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PacifiCorp owes $$ to Utahns

But utility wants to delay refunds until PSC’s decision

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PacifiCorp's Utah customers are due a refund of nearly $30 million, but the utility will try to have rates frozen until the Public Service Commission decides on a proposed $103.5 million increase early next year.

The commission this month granted PacifiCorp a $40.5 million increase, but because it had awarded the company an interim approval in February of $70 million, customers should receive a refund.

The utility will try to persuade the commission to keep rates at current levels and use any refund amount plus interest as an offset against any rate increases that might result from the $103.5 million rate case. That case involves amounts PacifiCorp paid for replacement power when a unit of its Hunter power plant in Emery County was shut down for several months due to an electrical short.

PacifiCorp will present a rate-freezing motion Wednesday when the commission considers a stipulation between the company and other parties in the case that resulted in the $40.5 million ruling. The stipulation establishes rates for each customer class, based on the Sept. 10 ruling.

"In the company's view, which is supported strongly by the regulatory community, is that in the interest of rate stability, it wouldn't make much sense to have a refund now and have the rates go down, just to have them go up again" when the commission rules on the Hunter case, said Dave Eskelsen, a PacifiCorp spokesman.

The cost of issuing a refund reaches hundreds of thousands of dollars, he said. "The decision for the commission is, what is the most efficient use of resources?" he said.

The state Committee of Consumer Services, which represents individuals and small-business customers in rate cases, is expected to oppose PacifiCorp's motion.

"We believe those two cases should remain separate," said Dan Gimble, the consumer committee's energy group manager. "We believe that the refund owed to customers should go back to customers expeditiously, and whatever comes of the Hunter case, that's what we live with."

If approved, the stipulation would spread the $40.5 million annual increase fairly evenly among customer classes. For residential and commercial customers, the increase equates to 5.4 percent — $2.70 on the typical homeowner's monthly bill — although the small-business class faces an increase that is half of that percentage.

The PSC has scheduled hearings on the Hunter case for January. If PacifiCorp prevails, the costs of the outage from late November to early May will add $3.57 per month to the typical Utah residential customer's bill for one year.

The outage occurred when replacement power on the spot market sported high prices. Utah is among several states where customers will be asked to pay for the power-replacement costs associated with the shutdown, with the overall total being $270.1 million.

Despite Wednesday's hearing on the rate-increase stipulation, PacifiCorp still is considering whether to petition for reconsideration of the amount of the rate increase. It originally asked for a record increase of $142.2 million and adjusted it later to $118 million.

PacifiCorp, which operates as Utah Power in Utah and Idaho, has about 645,000 customers in Utah, part of its 1.5 million customer base in six Western states.

E-mail: bwallace@desnews.com