Transmission lines lead away from the coal-fired Intermountain Power Plant near Delta, Utah on Monday, Feb. 3, 2025. (Photo by Spenser Heaps for Utah News Dispatch)
After the Utah Public Service Commission only granted a small portion of Rocky Mountain Power’s proposed electricity rate hike, the utility is challenging the decision, arguing that denying its ability to fully recover cost increases is “shortsighted” and threatens the long-term reliability, safety and resiliency of the state’s electric grid.
Last April, the public service commission approved a 4.7% increase in residential electric rates, only a quarter of the 18.1% bump the utility had requested last August after revising an original 30.5% proposal that dismayed Utah officials. The decision to approve a portion of the requested hike was later praised by lawmakers during May’s Public Utilities, Energy, and Technology Interim Committee.
In an over 130-page document filed on Tuesday, Rocky Mountain Power requested a rehearing saying that the order “improperly denies the Company recovery of prudently incurred expenses.” Additionally, the utility claims the public service commission’s decision “frequently reaches conclusions that depart from statute and Commission precedent or that are unsupported or even contradicted by the evidence.”
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This order, Rocky Mountain Power wrote, compromises the utility’s financial stability and its ability to add the necessary investments the state needs to continue its economic growth. It also undermines the policies that have allowed the state to keep one of the lowest energy costs in the country.
Commission orders 4.7% electricity rate increase, a quarter of Rocky Mountain Power’s proposal
“Those benefits are not by happenstance. They have come from a regulatory environment that allows recovery of prudently incurred costs and that allows the utility to deploy the necessary capital to maintain a system without having to pay excessive financing costs,” the document reads. “The Order is shortsighted and will undermine that environment.”
The utility said in a statement on Wednesday that it is asking the commission to reconsider some of its positions to achieve a sustainable and balanced outcome.
“No one, including Rocky Mountain Power and its 3,200 employees, wants to see increased electricity rates, and we work hard to avoid them,” the company said. “Unfortunately, the utility cannot always offset unexpected increased costs of providing the service our customers demand without seeking a rate increase.”
A big item in the commission’s order was how PacifiCorp, Rocky Mountain Power’s parent company, dealt with wildfires, questioning whether the company’s mitigation plan proved worth the cost.
That’s “an analysis that is at best subjective, particularly given that the Commission has not adopted any standard for making that assessment, and there is no industry accepted approach for conducting such a cost-risk analysis,” the utility wrote. Utah code also doesn’t require such an assessment.
While the commission concluded that vegetation management is enough to protect Utahns from fire risks, there isn’t any evidence to support that, the document reads. The conclusion is also inconsistent with evidence presented in the process “and the Governor’s own recent directives to strengthen wildfire preparedness.”
The commission was also profoundly critical of how PacifiCorp’s actions during 2020 wildfires in Oregon contributed to escalating insurance premiums and how after seeing an impact in its equity, it paid $550 million in dividends to Berkshire Hathaway, its parent company.
“It is unreasonable to expect RMP’s ratepayers in Utah to pay higher rates because of the wildfires in Oregon and the depletion of cash reserves by these dividend payments,” commissioners wrote in the order.
However, Rocky Mountain Power described that assessment as “demonstrably unsound,” arguing that it ignores that the verdict in a lawsuit against the company is in an appeal process and didn’t cause premiums to increase.
“The Order does not fairly weigh and apply factual evidence, ignores Commission precedent, is not consistent with applicable law, and, as a whole, appears outcome motivated to deprive the Company of legitimate and prudently incurred costs under the guise of controlling alleged out-of-control costs,” the utility wrote.
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