Utah Ratepayers Association

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Power company wants a rate hike

Consumers could be paying Rocky Mountain Power 11.3 percent more

Steven Oberbeck Salt Lake Tribune Tuesday, 18 December 2007

If Rocky Mountain Power gets its way, Utah consumers next fall will see a big increase in their monthly electricity bills.

Citing the need to address the continuing increase in demand for electricity from its system, the utility on Monday asked state regulators at the Utah Public Service Commission for permission to raise its rates $161 million.

If the increase is approved, most Utahns' monthly power bills will go up 11.3 percent, or $4.50 for the average residential household using 767 kilowatt-hours of electricity.

"We recognize price increases affect all our customers because we see how those same types of prices affect our business," Richard Walje, president of Rocky Mountain Power, said in a statement announcing the request.

Rocky Mountain Power, which connects about 22,000 new customers to its system every year, is asking the rate increase go into effect in August 2008.

It argues the increase is needed to maintain and expand its system for new and existing customers, and to ensure it has enough generating and transmission capacity to meet future needs.

Rocky Mountain Power projects that its capital investments over the next several years will hit $1.2 billion, or about 43 percent of the $2.8 billion that will be spent on capital improvements by its parent company, PacifiCorp.

"There are a lot of bottom-up projects that we need to undertake," said Dave Eskelsen, Utah spokesman for Rocky Mountain Power. "We are looking at the need for a number of new substations, transmission investments and major generation resources."

Still, there is hope for consumers that if the Public Service Commission approves an increase in rates that the hike will be less than the $161 million the utility is requesting.

In the three previous requests going back to April 2004, the PSC granted the company increases equal to 44 percent, 46 percent and 52 percent of their initial petition.

And Utah's Committee of Consumer Services, which under Utah law represents the interests of residential customers and the owners of small businesses, said it will be studying the documents the company files to support its position to ensure that the increase is justified.

There are many elements of Rocky Mountain Power's proposal that need to be scrutinized, said Michele Beck, the director of the consumer services committee.

She said the committee will want to ensure that the company's costs underlying its request are justified. It also must determine that the utility is investing in assets that will best benefit consumers.

Consumer advocate Roger Ball, a former director of the Committee of Consumer Services who now directs the Utah Ratepayer Association, said his organization intends to get involved in the case, as well.

Ball has been a critic of the way the past several rate cases were handled by the PSC.

In those instances, cases were settled after the company, the committee and the Division of Public Utilities all agreed on the size of the rate increase consumers should pay. Ball believes increases would have been much smaller had the PSC alone chosen to review all of the documents and evidence.

"We're going to intervene in the case," Ball said. "We want to be in a position to start shouting if we believe the Committee and the Division of Public Utilities aren't doing their jobs (in adequately representing consumers)."

PSC spokeswoman Julie Orchards noted that under state law, the agency must hand down a decision on rate cases within 240 days. The agency now will conduct a scheduling conference to set the time frame for how the case will proceed.


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Added: 1 February 2008