Payment
holidays; based on improved
payment practices.
Referral Services: Context specific
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Accessibility Affordability Continuity
get commission approval before
utility service is disconnected.
Referral Services: Context specific
referrals to assistance programs can
help households gain access to or
prevent termination of utility
service.
Pre-Payment Solutions: Advanced
metering solutions that allow
households to make incremental
electricity purchases and to avoid
buying energy on credit; eliminates
deposit requirements and avoids
demand for a large lump sum
payments of past due amounts.
households a flat monthly rate for
unlimited electric service.
Referral Services: Context specific
referrals to assistance programs can
help households gain access to or
prevent termination of utility
service.
Pre-Payment Solutions: Advanced
metering solutions that allow
households to make incremental
electricity purchases and to avoid
buying energy on credit, often
providing real-time feedback on
electric use.
referrals to assistance programs can
help households gain access to or
prevent termination of utility
service.
In 1992 Pennsylvania's Bureau of Consumer Services provided 83 detailed and interdependent
recommendations concerning alternatives to utility service disconnections. In the following list, we
highlight some of the recommendations suggested for utilities:
• Develop systems to identify and track low-income households
• Catalog low-income service providers within the utility service territory
• Inform consumers of available social service agencies
• Tailor referrals based on individual needs and geography
• Conduct follow-up calls regarding active referrals
• Develop consumer energy education and budget counseling programs
• Increase the number of households paying on budget billing plans
• Actively promote the availability of LIHEAP and other energy assistance
• Support and expand available fuel funds initiatives
Soon after these recommendations were published, the Pennsylvania Public Utilities Commission
mandated the development of three programs: the Low-Income Usage Reduction Program (LIURP),
Customer Assistance Plan (CAP), and the Customer Assistance and Referral Evaluation Service
(CARES). Together these programs sought first to lower the cost of utility service through
weatherization. Second, the programs sought to provide low-income consumers an incentive to make
regular and timely payments through the forgiveness of outstanding arrears. Lastly, the CARES
program was designed to ensure that households contacting the utility would receive informed
advice regarding the availability of energy assistance options.
This approach was adopted by the Wisconsin Public Service Company, which sought to treat these
services not as a separate low-income program, but rather as an integrated approach to customer
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care. This represents an early integration of low-income customer assistance into the utilities’ credit
management strategies.
Quick Highlights Of Successful Programs
The following are general results from a few successful programs. This is not intended to be a
comprehensive list of programs, as there are too many to list here. We present PacifiCorp’s
programs in the previous chapter.
• The three utilities of First Energy began to collect universal service funds in response to Title
52 of the Pennsylvania code. These funds were used to develop Customer Assistance Plans
(CAP), Customer Assistance and Referral Evaluation Services (CARES), and Low-Income
Usage Reduction Programs (LIURP). MetEd and PenElec included arrearage forgiveness
components, and PennPower leveraged a rate discount program. The combination of
programs reduced utility collection costs as households increased their payments.
• Columbia Gas of Pennsylvania's Customer Assistance Program, (CAP) generated:
o 61 percent fewer disputes
o 53 percent fewer new payment agreements
o 69 percent fewer canceled payment plans
o 48 percent fewer termination notices. While about 75 percent of the households were
at least one day delinquent in payment, the probability for gas shut off was only about
two percent.
• Customers who stayed in the Equitable Gas Energy Assistance Program (EAP) for one full
year generated net positive benefits to the company of $262. Those who remained in EAP for
a second year generated an additional $206.
• National Fuel Gas Distribution Company's Low-Income Rate Assistance (LIRA) program
generated an improvement in collections of $1.5 million (nearly a 40 percent improvement
over five years). The number of payments made by participants increased by 30 percent, an
average increase of 2.2 payments per participant, and the number of service disconnections
decreased by slightly over 80 percent.
• Niagara Mohawk Power Company's rate discount program almost doubled the total number
of payments to the utility during the post-treatment period compared to the pre-treatment
period. The program increased payments to $1,174 from $883 for one discount group, and to
$1,188 from $968 for the second discount group.
• The Clark County (Washington State) Public Utility District's Guarantee of Service Program
(GOSP) reduced delinquencies for program participants to 18 percent from 74 percent,
reduced disconnections for program participants by 64 percent, and increased average
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customer payments to $55 per month during the program from $22 per month prior to
program.
• The French have a right to electricity based on the Electricité de France's contract with the
state. Within the terms of privatization, Electricité de France agreed to certain measures that
seek to prevent and cure energy poverty. These measures included a no disconnection policy,
a minimum provision of electricity, a supported group of consumer advocacies, energy
assistance, dispute mediation, and an energy solidarity fund. Furthermore, the Policy Of The
City established specific measures that addressed high-density low-income neighborhoods in
their largest urban centers.
• The Belgian National Action Plan for Social Inclusion is part of a EU initiative in response to
the common objectives that have been agreed to by members. While not every member state
addressed home energy burdens, some states did so, but only modestly. Belgium was an
exception, due in large part to the liberalization of its energy market. The Belgian
government included various measures that oblige energy providers to address the different
situations of those in need. Notable components include a subsistence level of electricity to
be provided at no charge to the entire population, a local advisory committee that must rule
before utility service is disconnected, and the provision of prepay meters to avoid the
requirement of large lump sum payments to reconnect to the electric utility system. These
services were offered to low-income households and to middle-income households with
extreme levels of utility debt.
• The New Jersey Universal Service Fund (USF) program incorporated an arrearage
forgiveness component. To the extent that USF participants made full payments toward
current bills for twelve months, their pre-program arrears would be eliminated at the end of
that one-year period. The policy basis behind this Fresh Start program was that Fresh Start
would serve a critical affordability function within the overall USF framework. Arrearage
forgiveness serves to get low-income households on an even footing so they have a chance at
future success in making payments. The program designers believed that it would make no
difference to have current bills be affordable if the household was subject to disconnection
for pre-program arrears, or if the household’s total energy bills were unaffordable due to the
payment obligation to retire past arrears.
There can be little question but that the failure to have a Fresh Start program would
substantially impede the ability of USF program participants to successfully comply with the
payment terms of USF.
The USF Evaluation expressly found households with higher energy burden have
significantly lower ability to maintain payment compliance. Table 17 provides data for gas
and electric households.
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Table 17. New Jersey Universal Service Fund Distribution of Effective Coverage Rate by
Net Energy Burden
Coverage Rate Net Energy
Burden <50% 50% - <90% 90% - <100% 100% or more
Less than 2% 0.0% 2.7% 5.3% 92.0%
2% - 3% 0.0% 6.0% 11.5% 82.5%
3% - 4% 0.0% 10.0% 13.2% 76.9%
4% - 6% 0.0% 11.6% 16.6% 71.6%
6% - 8% 0.4% 16.6% 17.4% 65.5%
Over 8% 1.0% 25.6% 16.1% 57.4%

