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Rocky Mountain Power's ambitious plan to reduce emissions is meeting stiff opposition from a diverse coalition of environmental and other interests that argues the proposal would increase electric rates while providing minimal environmental benefits.
Utah's largest utility last year unveiled its Sustainable Transportation and Energy Plan, or STEP, which envisions investing in "clean coal" technology and electric vehicle charging stations, and switching power generation to plants that don't rely on coal. Executives said accomplishing these measures requires statutory changes that are now encapsulated in SB115, sponsored by Sen. Stuart Adams, R-Layton.
Critics from across the political spectrum charge that such a move is a dangerous end run around regulatory agencies and will stick ratepayers with millions in costs. The utility insists on gutting a crucial cost-sharing program in exchange for implementing the environmental measures.
Under this provision, RMP would be able to increase its reimbursement for energy costs from 70 percent to 100 percent, a goody worth $10 million a year at the expense of ratepayers, according to the state government's leading consumer advocate.
"Buried in all of the details and complexity of the legislation are a lot of perks for the utility," said Michele Beck, director of the Utah Office of Consumer Services. "All of the public presentations I have seen underplay these perks, but this legislation raises rates in multiple ways, often for the sole purpose of raising the utility's profits."
The plan calls for investments totaling $100 million during the next 10 years to support energy-efficiency measures, electric vehicle charging stations, "clean coal" research and other measures aimed at reducing emissions, particularly during the Wasatch Front's inversion season. Critics say RMP intends to pass all these costs to ratepayers.
"They aren't putting one dime of shareholder money in," Beck said. She contends using rates as a funding mechanism amounts to a "hidden tax" and is a highly regressive form of collecting revenue one that puts the larger burden on those least able to pay.
Calls to block the legislation are coming from a crowded dormitory of strange bedfellows, including the Utah Association of Energy Users, Utah Clean Energy, Breathe Utah, HEAL Utah, the Utah Mining Association, the Crossroads Urban Center and Western Resource Advocates.
The vigorous opposition has come as a surprise to the utility, particularly the condemnation from environmental groups such as HEAL Utah that have long pushed RMP to embrace energy efficiency and renewable sources and to reduce its reliance on coal.
"We met with HEAL. We said six of the 10 items are aimed at cleaning the air, so we are baffled they are coming out against it," said utility spokesman Paul Murphy. "We designed it so it wouldn't increase rates at all. It uses accounting methods so we could pay off our coal assets earlier, so if we have to close them down, there wouldn't be the sticker shock."
But HEAL's executive director, Matt Pacenza, panned the program, describing it as a work of "sinister genius" because it sells measures to make shareholders richer as a way to clean up the environment.
"They are taking huge changes in rate structures that shift risks from shareholders to ratepayers. We have a process in place where these things are explored in depth, and that's the Public Service Commission," Pacenza said. "There is no way they would approve something this big, so [RMP is] doing an end run to the Legislature."
These groups contend RMP's request should be weighed by The Public Service Commission, which has the expertise to decide whether the regulatory changes are in the public interest. SB115 sets a dangerous precedent in which the utility can run to politicians any time it can't get what it wants from the three-member commission, critics say.
The bill is expected to air soon before the Senate Transportation and Public Utilities and Technology Committee; a hearing set for Feb. 4 was rescheduled and then canceled Monday.
Kelly Francone, executive director of the Utah Association of Energy Users, said STEP would pose a drag on economic development by increasing electrical rates without measurably affecting air quality.
"This legislation is coming out too late for the full evaluation it deserves," she said. "We find this is going a step backward for economic development; clean-air initiatives should come from our Legislature and not from utility."
"STEP should not be seen as clean-air legislation," said Deborah Burney-Sigman of Breathe Utah. "There are a few pieces in here worth taking a look at in front of the PSC, but we share concerns that this bill is overall a step backward for clean air and clean energy."