Rocky Mountain Power, which supplies electricity to four-fifths of Utah, is asking the state for a whopping 30.6% increase in power rates, which would raise the average customer’s bill by more than $24 a month in the next 18 months.
Rocky Mountain proposes a two-phase increase in its Friday filing to the Utah Public Service Commission, which must approve the increase before it could take effect. The first phase would come in February 2025, when the residential customer rate would go from 10.96 cents per kilowatt-hour to 12.89 cents.
That would push the average customer’s bill up $13.87 per month, the company says.
Then a second jump would come in January 2026, when the rate would rise to 14.31 cents per kilowatt hour, adding another $10.27 to the average customer’s monthly bill.
Business and industrial customers also would see big increases, but the percentages would be smaller.
Rising fuel costs
Rocky Mountain Power’s rate hike proposal is “completely unacceptable,” said Gov. Spencer Cox.
“The proposed rate increase from Rocky Mountain Power would be laughable if it wasn’t so dangerous,” Cox posted Sunday on his official account on X. “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.”
The power company, which is part of PacifiCorp and is owned by Warren Buffett’s Berkshire Hathaway Energy, cited rising fuel costs and the cost of new infrastructure for the historically large increase.
Both coal and natural gas, which together supply most of Utah’s power, have seen large price increases and more volatile markets in recent years. Coal, in particular, has become harder to source as mines have closed.
And after holding steady for more than a decade, the industrial price of natural gas in Utah has nearly doubled in the last three years amid wider price swings.
“Like many businesses in these difficult economic conditions, the utility is facing inflationary pressures and increased costs outside of its control that cannot be offset through hard work and business discipline alone, making it necessary to seek a rate increase at this time,” Dick Garlish, president of Rocky Mountain Power, said in a statement.
As for new infrastructure, Rocky Mountain cited the Gateway South transmission project connecting Wyoming wind power to Sigurd, Utah, and the Rock Creek wind project in Wyoming.
“Rocky Mountain Power does not take this request lightly, and we are committed to continuing our efforts to provide reliable service, reduce impacts to customer bills and make much needed investments in energy infrastructure, which is the backbone of economic development in Utah,” Garlish added.
More to come?
And the rate could go even higher. This rate request does not include funding for a special wildfire mitigation fund created by the Utah Legislature this year. Under SB224, Rocky Mountain can collect up to $3.70 a month from residential customers in Utah to fund a self-insurance account that could be used to pay catastrophic wildfire claims in Utah after Rocky Mountain’s insurance is exhausted.
Rocky Mountain’s parent company PacifiCorp has been struggling to fund potentially billions of dollars in wildfire claims in Oregon, where it was found liable in court for large fires in 2020 that were caused by power lines the company didn’t shut down when the fire danger was extreme. It also has faced skyrocketing insurance costs, which it wants to pass on to ratepayers in several states, including Utah.
The wildfire fund would seem to help lower the company’s legal exposure, and Greg Abel, who is viewed as Buffett’s likely successor at Berkshire Hathaway, praised the Utah legislation that created it, calling it the “gold standard.” But the company has yet to file paperwork to set that fund up.
With or without the wildfire fund, the state could lose bragging rights as one of the cheapest states for electricity. That 14.31 cents per kilowatt hour proposed for 2026 would put Utah somewhere in the middle of a state-by-state ranking of current power costs.
But rates are going up virtually everywhere in the country, and the cost of electricity is outpacing inflation, so it’s hard to say where Utah may end up in a future ranking. (Statewide data also includes the 20% of Utah that gets its power from municipal power systems and rural electric cooperatives.)
New coal legislation?
The same legislation that allows the wildfire self-insurance fund also gives Rocky Mountain more leverage to pass along the costs of keeping its two Utah coal-fired power plants running. When the bill was discussed, ratepayer advocates voiced concerns that favoring coal is likely to produce higher rates as other, cheaper sources come online.
But this rate request doesn’t appear to pass along any new costs that weren’t allowed before the bill was passed. The financial effects of that legislation likely would be seen in future rate cases.
Friday’s filing starts a monthslong process of review by the Public Service Commission, and the company won’t necessarily get everything it wants. The review will include scrutiny from ratepayer advocates for residential customers from the Utah Office of Consumer Services and advocates for industrial customers from the Utah Association of Energy Users, among other watchdog groups.
In Wyoming last year, Rocky Mountain sought a 21% increase, and it only got 8.3%. But it has since returned to Wyoming’s Public Service Commission for more rate hikes.
Keeping a steady profit
As with all rate cases, the company also includes what it wants as profit, or “return on equity.” In essence, the Public Service Commission has to decide how much money Rocky Mountain Power gets to make from its Utah customers. In this case, the company is seeking to keep its current 9.65% return on equity.
Rocky Mountain is also reminding customers of its various assistance and efficiency programs. It offers a bill assistance program for low-income customers, and it has incentives for efficient appliances and home improvements.