• Northern Indiana Public Service Company (NIPSCO) Winter Warmth is an energy assistance
program directed toward assisting income-eligible households to avoid the disconnection of
service, achieve the reconnection of service, and avoid unaffordable winter heating bills.
Households may become eligible for Winter Warmth in one of two ways. First, households
meeting the State of Indiana's Energy Assistance Program (EAP) guideline are automatically
qualified. Second, households who are classified as hardship households by local Gift Of
Warmth agencies, the local community-based organizations that administer the program, are
also qualified to receive benefits under the Program. These local agencies have the sole
discretion for developing criteria that determine whether a household qualifies as a hardship
household.
Through the Winter Warmth program, participants receive benefits of up to $400 per
customer, per heating season. The local agencies administering the program may utilize the
household’s program benefits to pay deposit requirements. The Winter Warmth program
provided a noticeable interruption to the disconnection cycle within the population of households
receiving Winter Warmth benefits.
Recognizing that the significant Winter Warmth enrollment began in February, the impact of
such payments in helping to interrupt the disconnect cycle was evident. The proportion of
accounts that received disconnect notices, and that eventually actually lost their service,
decreased after the start of the Winter Warmth program. Similar decreases in the proportionate
number of accounts moving from receipt of a disconnect notice to the eventual loss of service
is seen, even as the time period during which a disconnection might occur extends out.
The Winter Warmth population does not experience a substantial rate of service disconnection
during the Spring months, despite an ongoing level of arrears. During the Spring months of
March through June, while there were roughly 13,000 Winter Warmth accounts each month,
service termination was limited to between 382 in March and 206 in June.
The number of accounts in arrears decreased 11.9 percent from March through June, and the
number of accounts in serious arrears decreased much more dramatically. After the
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implementation of Winter Warmth, the number of accounts so far in arrears that they received
disconnect notices decreased 42 percent while the number of accounts that experienced the
actual disconnection of service for nonpayment decreased 46 percent. Eighty percent of the
Winter Warmth recipients succeeded in staying out of arrears completely in the months
following receipt of their Winter Warmth benefits.
• The Universal Energy Charge and the Fund for Energy Assistance and Conservation provide
monies for the State of Nevada Energy Assistance Program and the Weatherization Assistance
Program. The program is designed so that eligible households, (150 percent of Federal
Poverty Level) of Sierra Pacific, Nevada Power, and Southwest Gas, do not have energy
burdens higher than the state median energy burden. The program began in 2003, and the
median energy burden is adjusted annually.
Participants increased the amount of payments from pre-program to the first program year by
18 percent (weighted average across utilities). Analysis in the second program year showed
that households tended not to pay when there was a credit on their account, but made up for
non-payment in the last two quarters of their enrollment year.
New with the 2005 program was an arrearage forgiveness component. Customers apply and
qualify for a Fixed Annual Credit which is sent to the utility, or divided between participating
utilities. When the Fixed Annual Credit is applied to 12 months of a household’s utility bills
where there is no arrearage, the household will pay the equivalent of the State’s median
energy burden. When a household enters the program with an arrearage, the credit is applied
to the arrearage first.
• Energy Share is one of Eugene Water and Electric Board’s original Low-Income Assistance
programs. The program is administered by St. Vincent de Paul. Customers can obtain funds
up to a maximum of $300 per customer over a rolling 12-month period. Funds can be obtained
over a period of several months as needed.
Energy Share emphasizes providing assistance to households who need help with paying their
utility bills. Participants are provided a packet of information on ways to reduce their utility
bills. On average, participants decreased their annual arrears by $374. The participation saved
the company around $32 per participant in collection costs. See Table 18 below.
Table 18. Annual Cost Savings Due to Energy Share Program (Per Participant)
Savings Category Savings per
Participant
Decrease in Average Annual Arrears $374.00
Decrease in Annual Carrying Cost $32.00
Decrease in Door Hanger Notices Cost $10.50
Decrease in Final Notice Mailing Cost $0.56
Decrease in Shutoffs $1.35
Based on 3,077 Energy Share participants in 2002 who did not also participate in another
EWEB low-income program, the program produced net benefits to EWEB and ratepayers
estimated at over $500,000
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Appendix A: Factors Influencing Arrears
Methodology
Factors Influencing Arrears
We used a multivariate regression algorithm to test associations between factors thought to influence
utility arrears, such as extreme weather conditions, commodity prices, economic conditions, rate
increases, etc.
The study period is longitudinal, and covers the years 2002 through 2006. We began the analysis
assigning a $0 balance to identified low-income households and accumulated arrears for each month
of service. Accumulated monthly amounts were estimated using regression models to explain the
variability among households, and to attempt to establish factors that lead to the accumulation of
arrears.
The following model was used to estimate annual arrears faced by the company under normal or
expected future conditions:
itititiitFactorsEconomicWeatherRateArrearsMonthly32βββα+++=
Regression (Causal) Model of Arrears
The regression model included in this study attempts to explain a portion of the variability in
monthly arrearage amounts (the dependent variable) based upon the potential relationships of
arrearage amounts with other variables (the independent variables) in the data set. This relationship
can be expressed mathematically through a theoretical functional relationship like:
Monthly arrearage amounts = f(weather, rates, payment programs, trend)
Regression Model Specifications
The first step in developing the final regression model for this study involved testing alternative
model specifications. Each model was checked for 1) statistical significance of the variables and 2)
whether the signs of the regression coefficients were intuitively correct.
The final model that was estimated is as follows:
Current Amount Due = f(HDD, CDD, trend, rates, EPP, invoice lagged 5 periods)
The model expressed with the estimated coefficients follows:
Current Amount Due = -16.9+ 0.00454 HDD + 0.04381 CDD + 1.35395 TREND
+ 127.9 RATE - 42.8 EPP + 0.75 INVLAG1 + 0.40 INVLAG2 + 0.27 INVLAG3 +
0.26 INVLAG4 + 0.20 INVLAG5
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All coefficients are statistically significant at the 0.5 percent level. The estimated signs of the
coefficients are also as expected. Briefly, the estimated coefficients tell us that for a particular level
of arrears (Current Amount Due) the independent variables affect arrearage level as follows:
• For a one unit increase in HDD, average arrears increase $0.0045 dollars.
• For a one unit increase in CDD, average arrears increase $0.0438 dollars.
• For a one unit increase in trend, average arrears increase $1.35 dollars (trend
likely captures the impact of several variables not explicitly in the model).
• For a one unit increase in rates, average arrears increase 127.9 dollars.
• The lagged invoice variables indicate the effect of past invoice amounts on
current arrearage levels.
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Appendix B: PacifiCorp’s Residential Customer Class
PacifiCorp serves residential, commercial, industrial and irrigation customers in California, Idaho,
Oregon, Utah, Washington, and Wyoming. Table 19 shows that Utah has the largest proportion of
PacifiCorp residential customers (47 percent), followed by Oregon (33 percent).
Table 19. PacifiCorp Residential Class by State
Total Residential
Customers
Percent of Total
Customers
CA 33,878 2.5%
ID 48,592 3.6%
OR 434,244 32.5%
UT 623,182 46.6%
WA 98,192 7.3%
WY 99,242 7.4%
PacifiCorp 1,337,330 100%
Figure 13 below shows the breakdown of customer classes in each state. In all states except Idaho
and Wyoming, the residential class is the largest revenue generator.
Figure 13. Percent of Total Revenue Generated by Customer Class and State

