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House OKs utility-rate bill

A bill that will give the Utah Public Service Commission greater discretion in choosing time periods on which to base future utility rates has moved through the Legislature.

The House on Tuesday passed SB61 with a 73-0 vote, allowing the commission to use future projections when setting rates. The Senate third-reading vote earlier in the session was 25-0.

Among the bill's provisions are giving the commission the option of setting rates using projected data up to 20 months from a proposed rate-change filing. When considering future rates, the commission almost always has used a historical period, or "test year," several months old as a basis.

Utility companies have said the bill will help end regulatory lag, thus making rates more closely match the conditions when the rates are in effect.

The bill also allows the commission to approve agreements among parties in rate cases to settle disputes and reserves the right for parties to maintain "appropriate" confidentiality in the negotiation process. The commission approval must be made after considering the interests of the public and other affected people, the bill states.

The bill's crafters had said earlier in the session that they had worked to resolve some of the issues brought up by consumer representatives who worried that the confidentiality provision could lead to rate-making procedures with less public notice or input.

Critics, however, said relying on projections for setting utility rates could mean higher costs for consumers, saying that speculation about future conditions might come into play. Utilities countered that the projections would be based on "known and measurable" factors.

The bill also limits the impact of commission decisions to the parties involved in particular cases rather than allowing the rulings to affect other utilities.

The Public Service Commission had taken a neutral stance on the bill, which was sponsored by Sen. John Valentine, R-Orem.