Rocky Mountain Power lowers its rate increase proposal to 18.1%, down from 30.5% (2024)

Rocky Mountain Power has updated its Utah rate increase application, lowering itsproposed hike of 30.5%for residential customers to 18.1%.

The company is revising its request to “further mitigate the customer impacts of the general rate case,” it said in its application, referring to its initial rate increase proposal. Rocky Mountain Power is also revisiting the amount allocated for insurance premiums for a 2025 test period.

In the new proposal, rates would only go through the first increase phase initially filed by Rocky Mountain Power. The new schedule presented by the company would take residential rates from 10.96 cents per kilowatt-hour to 12.94 cents per kWh, effective on Feb. 23, 2025. The second installment, scheduled for January 2026 that would have taken the rate to 14.31 cents per kWh, wouldn’t go into effect.

The change would represent a $14.28 monthly increase for the average Utah household, versus the original full two-phase proposal of $24.14 a month.

“The Company has heard the concerns of its customers regarding the requested increase in this case combined with other cost pressures and continued to review ways of further mitigating the impact of the requested increase on customers,” theapplicationreads.

In addition to the general rate increase proposal, Utahns’ electrical bills have been substantially increasing this year with other market adjustments included in the company’s Energy Balancing Account — a price adjustment that either credits or debits users for differences between power prices and the other market costs that are somewhat outside the control of the utility.

An interim 11.6% rate increase of the Energy Balancing Account went into effect on July 1,sending electricity costs soaring this summer.

Rocky Mountain Power had filed to spread that Energy Balancing Account adjustment across 24 months. However, state law requires the cost recovery to be done in 12 months, which made the company look to further mitigate the increased bills, said David Eskelsen, a Rocky Mountain Power spokesperson.

“We’re looking at ways to spread those costs out and kind of mitigate the impact and lessen it over time,” Eskelsen said.

Though Rocky Mountain Power is seeking just over half of its initial proposal, prices may still go up in the future, as the costs associated with increases in net power, fuel and wholesale power are expected to be recovered in the future through the Energy Balancing Account, Eskelsen said.

“It’s very important, because Rocky Mountain Power is an essential public service, that we cover our costs and remain financially viable,” Eskelsen said. “And that’s also why we’re regulated, so that customers can have confidence that there is a third-party analyzing the company’s financial records and all of its transactions.”

In the amendment to its application to the Utah Public Service Commission, the utility revised its initial ask to recover $667.3 million through a rate increase, and proposed a reduction of 41% to take that amount to $393.7 million.

Those $393.7 million include $92.9 million for new commercial insurance premiums and $21 million for amortization of the Wildfire Mitigation Balancing account.

The initial application had requested a recovery of $81.4 million for insurance premiums, the company’s best estimate at the time.

“Since the filing of the Company’s Application, the Company has entered into renewals of its excess liability insurance and the premium costs are now approximately $210 million total-company, or $92.9 million Utah-allocated for the recent policy period.”

Experts from Utah Clean Energy, a nonprofit that advocates to advance clean energy technologies, said they are still reviewing the details, but this should be “welcome news for Utah ratepayers at least for the short-term.”

“However, most of the remaining proposed 18% increase is still tied to rising fossil fuel costs and PacifiCorp’s insurance premiums increasing due to wildfires, so we are still at risk for more rate spikes in the future,” Logan Mitchell, climate scientist and energy analyst said in a statement. “This underlines the need to add more zero fuel cost energy like wind, solar, and geothermal to protect customers from rising and volatile fuel prices.”

Rocky Mountain Power had cited increased costs of fuel and wholesale power, in addition to ongoing new electric transmission and generation projects as the principal causes for the hike.

The initial application for a 30.5% rate hike was met with harsh reactions from Utah leaders, including Gov. Spencer Cox, who committed to ensure that proposal wouldn’t become effective.

“The proposal is completely unacceptable. The audacity and lack of awareness with this request seriously calls into question management at RMP. I will do everything I can to make sure a rate increase of that magnitude never sees the light of day,” Cox wrote in apost on X.

Rocky Mountain Power executives were alsogrilled during two legislative interim meetingsabout the increase, with some lawmakers asking the company’s shareholders to absorb some of the costs, and asking for a report studying a potential split of PacifiCorp, the company’s parent company.

The hope is to separate PacifiCorp’s two subsidiaries; making Utah, Idaho and Wyoming into a consortium and California, Oregon and Washington another one.

Utah News Dispatch is part ofStates Newsroom, the nation’s largest state-focused nonprofit news organization.

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