In January 2012, Rocky Mountain Power sought permission from Utah's top utility regulators at the Public Service Commission to boost the amount it charged its customers statewide for electricity by $172.3 million, or roughly 10.5 percent.
After negotiating with representatives for the Committee of Consumer Services, the state's Division of Public Utilities and industrial energy users, an agreement was hammered out that allowed the company to raise its rates by $154 million, although that increase would take place in two steps. The first phase of the increase $100 million took effect last fall and raised residential utility bills by an average of $4.55 a month. The $54 million second phase will start appearing on its customers' electricity bills this month.
"All of the heavy lifting (for this month's increase) took place last year," Michele Beck, director of the state's Office of Consumer Services, said of the negotiations and analysis that resulted in the two-phase rate hike.
Beck, whose office oversees the Committee of Consumer Services that serves as the voice for consumers and small-business owners in utility rate cases, last year said she thought the overall settlement was fair even though it gave the company most of what it requested.
The power company argued that it needed the increase to help it offset the cost of addressing a steadily rising demand for electricity in Utah that forced it to boost its spending on new power plants, transmission line upgrades and additional environmental equipment for its coal-fired plants.
Beck explained at the time that in looking at the company's costs in 2013, for example, the Office of Consumer Services' staff identified approximately $40 million the utility would have been entitled to recover from its customers under state regulations. In exchange for agreeing to the second $54 million portion of the rate hike, Beck said, the utility effectively eliminated $20 million to $25 million from future rate hikes.
In addition, she noted the utility gave up its demand that its Utah customers help pay for the cost of removing a dam on the Oregon-California border a plan that would have cost Utah ratepayers $7.4 million annually for the next 10 years.
The 2012 settlement also included a stipulation that Rocky Mountain Power had to refrain from filing for another rate increase until at least January 2014, which will mean that the utility's customers won't see another jump in their power bills until at least next fall or winter.