PacifiCorp trims rate request

PacifiCorp has reduced its request for an electricity rate hike to Utah customers by nearly $15 million due to overstated tax, lease and fee charges.

In August, the company petitioned state regulators for a $111 million rate increase. That would have raised the utility's overall revenues by 9.6 percent and cost a typical residential customer $4.75 more each month for a household using 700 kilowatt-hours of power.

Now the company said it needs $96.3 million in additional annual revenues, according to a recent filing with state regulators.

But that amount also may be lowered as the utility is nearing an agreement with regulators, consumer advocates and industrial users over the final amount of any increase. Although the exact timing of such an agreement is unclear, it could come within days.

The Utah Committee of Consumer Services, the state's consumer watchdog group, previously recommended a $39 million reduction in electricity rates, which would result in a 3.4 percent reduction in company revenues.

The Utah Division of Public Utilities recommended that PacifiCorp, which operates as Utah Power in Utah, be allowed a rate increase of $17.6 million to $29.5 million based on certain assumptions.

Donald N. Furman, PacifiCorp's senior vice president of regulation and external affairs, said the latest increase is necessary because of skyrocketing electricity usage in Utah.

In filings with state regulators, Furman said Utah's energy usage has grown roughly 32 percent from 1994 through 2003. Utah customers' summer peak usage, when air conditioning pushes demand, has grown by 53 percent.

Within PacifiCorp's six-state service area, Utah accounts for 41.2 percent of the total system load, up from 37.3 percent in fiscal year 2001.

"These higher rates are necessary to continue the required investment into this rapidly growing system," Furman said in filed testimony. "This investment is necessary to ensure that the company continues to provide safe, reliable power to its Utah customers. Even with this requested increase, customer prices would be lower than they were in both real and nominal terms in 1985."

But the proposed rate increase has brought criticism from Utah industrial companies that use large amounts of energy for their operations.