PacifiCorp Customer Classes by State
Percent of Total Revenue Generated by Class
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
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Irrigation
Industrial
Commercial
Residential
Irrigation 6.9% 20.4% 1.1% 0.7% 4.3% 0.3%
Industrial 5.7% 33.6% 15.2% 24.4% 20.3% 59.9%
Commercial 36.6% 15.3% 32.7% 35.1% 33.2% 21.4%
Residential 50.3% 30.6% 50.5% 37.5% 41.8% 17.9%
California Idaho Oregon Utah Washington Wyoming

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Figure 14 compares revenue billed to the residential class for each month in Fiscal Years 2003
through 2006. The residential class consistently accounts for between 33 percent to 46 percent of the
total revenue across all customer classes.
Figure 14. Residential Revenue Years 2003 - 2006
Residential Revenue as Percent of Total Revenue
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
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2003 2004 2005 2006
2003 45% 41% 41% 38% 37% 35% 35% 38% 35% 33% 37% 43%
2004 46% 43% 34% 37% 34% 33% 35% 37% 35% 34% 37% 44%
2005 46% 41% 41% 39% 35% 34% 36% 38% 36% 34% 37% 45%
2006 46% 43% 44% 39% 36% 35% 37% 39% 36% 34%
Jan Feb Mar April May June July Aug Sep Oct Nov Dec

In terms of dollars, residential revenue has been steadily climbing from 2003 through 2006.
Consumption and, therefore, revenue is very seasonal in nature, as seen in Figure 15.
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Figure 15. Residential Revenue 2003 - 2006
Residential Revenue
$45,000
$55,000
$65,000
$75,000
$85,000
$95,000
$105,000
$115,000
$125,000
Ja
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2003 2004 2005 2006

Figure 16 shows again that consumption has a seasonal component, and that Oregon has a heating
load while Utah has a cooling load. Figure 16 also shows Washington’s customers have a seasonal
component to their consumption.

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Figure 16. Residential Revenue by State 2005 - 2006
PacifiCorp Revenue Dollars by State
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06
2005 through June 2006
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California Idaho Oregon Utah Washington Wyoming

The states vary in terms of the presence of electric space and water heat. For example, in Utah only
11 percent of the households have electric space heat, while in Washington the proportion is at 49
percent. This information is not available at the account level. We used PacifiCorp’s Energy
Decision Survey data to create the macro level estimates provided in Table 20.

Table 20. Electric Heat and Electric Water Heat By State
State Percent with
Electric Space Heat
Percent with Electric
Water Heat
California 32% 81%
Idaho 31% 55%
Oregon 41% 67%
Utah 11% 14%
Washington 49% 75%
Wyoming 16% 32%
Credit and Collection Activities
The following sections describe PacifiCorp’s credit and collection activities by state as applied to the
overall residential households (not necessarily low-income). Table 21 describes collections policies
for households that have demonstrated some payment problem or risk in the past.
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This set of procedures offers several junctures where the household is given time to pay its bills in
order to stop future collections actions. Households that have demonstrated good payment practices,
and who have not presented payment risk follow nearly the same collections procedure. However,
those typically good-paying households receive a reminder notice prior to the first past due notice.
The reminder notice essentially gives these households an additional month to pay before the
collections process begins.
Regulatory Protections
Regulatory bodies establish consumer protections that must be followed by utilities operating in
those states. When the timeline of collection activities is coupled with the consumer protections
offered by each state, customers have several opportunities to avoid service termination.
The LIHEAP Clearinghouse published a summary of regulatory protections associated with
PacifiCorp’s service territory (see Table 21 below). This summary was compared to each state’s
regulatory Website. Note that Idaho excludes explicit protections for households that agree to
deferred or extended payment plans. Oregon does not have a seasonal moratorium on utility service
disconnects. Other states have limited prohibitions on shutoff or seasonal moratoriums.

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Table 21. State Regulatory Termination Protections
C
A

Utilities are prohibited from shutting off service during winter to residential customers who make regular payments of at
least 50 percent of their bills or where detrimental to health or safety of household member. The utilities may require such
customers to comply with a levelized payment plan to avoid shutoff, or otherwise must provide such customers with 9-
month repayment plans starting at the end of the winter. No disconnect if customer enters into deferred or extended
payment agreement. http://www.turn.org/article.php?id=465
I
D
During the months December through February there is a disconnect ban for households with children under 18, elderly
age 62 or older, or infirm. If the customer establishes a deferred payment plan before Nov 1, they cannot be shut off
between November and March. http://www.puc.state.id.us/webrules/Utility%20Customer%20Relations%20Rules_06.pdf
O
R

A medical certificate will prevent disconnection for up to 6 months for a non-chronic condition, up to 12 months for
chronic condition and requires the customer to set up a payment plan. Customers cannot be disconnected on a weekend
or holiday or any day prior to the weekend or the holiday. No disconnect if customer enters into a deferred payment plan.
http://arcweb.sos.state.or.us/rules/OARS_800/OAR_860/860_021.html
U
T

30-day disconnect delay if detrimental to the health of a household member; must have physician certification. Utilities
must have commission permission to discontinue service to a household where someone is dependant on life-saving
equipment. Utilities must offer payment plans. http://www.rules.utah.gov/publicat/code/r746/r746-200.htm#T7
W
A

