Changes are coming to Rocky Mountain Power's contracts with AI centers, but not its rate structure
Transmission lines lead away from the coal-fired Intermountain Power Plant near Delta, Utah on Monday, Feb. 3, 2025. (Photo by Spenser Heaps for Utah News Dispatch)
After Rocky Mountain Power announced it would pursue a double-digit rate increase for Utah residences, Gov. Spencer Cox and legislative leaders vowed to take matters into their own hands to keep it from happening.
It has been a couple eventful months for the utility ever since.
The rate proposal also led the Legislature to request splitting the utility's parent company, PacifiCorp, into two consortiums of states — red and blue — with similar energy policies, and raised the question of how it would serve large energy users, such as the artificial intelligence and data centers the state is hoping to host.
Here's how some 2025 bills may change — or not — how Rocky Mountain Power operates in Utah.
Finding ways to feed power-hungry AI centers in the state has been on the state government's mind for a while. Cox dedicated part of his opening statement during his March monthly news conference broadcast by PBS Utah to highlight the importance of it, arguing that the U.S. is in an 'AI arms race with China.' But, building an AI center may take gigawatts of power off the grid.
SB132, sponsored by Sen. Scott Sandall, R-Tremonton, established an alternative process to provide electric power to customers with large loads so existing ratepayers wouldn't have to bear the cost of the additional demands. According to the bill, if the data center and the utility can't reach an agreement within 90 days after a service application is submitted, the customer may be able to negotiate a contract with one or more large-scale generation providers.
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'This is outside their regulated monopoly, where we allow them to basically compete with other generators for this new load, and we give them the opportunity to come in and compete for these higher demand loads,' Sandall said.
It took a long time to finetune details of the bill and merge in some provisions included in another competing Senate bill, but it ultimately passed the Legislature almost unanimously and is waiting for the governor's signature to become law.
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Initially, Sandall's bill allowed intermittent energy sources, such as solar and wind, to be used in these hyperscale contracts only if they were 100% backed up with energy storage. That provision was eliminated, allowing AI centers to use solar and wind resources. But, they must still specify any arrangements for backup power supply.
'We married the two together through a lot of long hours and negotiation, and I think we're in a spot where both sides didn't get everything they wanted,' Sandall said, 'but I think they feel comfortable moving forward.'
David Eskelsen, a Rocky Mountain Power spokesperson, said that overall, the company followed its long-standing practice to provide information to lawmakers to help them draft their energy policy bills.
'Senate Bill 132 authorizes a path for the state to serve and attract large energy users, like data centers, while ensuring existing customers are protected from related rate impacts,' he said in an email.
Sandall worried that if intermittent resources didn't provide enough electricity to power the data centers, Rocky Mountain Power would try to provide power through its traditional resources, leaving other consumers short on power, he said.
'We were able to create language where I believe that we did give the protection to the consumer,' Sandall said. 'At the same time, we gave the possibility to find new generation sources without laying the cost back onto our traditional consumer.'
A House bill that directly changed Utah's largest utility's fee system was only used as a negotiation tool during the 2025 session and never received a Senate hearing, even after it was proposed and prioritized during the interim session.
HB72, sponsored by Rep. Carl Albrecht, R-Richfield, targeted Rocky Mountain Power's Energy Balancing Account. That account is tied to a market adjustment fee that can either credit or debit ratepayers for the utility's costs not covered by the regular electricity rates.
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Since the Legislature eliminated the sharing band that allowed customers to cover 70% of the adjustment and shareholders absorb 30% in 2016, Rocky Mountain Power has been able to recover 100% of its 'prudently incurred costs in an energy balancing account,' through adjustments for ratepayers.
Albrecht's proposal would have completely eliminated that fee from customers' electricity bills. But, amid other negotiations, the legislation fell through.
'Sometimes you use the bill for motivation, and we were trying to motivate Rocky Mountain Power to do some other things in the state,' Albrecht said. While the bill had overwhelming support in the House, when it reached the Senate, the sponsor was asked to stand down until other negotiations took place.
But, the bill will come back during the interim this year, Albrecht said, because there's still a need for it.
'We want to make sure that Rocky Mountain Power is not including costs from other states in their rate base that Utah customers have to pay,' he said.
But, Albrecht's next proposal may be a little more lenient, since he believes there should be a sharing band in place, a system that existed before that 2016 bill, sponsored by Senate President Stuart Adams, R-Layton.
While the fee changes according to market prices, it has been in an increase pattern for years. Last summer, for example, an interim 11.6% rate increase of the Energy Balancing Account came into effect on July 1, sending electricity costs soaring through the summer.
The Legislature also approved HCR9, a concurrent resolution to create an energy compact with Idaho and Wyoming, sponsored by House Majority Leader Jefferson Moss, R-Saratoga Springs, which, may elevate Utah's request to split PacifiCorp into two consortiums; one grouping California, Oregon and Washington together, and the other serving Utah, Idaho and Wyoming.
Cox has already signed the legislation and commended it, as Utah leaders make strong requests to step away from blue states' aggressive pursuit for a clean energy future. Cox has already met with Secretary of the Interior Doug Burgum and Energy Secretary Chris Wright on the issue, and they have 'aligned' with those goals, he said.
During interim committee meetings, lawmakers grilled Rocky Mountain Power executives as they searched for ways to make that split happen. However, the feat would be expensive and politically difficult, officials from the utility warned.
Albrecht, who has led some of those interim committee hearings, said that there's interest from Idaho and Wyoming as well.
'We did get a report back in Natural Resources and also Public Utilities (committees) during summer interims, fall interims, but it was very superficial,' Albrecht said, 'and we've asked them to do more work on that, because we feel like it's an important thing for the ratepayers in the state of Utah.'
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