A solar installation in Emery County, with PacifiCorp’s Hunter coal-fired power plant in the background, is pictured on Wednesday, July 31, 2024. (Photo by Spenser Heaps for Utah News Dispatch)
Clean energy advocates unsuccessfully petitioned the Utah Public Service Commission to direct the state’s largest electric utility to accelerate procurement processes for renewable energy. While their direct petition was denied, they aren’t counting the ruling as a defeat.
Utah Clean Energy asked commissioners to require PacifiCorp, Rocky Mountain Power’s parent company, to start an open call to identify potential developments that would qualify for clean energy tax credits expiring under congressional Republicans’ spending package, widely known as the “big, beautiful bill.” An action that, according to Utah Clean Energy’s calculations, could save ratepayers millions, if not billions of dollars in future energy costs.
In an order issued this month, the commission determined that it doesn’t have the authority to require a utility to solicit a specific generation resource. But, the order also clarified that in its rate-regulating duties, the commission will take into consideration whether Rocky Mountain Power evaluated projects that are eligible for the tax incentives — and that Rocky Mountain Power must “responsibly and prudently evaluate” these limited-time opportunities to keep energy costs low.
“While the (public service commission) has no authority to dictate RMP’s resource procurement decisions, the reasonableness of RMP’s actions in evaluating and acting on any time-sensitive opportunities may certainly be a material factor in future rate proceedings,” the commission wrote.
Any requests by Rocky Mountain Power to expedite applications to procure resources that may qualify for preferential tax treatment in a limited time will be granted, according to the order.
The commission may have denied the request, but it also started a conversation before it was too late to capture the incentives, Logan Mitchell, climate scientist and energy analyst at Utah Clean Energy said.
“In some ways this is almost the best outcome,” Mitchell said. “They’re saying ‘hey, we expect you guys to do your job and take advantage of opportunities for ratepayers to build resources.’”
Request to PacifiCorp to accelerate clean energy developments could save ratepayers millions
Mitchell also highlighted that Utah Clean Energy’s request didn’t ask the utility to procure extra resources it didn’t need, but to use generation included in the company’s resource plan.
“These are things that they’re planning to build anyway, and the question is whether or not we’ll get tax credits with them or not,” Mitchell said.
According to Rocky Mountain Power, that’s something the company could figure out through bilateral negotiations without this process, the utility said in a comment asking the commission to deny the advocates’ request.
The utility also said that its regional resource planning assumed the end of tax subsidies for renewables, which resulted in the removal of over 3,700 MW of wind, 3,366 MW of solar and 2,382 MW of storage from their plan.
“This shows that since the Company does not need new resources to serve Utah customers, rapid procurement of resources, even if they are tax-advantaged, will impose unnecessary costs on Utah customers,” the company wrote.
A conversation starter
States like Colorado and Arizona have issued executive orders aiming to fast-track the procurement processes of new clean energy projects before the federal incentives end, so the clean energy advocates wanted to ensure Utah was also having similar debates.
Especially, Mitchell said, since the organization has kept in touch with developers with existing projects that could reach agreements with Rocky Mountain Power for either development, or to purchase power.
State entities, like the Office of Consumer Services, commended Utah Clean Energy’s effort to capture the federal benefits. However, the office doesn’t believe that parties have adequate resources to participate in the proposal because of their current and upcoming regulatory workload.
“As an alternative, the (Office of Consumer Services) recommends that PacifiCorp identify shovel ready projects and bring them before the PSC under the waiver provision of the Utah Energy Resource Procurement Act,” the office wrote in a comment.
Interwest Energy Alliance, a trade association representing clean energy developers, said in a comment that “given the revised IRS guidance requiring a project to ‘commence construction,’ (before July, 2026) there is now a finite pool of available projects and development resources with a clear pathway to satisfying revised tax credit eligibility requirements and deadlines.”
Therefore, processes must be expedited if the state wants to benefit from the outgoing tax incentives, according to the association.
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