Between Nov 15 and March 15, customers may not be disconnected if they notify the utility of their inability to pay, and
within 5 days of a delinquency notice. The customer must be certified as LIHEAP eligible by presenting income
statements to a grantee such as a community action agency. The customer must apply for any bill payment assistance
and weatherization programs. The utility may require a payment of 7% of customer’s income during this period. The
customer must agree to pay all amounts currently owed by the following Oct 15. Disconnection will be immediately
delayed if a household member has a medical condition that could be aggravated by loss of utility service. The utility
must be supplied with written notification 5 days after first request for medical waiver. Utilities may be disconnected when
the threat of medical endangerment has passed. Utility may require payment of 10% of balance within 5 days and may
require customer to enter into an agreement to pay all the balance within 120 days. Following disconnection, the account
holder may request to be reconnected by claiming ‘prior obligation’. By doing so, the account holder is not required to
pay all outstanding balances before regaining service; however, the account holder may be required to place funds on
deposit and pay outstanding arrears via a payment arrangement. http://apps.leg.wa.gov/wac/default.aspx?cite=480
W
Y

22-day disconnect delay if physician certifies that a household member is disabled or seriously ill. 30-day delay if a
household member is on life support equipment; customer must enter into payment plan. November 1 – April 30 “weather
extremes” restrictions on disconnections if customer is unable to pay and has exhausted available assistance or is
actively seeking assistance, or can pay, but only in installments. http://soswy.state.wy.us/RULES/6185.pdf
FERC Form 1 Filings
The Federal Energy Regulatory Commission (FERC), regulates the interstate transmission of natural
gas, oil, and electricity. Each major utility must submit Form 1, the annual regulatory support
document that collects financial and operational information. Form 1 is a nonconfidential public use
form.
FERC Form 1 filings include electric operations and maintenance expenses for each customer class.
There are several residential entries of interest in this study. These include the following:28

28 Full definitions found in Electronic Code of Federal Regulations. <http://ecfr.gpoaccess.gov/>
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• Electric operations and maintenance expenses for customer records and collection expenses
(Account 903). This includes the cost of labor, materials used and expenses incurred in work
on customer applications, contracts, orders, credit investigations, billing and accounting,
collections and complaints. This account also includes activities associated with delinquent
accounts, including preparing and delivering delinquent notices, disconnecting and
reconnecting service because of nonpayment of bills. The actual amount expended for
activities associated with delinquent accounts is not delineated.
• Uncollectible accounts (Account 904). This account is “charged with amounts sufficient to
provide for losses from uncollectible utility revenues.”
• Accumulated Provision for Uncollectible Accounts—Credit (Account 144). Losses from
uncollectible accounts are charged to Account 144 as concurrent credits to amounts charged
to Account 904. Account 144 is “credited with amounts provided for losses on accounts
receivable which may become uncollectible, and also with collections on accounts previously
charged.”
• Customer assistance (Account 908). This includes the cost of labor, materials used and
expenses incurred in providing instructions or assistance to customers, to encourage safe,
efficient and economical use of the utility's service. It also includes, “Demonstrations,
exhibits, lectures, and other programs designed to instruct customers in the safe, economical
or efficient use of electric service, and/or oriented toward conservation of energy.” Account
908 also includes, “Engineering and technical advice to customers, the object of which is to
promote safe, efficient and economical use of the associate utility company's service.”

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Figure 17. Summary Of FERC Form 1 Accounts
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Selected FERC Accounts: Electric Operations and Maintenance
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2002 2003 2004 2005
2002 $34,317 $20,913 $8,094 $39,564
2003 $44,497 $20,345 $8,272 $32,330
2004 $47,711 $6,410 $32,568 $18,937
2005 $51,082 $7,233 $44,489 $10,877
903 Customer records
and collection expenses.
904 Uncollectible
accounts.
908 Customer assistance
expenses (Major only).
144 Accumulation
Provision for
Uncollectible Acct -

FERC filings show a steady increase in Account 903 which includes the cost of keeping customer
records and the expenses related to account collection. Over the four year period 2002 through 2005,
903 accounts rose 33 percent. Uncollectible accounts were dramatically reduced from a mean of
$20.6 million in the years 2002 and 2003, to a mean of $6.8 million in calendar years 2004 and
2005. PacifiCorp suggests that its change in collection practices, as well as changes in the collection
agencies providing service, resulted in the sharp decrease in the amount of 904 accounts from 2003
to 2004. Corresponding declines are seen in the 144 accounts in years 2004 and 2005.
A sharp increase in the customer assistance expenses is seen in 908 accounts, moving from an
average of $8.2 million in 2002 and 2003, to an average of $38.5 million in 2004 and 2005. The
increase reflects expenditures for conservation- and energy-related programs for all residential
customers. This includes for example, weatherization programs and DSM programs.
Aging of Accounts Receivables
PacifiCorp reports on aging arrears show that the overall amount of arrearage has decreased from
2002 to 2006. For example, in January 2003 account delinquencies aged over 90 days totaled $2.9
million, while in 2006 the amount was $2.2 million. This represents a reduction of 30 percent over a
four-year period. This trend is reflected in Figure 18 below.

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Figure 18. Dollars Delinquent, Fiscal Years 2003-2006
Active Residential Delinquency
Greater than 90 Days Old
$0
$1,000
$2,000
$3,000
$4,000
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2003 2004 2005 2006
2003 $2,954 $2,361 $2,230 $2,547 $2,954 $3,095 $3,257 $2,819 $2,652 $2,409 $2,873 $3,380
2004 $2,869 $2,357 $2,189 $2,823 $3,042 $3,312 $3,231 $2,678 $2,523 $2,253 $2,758 $2,842
2005 $2,407 $1,929 $1,873 $2,265 $2,551 $2,675 $2,968 $2,547 $2,322 $1,940 $2,427 $2,804
2006 $2,216 $1,649 $1,847 $2,024 $2,402 $2,871 $3,074 $2,587 $2,455 $2,237
Jan Feb Mar April May June July Aug Sep Oct Nov Dec

The amount at least 90 days delinquent peaks in July, drops to a low point in October, and increases
again in December. The seasonal nature suggests people catch up during the summer months.
Accounts delinquent over 90 days creep up again going into winter, peak in December, and drop
again from January through March. Utah, which experiences a summer peak in usage, experiences a
peak in delinquency in December, and a second but much smaller peak in delinquency in June.
Revenue billed that is zero to 30 days old is considered the current amount due. Figure 19 is a
snapshot of the aging of accounts in September 2006, by state. This plots all active accounts with at
least one active agreement. Between 70 percent and 83 percent of all revenue due the company has
aged 30 days or less. The largest portion of delinquent revenue occurs between 31 and 60 days.
Figure 20 shows between 13 percent and 23 percent of amounts billed have aged 31 to 60 days. In
these accounts with active agreements, the amount due continues to drop as the accounts age.
By contrast, the accounts with inactive agreements, that is, accounts that are closed, show a different
pattern. With the exception of Idaho, as seen in Figure 20, most outstanding revenue is 151 to 270
days old. In terms of the cost of capital, those with closed accounts cost the company much more
than active accounts with agreements since active accounts have a much greater incentive to pay
down past debt.

