Power bills unlikely to drop

Utah Power customers should not expect any special concessions that would lower their electricity bills once MidAmerican Energy Holdings Co. takes control of PacifiCorp.

In fact, customers likely will pay more, if PacifiCorp sticks to its 10-year building plan.

That would be in contrast to 1999, when ScottishPower acquired PacifiCorp. At that time, Utah Power customers benefitted from the deal, receiving a $48 million credit to their electricity bills over a four-year period.

Even in 1989, after Utah Power merged with PacifiCorp, the base electricity rate was lowered. Utah Power customers were given an initial 2.1 percent reduction in rates. That was followed by a 4.2 percent cut.

Yet customers probably will not see a similar gesture as MidAmerican Energy Holdings Co. prepares to take control of PacifiCorp., the company's top executive suggested.

Last week, Iowa-based MidAmerican announced it would acquire PacifiCorp in a $9.4 billion deal. The acquisition is conditioned upon approval by federal regulators and in each of the six states in which PacifiCorp operates.

On the day of the announcement, David Sokol, chief executive officer for MidAmerican, said merger credits were shortsighted.

"What we will urge the states to look at is the importance of long-term planning," Sokol said. "If the answer is, 'Write us a check today and not think long term,' we think that's a mistake. The goal should really be to have long-term energy sustainability and reliabilities. That's going to cost money, but if we do it the right way, customers will be a lot better off."

Other states part of the 1989 Utah Power-PacifiCorp. merger — like Oregon, Idaho and Washington — also were granted rate reductions. Oregon received a 3 percent reduction in its rates. Idaho saw rates drop 2.2 percent, and Washington, 1.4 percent, said Dave Eskelsen, a spokesman for PacifiCorp.

However, Julie Orchard, a spokeswoman for the Utah Public Service Commission, said it is unlikely the precedent will be continued.

"Customers can't necessarily expect there to be a merger credit in this case because now all these new plants are going online," Orchard said. "Customers are becoming more and more electricity hogs, and the company is forced to build larger and bigger plants to keep up with our demand. We anticipate that the company could be filing rate cases once a year because customers don't conserve as much as they should."