Utahns’ electric bills are about to get a little more expensive.
Nearly a year after first asking Utah’s Public Service Commission (PSC) to approve a rate increase that would amount to $667.3 million additional annual revenue, the commission ruled Friday to instead approve a $87.2 million sum. That will amount to an average increase of $4.31 per month for single-family households and $3.31 for multi-family households, effective immediately.
The order is the final step in a year-long process in which the PSC interrogated Rocky Mountain’s expenses and its executives to understand how the utility was spending its money, what expenses it was trying to account for in the rate increase and what expenses Utah rate payers should be responsible for paying.
“The Public Service Commission’s order is a significant step toward ensuring that Utahns have fair utility rates while allowing Rocky Mountain Power to make necessary investments in infrastructure and wildfire risk mitigation,” Margaret Woolley Busse, executive director of the Utah Department of Commerce, said in a news release. “It’s vital that we balance the needs of our utility providers with the interests of consumers, and this order does just that.”
RMP’s initial rate case would have been a more than 30% increase. It amended the request to 18% — or $330.2 million — in August. Its final request, according to the Department of Commerce, was an increase of $243 million. The commission ultimately approved a sum of roughly 26% of that final request.
“Rocky Mountain Power is disappointed with the order,” spokesperson David Eskelsen said in a statement. “Denying Rocky Mountain Power the ability to fully recover its prudent costs threatens the long-term reliability and resiliency of Utah’s electric grid.”
Many of the denied costs, including those intended for wildfire mitigation and infrastructure updates, will jeopardize the utility’s ability to respond quickly and safely to a growing demand for electricity, Eskelsen said. The order also “undermines broader executive and legislative policy objectives aimed at supporting a financially healthy utility capable of meeting growing customer demand while operating safely and efficiently.”
In its ruling, the commission said the difference between RMP’s first and final request would have appeared on the company’s Energy Balancing Account (EBA) — a pool of money that covers fluctuations in energy costs — and would ultimately reflect on customers’ bills.
So the commission, which reviews and approves Rocky Mountain Power’s EBA each year, ruled instead to defer roughly $240 million to future EBA filings.
RMP argued throughout the process that its rate increase accounted for rising energy costs and new infrastructure. But state officials — lawmakers and commissioners alike — said they worried the company was asking Utahns to pay for problems associated with RMP’s parent company, PacifiCorp, which is owned by Warren Buffett’s Berkshire Hathaway Energy.
PacifiCorp has paid billions of dollars in settlements in Oregon, where the company was held liable for wildfires in 2020 that sparked after the company did not shut down power lines in areas of extreme fire danger. A report released last month by the Oregon Department of Forestry found seven of the 19 fires that devastated Santiam Canyon were caused by down power lines, but those fires did “not contribute to the spread of large fires in Santiam Canyon” and were quickly suppressed.
To PacifiCorp, the report proved the utility was not responsible for the fires.
“The report confirms PacifiCorp‘s long-held position that any wildfire ignitions linked to the company’s electrical equipment in the Santiam Canyon did not contribute to the widespread devastation that occurred when the Beachie Creek fire tore through the canyon,” the president of PacifiCorp‘s west coast utility said in a news release last month.
But the company is still paying the price, both in settlements and increased insurance costs. In its ruling, the Utah commissioners wrote that 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.”
The commission also trimmed several million in costs it said were associated with “specific state climate action policies” in other states, “particularly Washington and Oregon.”
Note to readers, April 30, 2:45 p.m. • This story has been updated to include a more detailed response from Rocky Mountain Power.
Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.