Beginning this month, Rocky Mountain Power customers will see a new charge on their monthly power bills.
It won’t be much — around 18 cents a month for the average customer — but the line item represents a major change. It affects the way the utility charges its Utah customers for the fuel it needs to generate electricity at its power plants. Also covered are the costs of any additional power the utility must buy on the open market to meet demand.
“We have similar cost-adjustment mechanisms in place in Wyoming and Idaho, the other states we serve,” spokesman Dave Eskelsen said.
In the past, the company typically had to wait for its rate cases to be completed before it could adjust the amount it charges for additional purchases made in times of high demand. And sometimes the utility would go several years between such rate cases.
A year ago, Utah’s top regulators at the Public Service Commission gave the company permission to set up a four-year pilot program that established an “energy cost adjustment mechanism,” or ECAM for short.
The ECAM can be likened to the “balancing account” used by Questar Gas to periodically either raise or lower the amount it charges customers for the natural gas they use.
In an order issued last week, the PSC approved a deal the power company struck with the state’s Division of Public Utilities and the Office of Consumers Service. Under that agreement, the company gets to raise its rates by $7.8 million over the next two years to recover fuel and power purchase costs made in the final quarter of 2012.
Rocky Mountain Power, under the pilot program, will be able to come back annually to the PSC and request further adjustments in what it charges customers. The amount it requests, though, will depend upon what it had to pay for the fuel to run its plants and the cost of the electricity it had to purchase on the open market in the previous year.
Under the order signed by the PSC last week, 39 percent of the $7.8 million increase will be paid by residential customers, the rest by the utility’s commercial and industrial customers.
“The settlement was fair [for the company and its customers],” said Michele Beck, director of the Office of Consumer Services, whose operations look out for the interests of residential customers and small-business owners in utility rate cases. “Keep in mind, though, that the increase only represents the costs the company incurred during a three-month period.”
The typical power company customer will see rates rise initially a little more than $2 annually
The electric utility will be able seek further adjustments each year for the next four years