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Figure 19. Aging Account with Active Agreements By State, Sept. 2006
Residential Accounts With Active Agreements
Account Aging
0%
10%
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70%
80%
90%
Account Age
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CA
ID
OR
UT
WA
WY East
WY West
CA 82.89% 13.31% 2.44% 1.12% 0.20% 0.04%
ID 78.28% 16.30% 3.18% 1.68% 0.47% 0.09%
OR 72.15% 18.05% 5.23% 3.64% 0.87% 0.07%
UT 70.22% 22.79% 4.70% 1.67% 0.47% 0.15%
WA 71.69% 20.06% 4.44% 2.41% 1.21% 0.18%
WY East 78.20% 15.95% 3.43% 1.75% 0.56% 0.10%
WY West 80.56% 13.88% 3.18% 1.68% 0.56% 0.14%
0-30 Days 31-60 Days 61-90 Days 91-150 Days 151-270 Days Gt 270 Days

Figure 20. Aging Accounts With Inactive Agreements, By State, Sept. 2006
Residential Accounts With Inactive Agreements
Account Aging
0%
10%
20%
30%
40%
50%
60%
Account Age
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CA
ID
OR
UT
WA
WY East
WY West
CA 14.46% 9.74% 8.33% 23.27% 40.19% 4.00%
ID 45.16% 7.49% 6.64% 13.39% 22.69% 4.65%
OR 10.59% 9.67% 9.01% 23.47% 42.89% 4.37%
UT 16.89% 18.86% 13.52% 18.92% 25.62% 6.19%
WA 6.36% 7.65% 6.15% 18.23% 52.40% 9.23%
WY East 14.46% 12.36% 10.72% 22.63% 33.28% 6.54%
WY West 10.46% 9.16% 8.08% 21.80% 42.39% 8.10%
0-30 Days 31-60 Days 61-90 Days 91-150 Days 151-270 Days Gt 270 Days

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Disconnect Orders and Cuts in Service
As shown above, households receive past due notices one or two months after the amount was due.
Orders to disconnect service are typically issued two weeks after a past due notice. Before and after
the disconnect order, households have opportunities to contact the company to pay the balance or
make a payment arrangement before the disconnect is issued and sometimes directly with the person
performing the disconnect. Figure 21 shows both the number of disconnect orders (field collection
orders) and the number of actual cuts in service (disconnections). The number of field collection
orders was substantially lower in 2003 than in any other year. All years show that the numbers of
field orders worked are lowest April through September, jump in October, fall in November and
December (but still to levels higher than September), and rise again through March.
Figure 21. Residential Class Disconnect Orders by Year

Field Collection Orders Worked and Actual Cuts in Service
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2003 Orders 2004 Orders 2005 Orders 2006 Orders2003 Cuts 2004 Cuts 2005 Cuts 2006 Cuts
2003 Orders 16,044 17,852 17,406 13,925 12,768 12,918 10,755 10,752 11,785 15,065 11,656 13,997
2004 Orders 20,609 21,259 25,282 17,312 13,196 14,859 12,087 15,194 13,614 23,861 18,451 18,360
2005 Orders 22,759 23,858 28,977 14,304 14,567 14,938 11,226 14,804 17,387 26,054 21,814 19,935
2006 Orders 28,259 27,768 30,260 15,264 14,932 13,815 10,894 14,306 11,614 28,436
2003 Cuts 3,768 4,022 5,012 6,465 5,822 6,126 5,184 5,320 5,709 3,350 2,121 2,014
2004 Cuts 3,931 3,994 4,616 7,702 6,916 7,338 5,876 7,643 7,142 3,748 2,606 1,885
2005 Cuts 3,945 3,898 4,705 6,747 7,493 7,519 5,570 7,355 6,019 4,476 3,261 1,580
2006 Cuts 4,769 4,354 5,199 7,681 7,678 6,908 5,297 6,960 5,777 4,149
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Figure 22 shows the percent of field orders issued in one month that result in cuts in service in the
same month.29 From April through September about half the orders issued to cut service resulted in
actual cuts in service. From October through March, the numbers dropped by about half.

29 Since there are a maximum of about 2 weeks between the order issued and service cut, the percent was computed
using orders and cut data for the same month.
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Figure 22. Percent Field Orders Resulting In Cuts

Percent of Field Orders Resulting in Cuts in Service
0%
10%
20%
30%
40%
50%
60%
Pe
r
c
e
n
t

o
f

F
i
e
l
d

O
r
d
e
r
s

2003
2004
2005
2006
2003 23% 23% 29% 46% 46% 47% 48% 49% 48% 22% 18% 14%
2004 19% 19% 18% 44% 52% 49% 49% 50% 52% 16% 14% 10%
2005 17% 16% 16% 47% 51% 50% 50% 50% 35% 17% 15% 8%
2006 17% 16% 17% 50% 51% 50% 49% 49% 50% 15%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Write-Offs
Once the arrearage is 180 days beyond the closing bill, the company writes off the amount past due.
Figure 23 shows that the percentage of residential revenue written off has steadily decreased since
2003. Write-off as a percent of total revenue peaked in October at about 1.3 percent in 2004. In
2006, October peaked at one percent of total residential revenue. Note that the total revenue is the
amount billed to households during that month. The write-off occurring in the same month is not
related to that month’s revenue. In effect, the write-off further reduces the month’s net revenue.
Overall, PacifiCorp’s rate of write off is quite low, with all but one month in 2006 below one
percent, and steadily decreasing over time.

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Figure 23. Residential Class Write-Off 2003-2006
Residential Write-Off
$0
$500
$1,000
$1,500
Do
l
l
a
r
s

(
t
h
o
u
s
a
n
d
2003 2004 2005 2006
2003 $704 $682 $738 $585 $571 $533 $599 $807 $1,03 $910 $841 $818
2004 $800 $647 $503 $595 $510 $456 $499 $874 $1,05 $892 $846 $777
2005 $577 $520 $538 $404 $390 $410 $480 $774 $826 $800 $827 $710
2006 $587 $525 $547 $523 $434 $362 $418 $800 $796 $824
Jan Feb Mar April May June July Aug Sep Oct Nov Dec

