Energy bill may hurt consumers

A bill designed to foster fair competition in the acquisition of new energy resources may instead invite less regulatory scrutiny, some critics said Tuesday.

And that could be bad news for ratepayers, who could end up paying more for costly new power plants, according to consumer watchdogs and industrial energy users.

Gary Dodge, an attorney representing the Utah Association of Energy Users, said the New Energy Resource Procurement Act in its current form does not go far enough in providing an upfront analysis of new energy resources.

On Wednesday, the state Energy Policy Task Force passed the legislation as a committee bill.

"Unless several things are changed I fear it will be a bad bill," Dodge said. "It's too focused on the utility, and we need to get it back focused on ratepayers and making sure the right decision is made."

Portland-based PacifiCorp, which operates in Utah as Utah Power, discounts those fears, saying the utility is actually the one at risk, as it is compelled to build new power projects with the hope that state regulators will let it recover its costs.

"We're talking about hundreds of millions of dollars of investment that we're competing with many other utilities and other industries in trying to get that equity," said Rich Walje, PacifiCorp's executive vice president. "One of the things that will make us a more attractive investment is if there is some level of confidence when we make a big investment decision that it's been agreed to in advance."

Under the current process, PacifiCorp must first demonstrate a need for a new energy resource, but it may not recover the cost until after the resource has been built. In addition, the utility must prove that the resource was prudent and in the public interest.

The new legislation would allow for a so-called "predetermination" of the resource's prudence, essentially guaranteeing future cost recovery.

Dodge said he does not oppose the notion of preapproval. However, he believes the current bill does not provide for a meaningful and timely analysis.

"The problem is the utility controls all the information," Dodge said. "If all they need to do is do a huge data dump and then in very short time push a decision and then they are forever insulated, that's worse for ratepayers."

Walje said he believes there would be enough lead time to conduct a thorough review.