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UP&L SEEKS CHANGES ON ENERGY ACCOUNT

Utah Power & Light Co. is asking utility regulators to change the way energy-cost accounting is reviewed in an effort to allow the company to become more competitive.

In prefiled testimony for the October phase of the company's general-rate case that is now before the Utah Public Service Commission, UP&L President Verl R. Topham said it appears the days of rapidly changing energy prices are gone and there no longer is a need for the energy-balancing account used in the past as a mechanism to pass increases in fuel costs onto ratepayers.Topham is recommending a change to what he calls the semiannual results of operations reports. He said these reports can be used effectively to monitor overall company performance without affecting the regulatory oversight of power costs.

The energy balancing account was implemented in 1979 in an effort to deal with volatile changes in energy prices resulting from the Arab oil embargo and the effects of double-digit inflation. The account was reviewed twice yearly and was used to pass to ratepayers the increasing costs associated with fuels used in generating electricity. Other, more stable cost factors, continued to be reviewed through general rate cases.

Over the past three years, UP&L has been ordered to make nine rate decreases, and the 1990 case is expected to result in a 10th.

The current case is focusing for the first time on UP&L's merged operations with Pacific Power & Light Co. Both companies are owned by PacifiCorp. PSC commissioners have urged the company to review the future need for the energy balancing account and want that issue resolved during the October phase of the rate case.

With fuel costs decreasing in recent years, regulatory agencies such as the Utah Division of Public Utilities and consumer groups such as the Utah Committee of Consumer Services have argued for elimination of the energy balancing account.