A Sevier County Republican lawmaker wants to make sure that Utah electricity ratepayers are not bearing the burden of paying of projects that make no dent in what they are pulling out of their pocket to pay their monthly utility bill.
HB72, Electricity Rate Amendments, sponsored by Rep. Carl Albrecht, R-Richfield, provides that before the Utah Public Service Commission, the regulating entity over Rocky Mountain Power, approves an allocation of costs to Utah ratepayers, it must make sure the recovery of those costs are not from projects that benefit energy needs of other states.
Albrecht, speaking Wednesday before the House Public Utility and Energy Committee, mentioned a wind transmission project in Wyoming that crosses Utah and goes down into Nevada and ultimately provides energy to California ratepayers. The bill prohibits Utah ratepayers from subsidizing costs incurred by other states.
Under the proposal, the bill would also prohibit rate hikes from Utah ratepayers to pay the costs associated with “events or conditions” in other states that may drive up costs.
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“The allocation provisions in this bill should help the Public Service Commission ensure that our ratepayers are not paying for other states’ policies, fire policy for one, as we wait for the PacifiCorp study. And even though the Public Service Commission’s obligations might already require this sort of evaluation, it’ll make it explicit in code that they should focus the Public Service Commission attention on these type of questions.”
GOP lawmakers have expressed frustration and angst as they have sought to untangle Utah, Idaho and Wyoming from the renewable energy ambitions of other state partners that make up its parent company PacifiCorp.
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Albrecht’s bill would also eliminate Rocky Mountain Power’s energy balancing account, which he said operates will little ability to audit and be made accountable.
When it was first adopted by the Public Service Commission 13 years ago, a 70/30 split was built in to share the risks between ratepayers and the company. But by 2016, that cost sharing was eliminated by the state Legislature, meaning ratepayers bear the full cost of differences between the base rates and new costs.
“So I would say, are the shareholders of Rocky Mountain Power behaving prudently? I would also submit that there’s millions of dollars in the EBA account. And I would also submit that just before they had the settlement on the fire cases in Oregon, they refunded over $600 million to their repairs or to the stockholders.”
Albrecht added: “The big key issue for Rocky Mountain Power or any other utility in the state is to protect the the daily rate customers, residential, small, commercial, and still serve those data centers or whatever under a different rate schedule so that we’re not subsidizing them.”
James Owen, vice president of Rocky Mountain Power and PacifiCorp, said eliminating the energy balancing account would hamstring the utility company and its ability to respond to specific circumstances.
“Because of the complexity of the system, it is impossible to always have those costs exactly right during a rate case or during the time when you’re providing those estimates. So a true up mechanism is not uncommon, and it allows us the ability to take those costs, especially when circumstances occur that are outside of our control, and then we’re able to true up the differences between our our estimates and the actual costs with complete risk of lack of recovery.” In essence, it is a tool to adjust costs should market volatility occur in energy prices.
He added that the energy balancing account undergoes strict scrutiny by the Public Service Commission and if the costs are not justified, they are not approved.
But Albrecht and others on the committee were not convinced, giving the measure a unanimous measure to move it forward, with Albrecht noting the account had costs for 2020 of $1.1 billion.
“Are we getting a fair shake on that here in Utah?” Albrecht said. “It’s very difficult, and so I’m just saying, you know, the energy balancing account seems to be a catch-all for them, and it’s good for them and good for their stockholders, but it’s not very good for the ratepayers.”