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Utility changes may aid growth

A couple of county rural economic development directors have proposed changes to utility regulation as a way to remove impediments to business growth.

Rob Adams of Beaver County and Mike McCandless of Emery County told the Rural Development Legislative Liaison Committee on Tuesday that utility infrastructure problems are inhibiting growth in rural areas of Utah.

Adams said companies considering those areas for operations usually do their homework, calculating all costs of doing business there. "I've learned that when it comes to attracting industry to an area, it's a lot more about mathematics than it is schmoozing or anything else," he said.

In some places, a lack of electricity can keep a large, power-using operation from moving in. Elsewhere telecommunications are an issue, as are lingering charges to pay for utility infrastructure built years earlier.

"Infrastructure is not the only issue in rural Utah, but it certainly is a big one. . . . If you want rural economic development, infrastructure is a large part of it," Adams said.

Adams and McCandless suggested that the state Public Service Commission change a few rules, including allowing the commission to consider economic development in utility rate cases. They also called for utilities to be allowed to get a quicker rate of return on investment in rural areas, incentives for utilities to use leading-edge technology in rural areas, tax incentives or credits to utilities making rural system upgrades and a speedier rate-case process when issues are relatively minor.

However, Commissioner Ron Allen said the PSC operates in a "legally confining and practically confining" environment in which it must balance the interests of ratepayers and utilities. Constraints in rules are the result of years of litigation, he said.

About the only time the commission might consider economic development in decisionmaking would be if there are two virtually identical proposals, and then it likely would opt for the one creating more jobs, he said.

"There's not a lot that we can do that's overt," he said of economic development consideration.

And while Adams and McCandless suggested that the PSC reconsider its ban on utilities building speculative facilities, Allen noted that the existing rule does not prevent a municipal system or private industry — neither of which are regulated by the PSC — from doing so.