Utah Power & Light Co.'s Utah customers will get a one-time credit against their electric billings averaging about $31 per customer some time this spring.
The $51 million lump sum credit results from a $27.5 million stipulated settlement authorized by the Utah Public Service Commission as a final resolution to the so-called Simonelli case for overcharges in UP&L's coal- purchasing activities between 1982 and 1986 and a $23.5 million reduction in the company's energy balancing account.In addition, a $6 million or 1 percent permanent rate reduction will be implemented effective April 1. That reduction stems from the combination of a reduction ordered in connection with UP&L's refinancing of long-term debt and a promised reduction for efficiencies resulting from the company's merger with PacifiCorp in January 1989.
The merger reduction had been scheduled to go into effect March 10 and the refinancing reduction on April 15. The two were consolidated at UP&L's request so that only one set of new tariffs would have to be prepared.
Also, the commission ruled favorably on a new tariff for irrigators that should result in a 10.9 percent rate reduction for the coming irrigation season. Farmers will actually realize a 15.1 percent reduction over last year's costs because the current tariff did not take effect until after last summer's irrigation season ended and has never been used for billing purposes.
The $6 million reduction will be applied using the same rate design approved following last fall's extensive cost-of-service hearings involving UP&L's premerger costs.
The credit could show up on customer billings in May if no formal appeal of the commission's Tuesday bench order is received within the next 30 days.
UP&L officials say the credit will be based on the past 12-month use period once the order becomes effective. The credit will be based on electricity usage, with the largest credits going to those who have used the most power during that 12-month period.
The lump sum settlement is the result of efforts by the Utah Division of Public Utilities to resolve the Simonelli ruling in which UP&L had been ordered to return $60 million in overcharges. For the past three years, UP&L customers have been receiving repayment through a commission-ordered rebate on monthly billings.
That monthly reduction will disappear with the lump sum settlement. However, the other reductions will more than offset the elimination of the monthly credit.
Division officials said the lump sum settlement was needed to ensure that the majority of the repayment went to customers who had suffered from the overcharges.
Studies show that 9,000 UP&L customers leave the system each month. Many return at new addresses, but others leave the system completely and are thus denied reimbursement for the overcharge.
Also as part of the settlement, the Utah Association of Municipal Power Systems and Provo City, which had purchased coal from UP&L will receive lump sum payments. Another coal customer, Deseret Generation & Transmission, as asked that its portion of the settlement continue to be paid on a monthly basis.