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Rocky Mountain Power wants the state's poorest families and those who use the least amount of electricity to shoulder the biggest increases in its proposed $115 million rate hike, a utility watchdog group said.
The utility, formerly known as Utah Power, wants to raise the amount it charges its residential customers to read their meters and issue their bills from 98 cents a month to $3.40, along with raising the amount it charges them for electricity.
While the $115 million increase is expected to be approved by state regulators, how it will be spread among the company's approximately 650,000 residential customers in Utah is in dispute.
"We really think the company is on the wrong track," said Betsy Wolf of The Utah Ratepayers Alliance, an organization formed by the Salt Lake Community Action Program and the Crossroads Urban Center. "It wants to disproportionately increase the bills of the state's lowest energy users," many of whom are low-income families.
The company in late August secured an agreement with the Committee of Consumer Services and the state's Division of Public Utilities that will allow it to raise its rates. But while the committee consented to the $115 million increase, it also is contesting the way the company wants to implement it.
An expert hired by the committee, Anthony Yankel, told the state's Public Service Commission that Utah families who use the least amount of electricity will see their bills go up the most percentage-wise. Those that use 100 kilowatts of electricity during the summer months could see their bills rise 35.1 percent, while those that use 400 kilowatts would see an increase of 14.4 percent.
Households that use 2,000 to 5,000 kilowatts only would see their bill go up between 5.6 to 6.7 percent under the company's proposal, according to Yankel.
Rocky Mountain Power spokesman Dave Eskelsen said it's an issue of fairness.
Historically, Utah Power's largest customers have borne the brunt of most rate increases - that were implemented by the company raising the cost of the electricity it sells, Eskelsen said.
"The costs associated with serving each customer is the same [regardless of how much electricity they use], so this is really an issue of fairness," Eskelsen said, pointing out the 98 cent customer service charge has remained virtually unchanged for more than 20 years. "What we're trying to do is get closer to assigning costs appropriately [to each customer]."
The committee, charged with representing the interests of residential customers and small business owners in utility rate cases, has its own ideas of what is fair.
It is proposing that rates be adjusted so those households using less than 1,000 kilowatts a month will see their bills increase slightly less than 10 percent while those using more will see their rates go up more.
Under the committee's proposal, consumers who use more than 5,000 kilowatts a month, for example, will see their bills go up 15.1 percent.
Dan Gimble, chief of the technical staff at the Committee of Consumer Services said the company's proposed rate structure "just sends the wrong price signal to those people who use a lot of electricity in a period when we're trying to encourage energy conservation."
He pointed out that Rocky Mountain Power argued it needed the $115 million rate increase to recapture the costs associated with building new power plants to address the rising demand for electricity, much of which is associated with the increased use of residential air conditioning.
"Rates should be set to encourage those who use a lot of electricity to use less of it, not more," Gimble said.
Rocky Mountain Power's rate increase proposal
Utahns who use the least electricity may see the biggest percentage increase in their monthly bills as the company's pending $115M rate hike goes into effect.
* The Public Service Commission will hold a hearing today on the company's rate design proposal. The public is invited to provide their views on the issue beginning at 11:30 a.m. today in the PSC's chambers on the fourth floor of the Heber Wells Building at 160 E. 300 South in Salt Lake City.