Utah energy users say utility regulation is lax

Utah's largest industrial energy users say the state's utility regulatory process is broken and needs repair.

On Wednesday, Paul Barber, assistant director of the Utah Association of Energy Users, told the Legislature's Energy Policy Task Force that an "after-the-fact" regulatory review process does little to help consumers.

Barber said his association is concerned about Portland-based PacifiCorp, which recently chose itself over more than 100 independent bids to build a new power plant near Mona, Juab County.

But Rich Walje, head of PacifiCorp's Utah operations, said customers are paying lower electricity rates today than they were in 1986, a reflection of the utility's efficiency and expertise in acquiring the lowest-cost resources. Walje added that the utility was not against a review of its bidding process and how it sets rates.

Barber told legislators that an independent evaluator, Navigant Consulting Inc., hired by PacifiCorp to monitor the methodology of its bidding process, was tainted because of a public/private partnership between PacifiCorp and Navigant that dated back to 1996.

"If we had known that, there's no way we would have agreed that Navigant was anything but a PacifiCorp consultant," said Barber, referring to an agreement entered into by UAE and the utility.

Barber said the association also was troubled that Navigant was being paid $55,000 a month by PacifiCorp for its work.

"We need to look at the operation of the (state) Division of Public Utilities and how it relates to the customers," Barber said. "They have a dual charge right now where they have to look after the interests of the utility and the customer. We think the pendulum has swung too far in favor of the utility, and nobody is looking after the customer interest."

Sen. Mike Dmitrich, D-Price, said an overhaul of the regulatory system is unneeded.

"I think the process is working," Dmitrich said. "I think it would take control out of the utility. I think the bad part of that would be the consumer pays the price in the end with more expensive power."

But Sen. Curt Bramble, the sponsor of SB198, a failed bill that would have tightened Utah's regulatory process, said control of the state's power plants already is offshore. PacifiCorp, which operates in Utah as Utah Power, is internationally owned by ScottishPower.

"They are certainly farther away from Utah ratepayers than folks that own stock in American companies," Bramble said.

Bramble said he expects that his failed bill, which was sent to the task force for further study, will result in a recommendation and new legislation in next year's session.

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