Rocky Mountain Power faces the wrath of Utah's Capitol Hill over rate hike

Posted at 3:28 PM, Jul 09, 2024

SALT LAKE CITY — Rocky Mountain Power is facing pressure from some of Utah's top political leaders to back off of a proposed rate hike that would raise some people's power bills roughly 30%.

On Tuesday, the Public Service Commission scheduled a December hearing on whether to grant the proposed increase. But House Speaker Mike Schultz is urging the utility to reverse course or face pushback from the Utah State Legislature.

"I think they’re going to have to be willing to look at options, otherwise the state should be looking at and we will look at other options as well," Speaker Schultz, R-Hooper, said in an interview with FOX 13 News. "Right now, Rocky Mountain Power has a pretty firm monopoly on the state of Utah and there’s things we can do to increase competition to allow other companies to create energy."

Rocky Mountain Power has proposed raising rates 3.35 cents per kilowatt hour for an average Utah residence. It would be implemented in two phases, resulting in the average monthly bill increasing $13.87 in 2025, then another $10.27 in 2026 for a total of $24.14. The utility has also requested to revise some of the other fees it charges.

"We understand that rate increases are never welcome news. We don’t enjoy filing them," said David Eskelsen, a spokesperson for Rocky Mountain Power. "But our responsibility is to provide safe, reliable electric service at prices that are fair and reasonable."

Rocky Mountain Power has attributed the increase as necessary to cover costs for fuel, inflation, capital improvements and insurance premiums related to rising wildfire risks. Utah electricity rates are among the lowest in the nation.

"Rates at Rocky Mountain Power have been below the general economy, well below the rate of inflation," said Eskelsen. "That’s a result of the company’s prudent action and regulation of rates to ensure that rates are fair and reasonable."

But Utah political leaders believe the request is too much. Governor Spencer Cox has called the proposed rate hike "laughable if it wasn't so dangerous." Speaker Schultz vowed that he would "push back hard" on Rocky Mountain Power and has already expressed his displeasure with the utility and how big it has gotten from the days it was Utah Power & Light to now being a part of Pacificorp and Berkshire Hathaway. He objected to Utah ratepayers subsidizing issues Pacificorp has in other states.

"I think it’s going to be in Rocky Mountain Power’s best interest to work with us. I’m confident they will at the end of the day. They’re going to have to as a monopoly. The state of Utah has a lot of control over the policy," he said.

This year, the Utah State Legislature passed bills revising energy policy toward an "all of the above" approach ranging from coal to solar to nuclear power. Critics have said the policy props up fossil fuels at a time when renewable energy should be relied on to combat climate change. Legislative leaders have defended the policy as helping to keep energy rates low and ensure a reliable supply. Lawmakers also passed a bill allowing Rocky Mountain Power to collect a fee to help cover insurance costs related to wildfire litigation and a separate bill that allowed the state to take over a power plant after it began shifting away from coal.

"We want to make sure Utah ratepayers are only paying increased capacity costs that directly benefit them. Energy production has been a top priority over the past few years and will continue during the upcoming legislative session," Senate President J. Stuart Adams, R-Layton, said in a statement.

The Public Service Commission will consider the rate increase request in hearings that function similar to a trial with witness testimony, cross-examination and evidence. Stakeholders can also weigh in. On Tuesday, a group representing Meta's data centers filed to intervene (Meta owns the social media platforms Facebook, Instagram and Threads). The environmental group Western Resource Advocates has also sought to be involved, as has the Utah Association of Energy Users and Utah Clean Energy.

Some public comment has also trickled in, so far all opposed to a rate hike.

Eskelsen said Rocky Mountain Power had confidence in the Public Service Commission's ability to review the request and determine it is fair and reasonable.

"We're hopeful that when all is said and done, that our rate will still be among the lowest compared to electric providers nationally," he said.

Speaker Schultz said he wanted to ensure rates remain low.

"We need 'all of the above' to meet the demands of the state and we need to do it in a smart way," he said. "One that doesn’t put a huge burden on the citizens of the state and the ratepayers of the state."