Figure 24. Write-Off As Percent Of Revenue
Residential Write-off as Percent of Residential Revenue
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
Pe
r
c
e
n
t

o
f

R
e
s
i
d
e
n
t
i
a
l

R
e
v
e
n
u
e
2003 2004 2005 2006
2003 0.71% 0.82% 0.91% 0.82% 0.83% 0.75% 0.75% 0.89% 1.33% 1.44% 1.13% 0.84%
2004 0.71% 0.71% 0.74% 0.84% 0.76% 0.64% 0.61% 0.94% 1.38% 1.31% 1.08% 0.75%
2005 0.52% 0.56% 0.64% 0.51% 0.55% 0.55% 0.55% 0.75% 0.96% 1.13% 1.03% 0.61%
2006 0.49% 0.51% 0.54% 0.60% 0.58% 0.44% 0.42% 0.71% 0.87% 1.07%
Jan Feb Mar April May June July Aug Sep Oct Nov Dec

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Collections On Payment Plans
PacifiCorp offers time payment plans to assist households in paying their arrearage, typically plans
are 90 days or longer. One of the metrics PacifiCorp uses to assess payment on the time payment
plans is the amount of the past due balance collected within the first 30 days of establishing the plan.
Figure 25 shows activity from January 2005 through September 2006, and includes the amount
(thousands of dollars) entered into payment plans, and the amounts collected within the first 30 days
of the plan. Typically this amount collected in the first 30 days is the amount collected up front as
the plan is first established. This figure shows that the amounts entered into payment plans has
increased 56 percent from January 2005 to September 2006. Note that both July 2005 and July 2006
experienced a jump in amounts entered into payment plans. During this time period, $37.5 million
was entered into payment plans. A total of $12.9 million was collected within 30 days of establishing
the plan during the same time period.

Figure 25. Amounts Entered Into Collection; Amounts Paid Within 30 Days
Amount Entered Into Payment Plans
Amount Collected First 30 Days
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Ja
n

2
0
0
5
Fe
b

2
0
0
5
Ma
r
c
h

2
0
0
5
Ap
r
i
l

2
0
0
5
Ma
y

2
0
0
5
Ju
n
e

2
0
0
5
Ju
l
y

2
0
0
5
Au
g

2
0
0
5
Se
p
t

2
0
0
5
Oc
t

2
0
0
5
No
v

2
0
0
5
De
c

2
0
0
5
Ja
n

2
0
0
6
Fe
b

2
0
0
6
ma
r

2
0
0
6
Ap
r
i
l

2
0
0
6
Ma
y

2
0
0
6
Ju
n
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2
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0
6
Ju
l
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2
0
0
6
Au
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2
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6
Se
p
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2
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0
6
Do
l
l
a
r
s

(
t
h
o
u
s
a
n
d
s
)
Amount Entered into Payment Plan
Amount Collected First 30 Days

Figure 26 shows the percentage of past-due balances collected in the first 30 days of establishing a
time payment plan. In 2004 through 2006, about 30 percent of the past-due amount was collected in
the first 30 days. In 2003 the amount was much lower, about 20 percent. PacifiCorp changed and
tightened its collection practices from 2003 to 2004; the effect of these changes in collection
practices may be what we see in Figure 26.
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Figure 26. Amount Collected First 30 Days, Time Payment Plans
Percent of Past Due Balances Paid Within
30 Days of Setting Time Payment Plans
0%
5%
10%
15%
20%
25%
30%
35%
40%
Pe
r
c
e
n
t

2003 2004 2005 2006
2003 24% 28% 28% 31% 33% 33% 30% 29% 29% 28% 28% 27%
2004 28% 31% 28% 32% 30% 31% 32% 30% 29% 32% 33% 31%
2005 35% 36% 35% 36% 35% 35% 36% 33% 32% 33% 35% 31%
2006 36% 35% 35% 36% 33% 32% 33% 35% 31% 35% 37% 38%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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Appendix C: Residential Service Fees
The table below shows PacifiCorp’s residential service fees state by state.

Table 22. Residential Service Fees by State
CA ID OR UT WA WY
Deposit Twice the maximum
monthly bill
Not to exceed
1/6 of annual
billing
1/6 of
estimated
annual billing
Estimated
average 60
day billing
period
Not to exceed
1/6 of annual
billing
Up to 90 days
bill
Late payment
fee
1.5% of total unpaid
balance if balance >
$20
1% of
delinquent
balance
1.7% of
amount not
paid in full
each month
1% of
delinquent
balance
1% per month
of delinquent
balance
1.5% of
delinquent
balance
Returned
payment fee $12 $20 $20 $20 $20 $30
Reconnect fee
$30 regular
business hours;
$60 5pm to 8pm;
$75 all other times
$25 regular
business hrs;
$50 evenings,
wknds &
holidays
$30 regular
business hrs;
$75 non-
regular
business hrs;
$175 wknds &
holidays
$30 regular
business hrs;
$100 all other
times
$20 regular
business hrs;
$40 evenings,
wknds &
holidays
$20 regular
business hrs;
$100 other
times

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Appendix D: Low Income Arrearage Study Working
Group
Washington
Roger Kouchi, Washington Utilities & Transportation Commission
Steve Moss, Blue Mountain Action Council (BMAC)
Michael Karp, A World Institute for a Sustainable Humanity (A.W.I.S.H.)
Idaho
Beverley Barker, Idaho Public Utilities Commission
Teri Ottens, Community Action Partnership Association
Wyoming
Bryce Freeman, Wyoming Office of Consumer Advocates
Jeff Dockter, State of Wyoming Department of Family Services
Oregon
Deborah Garcia, Oregon Public Utilities Commission
Jim Abrahamson, Community Action Directors of Oregon
Donna Kinnaman, Community Action Program of East Central Oregon
California
Jeannine Elzey, California Public Utilities Commission
Michael Flannery, Great Northern Corp.
Utah
Rea Peterson, Utah Division of Public Utilities
Cheryl Murray, Committee of Consumer Services
Betsy Wolf, Salt Lake City CAP

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Appendix E: Working Group Comments on Draft Report
The following are comments received on the draft report, included here in chronological order.

From: Michael Karp [mailto:[e-mail]]
Sent: Thursday, March 08, 2007 10:37 AM
To: Anne West
Subject: Re: PacifiCorp Low-Income Arrearage Study -- Draft Final Report

Dear Anne et al,

Thanks so much for sending the draft report. . . . And kudos to the team for an
excellent analysis. There were some very interesting conclusions.

I do hope you can convey a dual message here. On the one hand, the study was
restricted to Company low-income in arrears. However, the conclusion states that “in
2006 PacifiCorp low-income households are remarkably covering 98% of their bill” . . .
. . I believe this needs further clarification. Commissioners and others will get the
message that there are adequate resources out there and that low-income are getting
along just fine. In fact, as the study was restricted to only those known to have gotten
energy assistance, weatherization or rate reduction assistance and that I would be
surprised if that combination accounted for more than 20-25% of the eligible low
income population pool in the Company service area . . . . There is a boggling unmet
need for low-income energy services. After all, the program in Washington State for
rate assistance is capped at 2,618 households. I think the overall message of need
should go hand in hand with the results of arrearage coverage so that there is no
confusion on the part of the report reader that does not know the ins and outs of these
programs. Please consider amending the executive summary to this end, and of
course call if you would like to discuss it further.

