Estimated read time: 3-4 minutes
- Rocky Mountain Power wants a rehearing after Utah commission's partial approval of rate hike.
- The company argues the comission's decision undermines financial stability and wildfire safety improvements.
- The commission deemed the full request imprudent, citing external issues and economic growth concerns.
SALT LAKE CITY — Rocky Mountain Power has taken the first step in appealing a Utah commission's decision to award only a portion of the company's proposed rate increase.
The state's largest power provider filed a request for a rehearing with the Utah Public Service Commission on Tuesday, which was the deadline for making the request. In it, the company argues that the commission's decision "deprives" it of the ability to provide "increased and improved" energy with enhanced wildfire safety.
"The order undermines the state's long-standing history of regulatory steadiness, which compromises the financial stability of the utility and diminishes the ability of (Rocky Mountain Power) to add the investments Utah needs to continue its economic growth in a safe and reliable manner," the document states.
The commission allowed Rocky Mountain Power to collect a revenue increase of $87.2 million, which equates to a 3.8% to 4.7% increase for the average customer, during a meeting last month. Rocky Mountain Power sought an increase of $393.7 million, or a rate increase of 18.1%, after initially requesting a 30% rate increase over 2025 and 2026.
The company argued that since its previous rate increase in 2020, inflation had led to increased costs to fuel power plants and purchasing wholesale power rates. They added that the increase was needed to cover the costs of rising insurance rates and capital investment projects in the state.
But the commission ruled that the full request wasn't "prudent" enough to approve, said Jerry Fenn, chairman of the Utah Public Service Commission, who explained the board's decision to members of the Utah Legislature's Public Utilities, Energy and Technology Interim Committee last week.
The board believed it was "unreasonable" for Utah customers to pay for company issues happening outside the state, including over $1 billion in wildfire settlements its parent company paid out for fires in Oregon, Fenn said. He added that other aspects of the plan would have exceeded "the growth rate of the economy," which the board disagreed with.
"Do we want Rocky Mountain Power to be successful and earn a reasonable rate of return on their investment? Yes, but we also want to protect ratepayers from what we think are unjust and (unreasonable) rate increases," he said.
In its request, Rocky Mountain Power called the commission's decision "shortsighted," arguing that it could "undermine" the state's regulatory environment that helps Utah have some of the nation's lowest energy costs.
Among other things, it states that the commission's decision ignored testimony from state land managers who said the plan "properly addressed the identified fire risks" in Utah, and evidence that a key Oregon court case — currently being appealed — did not cause wildfire premiums to increase.
"The assumptions implicit in the order also are internally inconsistent. It accuses the company of failing to adequately mitigate risks ... while simultaneously finding that the company seeks to over-mitigate fire risks in Utah," Rocky Mountain Power added in its 131-page request.
Its request isn't surprising. Fenn told lawmakers last week that he expected the company would seek a rehearing, which he said is required in pursuing an appeal. Should the rehearing be denied, the matter could go to the Utah Supreme Court.
While Rocky Mountain Power disagrees with the commission's ruling, state lawmakers applauded the commission's decision. State leaders bemoaned the utility provider's original rate proposal.
"I really appreciate you guys sticking up for us," said Sen. David Hinkins, R-Orangeville.
