Electricity rates increasing by about 4%, not the proposed 18%

SALT LAKE CITY — Rocky Mountain Power (RMP) customers will start to see higher electric bills, but nowhere near as high as the company had hoped.

On Friday, the Public Service Commission of Utah (PSC) issued an order that RMP would only be able to ask for $87.2 million in additional annual revenue from its Utah customers, even though the company was proposing $330.2 million. The ordered increase is only 26.4% of RMP’s asking price.

The PSC says this amounts to about a 4.7% increase, or an extra $4.31 a month, for the average single-family residential customer using 700 kilowatt hours each month.

Costs denied, not to be passed to Utah ratepayers

While the PSC said after considering the pre-filed testimony, briefs and evidence, they would grant the $87.2 million increase to fulfill RMP’s revenue requirements, the commission also denied a number of requests. 

The order listed a number of costs that the commission denied because it believes they should not be borne by Utah ratepayers.

“We’re pleased that the commission took a thoughtful approach at balancing the utility’s need for sufficient revenue to maintain safe, adequate and reliable service against the interests of customers to not pay things that they shouldn’t reasonably pay,” said Chris Parker, Director of the Utah Division of Public Utilities.

Parker said he agrees with the order that the costs RMP’s parent company, PacifiCorp, is paying for things like wildfire mitigation in other states they serve, should not be passed on to Utah ratepayers.

“PacifiCorp paid $550 million in dividends to its parent company after it became aware
of potential wildfire liability,” the order states. “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 order also cited five other costs they denied that would have been paid for by Utah ratepayers, include climate action policies that were specific to Washington and Oregon.

How the rate hike fight began

This comes after a long back-and-forth between RMP, utility customers, and Utah lawmakers. RMP had initially asked for $667.3 million, which would have resulted in a 30% rate increase for its customers.

Utah leaders, including Gov. Spencer Cox, called the request unacceptable and vowed to put a stop to it. Later, RMP reduced their request to an 18% increase. As previously stated, only about 4% of that was given the green light.

What now?

The commission approved rate hike went into effect as soon as the order was signed on Friday.

RMP has 30 days to request a review or rehearing of this order, though David Eskelsen, a spokesperson for Rocky Mountain Power, says they have not yet determined if they will. As of Tuesday, they were still reviewing the 200-page order.

“We need to determine the full financial implications of this order and evaluate the company’s next steps in our responsibility to provide electric service to our customers,” Eskelsen said.

Related: Rocky Mountain Power seeks to increase Utah rates 30% by 2026