Utah commission chairman defends approval of Rocky Mountain Power 4.7% rate increase
The chairman of a commission that approves utility rate adjustments across the state says the board only awarded a portion of Rocky Mountain Power's proposed rate increase because some of the company's woes were 'the result of their own actions.'
The board allowed the state's largest power provider to collect a revenue increase of $87.2 million, which amounts to a 3.8% to 4.7% increase for the average customer, late last month. Rocky Mountain Power, which initially requested a 30% rate increase before cutting it down to 18%, still has a few days left to request a rehearing before those changes go into effect.
The decision largely had to do with an issue with Utahns paying for problems the provider and its parent company have had outside of the state, as well as a failure from the company to provide evidence of benefits with other projects tied to the proposal, said Jerry Fenn, chairman of the Utah Public Service Commission.
'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.
Fenn defended the board's April 25 decision during a presentation to members of the Utah Legislature's Public Utilities, Energy and Technology Interim Committee on Wednesday. The committee requested an update on the situation, which drew plenty of attention last year, as well as ire from the Utah Legislature.
Rocky Mountain Power officials explained that inflation, since its previous rate increase in 2020, has resulted in increased costs to fuel power plants and to purchase wholesale power rates. At the same time, they planned to use increases to help offset rising insurance rates and fund capital investment projects, such as completing a 400-mile transmission line into central Utah.
'We go out and spend money on behalf of customers to make investments to provide an essential service,' Rocky Mountain Power President Dick Garlish told lawmakers last year.
Its initial request called for a revenue increase of $667.3 million, or a 30% rate increase spread out between 2025 and 2026.
Gov. Spencer Cox and other state leaders were critical of the proposal. The governor called it 'completely unacceptable,' while representatives questioned how massive wildfire settlements made by Rocky Mountain Power's parent company, PacifiCorp, factored into the equation. Rocky Mountain Power also provides energy in Idaho and Wyoming, while PacifiCorp also has dealings in parts of California, Oregon and Washington.
The company has paid over $1 billion in various wildfire-related settlements, many of which came from wildfires ignited by power lines in Oregon five years ago. Lawmakers argued that residents shouldn't be forced to pay for issues in other states.
Rocky Mountain Power later reduced its revenue request to $393.7 million, which would have been an 18.1% rate increase in 2025 with no subsequent increase in 2026, following the early feedback.
The request quickly became one of the more closely followed proposals to end up in front of the Public Service Commission, Fenn said on Wednesday. The board sifted through the arguments from both sides, as well as thousands of written or verbal public comments.
Commissioners also held two public hearings on the matter, one of which was held in Cedar City, which is 'unusual' for the board, he pointed out. The board ultimately decided that the 18% request wasn't 'prudent' enough to pass along to the customer.
'At the end of the day, we concluded ... that Rocky Mountain Power's models provided a growth rate that was greater than the growth rate of the economy,' he said. 'We really didn't think you could grow greater than GDP (gross domestic product).'
The board also believed it was 'unreasonable' for Utah customers to pay for company issues happening outside of Utah, such as wildfire settlements and capital projects in other states, Fenn added, referencing a class-action lawsuit in Oregon. A jury there found PacifiCorp liable for negligence tied to wildfires in 2020, the Statesman Journal reported in 2023. The company is appealing that ruling.
What the commission ultimately approved is expected to result in a monthly increase of $4.31 for the average residential customer, who consumes 700 kilowatt-hours per month, or $3.31 per month for the average multifamily dwelling.
Members of the legislative committee lauded the board for how it handled the process.
'I really appreciate you guys sticking up for us,' said Sen. David Hinkins, R-Orangeville.
The company still has time to formally request a rehearing, which is required in the appeal process, Fenn said. He expects the request will be filed.
He said the request must be filed by Sunday, but Rocky Mountain Power officials say it's Tuesday because of the weekend and the Monday holiday. Jonathan Whitesides, a spokesman for the company, declined to say whether it would request reconsideration, other than that a denied request could spark a judicial review with the Utah Supreme Court.
He said earlier this month that the company was still reviewing its options. He added that the company was still 'committed' to wildfire mitigation, despite the lower rate increases.
'It's going to be a challenge, but we're going to continue forward with the projects we've got going on (and) operational practices,' he said on May 6.
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