Thanks again for the opportunity to comment

Michael
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Comments of the Community Action Directors of Oregon and the
Oregon Energy Coordinators Association on the Draft Low-Income Arrearage Management
Study Prepared by Quantec, LLC
March 19, 2007
The Community Action Directors of Oregon (CADO) and the Oregon Energy Coordinators
Association (OECA) appreciate the opportunity to participate in the preliminary stages of this
project and to have the opportunity to comment on the Draft Report.
Our thanks go out to M. Sami Khawaja, Kevin Monte de Ramos, Anne West, Doug Bruchs, and
Roger Colton for their work on this study. This study was initiated and completed in accordance
with a settlement condition in the Mid-American Energy Holdings Company acquisition of
PacifiCorp. This ambitions study covered each of the six states served by PacifiCorp. The study
was funded at a level of $66,000 – an extremely modest level for a study of this much potential
magnitude and scope. The very diverse nature of the PacifiCorp service territory, and the
differences that each individual state brings to the regulation of low-income programs, highlights the
difficult nature of the challenge that Quantec, LLC must have encountered as they amassed the
information contained in this report and tackled the challenges of recommending cost effective cost
mitigation strategies.
The funding, and time, limitations may have led, inadvertently, to a situation where there was not
sufficient time or resources available to more fully engage the multi-state review team in ongoing
progress updates or to share preliminary report conclusions. We suspect that many reviewers have
scrambled to produce comments that will be of value to the various state commissions and to
PacifiCorp. Further, there was no opportunity to provide comment and input into the report itself.
As a consequence, comments by the multi-state review team will be included in the appendix of the
report and not reflected in the report’s conclusions.
We believe that this effort should be built upon and utilized as a springboard to further needed
analysis and investigation into further state and/or multi-state-level analysis of the problems of
arrearages of low-income households and a more in-depth evaluation of cost-effective strategies to
reduce these arrearages and lower operational costs.
Report Observations
Our comments are presented as a series of observations, questions and issues that emerged upon our
reading of this draft report. These comments are not presented in any order of importance.
• The report highlights the positive impact that existing low-income payment programs have
had (over the study period of 2002 to 2006) on the level of customer’s arrearages and upon
their ability to pay their electricity bills. The decline in the Average Annual Accumulation of
Arrears (Figure 1) and the total bill coverage displayed on Table 2 demonstrates this
progress.
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• We are in agreement with the observation Michael Karp submitted upon the release of this
draft report. He noted that the positive impact metrics are good news for those low-income
customers fortunate enough to receive assistance. However, these programs are of limited
value to low-income customers who qualify for (and need) assistance but do not receive any
due to the lack of available funds. By limiting the study to customers who had received
energy assistance, rate reductions, or weatherization it may lead decision makers to the false
conclusion that “low-income (customers) are getting along just fine”. In Oregon, we
estimate that as many as 75 to 80 percent of the total low-income customer base do not
receive assistance. The success story of programs already on the ground should not deflect
our attention from the large proportion of households whose needs are unmet.
• The California CARE rate discount program and the Home Electric Lifeline Program
(HELP) in Utah provide a 20 percent and 16 percent ($96 per year divided by an average
Utah PacifiCorp invoice of $592) discount to electricity customers respectively. The Low-
Income Bill Assistance (LIBA) program in Washington State has a total participation pool
that is capped at 2,618 households per year. In contrast, the Oregon Energy Assistance
Program (OEAP) which came into being with Oregon Senate Bill 1149 provided average
assistance of $321 in Program Year 2006 to customers, which translates to over 28 percent of
the annual Oregon PacifiCorp invoice of $1,063.
• The third bullet on Page 3 of the draft report requires additional investigation. It refers to a
period of “several months” to complete the process of committing assistance funds to an
account and the funding being received by the utility. This inefficiency needs to be explored
in more detail and rectified.
• At the beginning of the section titled “Recommended Strategies” on Page 5 it is noted that
specific cost effectiveness analyses were not conducted to evaluate each potential strategy.
This fact can be laid at the feet, we believe, of the limited budget and large scope of this
project. This valuable analysis needs to be conducted in subsequent analysis.
• Also on Page 5 is a brief section on the Identification of Low-Income Households. The
critical issue of customer privacy notwithstanding, the need to gather additional low-income
customer information and metrics is not only of great value, but is also a two-way street.
Utilities will require additional information and data to support their program and funding
efforts. At the same time, we would be supportive of the NARUC resolution to gather utility
billing and arrearage date from all electric and gas utilities within Commission jurisdiction in
support of State and federal low-income assistance programs.
• Quantec mentions prepaid meters in the section titled Maximize Use of New Trends. They
correctly note that many are opposed, for good reason, to this solution for low-income
clients. We agree with this notation – and are in opposition to their use for low-income
clients. We are not swayed by the argument made by some that prepaid meters eliminate
arrearages. Of course they do – through the elimination of electric service. Simply making a
prepaid meter program “voluntary” is insufficient protection for low-income customers. We
find the inclusion of prepaid meters as a possible arrearage management tool to be
unsupported by the data presented in the study and would urge decision makers to discount it
as a possible tool unless, and until, sufficient protections for low-income customers are
developed and implemented.
• Quantec is quite open with their support for rate discount programs. However, our reading of
the results of the report does not necessarily draw us to that conclusion. Further, they
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mention that Oregon Senate Bill 1149 should be modified to allow a rate discount program.
We have a couple of observations on this issue.
First, Oregon Senate Bill 1149, as currently written, may already possess that flexibility.
Second, and more importantly, we are not supportive of the call to divert some of the existing
funding from the previously mentioned OEAP program to fund a rate discount program.
On Page 22 of the report Quantec notes the difference in customer bill coverage ratios for the
three states that currently have rate discount programs compared to the three states that do
not. When the impacts of current energy assistance programs are added to the analysis in
states without rate discounts the bill coverage ratios not only become quite close, they also
each approach 100 percent. This “before and after” impact is clearly identified on Tables 1
and 2 on Page 3.
• In the final section on Page 7 titled “Longer Term Solutions”, Quantec mentions two
important points. The first calls upon PacifiCorp to participate in larger social efforts to
address the underlying issue of poverty. Quantec mentions Entergy’s support of local IDA
programs. In Oregon, there is an effort being launched called Oregon Thrives which aims at
supporting legislative action that addresses the very heart of the poverty issue. CADO
would welcome PacifiCorp’s support of the Oregon Thrives initiative.
The second point is the call for PacifiCorp to work through its various States on the review
and modification of the federal LIHEAP allocation formula to that it adequately reflects the
low-income needs of the states PacifiCorp serves. We would strongly encourage
PacifiCorp’s efforts on this vital issue.
• Table 3 on Page 13 displays the Proportion of Total Low-Income Households Identified for
Analysis. One of the metrics contained on this table is an estimate of the total number of
households under 150 percent of the Federal Poverty Level (FPL) served by PacifiCorp. The
number that is shown for Oregon is 72,092. This number is significantly different than
figures we have been using. The following discussion highlights this possible anomaly.
Oregon’s threshold of qualification for low-income energy assistance (and weatherization) is
60 percent of state median income – which is roughly equivalent to 150 percent of the FPL.
In our recently released Low-Income Energy Assistance Snapshot we cite a figure of 419,000
Oregon households that are at, or below, 60 percent of state median income. This figure
comes from the 2005 American Community Survey. In 2005 (according to Oregon PUC
data) PacifiCorp served 28.9 percent of the average number of total residential customers
(both investor-owned and consumer-owned utilities). Taking 28.9 percent of the 419,000
household figure one arrives at an estimate of over 121,000 low-income households served
by PacifiCorp – a significantly higher figure than provided in the Quantec study.
• We would like to have seen additional documentation of the calculation of Total Arrears that
appears on Table 9, on Page 26. (Please note: this analysis does not include the data anomaly
mentioned above.) Quantec identifies a total PacifiCorp low-income customer base (with
electric space or water heat) of 92,577, of which 47,734 received some form of energy
assistance. The subset of the population receiving assistance that exhibited arrears in 2006
was 13,753 households. The proportion of the subset of customers who received assistance
and exhibited arrears is 28.8 percent. These households have an average accumulated
arrearage of $238. Our question relates to the “other” customers who did not receive
assistance. It is calculated that 44,843 low-income customers with electric space or water
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heat did not receive assistance. Of these, Quantec states that only 5,241 (or 11.7 percent)
were expected to have “payment problems”. Why is this proportion significantly lower that
the proportion of customers who had received assistance? A further question emerges when
the figure of 5,241 is multiplied by the same average accumulated arrearage figure of $238 in
arriving at the estimate of Total Arrears. Our understanding from this analysis is that the
$238 average accumulated arrears figure includes the impact of currently available assistance
programs which were not enjoyed by these customers. Quantec acknowledges that these
estimates are uncertain, but then goes on to state that they foresee no upward or downward
direction to the bias of the estimates. We would like to see some additional clarification of
these figures because we see a possibility that the Total Arrears estimate of $4.5 million may
be significantly understated.
In conclusion, we urge that PacifiCorp, upon filing the final report with their respective regulatory
commissions, do not view this work as complete. This study should be viewed as the beginning of a
journey that we can all take together to explore tangible avenues of addressing the nagging problem
of low-income arrearages faced by PacifiCorp and its entire customer base.

