Customers of Utah’s largest electrical utility are set to save on their power bills beginning this month.
State regulators have given Rocky Mountain Power permission to pass savings associated with last winter’s federal tax bill on to customers in the form of credits that will offset the utility company’s current electrical rates.
The credits are expected to cut the average user’s total bill by 3.45 percent, or about $32 per year, according to the Utah Division of Public Utilities.
“It is consistent with good policy that this kind of savings should automatically go back to the customer,” said Michele Beck, director of the Utah Office of Consumer Services, “so everything seems to be working the way it should.”
The credits will be slightly larger this year — a 4.7 percent reduction for most customers — to refund customers for the company’s tax savings from January through April. The company will also provide state regulators with additional information about tax cuts in June that could result in further customer savings.
In addition to direct savings from tax cuts, Rocky Mountain Power (RMP) could also refund customers for taxes it prepaid that it may not longer owe, said Chris Parker, director of the Utah Division of Public Utilities.
But it may also choose to put those savings toward the cost of some large projects it has planned, such as a wind-power expansion in Wyoming, to avoid boosting electricity rates in the future.
“We’re not exactly sure yet, how…that will flow to ratepayers,” Parker said. “RMP has expressed a desire to kind of keep it in the back pocket, to offset future projects, like the wind project, and maybe offset the impact of new plant additions.”
Talks on how those savings will be distributed is expected to begin next month. In the meantime, the currently approved credits are expected to remain in place until RMP and state regulators revise the company’s overall electrical rates. That isn’t expected to happen for at least another few years.
RMP has committed to locking in its current electrical rates until at least 2020, said spokesman David Eskelsen. That lock is intended to benefit customers, who Eskelsen said have expressed a desire for stable electrical rates.
“One of the things that we’re hearing strongly from customers is that they need their energy costs to be affordable,” Eskelsen said, “and so our job in making sure rates are fair and reasonable is, to the degree that we can, hold rates steady.”
But Parker said he isn’t convinced that delaying rate changes always works in the best interest of electrical customers.
“I don’t know what rates would look like now if we did one now,” he said, “but we’d like to see [new electrical rates] come in sooner, rather than having all these separate mechanisms and charges.”