Stan Holmes: Utah ratepayers shouldn’t front climate change related costs for power companies

It’s time for Utahns to demand climate accountability.

(Mark Ylen | Albany Democrat-Herald | Associated Press) Chairs stand at the Gates Post office in the aftermath of a fire in Gates, Ore., Sept 9, 2020. The post office was destroyed along with several other buildings in the Santiam Canyon community as a result of the Santiam Fire. A jury verdict that found power company PacifiCorp liable for devastating wildfires in Oregon in 2020 is highlighting the legal and financial risks utilities face if they fail to take proper precautions for climate change.

A recent Tribune article reported that Rocky Mountain Power’s Utah customers may have to pay for a wildfire negligence charge against RMP’s parent company, PacifiCorp. Though the damages occurred in Oregon, costs totaling billions of dollars could be shifted to Utah ratepayers, who comprise the largest customer base in PacifiCorp’s six-state electricity network.

RMP has sought regulatory protection from the Utah Public Service Commission in the event PacifiCorp ultimately decides that Utahns must pay higher utility rates to cover the Berkshire Hathaway-owned company’s legal liability.

Cost shifting is a concept RMP has used for years to minimize the value of rooftop solar power, arguing that customers who export clean energy from their homes are not paying their share of costs to maintain the utility’s fossil fuel facilities and transmission lines. According to RMP, full value compensation for rooftop solar electricity means shifting costs to non-solar customers. Until now, the PSC has agreed: A rooftop solar kilowatt is credited at one-half the value of a coal-fired kilowatt.

But RMP’s recent pleas to the PSC for financial protection, via “deferred accounts,” from wildfire damage liability, mitigation expenses and increasing insurance rates warrant heightened scrutiny by Utah utility ratepayers, taxpayers and community leaders. This is not just about shifting liability costs from Oregonians to Utahns. It’s about shifting a wide range of climate change-related costs from Berkshire Hathaway’s corporate shareholders to Utah consumers.

Who should pay for the growing social, economic and environmental costs of RMP’s continued reliance on burning fossil fuels for electricity — fossil fuels that are heating the planet, intensifying weather events, and hurting people and communities? Are RMP’s corporate parents okay with shifting the additional costs to utility ratepayers and the general public?

At its 2023 annual meeting, Berkshire’s board of directors convinced shareholders to defeat proposals seeking more responsible management of “climate-related risks and opportunities.” In Utah, Berkshire’s shareholder philosophy translates as RMP joining state legislators and the attorney general in legal fights against stricter coal plant emissions controls.

Utahns should ask who’s paying for this. Which set of funds — corporate, ratepayer, taxpayer — is RMP using to fight federal efforts to combat climate change and to appeal PacifiCorp’s negligence for triggering wildfires in Oregon?

Climate change cost shifting is further evidenced by RMP’s desire to have ratepayers cover increasing insurance expenses as more wildfire claims are filed. This while boosting utility rates for new investments in “hardening” transmission lines and grid equipment against extreme weather events and wildfires, conditions worsened by the utility’s own fossil-fueling of climate change. This year, PacifiCorp raised its rates 14% in Oregon to cover wildfire mitigation costs. RMP already plans to raise rates for its Wyoming customers by 21%.

Meanwhile, property owners across California and in Utah’s Summit and Wasatch counties have trouble finding insurance coverage as companies withdraw from wildfire prone areas. Ironically, Berkshire Hathaway’s AmGuard insurance wing has joined other major insurers refusing coverage in climate change impacted regions.

At least Californians have state-run FAIR Plan insurance as back-up. In Utah, however, residents unable to secure property insurance from mainstream brokers are left to the mercy of “surplus line” insurers not certified by the state. It’s one more way RMP shifts and shirks real-world costs as it contributes to Utah’s reliance on fossil fuels for 79% of electricity production.

Fortunately, the Utah public can help PSC commissioners decide how to regulate the utility’s affairs and set reasonable rates. A biennial review of PacifiCorp’s 20-year integrated resource plan (IRP) is currently underway, and public comments are now accepted by emailing psc@utah.gov with IRP Docket 23-035-10 in the subject line.

Ratepayers and the general public can request that RMP be required to disclose the full range of climate impact expenses associated with its ongoing reliance on fossil fuels, even burning coal beyond 2040 if the gamble on nuclear power fails.

Instead of granting a regulatory “deferred account” for each climate cost, the PSC should establish an online climate change account for RMP that requires full disclosure — transparency — of all categories and expenditures linked to the worsening climate crisis that Utah’s monopoly electricity provider keeps fueling with its resource choices.

Every day we see the catastrophic effects of climate change worldwide. We are rapidly losing our opportunity to mitigate these effects. RMP needs to stop the burning of fossil fuels and shifting the costs of climate change from investors to ratepayers. Now is the time for Utahns to demand climate accountability.

Stan Holmes

Stan Holmes is a retired public school teacher living in Salt Lake City. He is outreach coordinator for the all-volunteer Utah Citizens Advocating Renewable Energy (UCARE).