The president of Rocky Mountain Power faced tough questions from Utah lawmakers Wednesday over a proposed 30% rate increase that would hit about four-fifths of the state’s electricity users.
Dick Garlish, RMP’s president, left the interim meeting of the Utah Legislature’s Natural Resources, Agriculture and Environment committee with a homework assignment: Create a new structure for assessing rate increases, one that doesn’t make Utahns pay for the company’s expenses in states with different energy policies.
“There’s a lot of push and pull between policy in states that you serve,” the committee’s chair, Sen. Scott Sandall, R-Tremonton, told Garlish. “And we feel like maybe the citizens of the state of Utah would be better, or best, represented in what you’re doing if we would look at some system that could serve in a different structure … where Utah could maybe combine with states who have policy objectives the same as we do.”
Sen. Nate Blouin, D-Salt Lake City, wrote on X (formerly Twitter) that Sandall’s request was “outlandish,” and showed “a fundamental misunderstanding of how the system operates and how we benefit from cooperation.”
Garlish’s appearance before lawmakers was mostly procedural, and he spent about five minutes explaining that a rate increase proposal — like the one RMP filed in June — is a highly litigious process, one that will force the utility to open its books and justify each cost it is asking customers to absorb.
“A rate case request is the initial step in the process. It’s not the final result,” Garlish said. “We have the burden to prove that we’re entitled to recover the money — money from our ratepayers that we spent on their behalf. And it’s a very active process.”
The proposed rate increase would amount to $24.14 per month on Utah customers’ power bills, split over two years.
Utah’s Public Services Commission has scheduled hearings over RMP’s rate increase proposal for December.
Rocky Mountain Power has said that it needed the rate increase to cover rising costs from state regulations, and the cost of new infrastructure. Coal is harder to get as mines close, and the price of natural gas has nearly doubled since 2021.
Rocky Mountain Power had made a promise early this year to transition away from coal and toward cleaner energy, but backtracked on that pledge, in part at the behest of the Utah Legislature. Lawmakers passed two bills earlier this year to keep the state’s two biggest coal plants alive and allow RMP to pass the associated costs onto Utah customers.
RMP’s rate request does not reflect any additional costs that may incur from those bills, but the legislation does bind the utility to use coal for longer. Clean energy advocates have argued that an over-reliance on fossil fuels is costly, and will only get more expensive for RMP and its customers.
Garlish said RMP was able to mitigate some of those costs with wind energy — but that coal is still the “core of our portfolio,” and the company’s goal is to have a “balance” of energy sources that can meet Utah’s needs.
Warren Buffett, the renowned billionaire and Berkshire Hathaway’s CEO, acknowledged a shareholder’s concern in a shareholder meeting in May that Utah could be poised to become a public utility state — meaning the state could gain exclusive purchasing rights over PacifiCorp’s utilities. But Buffett and Greg Abel, who chairs Berkshire Hathaway’s energy subsidiary, said Utah would be fair to RMP, and Abel called SB224 the “gold standard” of state utility regulations.
Legislators Wednesday questioned whether Utahns were getting a fair shake, or being asked to pay for increased costs associated with the business dealings of RMP’s parent company, PacifiCorp — which is owned by Warren Buffett’s Berkshire Hathaway Energy.
Rep. Casey Snider, a Republican who represents Cache County, asked Garlish how the company factors investor returns into the proposed rate increase. Garlish replied that return on investment is a factor in such decisions, but that a return isn’t guaranteed.
Rep. Carl Albrecht, R-Bicknell, asked if the rate increase request was prompted by the billions of dollars in settlements PacifiCorp had to pay in Oregon — where the company was held liable in court for devastating fires in 2020 that sparked after the company did not shut down power lines in areas of extreme fire danger.
Garlish said the requested increase was not directly caused by PacifiCorp’s liability — but it is intended to cover the higher insurance premiums RMP has been saddled with as a result of the Oregon fires and the settlements.
Albrecht told Garlish that he appreciated his attendance. “Thanks for being here taking the bullets today,” Albrecht said.
Not all the lawmakers’ questions were answered, and some were not even asked, after Sandall cut off discussion to move to the committee’s next agenda item to keep on schedule.
Before dismissing Garlish, though, Sandall — who sponsored the bill to keep RMP’s coal mines open — gave him the assignment to draft and propose an entirely new structure that could divorce some of RMP’s Utah costs from its business in other states. Sandall set a November deadline for that proposal.
”Let’s figure out what the walls are that we’ve got to get over, the hurdles we’ve [got] to jump to see if the citizens of Utah would be better served with other states more closely aligned with our policies, and not be in a position where we might absorb costs based on policy decisions from other states,” Sandall said.
Correction • An earlier version of this article misidentified the Rocky Mountain Power executive.
Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.