Rocky Mountain Power’s Utah rate conflict may be settled with an additional 4.2% hike

A thorny process over a Utah electricity rate increase may be coming to an end after Rocky Mountain Power proposed a settlement with the Utah Public Service Commission to add a 4.2% rate hike on top of the 4.7% increase commissioners approved last year.

The agreement, which the commission has yet to officially review, also proposes stabilizing rates through 2028, with the utility committing not to file another rate increase proposal until then. 

“The terms include a $93 million increase in general rates of 4.2% increase, or $3.44 for an average residential customer, effective July 1,” according to a news release from Rocky Mountain Power.

However, coincidentally, the increase will come at the same time customers will see a 10.6% decrease in energy charges on their bill because of market adjustments structures, which “will reduce a typical residential customer’s monthly bill by about $11 per month.” So, ultimately, the impact of the two actions will result in an overall net decrease for customers, the company said. 

Commission orders 4.7% electricity rate increase, a quarter of Rocky Mountain Power’s proposal

The settlement would also advance a plan to invest $2 billion “to support reliability, resilience and continued economic growth across the state,” the release says. 

“This is a strong and balanced outcome for Utah,” Dick Garlish, president of Rocky Mountain Power said in the release. “It delivers what our customers consistently tell us they want most — stable and predictable costs, reliable service and continued investment in the communities we serve.” 

The company proposed the settlement after a 30.5% rate hike proposal that was eventually lowered to 18.1% after provoking strong disapproval among Utah leaders, including Gov. Spencer Cox who in a social media post called the proposition “completely unacceptable,” while vowing to do everything in his power to ensure “a rate increase of that magnitude never sees the light of day.” 

The ordeal also reached the chambers of the Legislature with bill proposals to make Rocky Mountain Power “have some skin in the game” on other fees that customers pay for. 

The Utah Public Service Commission ended up ordering a 4.7% electricity rate increase, a quarter of the utility’s request. 

After a testy appeal request was rejected by the commission, Rocky Mountain Power brought the issue before the Utah Supreme Court. The court proceeding has been stayed as the Public Service Commission considers the settlement. 

Who wins with the settlement?

Cox voiced support for the agreement in a social media post, calling it “an encouraging step for Utah families and businesses.”

“Utah has some of the lowest electricity rates in the nation, and keeping them that way matters,” Cox wrote. “This proposed settlement helps preserve that advantage by providing rate certainty for families and businesses, strengthening accountability, and supporting the investments needed to keep our electric grid reliable.” 

For Rocky Mountain Power, the settlement would provide “the certainty of revenues coming in very soon without very contentious litigation,” said Michele Beck, director of the Office of Consumer Services. 

Customers would also get certainty because these are the rates they will get until 2029, she said.

However, there are other mechanisms in which rates could change, with charges like fees to feed wildfire mitigation funds, or the energy balancing account, which can either credit or debit ratepayers for the utility’s costs not covered by the regular electricity rates.

“It’s not absolute rate certainty, but it’s rate certainty on a large percentage of the total rates, and that’s kind of what both sides get, and it’s in the eye of the beholder who has the better deal there,” Beck said.