Thank You,

Jim Abrahamson, Oregon Energy Partnership Coordinator
Community Action Directors of Oregon
945 Columbia Street NE
Salem, Oregon 97301
Phone: [phone] ext. 612
Fax: [phone]
[e-mail]
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From: GARCIA Deborah [mailto:[e-mail]]
Sent: Monday, March 19, 2007 1:20 PM
To: DeCristoforo, Marisa; [e-mail]; [e-mail]; [e-mail];
Michael Karp; [e-mail]; [e-mail]; [e-mail];
[e-mail]; [e-mail]; Donna Kinnaman; [e-mail];
[e-mail]; [e-mail]; [e-mail]; [e-mail];
[e-mail]; [e-mail]; DURRENBERGER Ed; [e-mail]
Cc: Eberle, Becky; Hoffman, Jason; Doug Bruchs; M. Sami Khawaja; [e-mail]; Anne
West; BUSCH Ed; CONWAY Bryan; JOHNSON Judy; Rockney, Carole
Subject: RE: Deadline Extended for Low-Income Arrearage Study

Based on my review of this report I do not believe that all of the assumptions used to derive the
statistics and conclusions of this report are valid. In addition, the report includes inaccuracies
regarding Oregon law relating to discounted rates and collection practices. I would be happy to
share my specific concerns and suggestions with others at some later date as part of this or some
other process.

Deborah Garcia
Utility Analyst
Energy Rates & Tariffs
[phone]
[e-mail]
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From: Donna Kinnaman [mailto:[e-mail]]
Sent: Monday, March 19, 2007 4:36 PM
To: DeCristoforo, Marisa
Subject: RE: Deadline Extended for Low-Income Arrearage Study

I am sorry I have been out of the office so my response is late. After reading the draft copy of the
arrearage study, I do have a few concerns. I will keep my comments short.

I am reluctant to assume the conclusion on the benefit of rate discount. There is nothing in the
document that can substanciate the unmet need and how that factors into the cost benefit. The pay as
you go meters, would prevent arrearage but at what cost to the household? This is more or less an
observation, the pie charts in most illustrations appear to be a copy from one page to another and
don't necessarily represent the percentage outlined.
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From: B WOLF [mailto:[e-mail]]
Sent: Tuesday, March 20, 2007 8:50 AM
To: Anne West
Cc: bwolf; [e-mail]
Subject: Comment on Low Income Arrearage Study Draft Report

Anne,
Thank you very much for your assistance and patience - I really appreciate it. If you have any
questions, please call me on my cell phone at [phone].
Betsy

Comment by Betsy Wolf, Salt Lake Community Action Program
We will need to make further comments on the report at a later date due to time constraints
but need to correct one factual error. Regarding the recommendation on Longer Term
Solutions and the LIHEAP allocation formula on p. 7 in the Executive Summary: The report
asserts that Utah does not expend all its federal LIHEAP funds while Oregon funds are
exhausted quickly. State LIHEAP Director Sherm Roquiero asserts that Utah DOES expend all
its LIHEAP funds each year. However, each state has the discretion of how it expends its
LIHEAP dollars. Utah estimates the number of households it expects to serve in a heating
season and divides its allocated funds by that number. In so doing, it does not calculate the
amount that would cover a household's heating needs but an amount that will allow it to serve
all eligible applicants with some assistance. Therefore, a household in Utah receives an
average $290 LIHEAP payment and a maximum of $500 as compared with some states that
operate on a first come, first served basis, allocating more money on a per household basis but
running out of funds earlier in the season.

Quantec — Low-Income Arrearage Study Final Report 74
ID PAC-E-11-12
CAPAI 24 Attachment CAPAI 24
Attach CAPAI 24.pdf page 78 of 78